On competenciness

Centrists don't offer actual competence, but merely a false illusion of it.

Geoff Mulgan has written a great piece on the shortcomings of a centrism which wants “to be thought of as practical competent problem-solvers, sensible, grown-up and realistic.” I agree that Mulgan is right to call this a dead-end. I want to argue, though, that it is a dead-end in its own terms: a genuinely realistic competence would see that a government cannot survive merely by aspiring to competence.

Charlie Munger once said something very wise and important:

One skill is knowing the edge of your own competency. It’s not a competency if you don’t know the edge of it.

And even the best politicians’ circle of competence is inherently small simply because human affairs are complex and unpredictable and our knowledge limited. They are confronted with what Thomas Homer-Dixon called an ingenuity gap: “a shortfall between their rapidly rising need for ingenuity and their inadequate supply.”

This is one of Reeves’ problems. Her fiscal rules oblige her to ensure that “the current budget must be in surplus in 2029-30” and that government debt be falling as a share of GDP then. This means that fiscal policy must be set on the basis of the OBR’s medium-term forecasts. But forecasts are usually wrong simply because the future is unknowable*. What’s more, a good forecast will change randomly. This is because it will embody all available information and so will change only because of unpredictable surprises which are by definition random - which in turn means that fiscal policy will change randomly. Any Chancellor therefore risks having to make policy reversals and appear to be not in control of events, as Reeves is now doing. Unless they are lucky, their claim to competence will thus be undermined by events. Which is an especial problem if competence is all you are offering.

You might think the way out of this dilemma is to abandon fiscal rules and instead set fiscal policy to control inflation. This, however, merely replaces reliance upon a forecast for the public finances with a reliance upon one for inflation. This is an improvement because inflation is less unpredictable than government borrowing, but it doesn’t solve the problem.

The fact that governments cannot predict and control extends far beyond economics, however. Adam Smith famously said there was a “great deal of ruin in a nation”. There will always be some hospital that fails, or some outbreak of criminality, or some mistakes somewhere in the public sector. A government that claims competence will get the blame for these.

Especially, of course, if it is not a right-wing one. For example, there were 377 prisoners wrongly released in 2023-24 and 2024-24 and an average of one a week in the years before then. Such incompetence under a Tory government got little publicity. But the release of two prisoners recently means, says the BBC, that the “buck stops with Lammy” in a way that it did not stop with Chalk or Raab or Lewis or Buckland or Gauke or....

I fear a similar thing will be true of immigration. This has fallen sharply recently, and is expected to drop much further. It is unlikely, however, that the right will give Labour credit for competently “controlling our borders” More likely, any crime committed by a migrant (and such crimes are statistically inevitable) will trigger a moral panic.

People mocked David Cameron for warning of “chaos under Ed Miliband”. But he was right. A paperclip going missing at the Department for Rural Affairs would have been “chaos” under a Miliband government. The Tories wrecking the economy and public services, on the other hand, was “drama”, which is what lobby correspondents want.

There’s something else. The competence that a government needs has changed, and is more demanding now.

In the decades before the mid-00s, the job of macroeconomic policy was mainly to avoid egregious errors** and so free-ride upon an economy that was growing by 2-3% a year and generating rising tax revenues.

But that world has gone. In a stagnant economy, competent government requires that policy-makers find measures to raise trend supply-side growth or to raise taxes whilst doing as little economic harm as possible. These are much more demanding tasks, perhaps even impossible ones. The bar for what is “competent” is much higher now.

In theory, the government could acknowledge all this: that there’s a great deal of ruin in a nation; that human affairs are unpredictable; and that capitalism isn’t working as it used to. It could, for example, abandon the utterly silly reliance upon point forecasts and instead base policy upon upon the range of possible outcomes; things like the Bank of England’s fan charts should be more politically salient than they are.

I’m not sure, however, that any government could actually do this. Part of politicians’ professional deformation is to be overconfident about their abilities, and to not know the edge of their own competency. Nor, of course, would such a recognition of reality be acceptable to our debased and moronic political discourse. And of course, talking about the failures of capitalism is well off the agenda.

What centrists offer, therefore, is not so much competence as competenciness - a claim to be in control founded not upon realism but instead upon centrist utopianism, a belief in a world that is perfectible if only the right people were making the right policies. This is of course a profoundly ideological position, and a mistaken one. A truly realistic and competent politician would see it as such.

* The purpose of a forecast isn’t to tell us what events will occur. It is to tell us how surprised we should be when they do occur.

** Something the Tories failed to do, triggering recessions in 1980 and 1990.