Misrepresenting academic economists

Brad DeLong entered the debate between myself and Unlearning Economics with a post entitled “The Need for a Reformation of Authority and Hierarchy Among Economists in the Public Sphere”. He writes

“Simon needs to face that fact squarely, rather than to dodge it. The fact is that the "mainstream economists, and most mainstream economists" who were heard in the public sphere were not against austerity, but rather split, with, if anything, louder and larger voices on the pro-austerity side.”

The dodge, and I think it is a pretty good dodge, is that politicians and a good part of the media choose the economists they publicise. If you accept that austerity came from what I call deficit deceit - an attempt to reduce the size of the state using the false pretext of deficit reduction - then obviously politicians and their supporters in the media would choose those economists whose views were useful in promulgating that deceit. As the UK discovered during the Brexit debate, even a tiny proportion of economists (8!) can appear much larger if the media gives them much more attention than they deserve.

But the argument remains a dodge in the following respect. How were people outside economics, including much of the non-partisan media, meant to know that particular academic economists were unrepresentative of the majority? Indeed how can even economists be sure of this? I’ve argued that the majority of academic macroeconomists were always against austerity, particularly once the reason for the Eurozone crisis had been resolved by Paul De Grauwe, but the evidence I use to back this up is piecemeal and indirect (see here, pages 3 to 4).

Part of the problem is a certain disregard for consensus among economists. If you ask most scientists how a particular theory is regarded within their discipline, you will generally get a honest and fairly accurate answer. In contrast economists are less likely to preface a presentation of their work in the media with phrases like ‘untested idea’ or ‘minority view’. In macro it also reflects periods in the past, which still resonate today, when there was deep division and antagonism between different groups. This extends to not being sure what is taught at masters level in the top schools: it turned out, when André Moreira and I did the research, that there was more consensus in one key respect (Chicago excluded) than some had imagined.

Part of Brad’s post it seems to me is simply a lament that Reinhart and Rogoff are not even better economists than they already are. But there is also a very basic information problem: how does any economist, let alone someone who is not an economist, know what the consensus among economists is? How do we know that the people we meet at the conferences we go to are representative or not?

To help fill that gap we have in the US the IGM Economic Experts Panel survey, and in the UK/Europe the CFM survey. (The IGM survey has recently started a European version.) The US IGM survey has asked a question about the Obama stimulus package on more than one occasion, and the latest result is here. It is one key part of the evidence for my claim that most academics were and are against austerity.

However all these surveys share a common feature which I find problematic, and which also reflects on Brad’s concern. They are selective, and deliberately designed to only include the academic elite. IGM writes that panel members are all senior faculty at the most elite research universities in the United States. So they tell us not what academic economists think, but what a chosen sample of ‘elite’ economists think. Now if those samples are well chosen, as I think they mostly are for these surveys, that may not matter too much, but how representative they are can always be questioned. It also gives the impression that it is only this elite that are worth listening to when it comes to policy issues, something I think is simply wrong as well as being elitist.

As part of the build up to the Brexit vote, the Observer newspaper commissioned Ipsos MORI to email all members of the Royal Economic Society. 91% of those who responded thought Brexit would have a negative impact on UK GDP in the longer term. As most UK academic economists are RES members, it was therefore possible to say that there was a clear consensus among academic economists that Brexit was harmful. To be able to say this about all economists, rather than just a select few, in my view strengthens the power of the survey. (Some defend elitist surveys because the elite is ‘influential’, but if they influence their fellow economists that will show up in a larger sample.)

I think the experience with austerity and Brexit suggests it is time for national economics associations (like the RES or AEA) to start representing the opinions of economists by conducting such polls of their members under their own initiative. With email addresses the technology makes it easy to do. It is time these organisations started telling both us and the world about what the consensus (if any) is on key policy issues. It would be an important step towards ending the misrepresentation of economists and economics.

Economists vs. Business Leaders?

Today illustrated very clearly why the monthly CFM survey of mainly academic, mostly macro UK economists was such a good idea. (And something that I should have included in this discussion.) I have often written that I thought austerity was only supported by a small minority of UK macroeconomists, but my evidence for this has been much thinner than I would like. Today CFM published their latest survey which asked: “Do you agree that the austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK?”

The response was clear: 15% agreed, 18% neither agreed nor disagreed, and 66% disagreed. As CFM reported: “Ignoring those who sat on the fence, 19% agree and 81% disagree with the proposition. This ratio is unaffected by confidence weighting.”

That was welcome confirmation of my prior, but what was much more important is that the survey came out on the same day as the Daily Telegraph published a letter from 100 business leaders saying exactly the opposite. To quote: “We believe this Conservative-led Government has been good for business and has pursued policies which have supported investment and job creation.” Now of course a letter (organised by whom?) is not a survey, and it is hardly news that Labour has policies that are unpopular with business leaders. Yet the letter was nevertheless the lead item on BBC news today.

However in at least some of the reports I heard that led on the letter ‘news’, the CFM survey was also mentioned. I myself participated in Radio 4’s World at One (about 11 minutes in) as a direct result of the survey. Robert Peston went as far as to ask: “Who to trust - business leaders or economists?” I liked the way he introduced his post:

“Neither business leaders nor economists have a monopoly of wisdom on what's good for Britain or are free from political bias. But it is perhaps therefore all the more important to remember that those paid to think about how best an economy should be run don't necessarily agree with those paid to run companies.”

He might have also added that, probably without exception, we are paid a lot less than business leaders, so the danger that our opinions might be influenced by Labour policies like reintroducing the 50p income tax rate or introducing a mansion tax is perhaps also smaller!