Humans are annoying creatures, in that we look at the plan and then change our behaviour in order to take advantage of the plan.
Now, that seems cynical. That's fair, too, for it is cynical. But when it's put that way, it's obvious to anyone with any experience of life -- or, indeed, other people.
One of my favourite observations is that much of economics is just what we all know to be true already. The standard folk wisdom brought about by experience of other people but economics formalizes this and writes it down.
There are some exceptions but much of it really is that. Robert Lucas -- who gained the Nobel in Economics -- is best known for his “Critique.” Which is, essentially, that once there's a plan for the economy, then it won't work because once everyone knows what the plan is, then everyone will change their behaviour.
There are more specific examples of this, Goodhart's Law for example. Which is boring about money supply and interest rates but really says: “Once we use this as a target then it's useless as a target.”
Which is that same argument. Once we've said, as a matter of policy, then everyone changes their behaviour because they know what the target is. And, as with humans normally, everyone schemes about how to be as well off as they can knowing that that's the target.
The same happens when there's a production target, a supply target, a target for anything really. Norway once said that 40% (or some such number) of the members of the board of directors of companies had to be female.
Which led either to some few females being on many, many, boards of directors or foreigners being flown in. What it didn't lead to was equal representation.
It's possible to take this point wider. There's an economic idea called a cost-benefit analysis. Add up all the costs of doing this thing then add up all the benefits. If it costs more to do than we all gain from it being done, then don't do it. If the benefits are greater than the costs, then it's a great idea.
Seems like a sensible plan, right?
But people who want specific things to be done have now learned from this. So they produce their own cost-benefit analyses showing that – how miraculous this is! - that the benefits of what they want done are greater than the costs.
My favourite example of this is from Ireland. The government gave a basic income to artists. So they didn't have to worry about going to work and so on but could just do their art.
At the end of the experiment, one of these costs and benefits calculations was done. The plan cost 100 million euro and the actual art, the tax from it and so on, came to about 20 million euro. So, the benefits are less than the costs, we'll not do that again.
But people know how a cost-benefit analysis works now. So they change their answers. In this case, they asked the artists, well, are you happier because you're getting free money? “Oh, yes!” was the obvious answer and that happiness was valued at 80 million.
So, the basic income for artists has been renewed. On the basis of nothing more than free money makes people happier.
This is also the way certain think-tanks work. Given that I am, myself, at a think-tank, I'm allowed to say this. We all have our prejudices, we all have our goals.
At which point we've Ember, telling us that Bangladesh relies too much upon fossil fuels: “Bangladesh’s growing dependence on imported fossil fuels is leaving its energy sector increasingly exposed to global shocks, with recent supply disruptions underscoring structural vulnerabilities and intensifying calls for rapid diversification, according to a new analysis by energy think-tank Ember.”
And, well, yes. Ember's own description of its activities: “We’re a global energy think-tank that aims to accelerate the clean energy transition with data and policy.”
That is, they've already decided what the solution is.
It's wholly possible to agree that Bangladesh relies too much upon imported fossil fuels. I think I'd probably agree. But it's also true that the geologists say there are vast amounts of natural gas out there, underneath the Bay of Bengal. No, not reserves, that's something ready to produce.
But deposits that could, with some work, be turned into those reserves that could be used. Is Ember's solution to the import dependence that Bangladesh should do some more domestic production of fossil fuels? Do they even mention the idea? No, they don't.
People have now worked out how think-tanks work, just as with plans and cost-benefit analyses, so we're now subject to propaganda, not thinking. But, to reiterate, humans are just such annoying creatures. Which is why plans never quite work out.
Tim Worstall is a senior fellow at the Adam Smith Institute in London.