Volcker on policy studies

Paul Volcker on the mismatch between the academic study of policy and that of public administration.

Paul Volcker to Ezra Klein:

Those schools [of public administration] are not as strong as one would like to see them. Public administration has not been in fashion for decades. Many schools have turned to what they call policy. Everybody likes to talk about big issues of war and peace and how we take care of poor people and what we do about other social problems in the United States or elsewhere.
They do all this talking but they too seldom know how to implement what they’re talking about. I ran into a wonderful quotation from Thomas Edison. He said vision without execution is a hallucination. We have too many hallucinations and not enough execution.

Characteristically, Volcker isn’t just complaining, he’s launched – at the age of 85 – an initiative to do something about it, the Volcker Alliance.

I don’t have an axe to grind here but the RBC has a strong enough connection to schools of government and policy studies for this take to be worth discussing.

An anecdote about the elder von Moltke and the Prussian General Staff of 1870. According to Michael Howard (The Franco-Prussian War, p.62). Moltke ran the victorious campaign against France, controlling an army of 850,000 men, with a staff consisting of fourteen officers, ten draughtsmen, seven clerks, and 59 other ranks. (It wasn’t responsible for supply, run by a larger organisation under the Quartermaster-General). This tiny cadre worked because Moltke had trained all the staff officers attached to the corps in the field in his methods, so everybody was working in the same economical style. Moltke had solved the problem of strategic control of very large forces that had bedevilled Napoleon with the Grande Armée, a very blunt and unwieldy instrument compared to the smaller and more manoeuvrable armies with which he had triumphed at Marengo and Austerlitz.

I worked for 32 years for a high-minded international organisation that when I left had still, after 60 years, failed to establish a filing system.

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web

36 thoughts on “Volcker on policy studies”

  1. A version of this problem exists in business as well. Too often, a leader will be proclaimed – usually by himself – a “visionary,” who then avoids all responsibility for justifying the vision, or making it reality. Indeed, the vision may change from day to day, driving subordinates nuts.

    I think this sort of thinking is part of what leads to the cult of the CEO and the, IMO, vast underrating of the creative contributions, as well as the plain hard work, of lower-level employees to successful companies.

    1. Or, a CEO heralded as a visionary gets the credit and a vast majority of the monetary rewards that would not have been possible without the sort of administrative or operational expertise practiced by those in the trenches. In some cases, a CEO may be the one who brought in the managers who did the hard work of making procedures uniform, etc. to achieve the efficiency or performance increases that created to success, and so that CEO should get some credit for that. But only some.

  2. This tiny cadre worked because Moltke had trained all the staff officers attached to the corps in the field in his methods, so everybody was working in the same economical style.

    Probably true. But it misses the bigger picture: The tiny cadre worked because power wasn’t intensely concentrated at the top.

    The definition of Populism is: A political philosophy in which wealth and power are more equitably distributed. Systems built that way are more robust, more creative, more happy, more virile. The problem with America (and the world in general) is that we have an economic system built on concentrated wealth and “trickle down”. What is wanted is a world built on distributed wealth and “trickle up”. You want a measure of how totally screwed the world is? Everyone knows about “trickle down”, whereas I just made up the phrase “trickle up”. A phrase which runs in complete opposition to the way the world is run by hyper-manicured bumpkins like Bernanke and all the rest of the “Davos man” cadre.

    Did you see that recent article on central bankers in the Times?

    So far, the results of these activist central banks have fallen short of expectations. “I’m not sure why we’re not getting more response,” said Donald L. Kohn, a former Federal Reserve vice chairman who is now at the Brookings Institution. “Maybe we’ve made some progress in identifying some of the causes, but it’s not fully satisfying why we have negative real interest rates everywhere in the industrial world and so little growth.”

    They can’t figure out why their low interest rates and monetary expansion policy isn’t working(!)? That’s because they are so incestuous interbred on the same stinky academic economics and charts and bullshit that they don’t realize that those policies only feed the upper 1%. As implemented now, printing money is just more trickle down. Printing money and giving it away to the bottom 90% would be an example of “trickle up”. And who on this Planet of Austerity Apes, with an ounce of authority, is standing up for that? No one.

    What was it R. Buckminster Fuller said? Oh yeah:

    “We are powerfully imprisoned in these Dark Ages simply by the terms in which we are conditioned to think.”

    The problem is the terms in which central bankers, politicians, academic economists, the media are conditioned to think. It is inherently positioned around “trickle down”. LIke the proverbial gold fish they don’t sense the milieu in which they are conditioned to think. Until we learn to think in terms of “trickle up” nothing is going to change. All “recoveries” will end up impoverishing the middle class even more and concentrating wealth at the top even more and everyone in power scratching their Harvard heads and wondering why…

    1. Hear, hear! The financial industry and the government are shuffling and supporting these “toxic asset CDOs and MBSs” of shaky mortgages, when if they’d simply go down to the grassroots level and re-write the terms of every up-to-date mortgage to market rates (including reducing the principle–because the banks that caused the bubble should share in the costs) and if they’d do the same for every behind-in-payment mortgage holder, then the whole economy would benefit, as homeowners would be able to stay in their homes and contribute to the economy, and the CDOs and MBSs would suddenly become whole again, benefiting the banks and financial institutions who own the securities.

      We have a word for “trickle up” economics: Growth.

      1. Yeahbut we “can’t” do that, because it would benefit some minorities. And you know how they are lazy and stealing from the deserving rest of Americans.

    2. I might add that Molkte had the advantage of railways and the telegraph which made it possible to keep track of large, widely dispersed forces to an extent impossible for Napoleon. Poor Bonaparte had to actually be with his troops to know what they were doing.

    3. Koreyel: “The tiny cadre worked because power wasn’t intensely concentrated at the top.” I may have this wrong, because Howard does not explain exactly how the Prussian General Staff worked, but my understanding is that Moltke’s power was concentrated and effective because it was limited in ambition. Orders were concise and limited to objectives and routes of movement and supply. The recipients were given latitude as to how to go about carrying them out, and to use their own initiative. The encirclement of Bazaine’s army at Metz resulted from the decision of a mere brigade commander, Major-General von der Goltz – a graduate of the General Staff – to attack the retreating French at Borny, against the wishes of the doddery army commander Steinmetz.

      1. Mr. Wimberley, I don’t think you have it wrong. We are both correct. That’s possible too. As for support of my position I quote you here regarding power being more equitably distributed:

        The recipients were given latitude as to how to go about carrying them out, and to use their own initiative.

  3. Wasn’t Peter Drucker writing about stuff like this years ago? It is years since I read him, but maybe he should come back into fashion. He passed away in 2005.

    Reading his Wikipedia bio, it is easy to see why he has become obscure:

    …. Drucker’s writings [were] marked by a focus on relationships among human beings, as opposed to the crunching of numbers. His books were filled with lessons on how organizations can bring out the best in people, and how workers can find a sense of community and dignity in a modern society organized around large institutions.


      1. If you’ve had the, uh, privilege, of working with the products of the top tier of MBA programs, you might notice at some point that generating problems that apparently require an MBA to fix seems to be a core operating focus.

  4. Man who worked and lived in the glass house of “socialism for the rich” government should not throw stones at academia.

    1. That’s silly, even if you accept the first premise of your syllogism as true. Someone who saw problems on the inside of one org can’t make a prescription for how to fix them kin another org? Cam’annnn …

      1. Given the disturbing trends in the corporatization and privatization of education — and the failure of capitalism and its financial system to create a sustainable model without government handouts, all while preaching to the 99% that they need to be self-sustaining — I’d say my point is precisely on target.

        1. I don’t know if Volcker knows what he is talking about or not. But I do know that Mike’s argument is in the nature of an ad hominem. He is also conflating the failures of a set of institutions with the shortcomings of an individual who is at most loosely associated with the institutions whose failures he is alleging.

          Betsy is right–there is no valid connection between Mike’s premises and his conclusions.

          1. I thought though that Volcker’s critique was pretty vague and unfair too. I went to one of the UC policy schools and I found it quite invigorating. They were some of the smartest people I’ve ever met, and the most idealistic. There was plenty of math. So, I don’t know what Volcker is going on about, exactly. Maybe he doesn’t either.

            From where I sit, we have serious problems in our media and in voter knowledge. I don’t think Americans are actually dumb, it’s just that most of us don’t pay attention. And our media aren’t great. And our system is hugely distorted by money.

            So the people who make most decisions — politicians, not career civil servants — often seem to make bad decisions. And voters re-elect them. I don’t think the problem with pensions, f.e., has anything to do with a lack of decent accountants. (Though he may have a point about transparency! But that too is decided politically, imo.)

            So, I’m not sure what he was trying to say. I’m afraid he will turn out to be yet another person who thinks the solutions are to be found in the bipartisan “middle.” I’ve never seen that work yet. E.g., California Forward.

          2. Oh and btw, “policy” is really just problem-solving. That’s all it is, that’s all it claims to be. He seems to have a serious lack of respect for it. I wonder why.

          3. Ebenezer,
            Mine was an observation, not an argument.

            “We have too many hallucinations and not enough execution.”

            If privatization of public assets is the main course and we’ve been eating the same thing, from more or less including the era of Mr. Volcker’s watch forward, and yet the same thing keeps coming out of the kitchen, then, yes, I agree, there is something to be said about the chef’s menu — and it’s not exactly kind.

            I’m not a right wing crank, perhaps a left one. Just calling ’em as I see ’em. But I do not see further fire sales of the assets of the 99% to the 1% as especially productive. In fact, that’s why I have a bad taste in my mouth about the new chef, same as the old chef. We’ve had 3 decades of politicians selling off bits and pieces of government. After they bring down Social Security, there won’t be much to fight over, but fight they will because some folks really believe the Thatcherism of “There Is No Alternative.”

            Yes, there is. To begin with, you don’t hand government to a bunch of folks who don’t believe in it. That’s why government doesn’t work. Basically what we have here, to use a very tortured metaphor, is a Catholic country that doesn’t realize that the papacy, curiate and priesthood has been secretly handed over to the Hell’s Angels. No wonder things seem so ungodly for the rest of us.

            I do wonder what will happen if we get a lot of “execution” (such an ugly word when we’re trying to get rid of the death penalty — or we would be if the politicians listened to the policy wonks who tell them it’s a bad use of the public’s money versus life) of additional privatization and Volcker manages to hang on another 20 years. Government by then is nothing but a Help Line that has the same tape playing, “Check your paper’s want ads for a job” when you do manage to get it to ring through…

            I can hardly imagine any need for policy wonks at that point. Everything’s sold. If you can’t make a profit on it, it’s shut down. Does Volcker have an end game plan to merge with some MBA school, because jobs are gonna be kinda sparse in the public admin field, let alone policy wonks? Besides, that’s what Fox News and much of the rest of the media is already for. No need for Volcker to reinvent the wheel.

            I don’t mean to pick on Mr. Volcker, but you did kind of slap a “Kick Me” sign on his back if you’re a Chicago teacher, for instance, or any of the millions of other public servants laid off in some bizarro world bipartisan austerity fit in the last few years…when we all know that is a policy recipe for failure, if I may be so polite.

            I will, however, extend the olive branch of conceding I went overboard if Mr. Volcker immediately decides to weigh in the student loan legislation currently being held hostage by the same fiscal terrorists that have put so many other Americans out of work by stating his support for a renewal at the current interest rate, instead of the doubling demanded by the thugs. A press release and interview availability with the major networks would convince me that he really cares about what anyone below his pay grade thinks about public policy — let alone wants to give us something better. I still suggest he rethink that whole privatization scheme (a word used in the Indian sub-continent that really should be used more often in describing our current crop of bad public ideas in the good ol’ USA.)

            Government should work. Citizens have the right to expect that. The answer should not be, “Let’s have a garage sale.” This is a government whose business should not be what it has been for some time — making things safe, comfortable, and financially rewarding for the wealthy and the well-connected to exploit the rest of us. Wanna keep capitalism around? Instead, government should ensure the availability of safe, comfortable, financially solvent consumers. Because if we can’t be consumers, then we need to start thinking like citizens and figure out the next steps in dealing with a moribund system that fails the majority of us over and over and over and over…

            Now if you all are hallucinating circumstances that suggest I’m really wrong about that, go right ahead. I can take it, given I survived 3 decades in this rotten system before I got involved in academia again. No one’s offered me any koolaid where I study, but then, I’m a historian and take the long view. I’d suggest that we all start taking a long view of privatization, because it sure doesn’t work for most of us, most of the time. If Mr. Volcker’s new project does that, I will applaud. If it doesn’t, then there’s nothing new under that sun.

  5. And this is how you get the DMV problem

    As Keith Humphreys notes in that piece, the VA DMV he went to was horrible. The one I go to–in another large, fairly poor city in VA–is great. It’s the only DMV I’ve ever gone to where the security guards are actively helpful (they function as if their main role is to help people figure out what to do.)

    For me, this is where so much of government (and large organizations as well) needs better management. Why can’t the Arlington DMV work as well as the Richmond DMV?

    1. Sam,
      Much of your question is answered by James Q. Wilson’s great book: Bureaucracy. (It specifically discusses DMVs.) But it is concerned with a somewhat different question: how the (legislative) charter of an agency affects its performance. His book doesn’t account for the distinctions among branches of the same agency, all of which presumably have the same charter.

      1. Would this approach be responsible for the metastatic adoption of “mission statements” and similar over the past 15 or so years, that ate up endless amounts of time to generate and seem to require nothing but superlatives? A lot to answer for there, if so …

  6. The acme of the elder Moltke’s General Staff system was, perhaps, the 9-page operations order that launched Operation Barbarossa, the largest military campaign in history. Praise of the German model should be tempered, however, by recalling that graduates of the War Academy & the General Staff were well-schooled practitioners of tactics and the operational art, but (by and large) absolute strangers to strategy. Their competence was wasted going down whatever primrose paths their deranged sovereign or fuehrer chose to send them.

    1. Yes. You could also cite the Schlieffen Plan of WWI and Pearl Harbour. But it’s a trivial point against Volcker to repeat the truism that good execution doesn’t make up for bad policy. His argument is that the current hidden problem of US government is poor execution. I infer that looking at past organizations that worked – even in pursuit of bad or even evil policies – is useful. Trust, training, morale.

      Another interesting example is French railways. Postwar these have been heavily unionized, and the union old-line Communist. But the cheminot philosophy on running the system is the opposite of British Trotskyites like Arthur Scargill. The trains have to run on time; that’s what passengers are for.

    2. They were strangers to strategy but also deficient in logistics and intelligence. The German General Staff gets such good press from military historians because they were superior than their adversaries (though not by as much as they liked to think) at the sexy stuff of operations and tactics. They funneled all of their best talent into direct combat. This not only included teaching their best officers operations but also putting the best of their enlisted personnel on the front lines.

      When it worked it was fantastic. But the downside is that they had decidedly less competent people in their support services. They had a tendency to decide what they wanted to do and then try to make the logistics work rather than starting from an assessment of what they could support and producing operational plans that fit within their capabilities. Barbarossa turned into a mess because they simply couldn’t get adequate supplies to the front lines or keep their mobile forces properly maintained.

      And with a few rare exceptions (such as the Afrika Corps’ 621st Radio Intercept Company) the Germans’ military intelligence was a disaster. This was true not only on the large scale, such as falling completely for the ruse of Patton’s First Army Group but also on an almost daily basis on the Eastern Front. The Wehrmacht was consistently surprised by Red Army offensives. Combine the strategic and intelligence deficiencies and it isn’t surprising that the common thread of 20th century German warfare was their repetitive insistence on trying to do more than they were capable of. Postwar they managed (with the complicity of B.H. Liddel-Hart) to foist the responsibility for that off on Hitler, but the General Staff was really where those problems started.

      In the American Army, on the other hand, there were lots of ways for the most competent individuals to avoid front line duty and its inherent risks. While this meant that the average German combat soldier was markedly better than the average American, U.S. Army troops got much better support from rear echelon forces. In addition to making this trade-off to begin with, it also meant that the best German soldiers suffered much higher casualty rates than the best Americans and so the problem only got worse as each war continued.

  7. J.M. Neal:

    I’d love to see some facts to back up what appears to be the speculative claims about competent Americans avoiding front line duty and that front line Germans were so much better.

    Do you have any?

    By the way, I have heard exactly the opposite from folks I know who were paratroopers in the Battle of the Bulge. The U.S. troops were eagar to fight the Nazis.

    1. The man-to-man superiority of Wehrmacht front-line soldiers over their various adversaries is well established, contra Hollywood. Max Hastings in Overlord gives sources. They lost in the end because of numbers, aircraft, and artillery. Why they were so brave in such a bad cause is another matter.
      Paratroopers were selected, élite soldiers, not really representative of the average in any army. Luckily for the Allies, the Germans used up most of theirs capturing Crete.

      1. I think you’d have to drill down pretty deep to make a meaningful comparison of the capabilities
        of the various forces. Are we talking about the Wehrmacht of 1940 ? Or the forces defending
        France on D-day, which included many considered unfit for service on the Eastern front, and
        some fairly reluctant recruits from conquered regions ? I’d guess the best of each side were
        well-matched in individual skill and bravery: I remember reading how a handful of Americans
        with a machine gun held up a huge German force for hours early in the Battle of the Bulge.
        But as time went on, the Allies got better and better with logistics, technology, and the
        development of effective tactics to exploit those advantages – especially having artillery
        and ground-support aircraft, radios to call in support, and a command structure that allowed
        those resources to be used quickly and effectively.

      2. The Wehrmacht were bred for war thorugh organisations like the Hitler Youth and imbued with amoral racial superiority doctrines. The armies of the western Allies lack this psychological spur, at least the Soviets had a unquenchable thirst for revenge. And the best American or British formations (US Marines, Royal Marines, parachutists) were probably equal to the best of the German. Hastings is right about the gap in class, especially amonf the senior generals, but it was closing by the end of the war.

        Fear is also underestimated as a tool to get men to fight. Underperforming officers were often shot in both German and Soviet armies – both forces had “flying squads” of NKVD or SS soldiers behind the lines, gathering up and executing shirkers. Soldiers will stand and fight if running for the rear areas (or trying to surrender) is more dangerous.

        In the atmosphere the permeated the German and Soviet armies, the “scandal” of George Patton slapping a shellshocked soldier is a joke. In the forces of Hitler or Stalin, the soldier would have already been executed by his own side without a second thought.

        And in Beevor’s book he does say that the Soviets never faced the number or depth of top-class German divisions on a narrow front that the Allies faced in Normandy. From June to October, 1944, Normandy saw some of the most savage fighting of the war.

        The Allied response was of course, superior firepower, especially from the air. The appearance of Typhoons could empty a whole German armoured column, as men went scrambling for the ditches.

      3. Israeli military historian Martin van Creveld’s Fighting Power is a reference on this. I haven’t read it, but from the review he clearly agrees with the proposition that Wehrmacht troops were generally superior in combat. Another historian who reached the same conclusion is US Colonel Dupuy. A rambling rundown of the controversy here. There are dissenters, but the big names are on one side.
        The view accords with common sense. The Wehrmacht was generally outnumbered, but won numerous victories and carried out a long and stubborn defense on all fronts (Ukraine, Italy, Normandy) when attacked. It did not benefit from general air superiority after around 1942 – in Normandy it faced Allied air supremacy -, and its equipment advantage also declined (T34, Sherman, antitank guns, submachine guns and carbines), not to mention the Allied cornucopia of jeeps and trucks. So the claim of superior fighting power is probable.

        1. I’ll stress that it was “superior fighting power” only under limited definitions. Yes, if you restrict your view to only the number of troops on the firing line, the Germans were clearly the most effective fighting force, man for man. But it wasn’t an accident that they found themselves consistently outnumbered and outgunned. Their combination of poor strategy, leading them to consistently find themselves fighting every other major power simultaneously, poor logistics, leading them to experience chronic shortages of equipment and ammunition, and poor intelligence, allowing their enemies to concentrate overwhelming firepower on limited fronts while the Wehrmacht expected attacks elsewhere, caused problems that the quality of their individual fighting men couldn’t overcome.

          There’s a reason some of us think William Slim was the most competent senior general in any army during World War II. He not only ran a series of brilliant campaigns from Imphal/Kohima to Rangoon, but he also was responsible for recruiting and training 14th Army, for understanding its logistical needs and scaling his plans around them, for building sufficient trust and amiability with his allies that the Americans were willing to divert transport aircraft from the Hump to supplying the island fortress around Imphal, and for for identifying key subordinates such as Cowan and Messervy who could carry out his plans.

  8. It’s conventional thinking, and probably true enough, that a distinction of German military praxis in the century ending in 1945 was to delegate a lot of authority to shop-floor leadership (lieutenants and sergeants) who were expected to improvise and take advantage of what they could see close up.

    But the Germans lost all their wars after 1870, so that must be bad management, right?
    One reason policy schools invite Volcker’s criticism, in my view, is a characteristic misunderstanding on the part of academics (whose careers advance by stepping from one significant coefficient to another) of what knowledge in management really is, and how it is used to make things actually happen through the actions of others. In particular, a dismissal of all the knowledge that can’t be captured in a refutable Popperian proposition, which is unfortunately most of what’s available when the phone rings in your office.

    One reason management generally isn’t as good as it could be, in government and out, is the seduction of team sports and military analogies (meaning no criticism of James, whom I know to be resistant to it generally). These enterprises have simple payoff structures, no place for “win-win” outcomes, and a crippling (as instructional substrates) deficit of participation in, and management by, women. They should be used to study real-world management with extreme caution, and to illustrate it for teaching purposes very sparingly.

    1. I disagree that military enterprises have no room for win-win outcomes. You see them all the time in analyzing the way allies interact. I mentioned Slim above and following the way that he cultivated relationships with the Americans in his theater produced exactly those sorts of outcomes. Studying Slim’s actions from the spring of 1942 to the summer of 1945 is very instructional for how to run an organization. Among other things, a close look at his methods expose the extent to which a lot of business school teaching pays lip service to very important elements of leadership without actually understanding them.

  9. Touché on the dangerous seductiveness of military analogies. In my defence, it’s enlightening that even in these limiting cases of hierarchy and negative-sum, effective organisations encourage management by objectives not rules, initiative, and leading by example.

    On women in leadership, I made small contributions on this blog here and here.

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