Treasury Brain: The Cognitive Defect Holding Back Economic Growth
In this time of psychopathic talk, therapeutic jargon and remote diagnosis, a mental condition deserves our attention for a moment. Treasure brain. This is a cognitive defect said to plague the UK Treasury. Civil servants there, it is claimed, have an irrational aversion to ideas that incur upfront costs but could improve economic growth over time.
The Self-Destructive Parsimony
“Maybe,” I say. But those who accuse the Treasury of this self-destructive parsimony leave little doubt. An expensive new rail line? It will pay for itself. A public health campaign? Preventing disease costs less than curing it. Industrial subsidies? Wait for high value-added jobs to multiply by the thousands.
As a simple taxpayer or holder of UK public debt, you might wonder when you can expect this putative return on investment to materialize. Look, don’t be so picky. And learn to call it “investment”. “Spending” is as low as calling a towel a towel.
Crying “Treasury Brain” became the left-hand version of drawing a Laffer curve. This is not always wrong: civil servants can be overly cautious, just as tax cuts beyond a certain marginal rate can pay for themselves. But taken too far, the idea becomes a belief in free money. (And note that “Treasury Brain” is on the lips of those who otherwise deny the right-wing deep state theory.)
The Danger of Utopian Government
The real problem with Treasury intellectual skepticism is that there isn’t enough of it in the world. The West is going through a phase of almost messianic belief in the power of government. America’s protectionist turn against China is the greatest example of this. There is no need to go all the way with The Economist, who considers this commercial separation as “fake”, to see that he is already beset with perverse consequences. Yes, the United States imports less of certain goods directly from China. But the “friends” he turns to as alternative suppliers are themselves dependent on China for inputs. The United States does not isolate its existential rival. It’s cutting into the middle man.
The sudden faith in tariffs, subsidies, and bureaucratic investment controls is surprising. But this is not the only case of utopian government that exists. Rishi Sunak is the sixth or seventh British prime minister in my lifetime to try to “level up” or “rebalance” his London-centric nation. Emmanuel Macron is almost as far down the line of French presidents who have sought to influence West and Central Africa from Paris.
As a measure of the success of this project, the counterinsurgency in the Sahel was abandoned last year and Niger, a rare Western strongpoint there, is in chaos. The real lesson – that some things are beyond any of them condition, new or old – might be clearer now.
The Limits of Government Power
Think about what these politicians assume. Joe Biden against capitalism, Sunak against a city whose bizarre preponderance within Britain predates the Industrial Revolution, France against religiosity and the inhospitable topography of the Sahel. What is the decree of the government against such entrenched and impersonal forces?
The state can do spectacular things. Europe quickly reduced its dependence on Russian fossil fuels. Government leadership, not just biomedical engineering, produced the Covid-19 vaccine. But these feats tend to happen under extreme duress. Normally, the government’s business is to make things a little better, knowing that it will make others a little worse. Indeed, resources are limited, different goals are in conflict, advanced countries picked most of the low-hanging fruits long ago, unintended consequences occur, and social outcomes are determined as much by deep historical patterns or geographical constraints than by dictates.
Treasury Brain: A Public Service, Not a Mental Defect
The disease of the problem is not Treasury Brain. It’s Do Something-itis. Public life is not full of pessimism. It’s full of planes and 10-point vertices called things like Horizon 2055. Sunak started the year by pledging to halve inflation in 12 months. He is a man who “leads” a medium-sized open economy, exposed to external hazards such as the war in Ukraine and the foreign policy of the central bank. Even if the promise is kept, it was vain to do. And he is relatively skeptical of the government.
The Treasury has always been accused of hiring humanities-trained generalists rather than technical economists. Is everything bad? With a bit of Shakespeare or Conrad, it is easier to see that his plans for improving the world must take into account the permanence of human nature, among other external forces. It’s a public service, not a mental defect, to understand the little we can do against the storm.
Conclusion
To summarize, Treasury Brain is the cognitive defect that hinders the UK Treasury’s ability to embrace ideas that may have upfront costs but could lead to long-term economic growth. While some level of caution is necessary, an excessive aversion to investment and a belief in free money can be detrimental to progress.
This intellectual skepticism within the Treasury is a counterbalance to the prevailing belief in the power of government that we see in the West. The recent protectionist turn against China and the idea of utopian government are examples of this faith in government intervention. However, it is essential to recognize the limits of government power and the unintended consequences that can arise.
While the state can achieve significant accomplishments under extreme circumstances, its role is primarily to make incremental improvements due to limited resources and conflicting goals. Treasury Brain, therefore, should be seen as a public service that acknowledges the constraints of human nature and external forces.
By understanding the cognitive defect of Treasury Brain and the pitfalls of extreme government intervention, we can strike a balance that promotes economic growth while mitigating risks and unintended consequences.
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In this time of psychopathic talk, therapeutic jargon and remote diagnosis, a mental condition deserves our attention for a moment. Treasure brain. This is a cognitive defect said to plague the UK Treasury. Civil servants there, it is claimed, have an irrational aversion to ideas that incur upfront costs but could improve economic growth over time.
“Maybe,” I say. But those who accuse the Treasury of this self-destructive parsimony leave little doubt. An expensive new rail line? It will pay for itself. A public health campaign? Preventing disease costs less than curing it. Industrial subsidies? Wait for high value-added jobs to multiply by the thousands.
As a simple taxpayer or holder of UK public debt, you might wonder when you can expect this putative return on investment to materialise. Look, don’t be so picky. And learn to call it “investment”. “Spending” is as low as calling a towel a towel.
Crying “Treasury Brain” became the left-hand version of drawing a Laffer curve. This is not always wrong: civil servants can be overly cautious, just as tax cuts beyond a certain marginal rate can pay for themselves. But taken too far, the idea becomes a belief in free money. (And note that “Treasury Brain” is on the lips of those who otherwise deny the right-wing deep state theory.)
The real problem with Treasury intellectual skepticism is that there isn’t enough of it in the world. The West is going through a phase of almost messianic belief in the power of government. America’s protectionist turn against China is the greatest example of this. There is no need to go all the way with The Economist, who considers this commercial separation as “fake”, to see that he is already beset with perverse consequences. Yes, the United States imports less of certain goods directly from China. But the “friends” he turns to as alternative suppliers are themselves dependent on China for inputs. The United States does not isolate its existential rival. It’s cutting into the middle man.
The sudden faith in tariffs, subsidies and bureaucratic investment controls is surprising. But this is not the only case of utopian government that exists. Rishi Sunak is the sixth or seventh British prime minister in my lifetime to try to “level up” or “rebalance” his London-centric nation. Emmanuel Macron is almost as far down the line of French presidents who have sought to influence West and Central Africa from Paris.
As a measure of the success of this project, the counterinsurgency in the Sahel was abandoned last year and Niger, a rare Western strongpoint there, is in chaos. The real lesson – that some things are beyond any of them condition, new or old – might be clearer now.
Think about what these politicians assume. Joe Biden against capitalism, Sunak against a city whose bizarre preponderance within Britain predates the Industrial Revolution, France against religiosity and the inhospitable topography of the Sahel. What is the decree of the government against such entrenched and impersonal forces?
The state can do spectacular things. Europe quickly reduced its dependence on Russian fossil fuels. Government leadership, not just biomedical engineering, produced the Covid-19 vaccine. But these feats tend to happen under extreme duress. Normally, the government’s business is to make things a little better, knowing that it will make others a little worse. Indeed, resources are limited, different goals are in conflict, advanced countries picked most of the low-hanging fruits long ago, unintended consequences occur, and social outcomes are determined as much by deep historical patterns or geographical constraints than by dictates.
The disease of the problem is not Treasury Brain. It’s Do Something-itis. Public life is not full of pessimism. It’s full of planes and 10-point vertices called things like Horizon 2055. Sunak started the year by pledging to halve inflation in 12 months. He is a man who “leads” a medium-sized open economy, exposed to external hazards such as the war in Ukraine and the foreign policy of the central bank. Even if the promise is kept, it was vain to do. And he is relatively skeptical of the government.
The Treasury has always been accused of hiring humanities-trained generalists rather than technical economists. Is everything bad? With a bit of Shakespeare or Conrad, it is easier to see that his plans for improving the world must take into account the permanence of human nature, among other external forces. It’s a public service, not a mental defect, to understand the little we can do against the storm.
—————————————————-