Nicholas Gruen

Nicholas Gruen, a policy economist and CEO of Lateral Economics, explores the complexities of democracy and its alternatives. He critiques the alt-right's observations on institutional flaws while asserting that democracy, despite its imperfections, remains our best hope. Gruen highlights how elections overshadow essential democratic life, and delves into media pressures shaping political discourse. He advocates for citizen assemblies and reviews to enhance legitimacy, and discusses successful reforms like gerrymandering fixes in Michigan, showcasing innovative governance ideas.

Ryan Faulkner-Hogg asked me to join him on his long-form podcast show where, over nearly three hours, we spoke about many things.Here are his show notes:I joined the Australian economist Nicholas Gruen recently in his Melbourne home to host his first 'long-form' podcast (although I'm not sure at what hour it goes from short to long)At the core of Gruen's worldview is the “un-seriousness” he levels at Australian politics, the media landscape, institutions and in a word... bureaucracies.From his creation of the HALE Index to his decades inside Australia’s public institutions, Nicholas continuously challenges orthodox thinking.The podcast covers the (in my opinion) radical yet (Nicholas's opinion) ancient idea of citizens’ juries as a second pillar of representation, the reasons bold policy rarely survives bureaucratic reality, and how lessons from the Toyota production system could help governments actually listen to people at the bottom of the hierarchy.Along the way, Gruen takes us from Australia’s superannuation system to pokies, from the mental health crisis to the subtle erosion of public-spiritedness inside organisations. To be specific, these are all the topics covered in this chat.The HALE Index of Well-being – Why GDP misses the mark, how HALE works, and what it reveals about Australia’s progress.Measuring What Matters – The limits of subjective well-being metrics, correlations between indicators, and why faux indexes mislead policymakers.Indigenous Policy Contradictions – The tension between material “gap closing” and self-determination, and why policy rarely confronts it.Citizens’ Juries & Political Reform – Introducing random selection into governance and how it could act as a check on elected officials.Goodhart’s Law in Action – How turning measures into targets corrupts them, and the problem of gaming metrics in education and beyond.Internal vs External Goods – Alasdair MacIntyre’s framework and its relevance to public service, corporate culture, and motivation.Institutional Stagnation – Why promising initiatives stall, and how bottom-up programs could scale without being crushed by bureaucracy.Toyota Production System Lessons – Building respect for frontline workers into systems and how it transforms performance.Australia’s Superannuation System – Strengths, inefficiencies, unfair taxation, and misaligned regulation of self-managed super funds.Compulsory Voting & Preferential Systems – How they shape Australia’s political centre and guard against extreme populism.Universities Today – The shift from idea-driven discourse to metric-chasing careerism, especially in economics.Trade-offs vs Synergies – Why economics often overemphasises trade-offs, and examples of where quality and cost improve together.If you prefer to watch the video, it's here.

In this final talk at Web Directions NEXT, I explore how we might breathe new life into democracy—by giving ordinary people a permanent seat at the table.The idea is to establish a House of Citizens—a standing assembly of everyday people, chosen by lottery, deliberating on the same laws and policies as parliament or congress. No formal power at first. Just visibility to the public who get to see another way to do democracy.That other way involves building a new institution in which the considered judgement of citizens can be forged and then express itself. Imagine, how might that shift previously vexed debates on guns in the US, carbon pricing in Australia, or Brexit in the UK?I also reflect on conversations with Google’s Vint Cerf about building better online platforms for cultivating good discussion. This is a fairly visual presentation with a video played, so if you want to see the action you can find the talk on YouTube.

In the second of three talks at John Allsopp’s Web Directions Dec 2024 NEXT conference, I dig into a question modern life has taught us to overlook: how do we decide what's truly good?We’ve built a civilisation where merit is often confused with ambition, where leadership is predicated on self-promotion, and where institutions reward ambition and playing the game (instead of service) and ‘smartness’ (instead of good judgement). Enter what I call “bottom-up meritocracy”, as practised in medieval Venice and on modern Wikipedia, I explore how “bottom-up meritocracy” once thrived—and could again.We’ll look at how the American Founders tried (and failed) to build a system of bottom-up meritocracy inspired by Venice's constitution (among others), how our institutions have become increasingly hollowed out, and why Charlie Munger summed it all up when he described what we should be aiming for: a “seamless web of deserved trust”.If you prefer listening to the YouTube video, it's here:

In this freewheeling conversation with John Humphreys and Gene Tunny, we delve into what’s gone wrong with modern policymaking—and what can be done about it. We begin with the dysfunctional state of our tax system. I argue we should scrap dividend imputation and cut the company tax rate to attract foreign capital and grow the national pie. We then explore the systemic malaise of democracy: how spin, performativity, and institutional incentives have crowded out real deliberation and made difficult choices all but impossible. Politicians aren’t uniquely bad—they’re trapped in a system that punishes truth-telling and rewards evasion. All politicians are against tax and for spending and you can see that in the sea of red ink we're sailing into in Tasmania, Victoria, Australia and the US. That leads to my proposal for a deeper reform: embedding citizens’ juries into democratic life. We discuss how standing citizens’ assemblies could reorient policy debates on issues like housing, infrastructure, climate and budget repair. This is not about trusting “ordinary people” over politicians—it’s about designing a system that enables public reason to flourish again. (OK, well the AI wrote that sentence, which gives you some idea of why we can't hand over to AIs just yet.)If you prefer to watch the video (God knows why you would) it's here.

This is the first of three talks I gave to John Allsopp's Web Directions NEXT conference held in Sydney in late 2024. The three talks introduce a new project of mine - a series of short videos called Awakening our better angels.It’s about our institutions—how they shape our behaviour, our politics, and our civilisation.How they can bring out the worst in us—or the best. And how modern institutions all start from the premise that we're self-interested. That creates misery, inefficiency and dysfunction. But what's the alternative? Some institutions bring people together to get them to solve problems. They play to our better natures. You’ll meet Chris and Finbar—two very different people chosen by lottery to help decide a polarising question in Ireland.It didn’t begin well. But it ended with friendship, insight, and a better public conversation. If you'd like to watch the presentation, you can find it on my channel on YouTube here.

As readers may know, in contrast to most folks promoting citizen assemblies, I am not too optimistic that running temporary, special purpose citizen assemblies will achieve much. They come and go, serve up some recommendations to the government and then become ‘issues management’ fodder, and in so doing rehearse the role of the people as supplicants to their government. I think we need to develop an activism of sortition. By that I mean we need to find ways to assert the legitimacy of the deliberation of a representative sample of the people as a check and balance on the government. Had a citizen assembly voted against the abolition of carbon pricing in Australia or against a hard Brexit in the UK, it would have markedly strengthened the hand of those elected politicians who were resisting bad policy within the legislature. Given the case for an activism of sortition, it seemed to me that Donald Trump’s trade war on the world offered a promising environment in which to improvise. I discuss this idea with Leon Gettler in the recording above.

From Alex's blurbTogether, we examine how the internet’s kerosene amplifies wish-casting, why monarchic fantasies seduce tech elites, and what bottom-up meritocracy - citizen juries, sortition, and ‘small-scale hacks’ - might offer a polity that feels increasingly unmoored. We grapple with Burnham, Yarvin, and the uneasy marriage between markets, monopolies, and truth-telling institutions, asking whether stability can be coaxed from competitive chaos.

Rory Sutherland suggested that the host of Simplifying Complexity have me on his podcast a while back. In that interview, I was critical of those who peddle ‘complexity’ as a new paradigm in economics. It's not. It's a bunch of new models. But the idea of 'complexity' as some new lens really runs rampant in numerous discourses around society and, for instance, new approaches to social disadvantage. The idea is constantly peddled that the current system is blinkered in its thinking. The word 'linear' will be thrown around. However, to me, this misdiagnoses the problem. The reason existing systems don't work very well is that they're not, ultimately built to work for users. They're built to address the needs of those building the system. Building them so they do work takes more than some consultants coming in with a new 'holistic' view of the problem. And if the consultants do have a better view of the problem and how to fix it, how are they going to get it to stick and to grow once it's been developed and all the forces that produced the initial dysfunction remain.

An interview that took place with me at 5.20 on the 1st April 2025 on the release of the Tasmanian Planning Commission draft integrated assessment report.