Lines between macroeconomics and politics

The National Institute (NIESR) is old enough to count as a venerable British institution. I am a governor of that institution. The National Institute relies on research funding from a number of sources, which includes many that are directly or indirectly funded by the government. So when an MP of the governing coalition suggests publically that this institution should stop doing its job because its findings have political implications I have a direct concern.

Jonathan Portes today posted an extract from the (unedited) transcript of his recent appearance in front of the Treasury Select Committee. In the extract he is questioned by Jesse Norman, a Conservative MP. Mr. Norman finds it difficult to understand why Jonathan Portes does not credit the government for keeping interest rates on UK government debt low, and why he wrote an article for the Spectator (a right wing magazine) entitled ‘Plan A has failed’. But that is not the issue. What Mr. Norman suggests is that in saying such things Jonathan Portes is transgressing a line between the economic and the political, and to quote “My suggestion is that such things may not do the long-term well-being of the NIESR much good.”

I would suggest that it is Mr. Norman who has transgressed a line here. I have read a lot of what Jonathan Portes has written since he became director of NIESR in 2011. He and I obviously share the same views about Plan A and UK austerity, but on other issues that he writes about (like the impact of immigration) I have no particular views and can therefore be dispassionate. What strikes me about Jonathan’s writing is that he is not afraid to call a spade a spade, but he is also scrupulously careful to stick to the economics of an issue. That he is so good at that befits his previous experience as a senior civil servant working for governments of both major parties.

NIESR has always been the leading independent macroeconomics think tank in the UK. Macroeconomic policy is central for any government, and therefore it is bound to be political in that sense. Previous directors of NIESR have been equally forthright in public when they thought that the government was pursuing the wrong macroeconomic policy - I remember the two that I worked under being highly critical of the monetarism of Mrs. Thatcher’s government. As Jonathan Portes points out in the transcript, his predecessor Martin Weale was a constant thorn in the side of Gordon Brown’s fiscal policy, and with good reason.

In this sense, Jonathan Portes is continuing an honorable tradition, of running a politically independent think tank that is prepared to criticise the government when it thinks it is pursuing the wrong macroeconomic course. In today's world where think tanks often tend to have clear political agendas or allegiances, this is refreshing and publically valuable.

There are two things that are worrying about Mr. Norman’s line of questioning. The first is that he appears to be suggesting that because the macroeconomic judgements Jonathan Portes makes have political implications, he should keep quiet about them, or at least lose them in a fog of caveats. The potentially more serious is that by not keeping quiet he “may not do the long-term well-being of the NIESR much good.” But perhaps Mr. Norman was just offering some friendly advice, and intimidation was the last thing on his mind.