MEA Book Summary and Review: The Tyranny of Experts by William Easterly

MEA book summary and review: The Tyranny of Experts (William Easterly – March 3, 2014)

SUMMARY (scroll down for critique)

Paul Farmer meets Imperial Nature, Freakonomics, and Niall Ferguson in Professor Easterly’s latest work, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor. Like Farmer, Easterly advocates for a rights-based approach to solving the problems of the poor, criticizing autocracy and top-down development models. He takes a more purely economic perspective and a deeper look into history than Goldman did in Imperial Nature, a work in which Goldman critiqued the World Bank’s approach to “green science” and “eco-governmentality” and the Bank’s infringements upon the rights of the poor. Like Freakonomics, Easterly uses statistics in a way that makes you rethink the data to get at the underlying phenomena, and like Ferguson, he tells a larger history through small, fascinating snippets of story woven into the larger narrative. The Tyranny of Experts pulls together story, data, and theory to question top-down models of economic development, arguing that recent success attributed to autocratic states (such as Singapore, Taiwan, and China) might be attributed to many other factors. Historically, economic growth has happened primarily when more individual freedom is granted; furthermore, since individual freedom is desirable in itself, we should never be willing to sacrifice rights for economic growth, as the development community has been wont to do over the past 60 years.

While selective in the stories it tells, Easterly’s work in The Tyranny of Experts is far-reaching, moving from 10th century Italian cities to Bogota in 1948 to today’s Ethiopia in order to explore the relationships between political freedom, economic freedom and development. At the bottom, The Tyranny of Experts argues that economic development – “making poor countries rich” (p. 6) – is not brought about by planned economies and technical experts, which have in his eyes come to dominate development discourse in light of East Asia’s autocratic growth miracles of the past 2-3 decades. Easterly argues that most of the technical problems addressed by many development experts are symptoms of poverty, not causes, and that “the cause of poverty is the absence of political and economic rights, the absence of a free political and economic system” (7). Drawing largely on Friedrich Hayek and Adam Smith, Easterly suggests that economic development is a result of the invisible hand of the free market – innovation occurs where there is freedom, and innovation and competition benefit society, not just individuals.

A History of Development

The expressed point of Easterly’s work is to lay out the case that development is brought about through spontaneous solutions, rather than conscious design. He begins with a debate that never happened between Friedrich Hayek, a proponent of free-market solutions to economic development, and Gunnar Myrdal. In his brilliant storytelling fashion, Easterly pulls the story together at the 1974 Nobel Prize in Economics ceremony in Stockholm. Chapter two explores Hayek’s work in The Road to Serfdom and summarizes Hayek’s view as less “right-wing” than some of Hayek’s critics made him out to be. Easterly argues that a “development consensus” emerged around Gunnar Myrdal’s viewpoints on the three deadly mistakes described below.

To critique the modern consensus around what promotes economic growth, Easterly traces the emergence of this consensus (what he calls the “beginning of development” in 1949, when Truman announced a program of American aid for poor countries) and then compares the assertions of the consensus to data and facts. He shows how Western (and some local) academics working in Colombia and China laid the foundation for development with approaches and policies that were autocratic rather than inclusive. For example, the development of China sidelined equality and freedom of movement for the Chinese, who were discriminated against by the Oriental Exclusion Act. Racism in America also prevented America from supporting rights for Africans as the British exploited their continent. Autocratic colonial policies gave way to autocratic independent administrations such as that of Nkrumah in Ghana. The final example used is the World Bank’s intervention in Colombia in 1948, and the Bank’s willingness to overlook autocracy and humans rights abuses due to its non-political nature (strictly economic development). “[T]he article against politics made it easier to use the Bank to pursue politics” (p. 118).

While individual rights were championed in Western democracies, Easterly asserts that there are three main debates that never took place in the “developing world”.

The Three Deadly Development Community Mistakes

Easterly suggests that technocrats and development experts today make three critical mistakes in their approach to development:

(1) Development experts treat nations/states/societies as “blank slates,” ignoring the historical factors and looking for cookie-cutter solutions that work across every setting.

Here, The Tyranny of Experts cites Bill Gates’ plan to fix the world’s biggest problems: a goal-driven, planned approach to alleviating suffering such as child mortality in Ethiopia. Pointing out that child mortality rates are notoriously difficult to measure, Easterly questions that “goal-oriented” approach that prioritizes getting the numbers right while using data that are notoriously unreliable. The top-down approach that attempts to use specific interventions with measurable results ignores the history of societal development: child mortality rates in Western countries in the 1800s were far higher than those in Ethiopia today. Innovation by individuals in a free society eventually brought child mortality rates down, while also advancing the society and the economy to the point where the U.S. is today.

To bring additional evidence to bear against the “blank slate” approach, Easterly goes back to 1154 A.D. to argue that the northern Italian cities that remained free from autocratic rule under Frederick Barbarossa are today richer than other cities in Italy because they developed a society organized around individual rights – complete with a legal system and permanent courts. He also compares merchants from these northern cities (specifically Genoa) that upheld rights for all individuals with other trading groups such as the Maghribis, a group of Jews from Baghdad who formed a trade network in the Mediterranean. Easterly argues convincingly that individual values extended across a society are more economically beneficial over the long term than trust within an insider group. Values of individual rights and a respect for contracts make trading options much more diverse, so when inevitable economic shifts happen, societies with individual rights are much more able to shift trade to any productive sector that might arise, whereas insider groups are stuck where they have connections. Furthermore, democratic institutions promote democratic values; whereas autocracy promotes mistrust that can take centuries for a culture to overcome. To support this argument, Easterly traces the history of the slave trade in West Africa and shows that levels of trust remain low among those societies most exploited during the trans-Atlantic slave trade of the 1600s-1700s.

(2) The focus on development at the national level sidelines individual rights and ignores migration, people groups, and broader regional dynamics.

Easterly does a good job of using the history of people groups, rather than just countries/modern states, to show that both smaller-scale factors (families and ethnic groups) and regional factors (cultures, climates, relationships with neighboring countries/people) are at play in economic growth. In focusing on national development, experts and autocrats are ignoring the historical fact that economic development does not necessarily take place at the national level. Easterly points out that many people today would not criticize a Western individual for moving abroad for economic opportunity; yet successful doctors or businessmen coming from impoverished countries are sometimes seen as betraying their country – their nation needs them to help development (the “brain drain” view). What do national borders have to do with the issue of improving human welfare? If migration to the United States has solved many Haitians’ problems (Easterly points out that “Some 82 percent of the Haitian nonpoor lived in the United States”), why should migration be overruled as an approach to development? Furthermore, remittances sent back to the country of origin are a massive and growing source of investment and poverty alleviation in poorer areas. Another example used during this section is the network of Chinese merchants from Fujian that provided massive investment, in part driving East Asia’s economic boom in recent decades.

(3) Development experts and leaders approach problems by consciously designing solutions, while historically, the best problem-solving strategies have come about through the freedom for numerous people to experiment and come up with their own solutions.

The final big mistake that development experts make is using a small group of experts to consciously design solutions to problems, rather than leaving solutions to thousands of individuals trying to solve the problems in a free market. He explains the history of Chung Ju Yung, a starving farmer in Korea who “knew that the worst way to solve your own problem is to try to solve your own problem. A better way is to join an ‘association of problem-solvers’…” (239). Chung Ju Yung became an auto mechanic, learned a lot about cars, eventually contracted to manufacture cars for Ford Motors, and eventually established Hyundai Motors. The point is that experts often suggest solutions that locals know will not work – for example, in Korea, the development community emphasized increasing the capacity of farmers to grow their own food. South Koreans, recognizing the poverty of the soil with which their country was endowed, used trade and specialization to become wealthy and buy food from elsewhere.

The Invisible Hand is the primary principle that Easterly puts forward – the means by which, according to Adam Smith, we benefit others unintentionally by pursuing our own self-interest (p. 243). In a classic free-market approach, Easterly advocates the division of labor, specialization, and trade as the means to increase wealth. Nevertheless, the market on its own cannot solve all of the problems: there must be taxation and legislation to ensure that social payoffs align with private payoffs. Democratic accountability is a key feedback mechanism to make sure that the legislators are doing their jobs to protect the people. Easterly’s “crucial moment” in this section of the book argues that development experts face neither a market test nor a democratic test, and thus have little incentive to truly pursue popular policies and policies that actually work. The market – including the linchpin of finance – and a democratic political system provide the most effective means of promoting economic growth.

In the final two sections of the “conscious design vs. spontaneous solutions” debate, Easterly explores technological innovation and the appeal of autocratic leaders. Easterly argues that high populations (lots of innovators) and the presence of technology create opportunities for faster technological growth, and that technological innovation is not generally planned or intended from the top of society down. Innovators such as James Watt, the inventor of the steam engine, built on innovations in other fields (cannons, etc.) to produce a machine that then provided the basis for other innovations: when combined with iron rails that had been used for horse-drawn carts, the steam locomotive quickly developed. Easterly argues that “78 percent of the income difference today between Europe and sub-Saharan Africa can be explained by technology that was already in place by 1500” (p. 285). This bottom-up approach to technological innovation supports the final argument that only some autocrats (those who are lucky enough to preside over societies where the conditions are already present for growth) succeed in creating economic growth in their countries. The bottom line is that autocrats can certainly destroy opportunities for growth, but can hardly actually create the growth; the growth that has come in autocratic countries such as those in East Asia has followed incremental changes in the level of freedom. More freedom promotes more development.

Conclusions

People have always desired freedom, and economic growth has been only a secondary consideration in most instances – what most people truly desire is to have rights, to be treated equally, and to make their own decisions. Fortunately, according to Easterly, giving people these rights will also create the conditions for economic growth that we desire people to have. Autocratic and “non-political” (yet inherently ideological) organizations such as the World Bank abuse rights while purporting to generate economic growth. Individual rights are spreading, and while some have combatted this spread by arguing that “Western values” are being forced on the rest of the world, Easterly argues that individual rights are not simply Western values, but universal values. In development circles, people need to stand up and support individual rights and let people solve their own problems rather than trying to engineer top-down solutions to generate growth in the developing world.

 

Critique of The Tyranny of Experts

Easterly’s work pulls together diverse stories and statistics to create a compelling case that individual rights are essential to economic development. Furthermore, I agree with Easterly that the approach of the development community has not historically promoted individual rights, whereas individual rights are essential for humans to have. I recommend this book to anyone interested in development and economics in the developing world, and it is an important contribution to the development literature. Although there are many arguments in the book that need to be examined and critiqued in much more detail, I will raise four main points that warrant deeper exploration in the debate that Easterly promotes.

  1. A somewhat ahistorical historical approach? While advocating a historical approach, Easterly himself does not adequately address the past policies of countries that he uses as good examples. While we may want other countries to follow the U.S.’s lead in promoting inalienable rights for individuals, certain areas of the U.S. developed through what Easterly calls the “least-benign way” of breaking down ethnic barriers: the forced removal of Native Americans from productive land and the oppression of black slaves among are prime examples. As they claimed territory, European immigrants in North America certainly identified the nation with themselves and actively promoted discrimination toward others (see p. 30). If we are indeed looking at the history of development from all angles and taking into account specific historical developments, should we not look at how productive land was gained by what became the richest country in the world? Might this expropriation of productive means and the spirit of American expansionism have something to do with economic growth and invention in the US? And what about Britain? If we take a historical approach to much of the West’s development, we will see wealth generated not simply through individual innovation and trade, but also through exploitation of people across the globe, and now sustained because British and American banks and companies have powerful financial assets that allow their economy to continue to draw value from around the world. Easterly’s historical expositions are useful, but somewhat selective. Furthermore, the basis of individual rights in America is highly selective: we do not advocate truly universal rights on a practical level; otherwise we would probably be more hesitant to engage in exploiting the labor of Mexican citizens just across the border to provide us with low-cost goods. I am not arguing that individual rights do not generate economic growth, but that there is much more to the story of the West’s development than Easterly tells.
  2. Free-market problems and the lack of international governance over markets. Individual rights are good, and certainly are an end in themselves. However, the evident bias toward “mature capitalist democracies” might have some critics pointing out that rights do not always result in benefits – the poor are often still marginalized in capitalist systems (just take a walk down Skid Row in Los Angeles and you will know what I mean). Furthermore, critics of the global market have argued that through increasing returns to capital, free market systems reproduce and often increase inequality – particularly by encouraging a “dive to the bottom” in which countries compete to provide the cheapest labor (i.e. most exploitative conditions). I understand that Easterly’s argument is against the type of market-government nexus that characterizes much of the global market today (e.g., exploitative free trade zones in which foreign governments neglect to enforce labor laws that uphold basic rights). Nevertheless, the fact that he somewhat glosses over problems that are associated with the free market (including the commodification of nature and human life under free market conditions) detracts from his overall argument. We are more than simply political and economic entities, and I believe that any emphasis on individual rights also ought to undergird individual political and economic rights with social responsibility and education. Autocratic governments are not the only entities that exploit individuals; keep in mind that it is often foreign companies rushing to grab land in places like Ethiopia that creates the conditions for governments to forcibly resettle their citizens. The market can be a great equalizer, but it can be as great an exploiter as any autocrat when used to take advantage of people in desperate situations.
  3. Information and Expertise. The problems above point to the need for information to be used for decision-making by individuals. Easterly himself is taking part in the dissemination of information in the writing of this book, and is thus, as are all academics researching in this subject area, part of the development community, despite his separation of strict academics from “development experts.” Knowledge is a certain form of power, and even information produced for benign reasons may be used in less-benign ways. Thus even academics conducting research must be careful in what information is conveyed and how they convey. A free market and democratic system must be supported by education and local production of information. Unfortunately or fortunately, education is not at heart a democratic engagement: there are experts who teach others how to think, even if they allow students decisions on what to think (however, it is a market engagement: bad teachers or professors may not last long, although some of our school and college experiences suggest that the market is working imperfectly). The government and individuals with strong moral convictions will inevitably be involved in education, and experts are needed to tell people the truth that is not always conveyed through the market. Take the rise of synthetic cannaboids in America as an example of the fact that people regularly allow themselves to be duped as to what is in their best interest or act without thinking through the potential effects of their actions. Individual rights and the free market alone do not necessarily create conducive conditions for growth; there needs to be responsible production and dissemination of information in a way that reinforces individual rights.
  4. Innovation and the free market. While Easterly acknowledges that there is not a hard and fast divide between “conscious design” versus “spontaneous solutions”, he could certainly delve deeper into this distinction. Governments may actually be efficient at producing technological advances that help society, and it is not necessarily thousands of individuals experimenting that come up with solutions – a team of high-level thinkers and experts in their field may be quite capable of solving problems that they set out to solve as well as others that they did not intend to solve. This has been efficient when it goes together with a free market that has trained individuals to be entrepreneurial and creative in their thinking. The National Aeronautics and Space Administration (NASA) is a government agency established and executed through top-down planning that created space within its structure for people to invent. Invent they did, and many inventions provided solutions (sometimes unintentionally) for problems that the free market had yet to tackle – cochlear implants, imaging devices and techniques that opened the door for medical innovation and solutions, memory foam, scratch-resistant lenses, insulin pumps, chemicals that prevent corrosion and others used to treat polluted water, water filters, etc., etc., etc. Clearly it is possible that conscious design might create space for spontaneous solutions in a manner in which the potential of these solutions might be recognized. Furthermore, some of these solutions might provide products that are helpful, yet not in high enough demand on the general market to make their invention profitable to individual innovators. Now, the individuals involved in such a system might need to be trained in individual thinking that only comes in a society that promotes individual rights – I tend to think this is the case.

While none of these four points refutes Easterly’s argument, they are issues that should be addressed in the debate that he promotes. While advocating a broad approach to development, Easterly is fairly selective in information that he uses: he utilizes individual freedoms in Britain and the U.S. to explain their development while largely ignoring their exploitation of other individuals and countries as a factor in their economic advancement. Organizations like NASA show spontaneous solutions emerging from a consciously designed structure, though it may be argued whether or not this type of organization could only be successful in a society of “free thinkers”. Furthermore, the development community today has taken up the “spontaneous solutions” approach to some degree, although not at the individual level that Easterly recommends. Since the 1980s, hundreds of NGOs and INGOs have emerged to tackle the development needs of Africa south of the Sahara. These organizations are often – though not always – part of a market. If they fail to generate solutions and to convince donors of the benefits they provide, the market will eventually weed them out, as it has weeded out many before.

As Easterly says, the development industry has largely become self-sustaining. Not only should we seek to promote individual rights across the globe; we ourselves should also become innovators, creatively moving through solutions to life rather than confining ourselves to one career. The development industry should be an industry where individuals and organizations try to put themselves out of business by creating local capacity to solve problems. Then we can move on to tackle the next problem.

What are your thoughts?