It’s like 2016 all
over again. Lots of forecasts of how much poorer we will be under
different Brexit scenarios, which if the last time this happened is
anything to go by will be ignored or dismissed by around half the UK
population. Perhaps I should call for a total and complete shutdown
of pronouncements by experts until our country's representatives can
figure out what the hell is going on.
More seriously, what
has led to this apparent distrust in the words of experts? I want to
focus on experts in particular, rather than the more general concept
of elites, and even more specifically experts from academic
institutions or places directly tied to them. Will Davies has a nice
account
of the many reasons why distrust in politicians in the UK has
increased, but a lot of what he has to say does not really apply to
academia.
I have to admit to
being completely partial in believing that once society starts
ignoring what the evidence says it is on a road to ruin, and
academics in the sciences (including the social sciences) have as
their raison d'etre trying to understand evidence. And to be fair,
much of society understands that. As an IPSOS MORI survey
consistently shows for the UK, academics (‘professors’) regularly
come close to the top of groups that people trust most.
Furthermore, if
anything public trust in professors or scientists has been growing
rather than falling over time. The same is also true of social
trust in the UK, contrary to many popular accounts.
These results
suggest that there has not been any recent decline in how much
academics are trusted. But if you replace ‘professors’
by ‘economists’, levels of trust decline sharply. [1] And for good
reason. I would have fairly low levels of trust in probably what most
economists I see in the mainstream media say, and this is because I
most frequently see economists in the media who are not academics.
They are typically doing one of two things. The first is making up
stories (sometimes plausible stories, but still based on zero
evidence) about market movements. The second is describing macro
forecasts: a necessary but highly unreliable activity.
Many journalists do
not understand the difference between these kind of forecasts
(‘unconditional’) and the kind of analysis presented on the
economic effects of Brexit (‘conditional’). The analogy I tend to
use is between a doctor telling you that you are more likely to die
of a heart attack if you eat too much fat (‘conditional’), and a
doctor trying to predict your exact time of getting a heart attack
(‘unconditional’). This failure to understand the difference
between the two activities is the first major reason why academics
who say Brexit will reduce living standards are not trusted as much
as they should be. It is predominantly a failure of the media rather
than economists themselves.
I sometimes wonder,
however, if certain journalists and politicians deliberately choose
not to understand the difference between the two because it suits
them to remain ignorant. This brings me to the second reason that
academic economists may be ignored or dismissed over Brexit, and that
is because certain elites have an interest in doing so. Here
is Stewart Wood reacting to Jacob Rees-Mogg’s comments on Mark
Carney after the Bank released some of its Brexit analysis.
The Bank’s
analysis is of course not beyond criticism. [2] But the attacks of
the Brexiter elite are quite deliberately not economic in character
but political: Rees Mogg claimed Carney is a second rate politician
(a second rate foreign politician!) and his forecast is
designed to produce a political outcome (‘Project Hysteria’). The
idea is to suggest that these projections should not be taken as a
warning by experts but instead as a political act. Once again, I’m
not suggesting
we should never think about what an experts own interests might be,
but if you carry this line of thought to the Rees Mogg extreme you
undermine all expertise that is not ideologically based, which is
exactly what Rees Mogg wants to do.
This I think is the
second reason why the view of the overwhelming majority academic
economists that Brexit will be harmful is going to be ignored by
many. Since Mrs Thatcher and the 364 economists, the neoliberal right
has had an interest in discrediting economic expertise, and replacing
academic economists with City economists in positions of influence.
(Despite what most journalists will tell you, the 364 were correct
that tightening fiscal policy delayed the recovery.) Right wing think
tanks like the IEA are particularly useful in this respect, partly
because the media often makes no distinction between independent
academics and think tank employees. Just look at how the media began
to treat climate change as controversial.
But isn’t there a
paradox here? Why would members of the public, who have little trust
in politicians compared to academics, believe politicians and their
backers when they attack academics? In the case of Brexit, and I
think other issues like austerity, these elites have two advantages.
The first is access. Through a dominance of the printed media, a
right wing elite can get a message across despite it being misleading
or simply untrue. Remember how Labour’s fiscal profligacy caused
record deficits? Half the country believe this to be a fact despite
it being an obvious lie. What will most journalists tell you about
Brexit and forecasts? My guess is that forecasters got the immediate
impact of Brexit very wrong, rather than the reality that what they
expected to happen immediately happened more gradually. Why will
journalists get these things wrong? Because they read repeated
messages about failed forecasts in the right wing press, but very
little about how GDP is currently around 2.5% lower as a result of
Brexit, and real wages are lower still.
The second is that
the elite often plays on a simple understanding of how things work,
and dismisses anything more complex, when it suits them. Immigrants
‘obviously’ increase competition for scarce public resources,
because people typically fail to allow for immigrants adding to
public services either directly or through their taxes. The
government should ‘obviously’ tighten its belt when consumers are
having to do the same, and so on. In the case of the economic effects
of Brexit, it is obvious that we will save money by not paying in to
the EU, whereas everything else is uncertain and who believes
forecasts etc.
As the earlier
reference to Mrs Thatcher suggests, there is a common pattern to
these attacks by elites on experts: they come from the neoliberal
right. If you want to call the Blair/Brown years neoliberal as well,
you have to make a distinction between right and left. The
Blair/Brown period was a high point for the influence of academics in
general and academic economists in particular
on government. As I note here,
Iraq was the exception not the rule, for clear reasons. Attacks by
elites on experts tend to come from the political right and not the
left, and the neoliberal right in particular because they have an
ideology to sell.
[1] See this YouGov poll. Thanks to John Appleby for finding this for me.
[2] For example,
including a ‘worst case’ No Deal scenario designed for stress
testing banks in a graph alongside more standard projections of the
impact of the Withdrawal agreement is just asking for
misinterpretation of the former.
Reinforcing your comments, my experience is that people genuinely believe that media are "not allowed" to print fabrications and untruths, so they blindly believe what they read. I have even had quotes in all seriousness that could be traced to spoof readers' letters in Viz Comic. No wonder it's easy to rubbish expert advice if it suits your purpose (and, of course, the reader's).
ReplyDeleteit seems obvious that attacks on experts come not from the neoliberal right but from the neonationalist right. indeed the neoliberal right are often the "experts" being attacked on the virtues of trade, migration, free enterprise, &c. moreover, it's not just that experts were wrong in that what they expected to be immediate occurred gradually; they were categorically wrong about the nature of Brexit consequences altogether. differences in great enough degree become differences in kind: chronic back pain, while miserable, is not death. at issue is experts marketing of themselves using exaggerations and sky-falling predictions.
ReplyDelete"It is predominantly a failure of the media rather than economists themselves"
ReplyDeleteI disagree. Economists know that their comments will be distorted to suit the political ends of the media. It is ultimately their responsibility to communicate clearly and say things which are not ripe for misrepresentation.
One simple way to win back respect is to have larger error bands around forecasts. Point estimates convey a false sense of certainty which in the long run undermine public trust.
Perhaps the problem with academics is that they speak in a language that doesn't resonate with the average voter. For example, you don't often hear the average voter saying "I voted conservative because their policies will raise trend real GDP growth by 56bps a year".
A hard Brexit crashout would be a sudden discontinuity in day-to-day business operations. Models that assume continuity are less likely to be accurate than informed common sense. Andy Haldane of the Bank talks to businessmen, as Alfred Marshall did before him. I therefore give his forecasts more credibility than the conventional modelling of say Paul Krugman.
ReplyDeleteDover docks on Day 1 will be chaos. The customs software and new rule book won't be ready. A policy of waving everything through does not solve the symmetrical problem for the French customs at Calais. The window for fixing the problem is short, before just-in-time factories and warehouses close their doors.
At the other key border at Dundalk, the risk is of the chaos turning violent. Again, the time-frame is short.
“Many journalists do not understand the difference between these kind of forecasts (‘unconditional’) and the kind of analysis presented on the economic effects of Brexit (‘conditional’). The analogy I tend to use is between a doctor telling you that you are more likely to die of a heart attack if you eat too much fat (‘conditional’), and a doctor trying to predict your exact time of getting a heart attack (‘unconditional’)."
ReplyDeleteIt is disingenuous to criticise journalists when neither the Treasury nor Professor Sir Charles Dean make this distinction.
This is what the Treasury say in the document “HM Treasury analysis: the immediate economic impact of leaving the EU” as endorsed by Professor Dean.
“A vote to leave would cause an immediate and profound economic shock creating instability and uncertainty which would be compounded by the complex and interdependent negotiations that would follow. The central conclusion of the analysis is that the effect of this profound shock would be to push the UK into recession and lead to a sharp rise in unemployment.”
No conditionality there and very little throughout the report. What conditionality there is in the report is all on the downside. I challenge anyone to find any explicit upside conditionality.
The report starts with the statement.
“To inform the decision that the British people will make on whether the United Kingdom (UK) should remain a member of the European Union (EU), this document provides a comprehensive, rigorous and objective analysis of the immediate impact of a vote to leave.”
Yet, what little conditionality there is in report would lead a layman reader to conclude that any delay in the Brexit process would lead to a worse economic outcome. Despite this, when the Treasury subsequently disowned their forecasts, they told us that it was because their model had not allowed for a possible delay in invoking Article 50.
The bottom line is that the Treasury predicted a recession, they predicted a rise in unemployment of between 520,000 and 820,000 and a fall in house prices of between 10% and 18% within the 2 year period after a referendum vote for leaving the EU. Last week the Government published the document ‘EU Exit’ Long-term Analysis’. The first two sentences state the following.
“As the UK leaves the European Union it does so with strong economic fundamentals. The economy is growing, unemployment is low and real wages are rising.”
an explanation of the paradox would be that the public trust academics' integrity but not their judgment.
ReplyDeleteMost forecasts that people are interested in are unconditional, that is they forecast the whole economy. The concept of risk may be more readily applied to a conditional forecast but a forecast of the whole economy must surely fall into the category of uncertainty. There may be a lack of understanding about what forecasts are but forecasts about where the economy will be in fifteen years time are presented as authorative whereas they are not; they are little more than speculation.
ReplyDeleteIn 1971 the government issued a White Paper on EEC entry (Cmnd 4715). They made no predictions about where the economy would be in the long term because it was wholly dependent on how firms and individuals reacted to the changed circumstances (See paras 45-48). Now you might argue that that was nearly fifty years ago and we are more sophisticated; but that would be sophistry; we still do not know how Brexit would pan out over the next forty years. Mervyn King, in a recent interview on Bloomberg said in his view it would make very little difference.
Mark Carney discredited himself with his ridiculous comic performances and lies. His repeated lies about when he would put rates up. "Forward Guidance". Without knowing more as he's not worth your or my time and to defend him cos a buffoon like Rees-Mogg says something - mine enemy's enemy too far.
ReplyDeleteCredit for Blair/Brown and the PFI, the asset bubbles, debt, slow growth, low investment, etc etc. The creation of asset stripped zombie companies running public services, the charging for hospital car parking etc etc all stem from Labour's policies. Label it neo Liberal or mainstream academic thought.
Preferring transfer payments (to be removed when the economy turned) to actually changing anything. You can blame others but as Leveson/Fake Sheikh debacle showed the vile media atmosphere was caused by Labour leaders being close friends with Coulson, Murdoch, Dacre, Brookes et al Experts? & led in part to BrExit.
The harrying of the poor at dole offices, insecure employment, debt debt and more debt, land/property prices, a lack of focus on anti trust and banker loving - to de facto support Brown and Balls and their love of deregulation, financialisation and no such thing as fraud from the blame for GFC is rationalisation? In a satire of Labour Malcolm Tucker said "get another expert" to the minister. I find a defense of that amoral regime hard to reconcile.
Economics can forecast differences but not actual growth? That's a tough sell true or not to non experts. The 3-4% over 10 years (May's plan) (some other productivity factor might make it greater accepted) of leaving the EU (a moral choice for me having voted remain to avoid disruption to not leave now as EZ crushes democracy is pretty unprincipled IMO esp over less than the economic policy missteps and shocks of the last 40 years: oil shock:3 day week: Big Bang: 0 city regulation: austerity supported by all 3 mains in 10 & 15: Winter of discontent: Howe's budgets £ to $2.47 back to 1.08 in 3 years: Lawson: EMS: Gulf War:Tech bubble. And even stuff that counts as growth in GDP but does not make people's living standards better).
The economic profession has only itself to blame for the lack of trust by the public. It is a disgrace the way the profession is completely politicized and/or sold to the highest bidder.
ReplyDeleteCase in point:
Current deal / no deal economic projections, I quote the BBC 28-11-2018:
"Official figures say the UK economy could be up to 3.9% smaller after 15 years under Theresa May's Brexit plan, compared with staying in the EU.
But a no-deal Brexit could deliver a 9.3% hit, the new estimates say."
So official figures say the UK will be, on average, up to 0.26% poorer per year for a period of 15 years with May-deal and 0.62% with No-deal compared with full EC membership.
This is quite frankly ridiculous and laughable. Sorry about that. These forecasts fall effectively within the error margin for any standard economic yearly economic forecast in the UK. It is pure farce and fraud to pretend that these figures show a clear Brexit effect in the economy as opposed to any white noise of year to year economic variation, or any other so far unreported long term economic phenomenon.
In reality what these forecasts tell is that economists are NOT able to indicate clearly what is the economic benefit or otherwise of the UK's presence within the EU.
If this analysis is the best that mainstream economic experts have to base their "learned opinion" that the EU is good for the British economy then I'm afraid that their opinion can only be classified by an honest outside viewer as mere Dogma.
What would no trust look like? The public may say they 'trust' Professors (lets use science) but the Professor are having very little effect on the public debate. The scare around vaccines, the inaction on climate change, GM food, and the headlong pursuit of Brexit which will implode much of science are all mass delusions that science has failed to save us from. In actual fact Greenpeace or Monsanto have had much more impact. Its part of wider narrative that facts do not matter its what one feels. I was at public event, where a young person said they hated people being negative about their country, why could we not just all agree with each other and make Brexit a success after all Britain was a great country. Another went off on how Britain is the worst most unfair, exploitative racist country on the earth (presumably in a calmer moment they would have put Britain second to the US). Both suffer the same delusion, that of exceptionalism.
ReplyDeleteHere's a challenge. Go through the European territories that have self-government and look at the ones which since the 2nd world war have never been communist and never been members of the EU. Then come back and tell your readers which one of them is worse off ( GNP/head by PPP will do ) than its nearest EU neighbour.
ReplyDelete