In a couple
of interesting posts,
Jonathan Hopkin and Ben Rosamond, political scientists from the LSE
and Copenhagen respectively, talk about ‘political bullshit’.
They use ‘bullshit’ as a technical term due to Princeton
philosopher Harry Frankfurt. Unlike lying, bullshit tells false
stories that pay no heed to the truth. Their appeal is more to common
sense, or what Tyler Cowen calls
common sense morality. At a primitive level it is the stuff of
political sound bites, but at a slightly more detailed level it is
the language of what Krugman ironically calls ‘Very Serious
People’.
The implication
which can then be drawn is that because bullshit does not reside in
the “court of truth”, trying to combat it with facts, knowledge
or expertise may have limited effectiveness. The conditions under
which this might be true, and the extent to which information
technology impacts on this, are fascinating issues which the authors
briefly discuss. But what makes their discussion even more
interesting for me is that they use what they call ‘deficit
fetishism’, and in particular the stories that the UK government
told before the last election, as their subject matter.
In the case of
fiscal policy, deficit fetishism as bullshit involves appeals to
‘common sense’ by invoking simple analogies with households,
often coupled with an element of morality - it is responsible to pay
down debts. The point in calling it bullshit (in this technical
sense) is that attempts to counter it by appeals to facts or
knowledge (e.g. the government is not like a household, as every
economist knows) may have limited effectiveness. Instead it might be
better to fight bullshit with bullshit, by talking about the need to
borrow to invest, or even that it is best to ‘grow your way out of
debt’. (If you think the latter is nonsense, you are still in the
wrong court: the court of truth rather than bullshit. As long as the
phrase contains what I have sometimes called a ‘half-truth’, it
has the potential to be effective bullshit.)
If for the sake of
argument we accept all this, I want to ask whether deficit fetishism
will always be powerful bullshit, or whether its force is a symptom
of a particular time, and what is more a time that may by now have
passed. This, rather than discussions of the technical merits of
particular fiscal policies, may be the crucial political discussion
that needs to take place right now for all those in Europe that want
to put an end to needless austerity. (In the US deficit fetishism,
and also austerity
itself, seems to be taking a breather or having a
prolonged rest: which may depend on the forthcoming elections.) Just
to be clear, I’m not discussing bullshit more generally, but just
the appeal of the particular example of deficit fetishism.
At first sight
deficit fetishism seems to be innate, because it appeals to the basic
intuition of the household and the morality of good housekeeping.
However households also borrow to invest (such as in a house), and
most people understand that this is what firms also do. The reason
why the bullshit involving paying back borrowing may have been
particularly powerful over the last five years is that this is
exactly what many households have also been doing.
Although the Great
Recession may have started with a financial crisis, its persistence
despite low real interest rates is often put down to what many
economists call a balance sheet recession: individuals and firms
cutting back on borrowing (or saving more) over a number of years.
That process has been particularly evident in the US and UK, with
sustained increases in the aggregate savings ratio. However that
process now appears to have come to an end. As individuals start to
borrowing again (or at least stop running down their debt), perhaps
they will become more tolerant of governments doing the same.
To this we could add
an obvious external factor. In 2010 and the following two years,
deficit fetishism seemed to be validated by a superficial view of
external events. The difficulties that some countries were getting
into because their governments had ‘borrowed too much’ was top of
the news night after night. In that context, is it any wonder that
most people believed the bullshit?
One final indication
that the power of deficit fetishism is contextual is what economists
call deficit bias. Before the Great Recession, there was
a tendency in many countries for government debt as a share of GDP to
rise over time for no justifiable reason. Fiscal rules and then
fiscal councils were created largely to prevent this. It is difficult
to square this phenomenon with the idea that deficit fetishism is
always powerful.
Many political
parties on the centre left in Europe (such as the UK) currently seemed
resigned to deficit fetishism remaining a powerful force that can
sway elections. So, if you cannot beat them, join them (and never
mind what is good macroeconomics). This assumption at the very least
seems debatable.
