Winner of the New Statesman SPERI Prize in Political Economy 2016

Friday, 21 July 2017

The politics of ignoring knowledge

Simon Tilford has a post where he explores the roots of Brexit in a kind of UK exceptionalism. He argues that “the underlying reason [for the Brexit vote] is the hubris and ignorance of much of the British elite, not just the eurosceptics among it”. I want to expand on that. I do not think this ignorance and hubris is confined to the UK’s role in the world. It also extends to an attitude to knowledge of all kinds, and I suspect it is possible to date when this began to the revolutionary zeal of the right under Thatcher.

The Thatcher government that gained power in 1979 were going to do away with what they saw as Keynesian nonsense, and run the economy using money supply targets. Treasury civil servants produced a forecast that said their policy would lead to a recession, and this turned out to be what happened. The forecast when it was made was dismissed by the politicians in government as the product of outdated civil service advice reflecting a failed consensus.**

It is of course the prerogative of politicians to reject a consensus, particularly if there is a reasonable minority of experts who think the consensus is wrong. It is what happened next that was the problem. Monetarism was a monumental and predictable failure, but Conservative politicians and their supporters spent considerable effort and resources turning this failure into a triumph of Thatcher over an establishment civil service and academic economists. One example is the letter from 364 economists objecting to a deflationary fiscal policy in the 1981 budget. The right, and in particular the IEA, have successfully cultivated a belief that this letter was wrong when in fact it was right. The recovery (using the term as it should be used) was delayed by over a year by the 1981 budget. More generally the view was that social scientists or civil servants were probably antagonistic to the neoliberal project and could safely be ignored. They were, in Thatcher’s words, not one of us. [1]

The reality was that the Thatcher and later Major governments did subsequently often take note of what experts were saying, but the myth on the right prevailed. Before the Conservatives regained power in 2010, they thought very little of going against the advice of the majority of economists over austerity, although to be fair they were later supported in this by senior civil servants and the governor of the Bank of England. Policy based evidence replaced evidenced based policy. But this was the relatively sane wing of the party, as we discovered during the referendum campaign.

We know the EU referendum campaign largely ignored experts, whether they were economists, lawyers or experts in international relations. What I think surprised many is that the Leavers fantasy was not just a device to obtain votes, but actually reflected what the Brexiteers believed. Since the referendum the government has clung to the fantasy, and ignored or dismissed all the advice it was getting from its civil servants. (In two cases dismissed meant sacking or resignation.) As Steven Bullock says, the EU side are in despair that the UK has yet to work out a realistic position on many issues. Because large parts of the UK public, relying on the right wing press for their news, still believe in the fantasy, some in the main opposition party think their best strategy is to ape their opponents.

As a result, we are in a strange bifurcated world. One part consists of pretty well anyone who knows anything about the economics, politics or legal aspects of Brexit. They realise how hard Brexit will be, know how much damage it could do, and by and large think it will be disastrous for the UK. (Experts tend to recognise and respect knowledge in other areas.) The other part lives in a different world, the world of the media and politicians, where everyone still lives the fantasy.

In this respect, we are no different from what is happening across the Atlantic. Angus Deaton notes the tragic irony that in the year the great nobel prize winning US economist Ken Arrow dies, the Republican administration is ignoring one of his great achievements, which was to show why a simple market in healthcare will not work. The only ‘expert’ this Republican administration seems to recognise is Ayn Rand. If it is successful in replacing or sabotaging Obamacare, millions will lose coverage and thousands will die as a result. The experts (such as the CBO) who predict this are accused of inaccuracy by a White House that cannot even be bothered to check its spelling of 'inaccurately'.

May holding Trump's hand shortly after he became president was indeed symbolic. Those who justify ignoring experts often talk about them as ‘unaccountable elites’ who have ulterior motives in giving the advice they do. In reality ignoring expertise means dismissing evidence, ignoring history and experience, and eventually denying straightforward facts. It leads to the politics of barefaced lying, such as asserting that a new trade agreement can be negotiated in little over a year. [2] This disdain for knowledge is not a prerogative of the right: you can find it on the left among those who say, for example, that all social science is inherently value laden and therefore political. (Ironically often dismissing mainstream economics as a buttress of neoliberalism, the same economics that the right are so keen to discredit.) The difference is that that the knowledge dismissing right have power in the UK and US, and so we are suffering the consequences of their evidence-free politics.

[1] Sir Keith Joseph tried to abolish the Social Science Research Council.

[2] It seems finally that the government has accepted a reality that was obvious months ago to those who listened to experts. 

**Postscript 21/07/17 As Sasha Clarkson reminds me, one of that group now spends his time denying climate change.


26 comments:

  1. Nobel Prize for Economics? Really?

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  2. I can only speak for myself but I didn't ignore the voices of economists when I voted to leave. I heard what you said and accept that in the immediate aftermath of leaving the EU the short term economic consequences would be worse. There are two reasons why this did not change my vote.

    Firstly, the politics of power. If we are unable to leave the EU because the EU can choose to do significant damage to our economy, then that means the UK in the EU is effectively powerless, and hence will have no influence. We will be unable to resist the march of Federalism as our lack of power has been fully established. This will ultimately be a disaster for the UK as our country is used as a resource to be pillaged to solve the problems of mainland Europe with millions of UK citizens having increasingly bad outcomes they are unable to change through any democratic process. So best to just grit our teeth and take the hit now.

    Secondly, in the long run our economy is an expression of our culture. Leaving the EU gives us the space to form a UK that starts with putting beneficial outcomes for UK citizens at the top of the priority list and works from there. Currently that is not possible as Freedom of Movement as currently implemented in the UK does not allow us to build skills and careers for many UK citizens as skills can be imported cheaply from Europe. This is by design, and only be leaving can this be stopped.

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    1. The continued "march of federalism" would involve a great many treaty changes that require unanimous agreement between the EU states. The powerlessness of the UK is fiction, as is the talk of the "pillaging" of the UK by those nasty Europeans. Good grief.

      Your second argument assumes that UK opportunities for EU citizens are not balanced against EU opportunities for UK citizens. You seem to operate on some kind of zero-sum model that blinds you to the win-win opportunities of a common labour market. I'd like to see you substantiate your argument in any segment of the labour market other than low-paid, manual work.

      If you have indeed been listening to the voices of experts, with all due respect, you come across as not having listened terribly well.

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    2. The march of Federalism was occurring without any votes in the UK. Our politicians have an obvious moral hazard in their decisions making in that it is in their personal interest to have an option of a well-paid job with the EU at some point in their careers.

      There are a lot less opportunities for UK citizens working in Europe than vice-versa. Firstly, everyone in Europe learns English so can work here, whereas a UK citizen has to choose a particular country. Secondly, there is an implicit discrimination in favour of nationals that occurs in most European countries but does not occur here. And substantiating my argument in the low-paid manual work section is all I need to do as the more skilled end of the jobs market is international beyond the EU anyway.

      I listened critically and evaluated their arguments. I'm entitled to form my own opinions on the basis of the facts and arguments available to me, which I did.

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  3. I look at these negotiations, with May of the Daily Mail, Johnson of the Telegraph, and Gove of the Murdoch, and wonder whether it will all end up in a No Deal which is rejected by Parliament, and then a second referendum happens in the summer of 2019 with the choice of staying in or No Deal as the options.

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  4. There is a difference between ignoring experts and giving their views a proper weight in the "discussion" but you cannot see this because you appear to believe that the economic arguments in the case of Brexit are paramount when they are not.It is not a disdain for knowledge it is simply putting it in context.

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  5. The unaccountable elites that I worry about are those who find themselves in a position to ignore expert advice.

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  6. "Monetarism was a monumental and predictable failure..". Well it brought the disastrous 1970s decade of inflation to an end!

    Had Thatcher instead said "I'm going to bring excess inflation to an end and do it by imposing several years of deficient demand and I'm going to call that a "Keynesian way of halting inflation"", the effect would have been much the same: excess unemployment combined with falling inflation. But that would not have been a good reason for rejecting Keynesianism.

    However I agree that monetarism a la Milton Friedman, i.e. having the same annual increase in the money supply is too crude.

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    1. What is your version of monetarism instead?

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  7. This post seems to ignore the fact that Brussels has become a anti democratic project. Brexit and Trump are a predictable response to a power grab that evolved over decades into a movement utterly dismissive of the man in the street. "Speak now or forever hold your peace" - voters have spoken.

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  8. And what is "Knowledge?" "The science is settled" is bandied about far too often. Ask the peak oilers about that, that was an elite consensus, one of many hoisted onto its petard. AGW debate should be open and robust, it is rank absurdity to declare the issue settled.

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    1. Do not be so sure that crude oil production has not peaked. It appears that 'honest to god' crude oil (> 45 API) peaked around 2005 and the glut is largely 'so-called lease condensate'. See http://resourceinsights.blogspot.com.au/2016/01/the-great-condensate-con-is-oil-glut.html for example.

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  9. "The only ‘expert’ this Republican administration seems to recognise is Ayn Rand."
    from Wikipedia: "Rand underwent surgery for lung cancer in 1974 after decades of heavy smoking.In 1976, she retired from writing her newsletter and, despite her initial objections, allowed Evva Pryor, a social worker from her attorney's office, to enroll her in Social Security and Medicare."
    So not even her.

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  10. Hi Simon. In your bifurcated world, there are the media and politicians on one side and then "pretty well anyone who knows anything about the economics, politics or legal aspects of Brexit" on the other. Do you really think that is correct? I'll give you the economics, though I think it is not clear cut. But international negotiation is fundamentally about bargain not law (I know you have your own view about the strength of the UK position). And politics is a game played by politicians and the media not academics - and it's not an easy game. Your frustration at the fact that there is not more deference to experts and academics is clear and to some extent understandable. But you should do the media and politicians the courtesy of acknowledging their own expertise.

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  11. This could be the USSR as well: politics vs expertise (although experts might be heard, as deep within the military-industrial complex). And if you look at the history of American medicine, you also have this tension between expertise and "democratized" knowledge. Trained doctors might know what is happening to your body better than you do, but then this would grant them authority (whether they want it or not), which means some voices should be louder than ohters (unequal status)--which contradicts tenets of democracy (each voice has equal status).

    So what has been going on since Reagan & Thatcher is not unique across space & time. It's classic politics vs "science" (or "knowledge"), but now coupled with mass-based ideologies. Reagan & Thatcher (and Trump today) could invoke "democracy"--the will of the masses--to attack experts (e.g. climate change). In the USSR, the Party could invoke the "working class" and the Party's status as representative of the proletariat to attack "bourgeois science." (They could also invoke Marxism, which claimed to be "scientific" as well--but that irony is a whole other conversation.)

    In the US, UK, USSR, Catholic Church vs science, etc., we have interests that conflict with realities, and those interested parties will call on dogma (democracy as dogma, theology as dogma, etc.) to attack the expertise. Add to this that we know from soc psych that enough people will double down when they find out they are wrong...

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  12. To me, Brexit makes no sense from any position in given paradigm of internal Britain issue. The Corbyn's position and subsequent rise is indicative of something else but internal UK issue.
    I would place Brexit in Empire power games paradigm.
    What we see lately is German rise to power and copy paste of how USA came to be an Empire of post-WWII world. USA did have surpluses and then switched to trade deficits. The first fase was to spread enough of Dollar into the world and then to use it and abuse it.
    Recent spat of Merkel against POTUSes over Russian energy imports played through Ukraine crisis, then Merkel itself leaking spying on her is indicative of resistance of Germany to USA control.
    In order to show Who's the boss, USA will hurt EU economicaly but it wants a colaborator namely UK. USA most probably can hack UK elections and referendums, which i suspect because the best deflection of suspicions and blame is done by being first to accuse someone else of it. It is a usual human action of predatory mentality. ALl accusations of Russia hacking USA election is two fold: 1) to deflect the suspicions of hacking European elections and referendums
    2) to give excuse to elites in USA to unite domestic population by creating a common external enemy.

    So the reward for Corbyn not opposing Brexit was hacking of Labour elections and reinforcing his leadership.

    Brexit is necessery to use UK against new percieved threat to USA: EU with Germany in the lead. To hurt EU USA will use UK financial powers and connections to demolish the economic might that is becoming apparent, EU. EU is becoming stronger not per se, but in relation to USA who is on the falling trend.

    It seems to me that is the only logical scenario even tough it is an outrageous idea.
    It looks like the Brexit is reducing the connections with EU and such abillity to affect it but it is not. The debt of EU memebers will still be on the City books and Brexit is needed to blcok the feedbac from EU desintegration.
    Or it could be that the EU desintegration is allready clear and Brexit is a step to block it off from UK. That is another possibility.

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  13. And as you know well this is no better in Europe...Greece is supposed to run primary surpluses of 4.5% for decades, Macron is recycling expansionary austerity and so on. The Regling columns/official statements about Greece are truly Orwellian. And if we have a cdu-fdp coalition in Germany it will get even worse. Oh my...
    The difference is that in continental Europe we had a much stronger welfare state to begin with so destroying it takes more time and effort.

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  14. Ironically, the Chinese communist party seems to be a government that pays attention to evidence, from climate change, financial liberalisation (keeping an eye on risks), infrastructure investment in Belt &a Road countries, successful poverty reduction, unafraid to use fiscal policy to complement monetary policy, etc. .

    In Australia, the current government is struggling to put a price on carbon. Why do Western democracies find it so difficult to implement evidence-based policies? Is it because their electoral legitimacy lulls democratic governments into undervaluing the legitimacy from implementing policies that actually improve people's well-being?

    Hope the inattention to evidence among democratic governments is temporary!

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    1. The traditional government of china was the rule of self selecting experts in a civil service recruited by examination.

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  15. This is an interesting post, but this statement “This disdain for knowledge is not a prerogative of the right: you can find it on the left among those who say, for example, that all social science is inherently value laden and therefore political” is a simplistic and distorted view on the issue of scientific objectivity.

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    1. "One part consists of pretty well anyone who knows anything about the economics, politics or legal aspects of Brexit." I'd like to know how much crossover there is between these people and those who assured us rejecting the Euro would also be a disaster.

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  16. FWIW, this problem is more complicated I think. Elected officials tend to not be all that interested in knowledge/evidence-based policy and practice. It happens I wrote about this yesterday, because DC is being lauded for creating a "science lab" to come up with "solutions" but there are a myriad ways in which the city ignores knowledge in making decisions. The problem is pretty widespread.

    http://urbanplacesandspaces.blogspot.com/2017/07/for-lot-of-urban-problems-issue-isnt.html

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  17. In the early years of World War 2 Britain desperately needed to replace and repair the many merchant ships attacked by U-boats in the Atlantic. The British response to this problem is a good example of policy triumphing over evidence to such a bone-headed extent that the policy could have resulted in the Nazis winning the Battle of the Atlantic.

    Shortly before he became Prime Minister, Winston Churchill—a Conservative---put Sir James Lithgow in charge of the repair and replacement project.

    "[Lithgow] opposed an all-out expansion of production, he opposed standardization of design and parts, and he opposed centralization of control, endorsing a light regulatory regime which made it easy for individual shipbuilders to maximise their profits while minimizing the power of the unions..."

    'The Battle of the Atlantic' by Jonathan Dimbleby (page 128)

    Henry Kaiser’s (standardised and pre-fabricated) Liberty ships solved the replacement problem because they could be built faster than the U-boats could sink them. But they were all built in America, which had Democrat Franklin D. Roosevelt as President.

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  18. The myth of economics knowledge
    Comment on Simon Wren-Lewis on ‘The politics of ignoring knowledge’

    Simon Wren-Lewis muses about the psychology of the Brexit vote and then generalizes: “I do not think this ignorance and hubris is confined to the UK’s role in the world. It also extends to an attitude to knowledge of all kinds, and I suspect it is possible to date when this began to the revolutionary zeal of the right under Thatcher.”

    This explanation implies that there is valuable scientific knowledge of economists which is thrown to the wind by ignorant politicians. This is not how economic policy works. There is, to beginn with, NO such thing as valid economic knowledge, only a rummage table of opinions from which politicians pick one for giving the impression that their measures have the blessing of science. This is not different from selling toothpaste with the testimonial of a white-coated dentist.

    Here is the snag: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)

    It is well-known that economists do not have the true theory. This is their scientific track record: provably false
    • profit theory, since 200+ years,
    • Walrasian microfoundations (including equilibrium), since 140+ years,
    • Keynesian macrofoundations (including I=S, IS-LM), since 80+ years.

    ALL theories/models that contain profit, maximization-and-equilibrium, or I=S/IS-LM are a priori false and this is more than 90 percent of the content of peer-reviewed economic quality journals and 100 percent of textbooks of renowned authors since 1947, as well as 100 percent of what orthodox or heterodox or pluralistic economics professors teach beyond commonsensical trivialities.

    It is, first of all, of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics the scientific standards of material and formal consistency are observed.

    Theoretical economics has to be judged according to the criteria true/false and NOTHING else. The history of political economics from Adam Smith to Keynes and Arrow can be summarized as utter scientific failure. Economics never had any truth value, only political use value.

    Egmont Kakarot-Handtke

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  19. I see Brexit as a "right wing coup". I've seen the EU described as "too socialist" in the USA and have long suspected part of the motivation of the Tory right is a shared ideology with the US/globalised right.

    There's a real danger in trying to ascribe rational and reasonable motives and behaviours to anyone obsessed with implementing "hidden agendas". I realise this sounds like high level paranoia - but we now have a new book that seems to be offering a lot of evidence that it's not. I'm waiting for the paperback edition - but reading the reviews and George Monbiot's most recent blog talking about "Democracy in Chains" by Nancy MacLean, I feel we have to start recognising the underlying ideological agenda of the new right - which aims to destroy all social democratic progress ever gained. As for those who think leaving the EU will give us freedoms. I would bet my mortgage a very significant part of the Brexiters agenda is to escape European rules which embed a social democratic agenda in law. Anyone who thinks Brexit will bring the UK "greater freedom" needs to think long and hard about what "freedom" means.

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  20. The lack of concern for facts is pretty much the defining caharacteristc of psychological authoritarianism. Prof Bob Altemyer is excellent reading on the subject.

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