Gallery

What can eutectics teach us about public policy and economic policy?

Yes you read that right Eutectics.  Sounds exotic but it isn’t.  I first came across the term back when I could think of nothing other than clay, fire and glaze.  Back then my public high school had a very good ceramics program and very good textbooks.  The little working knowledge (as in applied) I have in chemistry comes from that initial inspiration.

Ceramic glazes are a rather complicated affair and one of the first things you learn is that if you take a series of minerals / metals with “melting” points above 1280 Celsius (applies to lower temperatures too) and combine them they will not necessarily “melt” above 1280 C.  The world melt here is put in quotes because glazes are actually supercooled liquids which are solid at room temperature but unlike their metallic friends do not have a definite melting point (alloy can and do have the same properties).

What has this to do with public policy and and economic policy in particular? Often in public policy discourse we act as though it is an additive process.  Policy X is good policy policy Y, is a good policy, and policy Z is a good policy.  Let us adopt all three policies.  Implicit here is the idea that in combination the three policies will make us three times (or sum) better-off.  mainstream economics can get at this bit via the distinction between rival and complimentary goods but more often than not it just takes and adding up approach.  Free trade is good, deregulation is good, corporate income tax cuts are good, and exchange liberalization is good.  Therefore lets have all four!

Then poof there goes Iceland, Ireland, not to mention the sundry Eastern European us too crowd.

Each policy was supposed to deliver a more flexible nimble and therefore more robust to shock macro-economy.  But in fact together they produced a more brittle and fragile macro-economy.  My hypothesis is simply this: something like eutectic chemistry is a work here.  Each policy has a specific a melting point above 1280 C but when combined in to a policy a paradigm (like a glaze) their melting point is actually lower.

That challenge for those in the policy sciences is to study the complex of public policies as if they are glazes rather than as a series of singular goods that stack.

In anticipation of critiques I will say that I think eutectic effects are different from compositional fallacies and externalities. Properly understood public policy is more like chemistry: add sodium bicarbonate (policy Y) to copper sulphate (problem A) with some H2O (policy X) and you get copper carbonate.  Pretty simple stuff:

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s