Working Definition episode 1: Transparency, with Tom Hoenig

[Transcript now added, below.]

I’m delighted to share with you the first episode of my new philosophy podcast!

In each episode of Working Definition, I’ll talk with a different philosophical guest about a different philosophical concept, with the aim of reaching a rough, accessible but rigorous, working definition. Over the coming weeks, I’ll be recording and releasing episodes on topics ranging from democracy (with Josh Ober) to free speech (with Nigel Warburton) to rights (with John Tasioulas) to freedom (with Tyler Cowen). And many more…

Before briefly telling you about the opening episode, however, here are three quick thoughts about the broad idea of this podcast. First, a lot of the concepts which I'll be focusing on are highly contested. My aim certainly won’t be to end contestation by providing rough working definitions, but rather to give listeners a useful starting point. Second, I have to admit that I find quite amusing the idea of a philosophy podcast that promises a solid product, even if it is a definition. Finally, of course, all this is really just an excuse for me to talk with interesting people about interesting things.

To that end, the guest on my very first episode is Tom Hoenig. Tom is a Distinguished Senior Fellow at the Mercatus Center at George Mason University, which means I’m fortunate to have him as a colleague. He’s the former Vice Chairman of the Federal Deposit Insurance Corporation, and the former President and CEO of the Federal Reserve Bank of Kansas City. And he’s a very philosophical economist.

In this episode, Tom and I discuss transparency. He talks about experiences from his career when transparency has been a driving practical concern. We think about conditions for, constraints on, relations to, and the value of transparency. In short, we do some philosophy! I hope you enjoy it..

TRANSCRIPT

[This was generated by AI, so may contain small errors.]

REBECCA: Hi, I'm Rebecca Lowe and welcome to Working Definition, the new philosophy podcast in which I talk with different philosophical guests about different philosophical concepts, with the aim of reaching a rough, accessible, but rigorous working definition. Now, since this is the very first episode, I thought I'd just make three quick points about its definitional focus.

First, a lot of the concepts I'll be focusing on — things like freedom, equality, democracy — are highly contested. My aim here isn't to end contestation by providing a rough working definition, but to give listeners a useful starting point. Second, I've got to admit that I find it quite amusing the idea of a philosophy podcast having a solid product to offer at the end of every episode, an output, even if it is a definition. Because we philosophers aren't exactly known for producing goods. And finally, of course, all this is really just an excuse for me to talk with interesting people about interesting things.

To that end, I am delighted to introduce you to my very first guest, Tom Hoenig. So Tom is an economist, a very philosophical economist. In fact, our very first conversation was about Adam Smith, qua philosopher. Tom is a distinguished senior fellow at the Mercatus Center, which means we're colleagues. Prior to that, he was vice chairman of the Federal Deposit Insurance Corporation, and he was also, among many other interesting jobs, president and CEO of the Kansas City Fed for 20 years.

And today, he's going to be talking to me about transparency. So Tom, I'm keen to get an opening stab from you about what transparency is. But I thought one way into this might be to ask you for an example of a time in your life when a concern for transparency was at the front of your mind. [1:52]

TOM: Well, what a great question to start with. But I guess I've had more than one occasion where it's been very important and difficult. And I'll start with an example which really did change the direction of the Federal Reserve Bank of Kansas City that I was associated with at the time.

For a considerable period, the Federal Reserve banks were basically paper transactors. They processed checks that were paper, they processed savings bonds that were paper, and they did that for many decades, and hundreds of people were involved in that process. But suddenly, technology took over, and electronic payments became dominant, and electronic sources of issuing savings bonds became important.

And we found ourselves at the Federal Reserve Bank of Kansas City having to downsize and release several hundred people that we no longer could use because we'd gone to payments that was electronic driven. So I had to face a lot of employees, not only the ones who were going to leave, but others who saw the future changing as well. And so we sat down, we, the committee, the management committee that helped me lead the bank, and began to sort through that.

And what we said was, if something's inevitable, you have to embrace it. And we decided to go on a very detailed strategic planning effort that would help transform our bank from a paper-driven organization to an electronic-driven organization. And that meant telling employees that we were going to go that way. Some people would, among that group, would be winners. Other people would be losers, but we all would have to change, and that was really quite a process.

It involved many meetings with our own management committee, then many meetings with our employees, and then also changing our direction. That is, hiring new people and letting go people that we could no longer use as we had in the past. That transition was difficult. And I think the fact that we were honest with our employees, honest with ourselves, and determined, though, to embrace this new technology and become a winner in the end as an institution was really our driving force.

And it turned out in the end, over several years it took, it turned out very successfully. But it wasn't easy. We could have just delayed it, told people the hour would be okay, but we didn't do that. And the way and the route we chose, I think, was the right one. And it was transparent, and it was involving everyone in going through the transition together with confidence. So that's how I think you should do it. [5:01]

REBECCA: It's a great example. I want to come back to the relation between honesty and transparency in a moment. But just, you know, as a kind of opener, what do you think transparency is? We can talk about this throughout the episode, but maybe you have a ready-made definition, or…?

TOM: Well, I don't have a ready-made definition, except to say I think you have to be very careful in what you promise to people. So transparency is… I keep coming back to the word being honest with people, but also letting them know what you're thinking, why you're thinking that way, and not — not to get theological here — but not to commit the sin of omission.

Not being fully honest with everyone is, I think, almost as bad as lying sometimes. So those transparencies, saying what you can and telling people what you can't say. So they know you're not hiding the ball, but you're being honest about them. You can't tell them everything at this point. So it's a complicated definition, to be honest with you.

REBECCA: It reminds me a little bit of what the great British philosopher Onora O'Neill says. So she's a Kantian. She's also a member of the House of Lords. And she's written a lot about transparency in relation to public trust. And she makes this point: she says that transparency can get rid of secrecy, but we also need constraints on deception and misinformation. So transparency is part of the job and not telling lies is part of the job. But as you're saying, that probably isn't sufficient.

TOM: It's not sufficient. You have to be... You have to be more straightforward in the sense that, for example, I can't guarantee you anything. The employees that we work with, we can't guarantee you anything. But we can tell you this is the direction we're going to go and here's how we're going to go about it. We'd like you to help us with that. And that's sometimes a hard sell. [7:01]

REBECCA: So it sounds to me like openness and honesty are key here. It does strike me that there must be a particularly strong relation between transparency and publicity, in the sense of openness that's directed at other people. I think it's got to be a directional thing. You're transparent to people. If you're in the forest being transparent, I don't think it really means something. So I think it's got to have a public element. But this doesn't mean that you can't be transparent in private relations. It's more just, I think, that it's going to be a common theme in the public domain, as well as being something that's directional.

So it strikes me that over the second half of the 20th century, transparency became a bit of a buzzword. Certainly in the UK, you get things like, I don't know, the Freedom of Information Act in the year 2000. And the Nolan principles in public life, which are supposed to constrain public servants to behave well — I think one of them is openness. Also in the NHS, there was a shift towards informed patient decision making. Is that something that also you think has been a key move in America?

TOM: Well, to your point, though, I think transparency has become a buzzword, and we use it too loosely in public policy, and actually we probably use it too loosely in private interactions. You have to be transparent. I mean, suddenly everyone's saying you have to be transparent. Well, of course, but transparency. What you're trying to do is build trust.

And by that I mean people have to have confidence in your integrity. That when you tell them something, you are telling them the truth. So that they don't, you know… transparency doesn't have to be a ledger of 50 things you did and didn't do. That I'm telling you something and I'm telling you as much as I can.

And people know you well enough as an institution that they will accept that. And I'll give you an example. One of the big issues around monetary policy, which I was involved with, or supervision policy, which I was involved with, is we have taken a consistent approach in our analysis, we have been open in our announcements, and we have delivered on what we said we would do. And people understand that. And if we say we have to raise rates, it's trusted, even though it's not necessarily popular. So I think transparency is a base to — shall we say — acceptability, in a policy environment for institutions.

And it is a base for trust in interpersonal relationships that what I say you can trust. And I will be honest about it. And if you ask me, I will show you what I mean. I won't just tell you, but I will show you to the extent I can. [10:01]

REBECCA: When I was reading about some of the things that you're known for, I did keep coming back to this idea that you clearly are somebody who cares a lot about the public understanding what's going on. The public understanding the seriousness of what's going on. You obviously were at the Fed during some pretty tumultuous times, I think during both the 80s banking crisis, and then again, the great financial crisis, 2007-2008.

And it seems like you were persistently wanting to make sure that the public were informed. So, for instance, when you were voting against easy money policies, when you wanted people to understand the risks of inflation, that seems to me like there was a guiding force in you saying the public need to understand the truth. Is that right?

TOM: I think that's absolutely right. And thank you for asking me that, because one of the difficult things within an institution is the institution wants to be seen as united, that we all agree that this is the right choice. But that's not necessarily transparency. That can be fabricated almost.

And what I kind of admire in this country is the Supreme Court, where you have sharp differences, but you come to a conclusion. You have a clear vote, but also those who disagree get to say why they disagree. And I think that's, to me, that was very important in monetary policy, that we disagree sometimes, and it's better to let the public know that we disagree and make a decision accordingly. They'll know the facts. They'll know there was a disagreement, and yet you came to a conclusion. And I think if you don't do that, people are wondering, well, what really went on there?

And I think that has handicapped, for example, monetary policy in the United States. I won't speak for other countries, but I think in the United States it has. [11:58]

REBECCA: Well, we philosophers always love to hear people talking about giving reasons! Reasons for coming to decisions, reasons for actions. And your point about the Supreme Court reminds me, I read last night this fantastic speech that you gave when you received the Truman Medal for Economic Policy.

I really love this speech. I think I will write about it on my Substack this weekend. It's one of the things I've enjoyed reading most this week. And a core theme of this speech is clearly how much you care about institutions being held to account. So you criticize Congress for overspending. You criticize the Fed for being short-termist. And again, you clearly see public knowledge as key to this. You want the public to be better informed, to know when bad things are going on.

But I also read it as being, it's not just that you think the public should know. I think I read it as you saying transparency can be a mitigant for bad behavior and bad consequences. Is that right?

TOM: I do think so. I think you can use the word transparency to give the perception that you're telling and you all agree and you're telling the truth, when, in fact, you may be misleading the public. And I think, for example, to me, it's very... I shouldn't be criticizing Congress as such, but as a citizen, I think Congress has a desire to be reelected as much as it does to direct the nation forward. Because... most congressmen that I've talked to, most individuals understand that we cannot continue in this country accumulating debt at the rate we're accumulating and remain a great prosperous nation. That there has to be a reckoning at some point.

And I think it... the Congress is reluctant to tell the public that, because the public wants assurances. And that's what I mean by transparency in the sense that I can't give you everything you want. And you may not like that, but let me explain myself. And, you know, I've seen countries in history who've come together and said, we can't do this any longer. We're going to put this effort together. We're going to be very transparent about it. And people do buy it. I mean, it is a fact that in the United States in the mid-90s, the economic circumstances where we were running huge deficits were recognized. They were addressed.

And as an outcome of that, we had a better economy for a while. But then we decided to go away from that again. So I think transparency in the sense of saying here's what the issue is and here's the path forward we're going to take is in the long run a very useful path to follow. [14:51]

REBECCA: Fantastic. So beyond the benefits of transparency, I think we've already touched a little on the reasons for informing the public, which might be a little deeper. Something to do with maybe obligation, something to do with the public maybe even having the right to know. So I have this view that there is a general obligation of state transparency: that being transparent is an obligation of state actors. I'd go as far as saying it correlates with the rights of citizens to know about state behavior. After all, it's behavior that's dependent on our support, our consent, our taxes. But it also strikes me there’s an interesting question here about who counts as a state actor.

So I read a bit of stuff about how the courts treat the reserve banks to this end. I think, sometimes they're treated as private corporations and sometimes as federal instrumentalities. So I was wondering when I was reading about this — I'm fascinated by it, I'd love to talk in more depth at some time with you about this. But one question I have for you today is, how did this strange identity situation affect the obligations of transparency that you thought you held?

TOM: Well, that is an interesting question. First of all, the institution is an odd institution in some ways, right? It is clearly public in the sense that the Board of Governors is a federal agency. Its members are appointed by the President of the United States and are confirmed by the Senate. That is a federal agency.

REBECCA: The Board of Governors.

TOM: The Board of Governors in Washington, D.C. But then the Federal Reserve System contains the Board of Governors, but then these 12 banks…

REBECCA: And they're owned by the private member banks, right?

TOM: They are owned by the banks. Technically owned by the banks. They invest in them. They have stock in them. And they actually have a board of directors each. And the board of directors is elected by the banks. Six of the nine, that is. There are nine members, three appointed by the board of governors, who are the public domain. So you see how complicated it gets.

REBECCA: I love it. I can just imagine the Venn diagram.

TOM: But it was designed around the idea that we want to disperse power. We want a balance of power. That's the American checks and balances kind of thinking. And so these private institutions were designed to be a check on the political element of that. Now, over time, it's become more centralized, as happens. But the idea is to give the regions, the outside of the central — the Washington, D.C. central, or the Wall Street central — influence, because the populace generally from the founding of the United States was very suspicious of concentrated power. [17:49]

REBECCA: So this is partly so that Washington interests don't dominate. And partly presumably so that the interests of the regions — I don't know enough about America yet! — but the rural communities and the particular interests, the commodities, the nature is different from the nature of D.C.

TOM: Exactly. And, you know, there was a wonderful article written years ago, I can't even tell you where it is, but, you know, it was the not-so-United States. There are… regions differ. We find that out. And to have If you're going to have a trust in your government, you have to feel you have an input into the decision-making process. And it happens through Congress, but it also happens through the regions themselves and through the states. And that's what this amorphous, unusual institution called the Federal Reserve System is all about. It has regional influence. And when you go to an open market committee meeting as a member of the region, as a president of a reserve bank, you have that region's interest but also an understanding of its differences.

And I used to call it creating a mosaic when you talked about the economic outlook. And so that's been very important, I think, to that transparency and to that confidence in that institution. And as you centralize it more and more, that confidence in the institution becomes more difficult to sustain, unless you really feel you've had reasonable input and it is a reasonable decision. That's why I've always felt having dissent in those discussions are very important. My region has been heard. I think that's a good thing, not a bad thing, and promotes transparency and trust from that. [19:38]

REBECCA: I love that. I love the way you describe the kind of mosaic. I'm a big believer in Aristotelian subsidiarity. I think decisions should be made at the lowest possible level. As long as they're effective, even if they're not the most efficient way of doing it, I think that people have… it's their business to be making decisions. But sometimes you do need to delegate. And it seems to me that a key facet of doing that well — doing it legitimately as well as effectively — is informing the people on whose behalf you're making decisions.

TOM: Absolutely. And I've argued for years that efficiency isn't the only goal in life.

REBECCA: Exactly. It's not the only value, right?

TOM: Right. And I think effectiveness involves input from others and also is the mainstay of trust in the institutions.

REBECCA: So I think we're agreed about some of the benefits and even some of the obligations of transparency. But we clearly can't all be fully transparent all of the time. And indeed, sometimes it might even be wrong. So I guess a classic example would be you can be the biggest believer in the state obligation of transparency, but if there's an ongoing counter-terrorist operation, if you reveal all of the details immediately, then a lot of people are probably going to die. And so the operative concern there is probably harm.

Sometimes there are concerns of privacy. So you might think that the institution, public institution, should be as transparent as possible. But you might say, well, that doesn't entail revealing the home addresses of all of the people working in it. And you might justify that in terms of relevance. In the financial world, you obviously have things like, I don't know, insider trading offends against fairness and competition. What do you think are the most important legitimate constraints on transparency? [21:23]

TOM: Well, let me first of all say that the states, the institutions can have very legitimate reasons for not being wholly transparent in everything they do. But I also say that puts even a heavier burden on them to be transparent to the maximum extent possible. For example, security. Absolutely. You can't say how you're doing everything if you're going to keep people safe, because the evil elements, if you want to use that term, would use that to their advantage.

So you know you have certain — and people have to know that — they have to understand that, but they also have to understand that's what you're using it for. Because too often states use security to hide their mistakes. So that's where this ability to be accountable comes in. And you have to be transparent enough, and have to have the mechanism in place to keep you accountable.

For example, I think... For a corporation or anyone, having an internal audit and external audit is particularly important to confirm that, okay these are secrets, but they are justifiably so, and you're not hiding something. And that's a big issue today, isn't it? So those are the sorts of things you have to be able to do, and that is... Make sure that you're being checked. You have external checks that are trustworthy in terms of not disclosing secrets, but knowing that those are legitimate secrets. And that's part of the process. [23:25]

REBECCA: It often strikes me that there's a big difference between telling somebody a secret, and saying that you have a secret, and telling the reason why you can't reveal the secret. I think maximal transparency in institutional terms, but also in our friendships. You might say to your friend, well, I've heard something about so-and-so. I can't tell you what it is, but it means that you should maybe be particularly kind to them today. You're not revealing the thing that you're not supposed to say, but you're saying that there is something, and you're giving the reasons why you can't say the whole case of the matter.

TOM: Absolutely. And you can do that when the person you have the relationship knows you. You're not hiding something, you're saying something that's really important. And I think that builds on, you build that relationship. It's not just there. I used to say, you know, I want to trust you, but show me why I should trust you.

REBECCA I think this is why we should have good institutional rules and practices and norms about this stuff.

TOM: I agree.

REBECCA: Such that people know what they can expect and institutions can know the standards that they should meet. And then once that's in place, it can then be the case that you get some emergency moment. And you already have in place the practices by which you can be not fully transparent, but for some time-limited period, you can withhold information legitimately. [24:39]

TOM: Exactly. And a good example of that, I think, is there was a long discussion in my area, in my business, when I was on the FOMC. There was a long discussion on the issue of transparency about the meetings. Should they be broadcast? How do you have a discussion about a very important matter if you're broadcasting it?

So, no, you shouldn't do that. You should be able to have a kind of discussion within the committee. But then the question came up, well, how long should you be able to keep that secret? And there was a long discussion. So there was an agreement, well, there will be minutes that will summarize things. That's within the first couple weeks.

But then verbatim discussions. Well, if you release it right away and you say something that kind of doesn't make sense, you may undermine your ability to convince people that you are sensible. So the agreement was five years. And I think that was probably a good compromise. I've said things that when I read them five years later, I say, well, I might have said that a little better. But by then, other things have happened. You've explained yourself more, and it does become overwhelming in how people view you. And they trust you more because they now have seen what you've said, and you didn't lie to them. And that's, I think, very important. It makes you more accountable.

REBECCA: Of course, this all becomes even more complicated now. We have, like, WhatsApp. We have all kinds of ways of communicating with each other. Even some of these technologies whereby baked into it is that the message deletes...

TOM: Yes. Yes. And, you know, but once you put it out there, someone will pick it up. And so you have to be thoughtful when you say something. And that's probably a good thing. Not that you lie or hold things back, but that you're thoughtful. If you want to go out there and say something, you should be pretty, you know, just don't shoot from the hip. Think about it.

REBECCA: I think that's right.

TOM: Especially if you're in an institutional policy-making environment or even an interpersonal. I mean, you have a friend and you get mad at him and you say something foolish. Well, you may regret that, so think about it first. Nothing wrong with that. [26:54]

REBECCA: There can be times, I think, where the interests of the institution can be seen as being in tension with the interests of the public or the interests of the nation. So an example I guess I'm thinking of, although the interesting thing about this example is that that's not the way probably the people in the institution would play it… But I'm thinking of something like government house utilitarianism, which is the idea that Bernard Williams, a great British 20th century philosopher, talks about. This is the idea of when utilitarian reasoning is used to justify state action, often secretly, manipulatively. It's like a kind of Plato noble lie. We won't tell the people the true reason, because then maybe they won't go along with it. But actually, it's for the good in the end. And you get this kind of manipulative non-transparency, but supposedly in the public's good.

TOM: Yeah, I'm very familiar with that. I think...you know, I think that I understand the concern. At the same time, I think you have to be, if you become manipulative, you get used to doing that and you can, it can quickly turn into lies. So you have to be very careful. And I would say: say as much as you can, and then say why you can't say more, is better than saying something that you think they want to hear that kind of misleads them that then comes back later.

REBECCA: Apart from anything else, it's just an epistemic problem. We don't really know what people want to hear.

TOM: Well, that's right. And you have to have some confidence in their ability to absorb the truth.

REBECCA: That's the other thing. So one reason people sometimes give for not revealing all of the case of the matter might be a relevance matter. So again, if it's the case that, I don't know, not revealing the home addresses of the civil servants. That seems like, yes, those things are not relevant.

But sometimes, and I guess you probably particularly get this in complex financial matters, you might just say, well, look, it's not relevant to the public because they couldn't understand it. I don't like that. It seems to me a really nasty kind of top-downness. And also, if part of the point is that this is important information, well, then surely it's the obligation of these people to find ways to make that understandable.

I read actually, for instance, about your global capital index. And my understanding of this is that this is using measurements of bank capitalization that are supposed to be more understandable. Ideally, not just for policymakers, but for the public too.

TOM: Yes. And yes, that was because, so we went through it. And to read a balance sheet on a bank is no easy matter for even the most expert among us. Accountants argue over things for hours and days. So what we wanted to do was, you know, one of the things that most people understand is, especially in the United States, you need so much capital to run a business, to be safe, to be able to make mistakes and go on, and so forth. And yet, the information being put out was horribly complicated.

I mean, if you think of the capital programs in the United States today. There are as many ways to calculate capital, risk weight capital this way, so much this way, tangible and so forth, so we decided we're gonna give a simple, straightforward, here's how much capital the institution has, and here's how many assets, and here's the ratio. And we normalized it for all the banks, especially the largest banks, and it's a single figure. And the higher it is, the better you are. The lower it is, well, the more at risk you are. And that's what it says. And it was very informative to people.

I mean, there were institutions, I won't name institutions, but there were institutions that were reporting 13% capital. So when we put it in our terms, that is, how much real capital do you have per asset? They had less than 2%.

REBECCA: Which, of course, is the...

TOM: Which is an invitation for trouble. Right. And we put it out there.

REBECCA: Good.

TOM: And some of those institutions weren't exactly pleased by that.

REBECCA: I was going to say, I bet this didn't make you terribly popular.

TOM: We got a couple phone calls. But the fact of the matter was we felt very good about it. First of all, we were giving away no secrets. This was all public information, shall we say, distilled down to its essence. And in its essence, it told a great deal. And I think it served the public well. And actually, it served the institutions well. They increased their capital.

REBECCA: Right. Of course. Also, I just have this hardcore view, which is it's bad for you to do bad stuff. It's not just bad for the people you do the bad things to.

TOM: And usually you end up paying in the long run yourself. So don't do it. [32:02]

REBECCA: For sure. And actually, that comes into your other narrative — about not being short-termist. I noticed this a lot in the things that I was reading, particularly that great speech of yours.

TOM: Well, the long run is very hard to keep in perspective.

REBECCA: Sure, you don't know what's going to happen. None of us can see into the future.

TOM: You don't know. And I need something now, and I want it now. I mean, I don't care what it is. Take habits. I mean, smoking habit. Drinking habit. I mean, everything. It may make you feel good in the short run, but the consequences can be dire. And we have to be able to think beyond the immediate. And I'm no different than anyone else. You know, how do you keep your weight down? You know, all these simple things we talk about. And the long run is out there a ways. So let's not worry about it right now.

REBECCA: Robert Nozick has this great line in one of his, I forget where it is, about having some kind of rule by which you don't have a drink until six o'clock. And the idea is sometimes you constrain your first-order preferences, to enable your longer...

TOM: Sustainability. Right.

REBECCA: Sustainability, resilience.

TOM: You know, I had a central banker tell me, it was long ago, but when I was first appointed president — and it wasn't the U.S., it was somewhere else, but a very good record. He says, Tom, the first thing you have to remember is the central bank's role is to take care of the long run, so the short run can take care of itself. That's how economies work best. And so I've never forgotten his advice. [33:41]

REBECCA: A couple more things I want to touch on before we start trying to hone in on our final definition. So one of these things is the way in which transparency can be instrumentalized. It can be used, particularly by people in positions of power. And one example I thought that might count as this — that came to my mind when I read that you'd fought in Vietnam — is the televising of the Vietnam draft lottery. Presumably the core reason for this was to be open about the process. But I think, maybe this is wrong, but I feel like there's a sense in which… is it kind of jingoistic also? Was it a kind of sensationalist event?

TOM: Well, I think, who knows? But having been in that age, one of the difficulties around that war was that the draft was kind of skewed. There were deferments of all sorts. Education deferment, which I did take advantage of for four years. And if you didn't, you were drafted. Or there were certain marriage deferments. So, some people married sooner than they otherwise might have, to get the deferment.

And the other thing that led to is if you had income so that you could go to college, you were less likely to be drafted. And so people didn't really trust the draft very much. And then, so the first thing that happened, to be honest with you, was they ended deferments for graduate school. Fine. I got drafted as a result of that. But that's because people didn't trust it any longer. And certain, shall we say, socioeconomic level was being drafted more than others. And so that's why you had distrust. And then you went to the lottery, clearly. So then deferments became less, and you went to the lottery.

So am I going to trust the lottery? So you almost had to make it a public event. So otherwise people would say it's fixed. Who would trust it at that point? You'd abuse the deferment system so long that you had to implement a lottery, and a public lottery at that. [35:58]

REBECCA: Fantastic. I think we come back again then to trust and to truthfulness. It strikes me when trying to think about the underlying values that are crucial to transparency. Because I think — I wonder what you think on this — I think transparency is a value in itself. In the sense of, I don't know, what we philosophers might think of as something as having kind of normative, positive relevance.

TOM: I think it is a value in itself. Because it says... you can see through, you can see through to the motives, and you can see through the objectives, to the objectives. It's critical as an instrument in of itself.

REBECCA: As a single value… I think that's right. It also seems to me though that it depends in some senses on other values. So I think it trades on truthfulness. I think I’m right in saying that… I think you can't be transparent if you're not telling the truth.

TOM: Oh absolutely, well, and the thing about it is…

REBECCA: You might be able to think of some clever philosopher's example against this, but I'm pretty sure that's right!

TOM: Well, the thing about it is: transparency has to be high integrity wise, because, look, back to the buzzword. Oh yeah, we're transparent… We're going to tell you everything that we want you to know. That's not transparent! But yet they'll use that word transparent. [36:53] So transparency means we have to let you see everything, unless there is a good reason not to. And I can explain that reason to you.

REBECCA: I love that. Unless there's a good reason not to. And explainability. Right, so we've got openness. We've got the benefits of transparency. We've got some obligations, particularly for people in particular positions. Truthfulness, integrity. What do you think? I think in my head I'm coming to some kind of sense of what transparency is. What do you think is really central? What are the kind of necessary components of these?

TOM: The most necessary component to me is integrity.

REBECCA: Integrity.

TOM: Integrity, because that's the foundation. Transparency is valuable, if I know that the parties involved have high integrity.

REBECCA: So its value depends on integrity, which in itself depends on truthfulness. It depends, I think, on the sense of knowledge of each other, as well, that you talked about earlier. I think integrity is something that is earned. It's something that develops.

TOM: Integrity. It is absolutely earned. Trust is earned. It's earned. Now, positions of trust, there is a presumption there, but I think it has to be exercised every day, or it will be lost very quickly. [38:42]

REBECCA: So, I just jotted down a kind of starter on this rough working definition, which is something like — it's a bit of a mouthful — being truthfully open about relevant things in line with your obligations...

TOM: And explaining yourself carefully.

REBECCA: Explainability, being able to explain them.

TOM: Right.

REBECCA: So… what's your final thought on the value of transparency? And also maybe a thought about its standing in the world today.

TOM: I think the value of transparency is critical to any institution, any country, any individual's long-run success. What I worry about is it's become a buzzword when it should not be. It has a dramatic place in our world today, and we should not demean it.

REBECCA: So tied to the values of truthfulness, integrity, openness…

TOM: And accountability.

REBECCA: And accountability. Tom, thank you so much. I've so enjoyed this.

TOM: Thanks for having me.

REBECCA: Thanks for being my very first guest.