Brexit, immigration and £100

With so many heavyweights, from Barack Obama to Mark Carney, saying that we will be worse off with Brexit, why are the polls still neck and neck? There seem to me two reasonable explanations: that the tabloid media have a strong influence, and that immigration is a big issue among voters. But perhaps the two are connected, for reasons that will become clear.

It is a well known result that worries about immigration tend to be greatest in areas where there is little immigration. In areas where there are a high proportion of migrants, like London, UKIP do rather poorly. For most, immigration is not a problem that is facing them directly, but rather an issue they feel is facing the country.

For some this concern about immigration is cultural, but for others it is economic. But if it is economic, on what is this concern based? All too often I come across arguments that make simple economic errors. Like more migrants put greater pressure on public services. Study after study suggest exactly the opposite: because migrants tend to be young adults who work, they pay more in taxes and take less advantage of public services or benefits than the average non-migrant. To his great credit, when Jonathan Portes (from the non-aligned research institute NIESR) was confronted in this Newsnight debate by nonsense from someone from the Centre for Policy Studies (right wing think tank, rated D for funding openness), he did not attempt to win the argument by quoting statistics or academic studies, but by trying to show why what he was saying made common sense once you explain it.

Sometimes it is simply false correlations: austerity has put pressure on public services and the recession and productivity slowdown has held back real wages, but both have happened at a time of high immigration. For a very good and simple explanation of the facts about recent EU immigration, see this LSE analysis. (For those that can access it, here is a similar take from Gemma Tetlow at the FT.) The only area where there might be some negative effect from migration is on the wages of unskilled labour, but even where a negative impact is found it seems to be small as the chart in this post shows. As Portes suggests, this negative impact could be wiped out by positive effects from higher growth and better public finances. 

In some sense what we have is very similar to the austerity problem, with the combination of simplistic ideas and non-causal association. It feels right that governments should tighten their belts when households are doing the same, and the ‘clearing up the mess’ idea is reinforced because the deficit went up when Labour was in power. With both austerity and immigration we have a visual media that normally makes no attempt to ‘educate and inform’, and a tabloid media that actively reinforces these mistakes. (If I open the MailOnline as I write this, here is the top story.) We have a governing party that does the same, and in the past an opposition that was reluctant to say that immigration benefits the economy as a whole. [1]

So the referendum debate amounts to economics versus immigration. But here is a revealing bit of information from the YouGov analysis cited earlier.

“We recently conducted an experiment in which we asked people to imagine how they would vote if they knew Brexit would make them just £100 worse off per year. This instantly changed a neck-and-neck result to a 12 point victory for ‘Remain’. The effect is even stronger among undecided voters, who flip 18 points from veering towards ‘Leave’ to veering strongly towards ‘Remain’ in this scenario.”

It is of course a classic technique economists use to quantify how strongly people feel about an issue, and it suggests the immigration concern is not worth that much to many people. Given that the economic assessments of the costs of Brexit are of the order of at least 10 times £100 a year, the economic argument is key. Which is why it is worrying that the BBC seem to ignore the consensus among academic economists, as expressed in the letter from the 196 (who cannot be accused of being part of the establishment) but instead find time to publish a 'fact check' that is, to put it politely, misleading.

[1] Labour’s line should be (and occasionally is) to note that recent immigration from the EU has benefited the economy, but not every part of the economy, and government needs to be active in spreading the benefits.

Left, Right and Centre: some recent observations

I’m sure many political scientists hate the way descriptions in politics so often amount to a position on a straight line. It is one-dimensional. There is the obvious aggregation problem: should a person or political party, who is left of centre on issue X, and right of centre on issue Y, be described at generally in the middle of the political spectrum? How do we weight the importance of issues X and Y? But there is also a problem about whether positions are relative or absolute. This matters in part because the perception among many is that being near the middle is good (‘moderate’), and being away from the centre is bad (‘extreme’).

Three recent posts made me think about this. The first, by Noah Smith, is part of a current economics blog topic on Milton Friedman. I happen to pretty much agree with everything Noah says, but have absolutely no expertise on this - on matters of who thought what decades ago, I am curious but not interested enough to do any work. (Much better to leave it to David Glasner or Brad DeLong.) However it did strike me as obviously relevant to what has happened to the political centre, at least in the US.

One of Paul Krugman’s frequent complaints is that political commentators define the political centre as being somewhere between the Democrats and Republicans, regardless of the positions that each side take. He argues that the Republicans today are much more right wing than a generation ago, so that under this definition the centre today becomes what was right wing back then. This matters in part because the presumption is that the centre is the place for commentators to be.

Now one reaction might be: well he would say that, wouldn’t he. He is just trying to make his own views, which are ‘obviously’ to the left, sound more centrist than they actually are. But on economics at least, how politicians see Milton Friedman’s views provides some sort of objective yardstick. As Noah points out, some of Friedman’s positions would now be regarded as dangerously left wing by a good part of today’s Republican Party, whereas they were not so regarded 30 years ago.

The second post was my own, and the comments on it. It was about the increase in support for parties away from the centre in the UK and Netherlands, which I thought could be related to the recessions and austerity there, and more particularly to falling real wages. (Incidentally Robert Reich wrote a post on the same day making a similar argument about US politics.) I received many interesting comments on my post, and I want to thank everyone involved. A persistent theme was that I was wrong to call UKIP and the Freedom Party ‘far-right’, and imply any kind of equivalence to fascism.

I deliberately did not use the term fascist. Nor did I intend to imply that UKIP or the Freedom Party was fascist, or indeed that they were comparable - except to the extent that they are to the right of their respective and longer established mainstream right-of-centre parties. I used the term ‘far-right’ to denote this, as commentators often do, but I appreciate that many people read that as short for ‘furthest-right’ rather than the ‘farther-right’ that I had in mind.

I think many of these comments raised important issues. For example, would it make more sense to characterise UKIP and perhaps others not as a point on a left/right spectrum, but instead as specific issue parties? But the comments also revealed how sensitive people are to where the party they may support or sympathise with is placed on the political spectrum, and the obvious reason why. The endpoints of the political spectrum are typically defined by fascism and communism, and therefore the farther away you appear to be from those extremes, the better. Whether that is a deficiency or an advantage of this simple left/right model is an interesting question.

Why this may have a more substantial importance is illustrated by the third post, which involves think thanks in the UK. The right of centre think tank, the Centre for Policy Studies (CPS), had publicised its study into BBC bias, based in part on how the BBC uses different think tanks. [1] Part of their argument is that the BBC often calls left-of-centre think tanks ‘independent’, but mentions the ideological position of right wing think tanks. One of the think tanks it defines as left-of-centre is the Social Market Foundation (SMF). Yet, as this post from SMF complains, the SMF do not think of themselves as left-of-centre, and they provide evidence about why that description is wrong.

Now I have worried in the past about whether some think tanks are in the business producing propaganda instead of being in the business of thinking. So I cannot resist quoting the end of SMF’s post. “Especially on a significant issue of public debate - ie. public service broadcasting - think tanks owe a duty to follow the evidence. Or are CPS doing something slightly different than the normal work of a think tank? Without more evidence, I won't stick any other name on them for now.” The post is both short and amusing (unless you work for the CPS), so please have a look. [2]

Yet putting the thinking versus propaganda issue aside, this little tiff does illustrate why these issues can have immediate relevance. An organisation like the BBC tries very hard to be balanced. How you achieve balance depends in many cases on a judgement about where positions or organisations are on the left/right spectrum. The spectrum becomes like a balance scale, with the pivot right in the middle. So if you can persuade an organisation like the BBC that the mid-point is not where they thought it was, you can significantly change the content of their reporting and coverage. Or, even more seriously, if you can convince others that the BBC’s judgement is wrong, you can threaten their future.

If you think I’m being alarmist in this respect, here is how the director of the CPS ends his comment on their own research. “The most important [question] is why should everyone in the UK be forced to pay a poll tax to support an institution which has so conspicuously failed for so long to obey its founding principle of impartiality?” A serious charge if true, but is it true? It is clear that governments (of whatever colour) put a lot of pressure on the BBC, although measuring its effect is very difficult (although sometimes the circumstantial evidence is strong).

However some simple things can be measured, like how much coverage different political parties get. Of course coverage always tends to be biased towards the party in power. But, as Justin Lewis of Cardiff University’s School of Journalism notes, one study suggests that whereas in 2007 the margin between the Labour government and Conservative opposition was less than 2 to 1, the margin in 2012 favoured Cameron over Miliband by more than 3 to 1, with a ratio of more than 4 to 1 between Government and Shadow Ministers. So on this count, the people who should be claiming that the BBC is biased is Labour, not the Conservatives or the right. Are we in danger of entering that state of affairs where everyone just ‘knows’ that the BBC is biased to the left, just as everyone ‘knows’ that there is a liberal bias in the US media, without bothering with that annoying stuff called evidence?

Now one response to this emerging state of affairs is to ask why the left does not bang on about media bias the same way as the right does. Although with a coverage ratio of 1 to 4, perhaps they do, but we just do not get to hear about it.

[1] The publicity appeared to predate publication of the report, which seemed like a strange thing to do.

[2] The blog response from the CPS is also worth reading. As far as I can see, their reason for characterising the SMF as left of centre is that their objective is to “champion policy ideas which marry markets with social justice and take a pro-market rather than free-market approach.” So social justice in the context of a pro-market approach is left wing! One rather telling comment on the SMF post suggested that the CPS used transparency of funding sources as their guide to who was left or right wing.