Winner of the New Statesman SPERI Prize in Political Economy 2016

Thursday, 24 May 2018

Brexiter nonsense and policy entrepreneurs

Brexiters typically sound convincing if you know little about what they are talking about. Ian Dunt takes a typical example from Rees-Mogg (still favourite to be next Conservative leader). Rees-Mogg asserts, with absolute certainty, that a House of Lords committee have missed a crucial aspect of trade law related to WTO rules. Trade experts spend some time scratching their heads wondering what on earth he is talking about. They finally work out where the idea comes from, and why it has next to zero applicability to Brexit. (See also Jim Cornelius here.)

As Dunt points out, nonsense of this kind is effective. Because broadcasters often fail to match Brexiters with trade experts, they get away with their nonsense. By the time the nonsense is revealed as such, and enough people know why it is nonsense. the discussion has moved on and new nonsense appears. The fantasy that is Brexit remains intact at the level of public discourse.

Politicians like Rees-Mogg are not able to generate this nonsense themselves. How could they when they seem to spend most of their lives going from one broadcast studio to the next. Because this nonsense normally has some tenuous connection to reality, it has to come from someone with some knowledge of international trade and trade agreements. Welcome to the policy entrepreneur.

The term policy entrepreneur comes I believe from Paul Krugman’s first book from 1995, Peddling Prosperity, which unfortunately remains as relevant as ever. The book begins with the Laffer curve and the economists - including Laffer - who promoted the idea that cutting taxes would raise revenue. It is a typical piece of nonsense. It takes the reality that if taxes were 100% lots of people would stop working, and mutates this into the idea that taxes are already so high that cutting them would encourage more growth such that tax revenue will rise. It is typical political bullshit: giving an imagined respectable gloss on something that too many Republicans just wish were true.

But in the latter part of Peddling Prosperity things got personal, as Krugman describes how different policy entrepreneurs took some of Krugman’s own research and used it in a way Krugman would not to lobby President Clinton for trade protection. Economic theory suggests that if a profitable opportunity arises and there are no barriers to entry people will exploit that opportunity. I think the policy entrepreneur is a good example of that happening. Some politicians want to pursue a policy but want some kind of rationalisation for it, and the policy entrepreneur steps up with some nonsense erroneously derived from economics or some other discipline to provide that veneer of respectability.

Policy entrepreneurs can be academics: in the UK the most obvious example many would point to is Patrick Minford. But they can just be good lobbyists, who put themselves in the right place at the right time. In the case of Brexit, the policy entrepreneurs from whom the Brexiters get most of their information are in the Legatum Institute. BuzzFeed has a very good profile of their until recently director of economic policy, Shanker Singham. It is worth quoting from it.
“BuzzFeed News spoke to multiple economists, policy wonks, Conservative advisers, politicians, and journalists who said they’re baffled that he’s become so prominent in the Brexit debate. They say his standing in the trade world has been overblown. They don’t dispute that he knows the subject, but most hadn’t heard of him before he emerged at Legatum. They find it exasperating that he’s been portrayed in the UK as a vastly experienced trade negotiator, as if he were one of the decision-makers in the room when the world’s biggest trade agreements were hammered out. He wasn’t that close to the action, they say.”

But of course someone with more experience or more knowledge could not take Singham’s place, because they would not be the true believer that Brexiters require. When you have faith as the Brexiters have, you do not seek real knowledge, but just enough facts to sound good and thereby promote the cause.

Policy entrepreneurs, whether they are seeing a profit opportunity or really are true believers, are a symptom that what I call the knowledge transmission mechanism has broken down. As Krugman’s book indicates, Brexit is not the first time that policy entrepreneurs have helped politicians enact destructive policies. Here I argue that that the knowledge transmission also broke down when it came to austerity. (Paper here.) It is possible for policymakers to use intermediaries like civil servants to find the best research and use it - it has happened in the past - but today it seems like the exception rather than the rule.


  1. A particularly galling example is the Iraq War. The policy entrepreneurs of *that* were the so-called Neo-Cons - hearing what they wanted to hear - while the actual experts like Hans Blix (or any experienced Iraq-watcher) came to look rather wise in retrospect.

    I say galling because now populists like Farage or Trump like to claim that the "experts" were in favour of the war, as though to claim that "nobody really knows anything". In fact the war is an extremely good example to counsel *against* throwing caution to the wind, and listening to those who really know what they're talking about.

    1. I have made this point in a past post, comparing Brexit and Iraq and how experts were ignored in each case. I would do it more often but whenever you use Iraq as a comparator you get comments from people on the left saying how dare you compare Brexit or whatever with the horror of Iraq! You can reply until you are blue in the face that the nature of the mistakes are the same but they are on a moral high horse and nothing will talk them down.

  2. Typos: "what an earth" -> "what on earth"
    "Brexit remains in tact" -> "Brexit remains intact"

    1. Simon, I think you give the broadcasters too much credit. If they wanted to scrutinise these proposals they would.

      For example, they would ask Jacob Rees Mogg how his novel idea what affect the existing trade arrangement of some big employers.

      They would then ask representatives from those industries if they agreed.

      Then they would ask workers whether they were satisfied their jobs were safe under Rees Moggs scheme.

      Then they would cut to Rees Mogg driving away in his Bentley.

  3. Well said. Since when has impartiality been an impediment to presenting expertise, evidence, truth and reasoned argument? Impartiality is only a starting point (stasis). When the evidence comes in something has to give. The problem with MSM - even when not enthrall to vested interests - is that it doesn't/won't/can't consider the evidence on its merits. As a consequence we are likely to find ourselves outside the world's largest free trade area on the basis that rest of the world, which isn't, is a better prospect. Similarly, no Brexiteer thus far, has been able to explain why being a member of the single market and customs union (with all that red tape and regulation) hasn't restricted Germany's ability to account for nearly 10% of the world's trade.

  4. I am watching the Daily Politics. Rees-Mogg is staring out of the screen with an intense gaze. "You are feeling relaxed..." he drawls, "you are feeling more and more relaxed...about driving the economy off a cliff next March. Trust me, nothing bad will happen....WTO rules...soft landing."

  5. "They say his standing in the trade world has been overblown. They don’t dispute that he knows the subject, but most hadn’t heard of him before he emerged at Legatum."

    I'm no fan of the man, but this is yet another example of the referendum-losing mindset. 'Never mind the knowledge, feel the CV.'

    "Policy entrepreneurs can be academics". And another one: it seems that the definition of a policy entrepreneur is 'someone who dares to say things I don't personally agree with (pejorative)'.

    One of the defining traits of the Remain campaign and continuity-Remain is their willingness to peddle economically illiterate nonsense ('Brexit absolutely guarantees that Britain will be worse off!' 'the gravity theory of trade comes with zero caveats whatsoever!' and to justify it with appeals to CVs rather than to reason or evidence.

    1. A policy entrepreneur is someone who touts a policy that has no evidence for it because they are a true believer or because they get the ear of politicians. Nearly all Remainers are happy to talk about why Brexit is a crazy idea.

  6. "Some politicians want to pursue a policy but want some kind of rationalisation for it, and the policy entrepreneur steps up with some nonsense erroneously derived from economics or some other discipline to provide that veneer of respectability.

    Policy entrepreneurs can be academics" -- Simon Wren-Lewis, Labour Party advisor & policy entrepreneur without even knowing it.

    1. Would you like to point to any of my policy recommendations that is erroneously derived from economics.

  7. Entrepreneurship has been described as the "capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit". When a entrepreneur operate his business globally,that can be described as international entrepreneurship


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