E. A. Goldenweiser

English

Research Papers in Economics

This PDF is a selection from an out-of-print volume from
the National Bureau of Economic Research
Volume Title: Economic Research and the Development
of Economic Science and Public Policy
Volume Author/Editor: NBER
Volume Publisher: NBER
Volume ISBN: 0-87014-115-5
Volume URL: http://www.nber.org/books/unkn46-1
Publication Date: June 1946
Chapter Title: Translating Facts Into Policy
Chapter Author: E. A. Goldenweiser
Chapter URL: http://www.nber.org/chapters/c9704
Chapter pages in book: (p. 53 - 62)TON
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Translating Facts into Policy
E. A. GOLDENWEISER
Institute for Advanced Study
President, American &onomic Association, 1946
Formerly, Director of Research and Statistics,
Board of Governors of the Federal Reserve Systemthe viewpoint of the historyof the country, twenty-five
years is a short time. From the viewpoint ofa child, it looks like
eternity. To an economist thequestion is: which twenty-five
years? The last twenty-fiveyears have marked a greater change
in the functions of economists,particularly in relationto public
affairs, than all the time thatwent before. It is not only that life
has become more integrated andmore complicated, nor only
that the last quartercentury has witnessed life under nearly
every conceivable set of economic conditions, butalso that there
has been a marked growth inthe recognition of the importance
of economic decisions and of theunderlying economic realities
with which political decisionsmust deal. It is not devoid of
significance that most of the pointsin the Atlantic Charter deal
with economic problems whileWilsons Fourteen Pointsare
almost entirely political.
It is during this period of rapid stridesin the importance of
economics and economists that theNational Bureau of Eco.
nomic Research has functioned. It hascontributed enormously
valuable material toward betterunderstanding of economic
phenomena and has maintainedthroughout it standingas a
source of unofilcial, objective facts and analyses.The material
it presents is handled withas little bias as is possible toman.
Indeed, its lack of bias has sometimesapproached or even ex-
ceeded the limits imposed bynature upon the purposeful func-
tioning of the human mind. It isa great privilege to participate
in the Silver Anniversary of thisgreat institution.
Fuller recognition of the importance ofeconomic understand..
ing of political decisions has placeda great burden of respon-
55
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IE. A. GOLDENWEISER
sibility on fact-finders and interpreters, official and unoflicial
There has been a large flow of facts, little of which, contraryto
a common complaint, has been wasteful, the great bulk of Which
has been vitally important. The opinion that too manyfigures
are collected arises because some statistics are collected Without
adequate previous study of their inherent limitationsor their
actual uses, and more importantly because adequateinterpreta..
tion has not always kept up with the collection ofdata. The
trouble is not too many facts but not enoughunderstanding.
There is, however, the questionas to how these facts and
interpretations which flow aroundus in a continuous stream
find their way into the councils ofthe officials who make decisions.
The ways and methodsare different in different institutionsbut
there is a pattern representativeenough to serveas a guide for
understanding the process.
All crucial decisions ingovernment are made byamateurs;
policy makersare usually business men, lawyersor politicians,
not specialists in the subjectmatter to which their decisions
relate. Generally, thoughnot always, they have beensuccessful in their earlier work.As a consequence, theyhave acquiredcon-
siderable confidence in theirjudgment and are likelyto feel that their own thinking ismore practical and realisticthan the judg.
ments of professional interpreters.In practice thismeans that there is alwaysa tendency to makedecisions on the basisof hunches or intuitionsor on the basis of familiaritywith fortuito
individual instances whichrarely arerepresentative Thesur- prising thingis not that so manydecisions have beenbad as that in theaggregate over the decadesso many have been right.
That one couldnot entrust the welfareof thecountry to hap. hazard decisionat critical times,however, becameapparent and generally recognizedduring the firstWorld War whenthe need for facts becameso clear that a wholearmy of fact-finderswas drafted to providethe basis fororganizing theeconomy for a concerted effort. Sincethat time theappetite for facts has in-
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Translating Facts into Policy
creased progressively. It has become a fashion as well as a need.
The great depression of the 'thirties accentuated this desire for
knowledge and another wave of economic interpreters flowed
toward the seat of Government.
This demand for professional economists in the Government
has had an effect on the profession as well as on public policy.
Many efforts have been made at universities and foundations
to bridge the gap between the ivory tower of the scholar and the
theater of economic action. A continuous and healthy move-
ment between universities and the Government has been in
evidence in recent years. The economist himself has become
considerably more aware of the responsibilities of thought and
interpretation. It is no longer true that the only consequence
of a false analysis is a faulty paperand paper will endure any-
thingand possibly a reply from a colleague. The fact that eco-
nomic interpretations may be the basis of political action is in-
creasingly realized by the profession. There is some danger in
this. Keynes has said that practical men, who believe themselves
to be quite exempt from intellectual influences, are usually the
slaves of some defunct economist. It is equally true that many
an economist when he breaks away from his academic detach-
ment has become the intellectual slave of some business man,
usually not defunct, but very much aliveand convinced that
he knows exactly what he wants.
There is danger for an economist in trying desperately to be
practical realistic, and to let political exigencies color his pro-
fessional judgment. Much obscure thinking and one-sided in-
terpretation has arisen from that source. When a policy making
individual or body consults an economist, he or it has a right to
expect an economic, not a political answer. Political expediency
and compromise are the responsibility of the official, not of his
consultant. The real danger arises from the fact that thinking
processes are sensitive and imperfect; clarity of thinking is rare
enough at best. An attempt at expediency may lead not only to
faulty advice but also to inteiference with the thinking processes
57
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E. A. GOLDENWFISER
of the adviser. The light of his searching mind,even thoughit
may he vigorous, can easily be obscured by the Intrusion
of cx-
traneous matter. It is an economist's duty to thinkthroughany
economic problem that is presented to him andto strajevery
effort to reach a correct economic solution. The
economist is
not a machine but a human being striving to arriveat correct
answers to difficult problems. Intrusion ofconsidertjonso
expediency is likely to throw his thinkingout of gear, Wththe
consequence that the answer he arrives atmay be neitherthe best that he could reachas an economist nor the bestthat could
be devised by a mindmore expert in the game ofpolitics. Mojj.
cations and compromises tomeet political exigenciesShould be left for subsequent considerationand must not bepermitted to cloud the economist's initialjudgment.
But the question stillremains how the vastvolume ofeconomic material that is assembled insideand outside theGovernment finds its way into thecouncil chambers wheredecisions are made. There is no longerany question in any of theinstituuopj that make economic decisionsabout thenecessity for havingeconomic analysts at the disposalof the policymakers. This battlehas been won. Economic chartsconstitute a part ofthe architectureof the council chamber.This was literallytrue in one instance where, to thegreat horror andindignation of thearchitect a handsome councilchamber was disfiguredin his eyes bythe in- corporation of economiccharts into itsbasic architectureThis is symbolic Itmakes it clear thatthe beautifulroom is intended to be used foreconomic decisionsnot for social amenities.Also the chartson the wall imperceptibly
insinuate themselvesinto the thinkingof the policymaking body.They standas a constant reminder that decjsjmust be basedon and conformto eco- nomic facts.
All the policymaking bodieshaveeconomic staffs, whichare. generally speaking,of a highcalibre Thereis no shortage of material, thougJthere usuallyare gaps in thevery area in which decii05must be made.Thecurrenc- of conferencerooms has
58
*Translating Facts into Policy
changed from gossip to facts and from real or imaginary in-
stances to representative conditions.
Much progress has been made, many courses in practical eco-
nomics have been given by official subordinates to official su-
periors. The technique of presentation has improved. Much of
of the economic shorthand has been discarded, though some of
it still prevails, and in many instances has come into common
use by those who are not adequately aware of its limitations.
Professional jargon, in which economists try to emulate lawyers,
is not only useless in this connection but is often misleading and
harmful, particularly when common words are used in exotic
ways.
One thing the economist has learned is that he can be of the
greatest service by presenting his views in as frank, direct, and
simple a manner as he knows how. He has found that much of
the obscurity and complexity of his habitual manner have their
roots fully as much in the obscurity of his own thinking as in
the technical and supposedly superior terminology of his craft.
The economist who has succeeded in influencing decisions is
the one who has won the confidence of the policy makers, for,
while these men do not know economics, they often know char-
acter. In the final analysis it is the confidence the economic ad-
viser inspires in his sincerity and integrity that constitutes the
most important complement to his professional competence for
effective service.
Since it has become fashionable to have economic staffs, many
policy makers tend to believe that they are guiding the eco-
nomic research of their organizations. It is the part of wisdom
not to disillusion them on this point, but it is equally important
to make sure that this remains an illusion and does not become
a fact. Policy makers take much greater interest inthe work and
are much more likely to be guided by its results if they feel them-
selves to be its initiators or organizers. but sound and construc-
tive economic work is possible only when its fundamental plan-
fling is in the hands of economists.
59
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E. A. GOLDENWEISER
One incidental difficulty that frequently arises is thatthe policy
maker is often also a speechmakeror a writer of books. There is
in the seat of Governmentan army of ghost writers. On the
whole it is notan unhealthy development. It is far better to have
ghost writing than bad writing;perhaps it would be stillbetter
to have less writing orno writing at all by those who cannotwrite,
but that is anunattainable ideal. It is important, however,for
the continuefi usefulnessof an economist's mindnot to lend
such facility of expressionas he may have to the Voicing ofviews
not his own. If all the policymaker requires is goodphrasing, he shouldturn to professional writers ofprose rather thanto
professional economists. It isnot that the economist shouldbe superior to expressinganother man's views; thedifficulty is the effect onown mind. It is not easy for himto keep his thinking
on a straight track if hehas been in the habit ofusing language
to express viewsnot his own. Language isa great tyrant. Anapt phrase exertsa great influence on thethinking process. Whatis often forgottenand yet is cruciallyimportant is that theuse of language withoutreference to substanceis fundamentallyim- possible, and whenattempted, has graveconsequences on the thinking process itself.
One wonderssometimes whether thefacts thatcome off the assembly line andare presented inmore or less finishedmodels to the policy makersactually influencedecisions. At closeview, from day to day,it oftenappears as though they donot. But in the long run it issurprising to whatextent economic ideasbecome translated into action.
A consolingthought is that thegreatest single force inhuman affairs is inertia.It is themost exasperatingobstacle oneencoun- ters and the hardestto overcome, butit works bothways. In the course of time the lineof leastresistance is likelyto turn out to be the oneindicated on theeconomic chart. Whenthis degree of inertia has beenestablished, theresponsibility forseeing that the chart pointsthe rightway becomesacute. The economisthas won a tactical victory.He must bewareof strate81cdefeat which
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Translating Facts into Policy
lurks in the fallibility of his material and of his ownjudgment.
In this analysis it becomes strikingly clear that thequality of
the economist's ammunition is of vital importance tothe nation.
Consequently, it is no exaggeration to say that this countryis
better off because for a quarter of a century the NationalBureau
of Economic Research has produced the right kind ofammuni-
tion. In a very real sense it is an important unit in theintellectual
arsenal of democracy.

Economic Research and the Development of Economic Science and Public Policy

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