Red Tape
This little gem recently came to my attention:

The Pythagorean Theorem has 24 words. The ten commandments (English version) contain 138 words. US regulations about cabbages contain about 26,000.

Not to be outdone, the Department for Education in this country over a 12 month period sent to schools thousands of pages of “guidance” documents, containing almost 1.3 million words – one and a half times as many as in the King James Bible. Schools even received a 90-page document advising head teachers how to cut down on bureaucracy.

Mussolini’s quote that the more complex society becomes the more we need to have central planning is well known – as is the Austrian refutation of that absurd contention. However, it seems that we live in a world where governments are seriously responding to the complexity of society by centrally planning it and, at the same time, developing regulations that reflect the increased complexity. Some people have commented that we should have some short blog posts, so I won’t say any more and simply invite comments.

Philip Booth 154x154

Academic and Research Director, IEA

Philip Booth is Academic and Research Director at the Institute of Economic Affairs and Professor of Finance, Public Policy and Ethics at St. Mary's University, Twickenham. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. Previously, Philip Booth worked for the Bank of England as an advisor on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs and on the editorial boards of various other academic journals. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.

8 thoughts on “Complexity and central planning”

  1. Posted 27/08/2009 at 10:17 | Permalink

    My own modest suggestion to substitute a single sentence for some 3,000 pages of accounting regulations has met with an underwhelming response. How lucky we are to be able to lay our hands on 3,000 pages of ‘principles’ in this subject.

    What about a moratorium — or we could call it a ‘lessatorium’ — say a period of twelve months when government departments would issue NO instructions or guidance at all? Would the heavens fall in?

  2. Posted 27/08/2009 at 10:17 | Permalink

    My own modest suggestion to substitute a single sentence for some 3,000 pages of accounting regulations has met with an underwhelming response. How lucky we are to be able to lay our hands on 3,000 pages of ‘principles’ in this subject.

    What about a moratorium — or we could call it a ‘lessatorium’ — say a period of twelve months when government departments would issue NO instructions or guidance at all? Would the heavens fall in?

  3. Posted 27/08/2009 at 10:49 | Permalink

    Another example, which Philip used in a recent Sunday Times article, is the Financial Services Authority (FSA) handbook:

    “The full handbook contains 10 sections. The section entitled ‘prudential standards’ is divided into 11 sub-sections. The sub-section ‘prudential sourcebook for banks, building societies and investment firms’ is made up of 14 sub-sub-sections. The sub-sub section ‘market risk’ is divided into 11 sub-sub-sub sections. The sub-sub-sub-section on ‘interest rate PRR’ has 66 paragraphs.”

  4. Posted 27/08/2009 at 10:49 | Permalink

    Another example, which Philip used in a recent Sunday Times article, is the Financial Services Authority (FSA) handbook:

    “The full handbook contains 10 sections. The section entitled ‘prudential standards’ is divided into 11 sub-sections. The sub-section ‘prudential sourcebook for banks, building societies and investment firms’ is made up of 14 sub-sub-sections. The sub-sub section ‘market risk’ is divided into 11 sub-sub-sub sections. The sub-sub-sub-section on ‘interest rate PRR’ has 66 paragraphs.”

  5. Posted 27/08/2009 at 11:41 | Permalink

    When I mentioned this, and the estimate that the FSA Handbook in all probably contained more than a million paragraphs, someone asked me how many pages there were. I did try to consult the website, but that information didn’t spring out at me.

    Of course the tax rules will always be a contender for the most obscure and incomprehensible verbiage. May I quote Lord Justice Diplock, in 1965, in the three-man Court of Appeal:

    “It would be a poor compliment to the draftsman of the 1960 Finance Act if this court were to be unanimous as to its meaning.”

  6. Posted 27/08/2009 at 11:41 | Permalink

    When I mentioned this, and the estimate that the FSA Handbook in all probably contained more than a million paragraphs, someone asked me how many pages there were. I did try to consult the website, but that information didn’t spring out at me.

    Of course the tax rules will always be a contender for the most obscure and incomprehensible verbiage. May I quote Lord Justice Diplock, in 1965, in the three-man Court of Appeal:

    “It would be a poor compliment to the draftsman of the 1960 Finance Act if this court were to be unanimous as to its meaning.”

  7. Posted 28/08/2009 at 17:34 | Permalink

    It reminds me of the wonderful P.J. O’Rourke: “Our founding fathers lacked the special literary skills with which modern writers on the subject of government are so richly endowed. When they wrote the Declaration of Independence, the Constitution, and the Bill of Rights, they found themselves more or less forced to come to the point. So clumsy of thought and pen were the Founders that even today, seven generations later, we can tell what they were talking about.” (Parliament of Whores)

  8. Posted 28/08/2009 at 17:34 | Permalink

    It reminds me of the wonderful P.J. O’Rourke: “Our founding fathers lacked the special literary skills with which modern writers on the subject of government are so richly endowed. When they wrote the Declaration of Independence, the Constitution, and the Bill of Rights, they found themselves more or less forced to come to the point. So clumsy of thought and pen were the Founders that even today, seven generations later, we can tell what they were talking about.” (Parliament of Whores)

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