Winner of the New Statesman SPERI Prize in Political Economy 2016

Tuesday 30 April 2019

Buses are about redistribution, productivity and a greener future

Labour’s policy for buses is a key part of reversing the impact of neoliberalism on transport since the 1980s. It is redistributive: it helps those who cannot afford to drive to work. Nearly half of all bus journeys are taken by those who have no car, and two thirds of those who travel on buses have an annual income below £25,000 per annum. But it is also a brave policy. By far the most popular mode of transport is by car (or van), and the policy will be portrayed by opponents as putting road building at risk. .

The money recently promised by Labour will mainly go to undoing another impact of austerity. Outside London fares on commercial routes are set by bus operators. Local authorities can provide subsidies for routes that are socially important but not commercially viable. Local authority-supported services outside London have halved in vehicle mileage since 2009 as austerity has squeezed local authority budgets.

But Labour also plan to change the way buses are run outside London. Bus operation was privatised by Mrs Thatcher in 1986. Yet privatisation has in most cases failed to bring the benefits of competition. Largely as a result of a long-term process of consolidation through merger and acquisition, the UK bus industry is highly concentrated with three businesses (Arriva, FirstGroup, and Stagecoach) dominating the sector. Head-to-head competition between operators is uncommon, producing what is effectively a monopoly.

The market failure in this case may be the ability of a large bus operator to stifle any competition by temporarily cutting prices or increasing frequency. That makes the routes unprofitable for a time for the large bus company, but it is also unprofitable for the new entrant. As the financial resources available to the big company are much greater, they have the ability to kill off or take over any competition.There is no regulator preventing this kind of unfair competition.

With new entry unlikely to happen because of the possibility of such threats, the large bus companies can do what every unregulated monopoly does: raise fares and reduce services. That is good for profits and dividends, but bad for passengers. The large bus companies make good profits, and the passenger gets a more expensive or less frequent service. Since 2009, for example, the average price of riding a bus has increased in real terms by over 15%, while the cost of using a car in real terms has hardly changed.

There is a vicious circle here. The cost of running a bus is largely independent of how many people use it, so if usage declines firms put prices up, which in turn discourages passengers. But one important area has seen bus use rise rather than decline, and that is London.

The system in London is rather different from the rest of the country. Contrary to common belief, Transport for London does not own its buses. What it can do that local authorities elsewhere cannot is set routes and fares, with private companies bidding to run each route. That avoids the high fares that come from monopoly, and it also makes it easy to establish a common ticketing system which is absent in places like Manchester. The system used in many European countries for their bus services is similar to London. An important advantage London has is that there is effective competition between bus companies to bid for tenders on routes, which helps keep costs down and maintains efficiency that might be lost in a completely nationalised system.

The success of London compared to most other areas of the country suggests the neoliberal ideal of a bus system free from government ‘interference’ does not work, and local control over routes and fares can provide a better service. It is a classic example of where economics, which recognises the social costs of monopoly, beats a neoliberal ideology that is often blind to the dangers of monopoly. This is why Labour also plan to encourage areas outside London to re-regulate bus services, and support the creation of municipal bus companies that are publicly run.

While a comparison between London and elsewhere shows the dangers of private monopolies charging too high a price for services, is there not a danger that if local government can set fares it will tend to set fares too low? I don’t think this is likely to be a major issue because of two other problems (what economists call externalities) with a profit-based bus service. If people use many cars rather than a single bus this increases congestion and pollution.

Anyone familiar with large towns and cities during rush hour will know what a nightmare congestion can be. Buses can reduce congestion by persuading people not to use their cars. Basic economics tells us that the congestion externality justifies subsidising bus travel or taxing cars. Exactly the same point applies to CO2 emissions and pollution. In this respect underpricing bus travel can be advantageous.

Unfortunately the experience of UK cities suggest that cheap fares alone may not be enough to prevent congestion. In addition congestion outside London may be having a serious impact on the productivity of our cities, as well as increasing pollution and CO2 emissions.

Tom Forth writes about a recent study that starts with a puzzle. In many countries large cities tend to be more productive than small cities, and economists explain this by talking about agglomeration effects. However this pattern does not seem to be true for the UK if you exclude London. Another way of putting the same point is that UK cities outside London are not as productive as they should be.

The study then looks at transport times to the centre of Birmingham, where the transport system is mainly based on buses. At peak times, when congestion is high, bus journey times into work can double on bad days, and anyone using a bus route has to plan for bad days. So if we think about the effective size of Birmingham in terms of a reasonable time to get to the centre, the city shrinks substantially.

This study shows that as long as cars are free to come into the centre those travelling on buses also suffer. Birmingham is using this study to target investment in bus lanes, which provides a partial answer. Park and ride schemes can help too. Another approach is to again follow London and introduce a congestion charge, but this will only be politically feasible if alternatives are easy, cheap, frequent and reliable.

If we look at cities in France, the big difference with UK cities is metros. Lyon has 4 lines, while Lille and Marseille have two lines each. Birmingham and Manchester have none. Last week I visited the French city of Rennes, population 215,000, that has one metro and is building another. Manchester has a good tram network similar to Lyon, but Birmingham has just one and Leeds none (compared to three in Marseille and two in Lille).

In short, cities outside London lack the transport infrastructure that can make them work productively, but also in a way that reduces CO2 emissions and other forms of pollution. One difference with France is how money is provided. In France every city larger than 100,000 people has a ten-year transport plan, with significant national investment in five-year allocations with ten-year strategies. In the UK cities are good at the strategies and visions but cannot secure funding to realise them.

Once you have well functioning cities you need to provide easy connections to nearby towns. Towns flourish when they are well connected to dynamic cities. Many will argue that this kind of local investment is money better spent than HS2, but I don’t think we should think of these as alternatives. Cities that link quickly to other cities are likely to be more productive, and France’s TGV network puts the UK to shame. The UK has underinvested in non-road transport infrastructure outside London for decades, and we need to make up for this quickly to create a more prosperous and greener future.

Saturday 27 April 2019

How the media can frame our understanding of elections

What will the European elections mean for the future of Brexit? We know that Remain is clearly ahead in polls and has been for some time, but an actual election has additional validity. What better to focus on the EU issue than elections to the European parliament. So quite rightly everyone will be looking to the result to gauge popular opinion.

There is only one problem. The obvious thing to look at is votes cast, because these are unaffected by a voting system that penalises small parties. There are three main pro-Brexit, anti-People’s Vote parties (Con, Brexit and UKIP), five anti-Brexit, pro-PV parties (Green, LibDem, CHUK, SNP and Plaid) and Labour. Although Labour is officially a pro-Brexit party, it is likely something in excess of three quarters of those who vote for Labour are anti-Brexit.

But as I have written before, the media will focus on Nigel Farage. What is also almost certain is that they will focus on seats won rather than votes. As Ian Dunt writes

“Sure, Remain might end up doing as well as Brexit parties in the popular vote, but it won't matter. That's not how journalists think and it's not how Westminster thinks. They care about who wins: how many MEPs are returned and from which party.

I can confirm, based on a twitter conversation with a journalist for a major broadcaster, that this is exactly how they will behave. They will focus on the large number of seats Farage wins compared to the small number of seats that the anti-Brexit parties win in England and declare a victory for Brexit. This journalist even said it would mean the death of a People’s Vote.

Now if this was all about the UK’s representatives to the European Parliament, then of course it would be right to focus on seats. It seems likely that had the Greens, LibDems and CHUK cooperated they would win more seats each than if they fight each other. But if you are trying to assess what the vote means for popular sentiment on Brexit you should look at the vote. Ask any pollster. But the media will to a large extent ignore this.

The only defence for the media’s approach is that politicians will also focus on seats. But will they? I think the truth is that the political parties that do well in terms of seats will do so. Those that do well in terms of votes will focus on votes. In particular the winner in terms of seats will make a great deal of fuss about that fact. The media loves to focus on winners for understandable reasons. The problem comes in letting this focus spill over into statements about issues where its votes not seats that matter.

Suppose the result in terms of votes and seats (excl Northern Ireland) is something like this (not a forecast, but just reasonable numbers to illustrate my point):

Labour 27% Seats 23

Pro-No Deal parties 28% Seats 25

Conservative 14% Seats 10

Anti-Brexit 31% Seats 12

Suppose Farage gets all of those 25 seats. He will be the winner, and we will see celebrations by him everywhere. But does that imply that a People’s Vote is dead? Of course not, as PV parties will have won 58% of the vote. Does it imply we should leave with No Deal. Of course not: no deal parties have only 28% of the vote, which is less than the anti-Brexit parties. Can we trust the media to make these points? I suspect not.

It is depressing how people internalise media behaviour. I have read countless tweets, articles and podcasts saying that the failure of the three anti-Brexit parties to cooperate is a huge mistake, because it will damage Remain’s cause. This is from Remainers themselves, not their opponents, and Remainers who know how the media behaves.

Why is it so difficult for the media to focus on reality, rather than make up a false truth that is sympathetic to certain politicians and newspapers. Maybe the reason is just bias - a bias imposed by the partisan press that too often sets the agenda. Maybe it reflects the media’s obsession with parliament and MPs, where MPs from Remain parties are few in number. Maybe it reflects how the media sees elections as horse races were only the winner matters. None of these reasons are good, so it is a shame that so many people internalise the media's framing rather than challenging it.

Tuesday 23 April 2019

When people warning about incipient fascism are criticised rather than laughed at is the time to worry about incipient fascism

I’m old enough to remember left wing demonstrations in the UK when ‘fascist!’ was a standard chant. On most occasions back then it was a ridiculous accusation, and as such it was rightly laughed away. But times have unfortunately changed. With authoritarian regimes in some East European countries, Trump’s election and subsequent behaviour, and far right parties gaining ground in other countries, fears of a return of something like fascism are no longer a laughing matter.

When Andrew Marr interviewed David Lammy a week ago, he suggested Lammy talking about appeasement of the ERG in the same terms of Hitler or apartheid was “unacceptable”. Not ludicrous but unacceptable, and by implication something Lammy should apologise for. Quite rightly, and so refreshingly for a Labour MP in the glare of TV lights, Lammy was having none of this. He said his comments were not strong enough. When Marr protested that these were elected MPs he was talking about, Lammy reminded him that the National Socialists had elected MPs. In 1932 they were the largest party in the Reichstag.

Nigel Farage is not an MP, but the BBC seem happy not just to give the launch of his new party considerable airtime, but also to do so in an uncritical manner. After the BBC had chosen the soundbite from his speech about putting the fear of god into MPs for what they had done to us, no one was given airtime to warn about how dangerous that kind of speech was, and that one MP had been murdered by the far right, another plot foiled and about many other serious threats to MPs. I think it is fair to say that the launch of the Brexit party was news and had to be covered, but to provide no kind of critical balance whatsoever was a strange decision.

Discussions of incipient fascism go in the wrong direction when direct comparisons are made to fascism in the 1930s. Equally ticking off check lists of signs of fascism just beg the question of how many ticks mean we should be worried. There is no generally accepted definition of fascism. We need to be more analytical, but also to update the analysis to the circumstances of today.

Much of the academic discussion of this issue takes place under the umbrella of studying populism. I think this is a little unfortunate, because the populism umbrella can be spread very wide to include any political party that challenges an existing party political structure. If you are interested in incipient fascism a better conceptualisation of populism is expressed by Jan-Werner Müller. You can tell a populist by whether they claim to represent ‘the people’, which is certainly not all the people, but instead just the ‘real people’. The real people quickly becomes those that support the populist leader. The others, especially immigrants or minority religions or races, just do not count, or worse still are ‘saboteurs’ trying to thwart the ‘will of the people’. Populists of the Müller type will be strong on nationalism, as well as threats from within and without. Intimidation and violence against opponents is never far away. Populists will talk about the elite that has been leading the country astray, and how they as leader has to constantly battle against this elite, even though they themselves are often part of that elite.

I think a critical aspect of Müller’s account is that populists are prepared to overturn the institutions of pluralist democracy if they believe they are frustrating what the populist leader perceives as the will of the people. Authoritarian populist leaders deny the necessity of democratic pluralism, such as an independent judiciary or an independent media. The people, as expressed through the populist leadership, takes precedence over all other elements of pluralist democracy, and these elements must be made to bow before that will or be replaced by those who embody that will.

A clear example of what Müller is talking about is Viktor Orbán’s Hungary. He has pledged to create an illiberal state like Russia or China. Perhaps as a result, European Commission President Jean-Claude Juncker at a 2015 EU summit dispensed with diplomatic protocol to greet Orbán with a "Hello, dictator." To further this aim he has gone about controlling the media and courts either directly or through placement of allies, with complete success. This together with a lethal combination of extreme nationalism, scaremongering about migrants and antagonism against Muslims and Jews keeps him popular. NGOs have been attacked, which has led to legal proceedings by the European Commission. A host of public bodies like its fiscal council, the central bank, and the national elections commission, have been abolished or their independence limited. An international university in Budapest has been forced to close down.

Yet Hungary is still a democracy in the sense of having reasonably genuine elections. When occasionally the opposition does win a local election, Orbán unleashes the full might of his nationalist, enemies at the door, enemies within narrative at them. With almost total control of the media and civil institutions, he can make life very difficult for the opposition. He won his last election with ease.

I would argue that this is the incipient fascism of today. It is possible that Orbán’s nationalism and control of the media and other parts of the state will allow him to maintain total control for many years. If at some point in the future a unified and effective opposition does arise, we will see if Hungary moves back to democracy or to something worse than the elected dictatorship it now is.

It is also easy to see many of the traits of a Müller populist in Donald Trump. He is impatient with the constraints of the judiciary, and is more than happy to fill vacancies with barely qualified or unqualified individuals who will do what he wants. He plays up threats from within and without. He has a penchant for dictators in other countries. He endlessly criticises the ‘fake news’ that comes from an independent press, and instead favours the Republican/Trump propaganda that comes from Fox News. When asked whether he was concerned about death threats that followed his disgraceful attack on one of only two Muslims in Congress he basically said no. His own Republican party provides no check on his actions.

But in what sense can any of this be applied to the single political project called Brexit? The ERG are a disparate group of MPs, whose common cause is to push for the most extreme form of Brexit. There is no single authoritarian leader among them. So can Müller’s concept of populism still apply to this project and some of those who push it?

Let’s begin with what happened shortly after the 2016 vote. That referendum did not specify how we left or under what circumstances Article 50 should be triggered, but May decided that she uniquely understood what the referendum meant and parliament did not need to be involved. The Prime Minister wanted to start the Article 50 process without consulting parliament. The issue went to court, and when three judges decided parliament did have to approve the decision, the Daily Mail described them on its front page as enemies of the people.

The Brexit press and those promoting Brexit frequently talk about the will of the people, thereby excluding the 48% who did not vote for it. Indeed Remainers are often accused of sabotaging Brexit, and being the elite that those carrying out the will of the people have to defeat. EU citizens living here are effectively ignored, and were not even allowed to vote in the referendum. When the costs of Brexit are mentioned, we will often be reminded of how the British stood alone in WWII and came through the hardship of war. This is nationalist imagery at its most potent and dangerous. At one point the Daily Telegraph managed to find common cause with the authoritarian regime in Hungary and the far right in the US by scapegoating the same wealthy Jew for his ‘plot’ to stop Brexit.

To sum up, Brexit and those that push it have displayed almost every element of Müller style populism. I have not even needed to refer to links between various Brexit politicians and the German AfD, Steve Bannon and various far right groups. Or about law breaking in order to win the vote, and the lack of enthusiasm shown by the police in investigating this. Brexit displays the same populist characteristics that you see in Victor Orban or Donald Trump. Add the violence that Brexit has inspired and the pro-Brexit right encourage with their talk of treason and we have every reason to warn about incipient fascism, as Michael Heseltine pointed out.

It is also naive to imagine that all this will stop if we end up leaving the EU. Steve Bannon is creating a network of far right parties that will use immigration and islamophobia to undermine existing parties and then pluralist democracy. Islamophobia has already been employed by the Conservatives in trying to stop Sadiq Khan becoming mayor of London. Brexit of the kind proposed by May will undermine living standards for working people that have hardly grown for a decade. This stagnation, coupled by unfettered and growing inequality, is the kindling that Bannon and his network hope to set alight.

In my view this has become so dangerous partly because the political centre fails to see it. The Brexiters are appeased by May rather than isolated as John Major did. Those termed political moderates fret about the leader of the Labour party as much if not more than incipient fascism. I cannot quite decide whether the BBC is just blind to all this or elements within actively promote it. A lesson of history is that the far right is at its most dangerous when it is appeased by a centre that is more concerned about the threat from the left.

Friday 19 April 2019

Views on the minimum wage show economics to be an inexact science

.The hallmark of a science is not just having refutable hypotheses, but also changing its view when data shows the theory is wrong. Economics is often accused of not being a science. A good test case to see if that is true is the minimum wage. Basic economic theory suggests if you fix wages at above their level in the market, employment will fall as less workers are employed. However a number of empirical studies, the most well known of which was written by Card and Krueger in 1994, have suggested that employment shows no noticeable decline when a minimum wage is imposed or modestly increased. My reading is that the most convincing studies do show this result, but not all do, so the picture is not completely clear.

This illustrates a problem for economics (and all social sciences) that outsides often fail to appreciate. Measurements and econometric studies are often not conclusive, and even in the case of austerity you can find one or two empirical studies which says something different to all the rest. As a result, it is more difficult to use data to show a hypothesis is conclusively wrong in the way the natural sciences can. My own view is that the balance of studies clearly shows a modest minimum wage has no noticeable impact on employment, but others would disagree.

Here is a question from the IGM survey.of around 50 top US economists on the minimum wage

Academic economists appear evenly divided, and few hold a strong opinion on the issue. A similar survey of UK economists, asked about the 2016 increase in the minimum wage, was also divided but lent more towards no effect. In contrast, most German economists appear to have been opposed to the recent introduction of a minimum wage.

If you were cynical you might say that all this shows is that the views of economists just reflect their political opinions, and I would indeed expect there would be a clear correlation to support that with the minimum wage. However when either theory or evidence are pretty clear, economists do not divide by political opinion. The same survey in 2012 and 2014 showed economists largely agreeing that the Obama stimulus reduced unemployment and was beneficial, even though the political right was strongly opposed to it. The reason is that economic theory and nearly all evidence shows that fiscal expansion when interest rates are stuck at their lower bound is expansionary.

Equally standard microeconomic theory is just as clear that the minimum wage will reduce employment, and I suspect that had this survey been done in the early 1990s most academics would have agreed with this, whatever their political persuasion. What has changed is the evidence. This example clearly shows a good number of academics responding to empirical results that conflict with standard theory.

Furthermore some economists have done what good scientists should do and produced new theories which can explain the empirical results that the minimum wage does not reduce employment. In that sense economists have been behaving as a science should. But because there are some contrary studies, that allows two things that distinguish economics from physical sciences. The first thing is a temptation to hold on to basic theory even though the balance of evidence is against it, something that is not totally absent in the physical science either (Kuhn, Lakatos etc). The second is to allow ideological influences to help decide what should be a scientific judgement. These are the senses in which economics is an inexact science.

For those interested in economic methodology, and excellent place to start is here, the title of which I am abusing in this post. However it is also worth reading this for sources on the new 'empirical turn' in economics. On the impact of ideology on economics a great place to start is this thread from Beatrice Cherrier. On the introduction and history of the minimum wage in the UK, including initial political resistance to it, see here.

Tuesday 16 April 2019

Why the European Elections will be painful to watch for some Remainers

In theory the forthcoming European Elections on 23rd May should be an opportunity for Remainers to translate the clear majority for staying in the EU that we see in the polls into actual votes. Remain has been ahead of Leave since the summer of 2017, and recent majorities have been above 5%. Indeed some in the smaller anti-Brexit parties have been suggesting exactly this: the EU elections should be about Remaining rather than Leaving. Unfortunately things are not that simple, as the following YouGov poll illustrates.

The smaller columns for the parties represent the data with ‘Would not vote’ and ‘Don’t know’ included.

The first point is that the anti-Brexit parties are polling at around half the level of the pro-Brexit, anti-People’s Vote parties. The key problem, as it has always been for the Remain cause, is that the Labour vote is mostly made up of Remainers. In this poll, 77% of Labour voters voted Remain in the 2016 referendum, and some of the other 23% may have changed their minds since then. Labour is an overwhelmingly Remain party in terms of who votes for it, but its leadership is in favour of its own form of Brexit and appears ambivalent towards a People’s Vote.

Some Remainers would love voters to desert Labour and vote for one of the three unambiguously anti-Brexit parties. But this is very unlikely to happen. Many voters, even though they might support Remain, want a Labour government above all else, and they will vote for Labour despite this being about elections to the European Parliament. This is of course exactly what happened in the 2017 general election. Voting left is hardly an irrational choice for these Remainers, because if we do not leave the EU the European Parliament does play a minor role in EU affairs and it is important to have left wing voices there.

The second point is that the elections for the European Parliament is actually about voting for MEPs, so seats matter as well as the popular vote. The D'Hondt voting system used in British elections for the European parliament combined with voting for MEPs on a regional basis does penalise smaller parties. The Liberal Democrats only received 1 seat out of 73 in 2014, even though they got nearly 7% of the overall vote. As a result, if the Remain vote splits badly it is conceivable that the total seat count for the Remain parties combined may only be a few seats, which will not look good compared to the double figures that Farage will get.

A very good question is why the anti-Brexit parties have not cooperated. It would be difficult to choose just one of the three parties to stand in each district, but it would not be impossible. Without this cooperation, tactical voting is unlikely to prevent the anti-Brexit vote being split three ways in each England region. It would seem these parties think it is more important to fight among themselves than unite in sending a clear message on Brexit. That will be sad if this failure leads to MEPs only being in the job for a few months. Remain can get a million on the streets and 6 million signatures, but it seems getting small parties to cooperate is a more difficult task.

Another possibility would have been for the People's Vote campaign to do as Nigel Farage has done, and put up candidates themselves on a pro-EU ticket. Unlike Farage, the People's Vote campaign would face problems in doing so. Electing individuals on a simple pro-EU ticket only makes sense if these MEPs only have a very short tenure. If the campaign is successful, you want proper MEPs representing different political perspectives. That is probably one of many reasons why the People's Vote campaign will not field candidates of its own, and is perhaps another reason why the smaller parties do not cooperate.

Given Labour's position and the lack of cooperation among the anti-Brexit parties, Remainers should not turn these European elections into a vote about being anti-Brexit, because they will lose badly. The combined vote for UKIP, the new Brexit party and the Conservatives is almost certain to exceed the combined vote for the LibDems, CHUK and the Greens. A smarter tactic would be, through the People’s Vote campaign, to make these elections into a vote about a People’s vote. The key difference of course is that Labour can potentially be counted as being in favour of a People’s Vote, and so making the European elections as a kind of referendum on a People’s Vote might succeed. Using the poll numbers above, the pro-People’s Vote parties have an overall majority.

In reality Labour’s position on a People’s Vote is nuanced, or perhaps just confused. It is in favour of a People’s Vote for a deal it does not like, but is rather ambivalent if the deal is its own. The leadership is divided on the issue. Apparently Keir Starmer was described by Tories in the joint government/Labour negotiations as the ‘ideologue’ for wanting a People’s Vote, while his colleagues were described as more reasonable! The European elections could force Labour’s hand on the issue. This is obviously what the People’s Vote campaign will hope for, but how much the Electoral Commission will allow it to campaign over the election is unclear.

If Labour did unambiguously commit to a People’s Vote in all circumstances it could take votes from the smaller parties, and this may well dominate any votes it my lose from Labour leavers. Labour has the opportunity for an overwhelming victory in these elections, as Brexit will take many votes away from the Conservatives to pro-No Deal parties. However that inducement may not be enough, in part because Labour are constantly thinking about the possibility of a General Election where they do not want to be painted as the anti-Brexit party. Remainers should also have the sense to see that a Labour victory in a general election would be a better option from a Remain point of view than a People’s Vote, for reasons I set out here.

Without a general election, the Brexit position has become a stalemate. Theresa May is set against holding a People’s Vote, and so are Brexiters. Behind all their guff about such a vote being an insult against democracy (“War is peace. Freedom is slavery. Ignorance is strength”), the real reason Brexiters hate the idea of a second referendum is that they think they will lose. Nor has parliament been able to force the government to hold a referendum, with the latest vote in parliament being 280 voting in favor of a People’s Vote and 292 against.

However no other option looks like getting over the line anytime soon either. Brexit has become a war of attrition. Brexiters are in no mood to accept May’s deal, and instead some have pinned their hopes on replacing her. Even if they succeed, it is unclear how this changes the parliamentary arithmetic. The Tories also fear a general election for the same reasons Brexiters fear a People’s Vote. Talks between Labour and the government are unlikely to get anywhere because a compromise that didn’t include a People’s Vote would be devastating for Labour, and any compromise by the government would pour oil on the fire of Tory divisions. Finally the new October deadline set by the EU is unlikely to force anyone to change their mind, because there is a belief in the UK that the EU will always allow another extension rather than risk an exit with no deal.

In these circumstances, a People’s Vote (PV) is going to be seen more and more as the only way out. In parliament it is already the option with most votes. It is just possible that the European Elections could change some minds if it was seen as an endorsement for holding a PV. But for this to happen the PV campaign needs to persuade the smaller parties to stop talking about this election as being about Brexit and instead start talking about a People’s Vote.

As far as the media is concerned, the European elections will be about the showing of the pro-No Deal parties. Indeed it could all be about Nigel Farage. His new Brexit party is well organised, well funded (from sources unknown), and is likely to get extensive publicity from the BBC at least. (To see the BBC choosing his “put the fear of god into MPs at Westminster” line as their headline quote illustrates all too well the themes of last week’s article on how the media encourages far right extremism.) The poll above, taken before his party was formally launched, indicates that his Brexit party could easily end up beating the Conservatives and coming second, as UKIP voters switch to his party. This will become the main new story.

That will be painful to watch for Remainers, but ironically it could indirectly help the People’s Vote cause. Moderate Conservative MPs will see the poor showing of their party in the European elections and begin to understand more clearly the bind they are in. For as long as Brexit is an issue, they will be in danger of hemorrhaging votes to pro-No Deal parties, but if they accept No Deal the Conservatives will not be in government for decades. A People’s Vote on May’s deal may be the only chance they have of changing that situation any time soon.

Friday 12 April 2019

Why have pundits got politics so wrong since 2015?

I have just read a paper called “Political science, punditry, and the Corbyn problem’ by Peter Allen, a Reader in comparative politics at Bath. It reflects on how most pundits, including some political scientists, got Corbyn’s initial success and then survival completely wrong. I will not attempt to summarise the paper here. It is well worth reading. I am going to take it as read that many pundits did get Corbyn completely wrong in 2015 and 2017. This has nothing to do with whether the left ascendency is a good or bad thing, but just the failure of pundits to see why it was happening.

Allen notes a kind of epistemic snobbery “‘whereby people who do not meet the above criteria of political inclusion are not seen as worthy participants or contributors in political discussions, or whereby their political opinions are devalued in some way”. It was a kind of “othering” that I felt personally when I joined Labour’s Economic Advisory Council. I was told, by people who I respect, that my academic standing would be harmed if I joined the group. It was if I had decided to give economic advice to the BNP rather than the Labour party.

Part of this represented a longstanding dislike by the centre and centre-left of the left in the UK that stems from the political battles within Labour in the 1980s. Andy Beckett tells some of the story here. There was a lot wrong with the Labour left at that time, and Labour leaders from Kinnock to Blair found they could gain a certain credibility by attacking both the left and the unions. Indeed some of those who attack the left today were part of the left back then, and now see the error of their ways. The Labour left came to be seen as generically toxic.

As Allen notes, another element in this failure to understand Corbyn was a belief in triangulation. In the world that takes triangulation as the theory rather than just a useful model with limitations, moving sharply to the left when a party of the right wins an election makes no sense. But why were the same pundits not already noting that the theory of triangulation had broken down, because the Conservative party from 2010 to 2015 had moved sharply to the right and yet had won a general election? This is what the rest of this post is about.

Allen does not mention austerity specifically, but I think misunderstanding austerity plays a large role in failing to see how far right the Conservatives were moving, and therefore Corbyn’s rise in 2015 and Labour’s gains during the 2017 campaign. If you look at what the Coalition did collectively there can be no doubt about what was going on. The hostile environment, privatisation of the NHS, demonisation of those on welfare and so on. Yet perhaps all of these things could be explained away individually if that is what you want to do: continuing Blairs policy on the NHS, responding to popular opinion on immigration and welfare. The dominant narrative, at least to begin with, was of Cameron the moderniser.

The clearest indicator of a rightward shift was austerity. It should have been clear by 2012 if not earlier that the recovery was stalling. Thatchers experiment with austerity had been brief and was quickly reversed, but Osborne was not for turning. We had for the first time since WWII a government attempting sustained austerity during a recovery phase of a recession. Perhaps too many placed their faith in City folk that told stories of imminent bond strikes, so they believed deficit reduction had to be done. But when interest rates on government debt started falling curious academic minds at least should have begun to smell a rat. Did pundits not notice that the majority of economists were against austerity? This is a genuine question rather than a rebuke, because you had to do a little research to find out they were.

Once you miss the rightward move of the Coalition government, and note that it would have been worse still but for the Liberal Democrats, then you also fail to see that Labour from 2010 to 2015 had been following a triangulation strategy and failed. Did pundits put everything down to Miliband’s unpopularity? Once you understood that Labour had moved to the right and lost, then Corbyn’s victory should have come as no surprise, as I argued here before the result.

Understanding the deep damage that the austerity policy did to the country means that it is hardly surprising that under a left leader opposed to austerity the Labour party should attract half a million members. Too many pundits talked about this in terms that applied to the Labour party in the 1970s and early 80s, but this was a danger for rather than a description of the mass movement that Labour were becoming.

There was one feature of received wisdom that seemed to be holding true, however, and that was that Labour led from the left would be defeated decisively in any general election. Poll after poll suggested this was true. I was told too many times that the left were only interested in controlling the party (how surprising) and not interested in winning elections. It was nonsense of course.

As soon as Labour's position in the polls started rising in the middle of the campaign I suggested that Corbyn’s unpopularity before the campaign told us more about the media than anything else, but I’m not sure this is accepted by most pundits. Many will blame the Tories bad campaign, but what that showed us was that May and her team were pretty bad at doing politics, which was something that should have been clear given the evidence if the media had been doing its job properly. But underestimating the role of austerity is important here too.

Austerity was, after a time if not initially, designed to shrink the UK state. And it succeeded. Attitude surveys tell us that is very unpopular, with less than 10% of the population wanting lower taxes and spending. So a party proposing the opposite, with a tax financed fiscal expansion that was at the heart of the Labour campaign, was bound to be popular on that account. Again the Labour surge was a consequence of a media that preferred talking about Labour divisions and personalities rather than policies, so Labour's policy stance came to voters as a surprise.

Thus in my view the failure to see austerity for what it really was is crucial in understanding why pundits got Corbyn so wrong. However I would be fascinated to know how some of those same pundits themselves account for this failure, and whether they see my account having some validity or not.

Tuesday 9 April 2019

The right wing partisan media is the elephant in the room in discussions of mainstream politics and far right extremism

Treason used to be a word associated with spies or assassins. Crimes against the state of the utmost severity. Yet, to take just two recent examples, here is an article in the Sun describing how “Treacherous Theresa” has surrendered our freedom. “May's name will rank alongside those of the worst eels in Western history - and she deserves it”. Cross the Atlantic, and here is a presenter at Fox News calling for the "the traitorous treasonous group that accused Donald Trump" to be locked up. “True justice” she calls it.

It seems that the word treason is now being used to describe the actions of a Prime Minister the writer disagrees with, or to describe a legal inquiry that successfully prosecuted a number of individuals who were once close to the President of the United States. How does this escalation of language happen, and does it matter? To understand both questions we need to start with what links these two examples. The are both from media outlets owned by Rupert Murdoch.

As a detailed analysis of the Murdoch dynasty by Mahler and Rutenberg of the New York Times shows, Rupert Murdoch created, and runs with the help of his sons, a supremely successful media empire. Media businesses in particular are subject to regulations, and part of Murdoch’s success has been to get round those regulations. As Mahler and Rutenberg write: “Murdoch’s news empire is a monument to decades’ worth of transactional relationships with elected officials.” These are not always right wing politicians, as his support for Tony Blair showed, but they tend to be, reflecting Murdoch’s own situation and views.

Murdoch is not part of a long-standing establishment but rather the opposite. In that sense he is a particularly influential example of what we could call the neoliberal elite that Aeron Davis describes so well in his book ‘Reckless opportunists: Elites at the end of the Establishment’. But why would someone like Murdoch, and the UK’s other press barons, be happy with people employed by their media organisations using inflammatory language like ‘treasonous’ in their papers?

The standard response of many people in the media to a question like this is that it sells newspapers. Newspapers or radio stations or TV channels like Fox are just expressing the views of their readers. There is no doubt that is partly true, but the reality is that this is a two-way relationship. The media reflects the views of those that read or see it, but it also shapes those views. The excuse that media just reflects their audience’s opinions cannot be used to absolve those media outlets of responsibility for what is said or written there.

There is now overwhelming academic evidence that the media can have a potentially powerful influence on what those who consume it think and do. A particularly interesting and powerful recent study by two economists looked at US cable channels, which remain the main source of news on political campaigns even in the digital age. They isolate viewers who view these channels just because of their place in the channel ordering, rather than because their political preferences seek out particular channels, in order to look at how influential the channel was.

They find that the existence of Fox News boosted the Republican vote share in 2000 by about 0.5%, which fits with another study that used a different method to isolate the influence of Fox. However the growing viewership and increasingly right wing stance of Fox increased its impact on the Republican vote share in 2008 to a huge 6%, which was far bigger than the influence of any other channel. An equally interesting finding is that the political stance of Fox is far to the right of where it should be to maximise viewers. In other words Fox is broadcasting material that maximises its ability to shift its audience to the right, rather than to maximise its profits.

Unfortunately there are no studies yet of Trump’s election, but it seems very likely that the influence of Fox was crucial in his victory over Clinton. In the primaries Fox had a more critical view of Trump, perhaps because Murdoch did not think he was up to the job. Mahler and Rutenberg found three sources who reported Murdoch saying “He’s a [expletive] idiot” about Trump, although Murdoch’s spokesman denies this. It was ironically other broadcasters that gave Trump much more coverage than his opponents, because he was “good TV”. Reporters then talked favourably about Trump, simply because he was gaining vote share. After it was clear he would win, Murdoch saw his chance to form a close relationship to a US President. That influence is now so strong that one recent article in the New Yorker was entitled “The Making of the Fox News White House” (HT @rupertww).

Would this level of influence also apply to the UK press? There is every reason to think so. For example this study found that when Murdoch’s Sun switched support to Labour, it increased Labour’s vote in 1997 by 2%. That was not enough to influence the result, but when the Sun switched back to the Conservatives in 2010 that had a similar impact in the opposite direction, which was enough to influence that result. Newspapers influence attitudes towards austerity, and the best predictor of attitudes on immigration is newspaper readership. I note other studies with a similar message here.

There is no doubt that both Trump and Brexit reflect deep underlying causes. What the media is able to do is help direct those causes in particular ways. To again quote Mahler and Rutenberg: “The Murdoch empire did not cause this [populist] wave. But more than any single media company, it enabled it, promoted it and profited from it.” Given the narrowness of Trump’s victory and the Brexit majority, it is extremely likely that Fox News and the Brexit press were respectively the difference between defeat and victory.

Once we accept that the media can have an influence on mainstream politics, it would be very surprising if it did not also influence the political fringe. We should be shocked at soldiers using a photograph of the leader of Her Majesty’s Opposition for target practice, but we cannot just put this down to soldiers expressing their personal views about Corbyn’s attitude to Nato and his past associations. What legitimises in soldiers’ eyes doing this is the constant demonisation of him in the press. The press both reflects and influences.

More serious than target practice, Corbyn was the intended target of the man responsible for the terrorist attack at Finsbury Park mosque. A Labour MP, Jo Cox, was murdered during the Brexit campaign, and a member of a far right organisation plotted to kill another, and many MPs have received credible death threats. According to Britain’s counter-terrorism chief, the man responsible for the Finsbury Park attack was “driven to an act of terror by far-right messaging he found mostly on mainstream media”. As Gary Younge writes, the threat from far right terrorism is growing alarmingly and while “the violence may come from the fringes, the encouragement comes from the centre.”

If you think the idea of terrorists being inspired by the mainstream media is fanciful, just listen to the extract from Fox I linked to in the first paragraph above. Of course this is an unintended effect of the extreme language the partisan media uses. Whether the rise of far right parties and groups is an unintended consequence is less clear, particularly when the BBC chooses to broadcast an interview with a far right leader straight after 49 people had been murdered in New Zealand. There is academic evidence that media coverage of far right groups like UKIP does increase support for these groups, and as I have already noted this is partly why Trump became the Republican candidate for President.

But the main reason for the language the partisan media is now using is to ‘fire up the base’, who in turn will influence politicians to do what the owners of this media want. This route of influence is well established in the US, which is why David Frum, former George W Bush speechwriter, says “Republicans originally thought that Fox worked for us. And now we’re discovering we work for Fox.” We are now seeing it happen over Brexit, as candidates who oppose No Deal are deselected and would-be leaders play to a base which is heavily influenced by the partisan press it reads.

There is one important difference between the UK and US, however. The US retains a widely read independent press that can discuss the influence of the media. In the UK, independent broadcasters would find that more difficult and in any case they mostly do not try. UK journalists tend not to talk about the partisan press as a key political player that can influence a party, perhaps in part because they would be talking about colleagues who work for that press. The myth that the media just reflects and does not influence is too convenient for many, so the media remains the elephant in the room in discussions about politics and political extremism in the UK.