The Technocratic Company

The Technocratic Dilemma
What experts don't know can kill a program

Washington is in the throes of a rekindled romance with technocracy: the idea
that what is most needed to save the economy and the planet is a bunch of
really smart people who have spent their lives studying complicated
problems like health care finance or renewable energy. The last time we had
this many fresh-faced wonks geting feted for their deep thoughts was the
New Deal.
And who could be against having very smart people studying problems?
What am I, in favor of having stupid, ignorant people run things?
No, of course not. But there's a danger in the technocratic class. Funnelled
through an ever-expanding system in which they are paid to sit around and
think about things, observe things, and write things, but never actually do
things, our information mandarins are frequently totally disconnected from
the people and processes they are supposed to rule. Their knowledge comes
from sporadic meetings, usually with members of the regulated class who
have been carefully selected as spokesmen. The screening process by which
these people are found selects heavily for personal contacts with the
mandarin class, or an ability to speak to a specific agenda (single mother with
cancer who wants to buy health insurance; small business owner who will go
broke trying to provide it under Obamacare). This creates problems, as
Arnold Kling points out:
I have many concerns with the technocratic mindset. The one I wish to raise here is that the
technocrat has no experience working in the context of an organization. To the technocrat,
everything boils down to setting the right parameters and imposing the right rules.
Implementation is taken for granted.
Within a business, someone with the technocratic mindset does not get very far. The people
who get ahead are the people who can negotiate, build organizational capital, manage
projects, and sell.
If you want to see how ineffective technocrats are, I give you as Exhibit A the attempts by the
government to prevent foreclosures. The rules and the parameters looked good to the
technocrats. The results in the real world were abysmal. That is because nobody had any idea
what was involved in actually implementing these policies on the ground.
Before he was a commentator, Kling worked for Freddie Mac, doing things
like forecasting default risk.
I think about this often with health care and education. All of the health care
experts that I interview are quite sure that there is a lot of waste and nestfeathering inside of hospitals, waste that could be cut if we could hit on the
right combination of regulations and payment reform. They make a very
compelling case. But none of them can describe how it happens, because
they are all academics, not hospital administrators. As far as I know, no
hospital administrator has so far come forward to explain how we could cut
costs by 30% without causing quality to suffer. No one even really
understands what is going on inside hospital finance departments: who is
cross-subsidizing who, how and when "upcoding" is used to pad billings, and
so forth. We are trying to regulate behavior that we can't even really
describe.
One hears almost the same claims about education, with the same lack of
understanding of where, exactly, all the extra money we spend has gone. Yet
many of the critiques come from people who work at universities. Professors
don't even understand the administrative processes of their own industry.
But an administrator who came out and said "I can cut costs by 30% would
run into three problems". The first is that this is a hard cognitive leap to
make; any turnaround expert will tell you that the folks who run moneylosing companies are genuinely, sincerely convinced that there is no cheaper
or better way to do it. The second is that they would be viewed as a traitor to
their professional class--I know that Paul Campos, for example, has taken
quite a bit of flack from fellow law professors for his scathing critiques of the
law school cost structure. And the third is that they would not, quite, be
believed. That is, people would be happy to hear that there were all these
great ways to cut costs. But when the expert looked at their pet proposal and
said, "No, really, you haven't thought this all the way through; we need all
those staff and procedures", they would be dismissed as self-interested.
The benefit of technocracy is that it avoids the petty mercenary self-interest
of industry players. (That doesn't mean that it avoids all self-interest, of
course; just the particular desire to enrich yourself by directing government
contracts, or regulatory benefits, to firms that you work or have worked for).
The problem of technocracy is that it has no understanding of how the
industry actually works, in the boring, you-personally-grinding-it-out day by
day. Technocrats understand what they can measure, or be told in interviews.
But they do not know how the firms actually work, or decisions actually get
made.
The core complaint about the financial crisis was that it was too nice
to bankers, because the bailout was run by bankers. I don't think that
the ultra-cynical view (bankers giving goodies to their friends for a

payoff later) is correct. But it's hard to deny the more nuanced claim
that people who spent their lives in the banking industry are bound to
be excessively sympathetic to the idea that the banking industry is
uniquely vital and must be saved at all costs. It's the regulatory
version of the old Woody Allen joke: "I think my brain is the most
important organ--but look who's telling me that!"
As in the Woody Allen joke, the problem is inescapable. If you want
information about how things work, you have to get it from the people
in the industry. But those people will naturally carry with them the
belief that their industry is incredibly important, and that its needs are
the needs of the American people.
When you complain about the "revolving door" between government
and industry, what you are saying is that government and industry
should be completely separate classes, staring suspiciously at each
other over a gaping cognitive divide. Is that better than letting the fox
take over the henhouse? Morally, my heart sings "Yes! yes!". But if we
care about practical results, the answer is less clear.
Abstract
Technocratic control is the most recent in a series of different types of workplace control:
precapitalist craft/guild control, simple control, technical control, bureaucratic control, and
professionalism. In recent years, as organizations have been socially and politically
transformed around advanced technological systems, observable changes in structure have
occured. Technocracies are characterized by a polarization into expert and nonexpert
sectors, the declining importance of internal job ladders in favor of external credentialing
barriers, the increased importance of technical expertise as a central basis of organizational
authority, the transformation of professionals and managers into specialized experts
concerned with administration and efficiency, and the emergence of a world-wide
technocratic system.
Technocratic reorganization is parallelling and reinforcing sex segregation, with women
disproportionately found in the nonexpert sector, where mobility prospects are minimal or
nonexistent and working conditions poor. Even women in the expert sector of technocratic
organizations are disadvantaged, as stereotypes persist which define women as antithetical
to technocratic norms of scientific rationality.
Abstract
Technocracy, a new type of organizational control structure, is defined and analyzed. The culmination of a
dialectical process of organizational rationalization, technocracy transcends and integrates earlier forms of
organizational control, particularly technical control, bureaucratic control, and professional control.
Technocratic organizations are characterized by a flattening of bureaucratic hierarchies, a polarization into
'expert' and 'non-expert' sectors, a substitution of expertise for rank position as the primary basis of
authority, a de-emphasis on internal job ladders in favour of external credentialing and credential barriers,
flexible configurations of centralization/decentralization, and other related organizational changes.
Technocracy is analyzed with regard to its theoretical background, historical development, contemporary
manifestations, and socio-political implications.

The Technocratic Company

Uploaded by

Copyright:

Available Formats

The Technocratic Company

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Technocratic Company

Uploaded by

Copyright:

Available Formats

The Technocratic Dilemma

What experts don't know can kill a program

the ultra-cynical view (bankers giving goodies to their friends for a

You might also like