Dear Catherine Rampell, the Former Soviet Union Had Many 'Experts' Too
A frequent theme in this column is one about the fallability of the brilliant. Jeff Bezos regularly acknowledges how often his experiments prove much less than great, the best venture capitalists admit that more than nine out of ten capital commitments result in bankruptcy, and then the world's best traders note that they're wrong almost as often as they're right. It's incredibly difficult to predict the future, and that's an understatement.
This truism came to mind while reading Washington Post columnist Catherine Rampell’s lament about the Department of Agriculture’s recent decision to relocate the Economic Research Service (ERS) from Washington, D.C. to Kansas City. Rampell reports that in response to the announced change, only 116 ERS employees had agreed to move. The columnist is up in arms. Rampell claims that the “small-but-mighty ERS is arguably the world’s premier agricultural economics agency. It produces critical numbers that farmers rely on when deciding what to plant and how much, how to price, how to manage risk….” Someday Rampell will admit she overreacted here.
Up front, “arguably the world’s premier agricultural economics agency” doesn’t much excite the mind. Or conjure up images of genius on the job. Figure that the Federal Reserve is ‘the world’s premier central bank,’ and by extension it logically employs some of the economics profession’s greatest minds, but the track record of those allegedly wise minds….Just about every prediction made by Fed economists over the decades has been spectacularly wrong. In that case, how expert could the economists in the employ of the ERS be?
In fairness to the economists at the Fed, of course they’re always wrong. Really, does anyone think they’d work at the Fed if they had a tendency to be right? If known to see into the future with any kind of regularity these economists would soon be earning gargantuan sums in the private sector. Figure that billions are wagered every minute of every day about matters economic around the world, which means that anyone possessing the ability to “see around the corner” won’t toil for very long in government.
Unknown then is why Rampell would think the economists at the ERS so crucial to the successful operation of the U.S. agricultural sector. Can she really mean what she wrote? Please stop and think about it.
Lest readers or Rampell forget, the U.S. agricultural sector hasn’t been able to operate without subsidies since at least the 1930s? Rampell claims the ERS “produces critical numbers that farmers rely on when deciding what to plant and how much, how to price, how to manage risk,” but if the information produced by these economists were actually useful, isn’t it reasonable to say that the farming sector wouldn’t require so much federal support?
Taking this further, it’s worth remembering the essential truth about traders. Great ones are wrong nearly as often as they’re right. Looking at it through the prism of what Rampell says ERS employees do, anyone with a strong sense about what farmers should plant, how much, and how much risk they should take on would not do this at the ERS. Logic dictates they would earn many multiples of what the feds pay while in the employ of Cargill, Tyson Foods, or for countless asset managers that trade commodities.
To all this some will predictably respond that not everyone’s motivated by money, that some would gladly toil for a fraction of private sector pay based on some kind of need to be honorable, and that some of these very people are employed by the ERS. Rampell surely thinks so, because as she sees it the Trumpian desire to “drain the swamp” in Washington, D.C. is increasingly about draining it of those she deems “experts.” Such a view is hard to take seriously. Better yet, it’s hard to imagine even Rampell would take such a view seriously if it weren’t members of the Trump administration (Rampell cites Trump chief of staff Mick Mulvaney) celebrating the draining that the shrinkage of ERS represents.
Indeed, it’s not as though “experts” uniquely work in government in Washington, D.C. Readers can rest assured that Fidel Castro’s Cuba had its share of experts high up in government, same in Mao’s China, and surely in Stalin’s Russia. Of course, the previous truth didn’t mean that hunger, starvation, murder and relentless misery didn’t broadly define life in countries ruled by experts. Brilliant as experts might be, they’ll never know even a fraction of what markets do. They won’t simply because markets are an aggregation of global knowledge held by billions of individuals, as opposed to genius inside one individual’s head, or a few.
Rampell somehow glossed over the basic truth that the Soviet “Five Year Plans” were drawn up by experts, and were an expansion to all economic sectors of what Rampell claims ERS economists do for farmers. Rather than simply focusing on agricultural output, the experts in the former Soviet Union produced “critical numbers” that the producers there had to abide in all sectors. The experts in the thankfully gone U.S.S.R. failed in murderous fashion, yet Rampell thinks the Trump administration is in the wrong for cheering the departure of the central planners at the ERS?
Readers get where this is going. Rampell is obviously very smart, if not misguided on matters economic. But this time the problem seemingly isn’t an inability to be logical. In this case, it seems Rampell’s deep hatred for President Trump has blinded her to how very superfluous is the ERS. Assuming farmers do abide the “critical numbers” produced by ERS economists, it’s time they stop. Maybe they won’t need so much federal support if so. And if they don’t (why would anyone eager to prosper rely on an entity – government – so long associated with failed projections about everything?), then it’s worth stressing that the Trump administration is correct in its celebration of a federal department’s shrinkage. Experts in government are dangerous precisely because it’s unlikely they’re experts.