In praise of pragmatism

You would think pragmatism needed no defenders. Tony Blair went to the country in 1997 declaring that New Labour was not a party of "outdated ideology. What counts is what works". Deng Xiaoping, the reformist Chinese leader who led his country from famine and chaos into a growth miracle, was fond of quoting an old Sichuan proverb: "No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat". And here's a simple dictionary definition of pragmatism: "A reasonable and logical way of doing things or of thinking about problems that is based on dealing with specific situations instead of on ideas and theories".

What's to dislike about pragmatism? Nothing. But here's the problem: we pay lip service to the concept, but in practice we dislike pragmatism. We don't vote for genuinely pragmatic politicians. We don't invest in pragmatic businesses. The truth is that making pragmatism work requires effort, embarrassment, and compromise. We don't seem to be willing to pay what it costs.

Because the pragmatist tries to take each situation on its own merits and figure out a sensible way forward, pragmatism tends to look hesitant, messy, and prone to error. The ideologue, whether a left winger or a right winger, a corporate visionary or a pub philosopher, looks decisive in comparison. Ideology always offers a neat answer, whether through reference to Karl Marx, Milton Friedman or the latest corporate mission statement. The fact that the answer may simply be wrong is irrelevant to the dogmatist, because it needs no testing.

The poor pragmatist, by contrast, must endure the rigmarole of figuring out whether his or her approach actually worked, and embarrassingly, many sensible seeming ideas fail. Ten per cent of American businesses go bust each year, according to the economist Paul Ormerod – author of a book called, naturally enough, Why Most Things Fail. This is because the world is a complex place: Eric Beinhocker of the McKinsey Global Institute estimates that London's economy alone offers about 10 billion distinct products and services, many of which are themselves hugely sophisticated. Whether launching a new clothing label or reforming the National Health Service, when we try to improve a mind-bogglingly complex system we are very likely to make things worse before we make them better.

You might think this was an argument in favour of pragmatism – and of course, it is. But it also explains why pragmatism quickly becomes unappealing. The awkward truth for the pragmatist is that they will constantly be bumping into their own errors and trying to fix them. But if pragmatism is a painful process of continually correcting errors, ideology is a blissful path of being oblivious to them.

The Vietnam War is a case in point. It was initially masterminded by Robert McNamara, to whom President Lyndon Johnson effectively ceded decision-making authority. McNamara, renowned as a management genius after his time at the Ford motor company, believed that armed with enough business-school graduates, he could number-crunch his way to victory in South-East Asia. Unfortunately, McNamara's numbers never measured what really counted: his methods, so effective in Ford, didn't survive being transplanted to Vietnam.

The failure in Vietnam wasn't McNamara's fault alone. Recognising the problems on the ground and adjusting strategies to deal with the Viet Cong would have required painful changes to the way the army conducted itself. It seems that the top brass chose to lose rather than to adapt. As one senior general put it, according to John Nagl's Learning to Eat Soup with a Knife: "I'll be damned if I permit the United States army, its institutions, its doctrine, and its traditions to be destroyed just to win this lousy war."

Does that sound familiar? Much the same words could have been uttered by the Labour traditionalists ranged against Tony Blair in the mid-1990s, as he threatened to destroy the institutions, doctrine and traditions of the Labour party just to win that lousy election. David Cameron and Nick Clegg are also finding that their own backbenchers and party members thoroughly disapprove of their pragmatic agreement to govern in coalition. Pragmatism requires compromise and change, often a painful reality.

Pragmatism also requires evidence, which is time-consuming to gather, difficult to put across in a sound-bite, and, frankly, boring. Voters understand simple ideas such as welfare fraud, tax-dodging, "privatising the NHS", or "bureaucrats from the EU". Fine: that is politics. But sensible, pragmatic policy-making requires a mountain of detail that no voter could reasonably be expected to take an interest in. And if voters are not interested, politicians are unlikely to be interested, either.

Politicians and their advisors have repeatedly explained to me the problem: gathering evidence is all very well in theory, but in practice a minister will arrive at their post to discover her predecessor has done little to commission the kind of solid evidence that might be useful when, say, improving literacy standards in schools, or reducing re-offending rates of former prisoners.

When she asks how long it will take to produce her own evidence base, she'll be told three or four years, perhaps longer. Figuring that by then she'll be on to her next job, or perhaps even the job after that, they'll set about figuring out what to do immediately. And action without decent evidence is bound to be dogmatic, not pragmatic. Two years later, a new minister will arrive in seat, and the cycle of ignorance continues.

You might think it takes a special kind of person to make multi-billion-pound decisions despite being totally ignorant of what works, and perhaps politicians qualify. I suspect they are just the same as the rest of us. Archie Cochrane, a great doctor and epidemiologist who revolutionised the way the British medical establishment thought about evidence, railed against his colleagues' "God complex". He complained his fellow doctors thought they didn't need evidence because the answer was already obvious. The God complex seems to affect everyone: doctors, politicians, newspaper columnists and your boss. Perhaps we all fancy ourselves touched by the divine when it comes to spouting opinions in ignorance of the facts.

It's fascinating to reflect on the role of pragmatism in business. Compare the corporate culture of the two coasts of the USA – Silicon Valley versus Wall Street. In Silicon Valley, the mantra is "fail faster". Venture capitalists fund countless business projects on the assumption that most of them will fail. Rapid prototyping is the order of the day. Products are released in "beta" so that they can be tested against the needs of real users and fixed on a rolling basis. Google says it expects 80 per cent of its products and services to flop.

On Wall Street, instead of "fail faster" we have "too big to fail". Financial engineers constructed multi-billion dollar bets on the basis of theoretical models and scant data. (At the dawn of the financial crisis in 2007, there were $1,250,000,000,000,000 of derivatives contracts outstanding – over a million billion dollars of bets.) Traders were given performance bonuses on the basis of theoretical predictions of the outcome of these bets, rather than actually waiting years or even decades until the results became clear. It was the opposite of pragmatism. And it was a disaster.

So let's hear it for pragmatism: for trusting evidence rather than theory; for looking at the specifics of the situation rather than some overarching narrative; for preferring what works to what fits our preconceptions; and for being willing to test our ideas and change direction as is necessary.

But I am not holding my breath while waiting for an outburst of genuine pragmatism – particularly not in British politics. Remember Lady Thatcher's "You turn if you want to. The lady's not for turning"; Tony Blair was proud of the fact that he didn't have a reverse gear. I'd have trouble selling you a car that didn't turn or go backwards. But we seem to think of these as highly desirable qualities in prime ministers: British voters rewarded Thatcher and Blair for their self-professed lack of pragmatic adaptability with six general election victories. Pragmatism. Nice idea. Shame we don't vote for it.

Tim Harford is a 'Financial Times' columnist. His new book, 'Adapt: Why Success Always Starts with Failure', is published by Little, Brown (£20). To order a copy for £18 (free P&P), call Independent Books Direct on 08430 600 030, or visit www.independentbooksdirect.co.uk