The Guardian today publishes a letter from 79 economists, including yours truly, about George Osborne’s plan to outlaw government budget deficits in normal times. I’ve written two recent posts on this, so I will not go through the issues again here, but I thought I’d say a couple of things about the business of signing letters and whether they are worth the effort.
The first is whether the reader or potential signatory should worry about the details of the text of multi-signatory letters. You might think the letter could be better written, and someone asked to sign it might think they could have put it much better themselves. The person asked to sign might agree strongly with the overall message of the letter, but could have some misgivings about particular sentences. The problem of course is that, because the letter is signed by X number of people, where X is large, having all X making their own attempts at redrafting becomes a nightmare in coordination. So these letters should never be read for the details of the text, but instead for their overall message.
The second is whether there is any point in these multi-signatory letters from economists. Alan Manning makes a number of good points here. When these letters involve issues where there is genuine division among economists, then a letter followed by a counter letter just encourages further jokes about economists never agreeing. (But because there is some news value in getting in first, letters on this type of issue keep coming.) The letter format is also too short for making proper arguments: other forms of media are better in that respect.
That argument does not I believe apply to this particular letter, or to the other which I recently signed on the Greece-Troika negotiations. In both cases there is probably a clear majority view among economists. Multi-signatory letters then have an important information value to both readers and political commentators.
This brings us - inevitably - to perhaps the most famous example in the UK of such a letter, from 364 economists protesting at Margaret Thatcher's 1981 deflationary budget. It is also a good example of not worrying too much about the text, as I’m sure many/most who signed that letter would have found at least one sentence objectionable.
If you have previously heard about this letter it may well have been accompanied by a comment on how the letter is now ‘generally regarded’ as reflecting badly on economists. The reasons for this view are in themselves interesting. Ask anyone on the political right, and they will tell you this is because Margaret Thatcher was correct and the economists were wrong. But you can equally well make the opposite claim. The economic strategy at the time was monetary targeting, and that policy in itself failed dismally: monetary targets were hopelessly missed and the policy framework was abandoned shortly after the letter was written. In terms of overall outcomes, it took two decades before UK unemployment returned to pre-1981 levels.
So why is it ‘generally regarded’ as reflecting badly on economists? Essentially because many supporters of Conservative governments - some economists but also many politicos - have gone out of their way to say so. (I go into more detail in this post.) As we have witnessed recently, the political right tends to be much better than the left at rewriting history for its own purposes. But that in itself is a form of flattery. Why bother to spend time and effort rubbishing a letter from 364 economists unless that letter, and any similar letters that might follow it, had some impact? So maybe letters from economists on issues on which most economists agree are important and can have some small influence.