How should academic economics cope with ideological bias

This question was prompted by this study by Mohsen Javdani and Ha-Joon Chang, which tries to show two things: mainstream economists are biased against heterodox economists, and also tend to favour statements by those close to their own political viewpoint, particularly on the right. I don’t want to talk here about the first bias, or about the merits or otherwise of this particular study. Instead I will take it as given that ideological bias exists within mainstream academic economists (and hereafter when I just say ‘academic economics’ I’m only talking about the mainstream), as it does with many social sciences. I take this as given simply because of my own experience as an economist.

I also, from my own experience, want to suggest that in their formal discourse (seminars, refereeing etc) academic economists normally pretend that this ideological bias does not exist. I cannot recall anyone in any seminar saying something like ‘you only assume that because of your ideology/politics’. This has one huge advantage. It means that academic analysis is judged (on the surface at least) on its merits, and not on the basis of the ideology of those involved.

The danger of doing the opposite should be obvious. Your view on the theoretical and empirical validity of an academic paper or study may become dependent on the ideology or politics of the author or the political implications of the results rather than its scientific merits. Having said that, there are many people who argue that economics is just a form of politics and economists should stop pretending otherwise. I disagree. Economics can only be called a science because it embraces the scientific method. The moment evidence is routinely ignored by academics because it does not help some political project economics stops being the science it undoubtedly is.

Take, for example, the idea - almost an article of faith in the Republican party - that we are on the part of the Laffer curve where tax cuts raise revenue. The overwhelming majority, perhaps all, of academic economic studies find this to be false. If economics was merely politics in disguise, this would not be the case. This is also what distinguishes academic economics and some of the economics undertaken by certain think tanks, where results always seem to match the political or ideological orientation of the think tank.

There is a danger, however, in pretense going too far. This can be particularly true in subjects where empirical criticism of assumptions or parameterisation is weak. I think this was the basis of Paul Romer’s criticism of growth theory and microfoundations macro for what he calls mathiness, and by Paul Pfleiderer for what he calls ‘chameleon models’ in finance and economics. If authors choose assumptions simply to derive a particular politically convenient result, or stick to simplifications simply because it produces results that conform to some ideological viewpoint, it seems absurd to ignore this.

Romer’s discussion suggests that it is at least possible for ideological bias to send a branch of economics off in the wrong direction for some time. I would argue, for example, that Real Business Cycle theory in business cycle macro, which was briefly dominant around 40 years ago, was in part influenced by a desire among those who championed it to look for models where policy had little role. In addition, it showed up economists tendency to ignore other social sciences, or even common sense, at its worse. [1] It didn’t last because explaining cycles is so much easier when you assume sticky prices, as most macroeconomists now do, but it may be possible that other aspects of mainstream economics may be ideologically driven and persist for a much longer time (Pareto optimality?), and mainstream economists should always be aware of that possibility. One of my first posts was about the influence of ideology on the reaction of some economists to Keynesian fiscal stimulus.

The basic problem arises in part because empirical results are never clear cut and conclusive. For example the debate about whether increases in the minimum wage reduce employment continues, despite plenty of empirical work that suggests it does not, because there is some evidence that points the other way. This opens the way for ideology to have an influence. But the political implications of academic economics will always mean that ideology plays a role, whatever the evidence. Even when evidence is clear, as it is for the continuing importance of gravity (how close two countries are to each other) for trade for example, it is possible for an academic economist to claim gravity no longer matters and gain a huge amount of publicity for their work that assumes this. This is an implication of academic freedom, although in the case of economics, I still think there is a role for an organisation like (in the UK) the Royal Economic Society to point out what the academic consensus is.

Does this mean economics is not a true science? No, because ideological influence does not trump data when the data is very clear, as in the case of the Laffer curve or gravity equations, although ideology and academic freedom may allow the occasional maverick to go against the consensus. That in turn means that it is important for any user of economics to be aware of possible ideological bias, and always establish what the consensus is, if it exists, on an issue. Could ideology influence the direction particular areas of economics take for some time? The evidence cited above suggests yes. So while I have no quarrel with the pretense that ideology is absent from academic economics in formal discourse, academics should always be aware of its existence. In this respect, some of the points that the authors of this study mention in the discussion section of their paper are relevant. 

[1] This reflected the introduction of a microfoundations methodology which soon began to dominate the discipline, and which I have talked about elsewhere (e.g. here and here).

The BBC and Patrick Minford

Over the last few days the BBC has given considerable publicity to Patrick Minford’s new report published by the ‘Economists for Free Trade’. I have looked at both the BBC News website entry and listened to the Radio 4 Today programme’s discussion. They are both classic ‘2 sided controversy’ formats, with Monique Ebell from the National Institute of Social and Economic Research (NIESR) providing the main opposition.

So why was this coverage something the BBC should be deeply ashamed about? There are two main reasons, but first let me make a more general point which applies to journalism more generally. There is no quality control in most of the media when it comes to giving publicity to a report like this. There is a very simple reason for this, and that is the primacy given to immediacy. In a better world, when a report like this came out, journalists would spend a few days ringing around to see what the reaction of other experts were, or nowadays just look at reactions on twitter.

In this particular case such a strategy would have thrown up some apparently large errors, and this should have led journalists to question whether they should give the report any publicity. They might at the very least have waited until the full report was published next month.

Let me give an analogy. Suppose a report of a medical trial had suggested a miracle cure for some serious disease. The report had not been peer reviewed, and its author had connections to a drug company that stood to benefit from the alleged cure, but the BBC had decided to give it considerable publicity nevertheless. Within days it became clear that there were serious problems with the report, and that there were other existing papers that came to a completely different conclusion. The BBC would then look very foolish, and many sufferers from this disease would have been given false hope. I suspect for that reason the BBC would be much more cautious. Yet if the report is about a subject matter with any political implications this caution appears to go out of the window.

Now let me get to the two reasons why the BBC should be ashamed in this case. First, Patrick Minford is no expert in international trade. He is a macroeconomist, who in his younger, less obviously political, days served as something of a role model for me. He published a very similar argument about the benefits of unilateral trade liberalisation during the referendum campaign. It was heavily criticised by individuals or groups that are experts in international trade. So we have already had the quality control, yet the BBC decided to ignore that. Returning to my analogy, it is as if there had been earlier claims of miracle cure that had been thoroughly debunked by medical experts and the BBC had ignored these.

Second, at no point in either of the two items I looked at is there any mention that the overwhelming consensus among academic economists is that Brexit would be harmful to the economy. We just have reports that give two opinions, with no context whatsoever about which opinion is the consensus view and which is the maverick. It is exactly equivalent to giving considerable publicity to a report from some climate change denial outfit, and including a response from one or two climate scientists with no mention of what the consensus among climate scientists is. Again to draw on my analogy, it is like reporting a miracle cure and failing to say that nearly all doctors thought this was rubbish.

This last point about ignoring the clear consensus touches a particular nerve for me, because it is exactly what the BBC appeared to many of us to do during the referendum campaign. Yet when the Royal Economic Society complained about this, they were told that the economic consensus had been mentioned in this and that bulletin. Whether this was cherry picking by the BBC is not easy to establish after the event. [1] Well here is an example where it was not mentioned, and I would like to hear from the BBC why this information was not thought to be useful to convey to its audience. [2] 

On both counts, this is very bad journalism, even if you do not think economics has the same standing as medicine. The BBC may have thought they had brushed off complaints from economists, but here is a specific example where they really do have a serious case to answer. As Ben Chu rightly says: “The legitimate news story around Minford’s work is how bad science can survive and thrive when it supports the desires and prejudices of powerful people in our society … the BBC ... has become part of the problem.” Brexit is the Emperor's New Clothes, and no one - including the BBC - dares say that the Emperor has no clothes.

[1] Not easy but not impossible: it would cost a few thousand pounds in research time for someone to go through the main news reports during the Brexit campaign and establish how many times the economic consensus was mentioned.

[2] Channel 4 News did put the point to Minford that many economists thought his work was flawed, to which he responded by saying “all these trumped up economists and the consensus they are all hired hands”‘. A very political answer from a very political economist, and therefore very revealing, but not a question the BBC apparently thought worth asking.  

The politics of lying

When people say ‘all politicians lie’, they cannot seriously mean they all hold to the same standards of veracity as Donald Trump. But how do you measure degrees of lying in politics?

Paul Krugman suggests that the Republican party’s problems began when they started pushing the idea that tax cuts pay for themselves. The notion that cutting taxes will bring in more rather than less tax revenue is a theoretical possibility but has been shown by study after study to be empirically false. But why was this lie worse than others?

I would suggest the following. The lie became (and continues to be) a major plank of Republican policy. We are not talking about being economical with the truth with statistics to present a party’s policies in a more favourable light. This lie was ultimately an attempt to legitimise cutting taxes on the very rich, and reducing the size of the state (because when the tax cuts did not pay for themselves the next step was to cut spending to control the deficit). It was a lie that went completely against expert opinion, and was at the heart of Republican economic strategy.

Lying in this fundamental way distorts the whole direction of political activity. It and its supporters begin to focus on ways to hide the truth. It means setting up think tanks whose aim is not just to push the party line, but also to provide a counter-weight to, and therefore neutralise the power of, real expertise. Such think tanks involve an element of ‘pay us your money and we will push your interests’, which is why right wing think tanks are the least transparent about their funding. It also means using partisan media outlets to present an alternative reality to voters.

If you can get away with this, then why stop at one crucial lie. Politics becomes about choosing the lies they can get away with that will promote their cause. It is about what lies sound plausible to particular voters, or what lies a partisan press can reliably sustain by selecting evidence to support them. Lines between politics and journalism in partisan outlets become blurred.

We see the politics of lying all the time in totalitarian regimes, or regimes that control much of the mean of information. What I think has surprised many is that two nations that pride themselves on their democratic traditions and independent media can reach a point where the leader and ruling party of one lies all the time, and the other undertakes a huge constitutional change on the basis of a campaign where one side lied with impunity. The Brexit campaign did not lie for the fun of it, but because it would gain them votes, and what evidence we have suggests their lies were believed.

It is not hard to understand why these two longstanding democracies succumbed so easily to the politics of lying. First, they tolerated the growth of a partisan media that danced to whatever tune their owners played. Second, the remaining non-partisan media placed even-handedness between each side, the political horse race and entertainment above informing the public and telling the truth. The Clinton email controversy illustrated clearly a failure to apply any notion of balance. Calling the £350 million a week figure ‘contested’ was literally being economical with the truth. The BBC’s mission to “inform, educate and entertain” has a secret caveat: informing and educating does not include anything deemed political.

What I find surprising is not just that this happened, but that the non-partisan broadcast media has so little interest in doing anything about it. In the US, when Trump complained about his coverage, CNN hired someone nominated by Trump. In the UK the BBC sees no evil, and bats away letters from the Royal Economic Society about its Brexit coverage as just one more irritating complainant. Understandable given business models and constant attacks on Fake News/Liberal bias by the political right, but it means both countries remain wide open to the politics of lying.

Longer read on similar themes: Post-truth and propaganda

When journalism becomes propaganda

A few days ago I took part in a Royal Economic Conference session on the implications of the Brexit vote. There is no need for me to describe how it went, as there is a good write up in the FT. By good, I mean that it was a fair reflection of what went on. Philip Aldrick, economics editor at the Times, took exception to something I said at the meeting on twitter.

Almost a month ago I wrote a post on propaganda. I used a definition borrowed from Jason Stanley, where intent was key. A good journalists provides what they believe are they key facts that the reader needs, while propaganda involves providing facts that advance the newspaper’s view. The interesting thing about this twitter conversation was that Aldrick thought that selecting facts to support the papers view was not propaganda, and that he thought it was what the other newspapers he named and I as an academic did.

Just to crystalise what I mean, take this article that recently appeared in the Telegraph. The headline (and remember this is all that many Telegraph readers will read) said “EU migrants without a job make up city the size of Bristol”. The article continued:

“EU migrants of working age living in the UK who do not have a job account for a city the size of Bristol, new figures have revealed. One in seven of the 2,733,000 EU migrants aged 16-64 - a total of 390,000 - are unemployed or “inactive”.

A survey by the Office for National Statistics does not give a breakdown of how many claim benefits, but those who are unemployed will be eligible for jobseeker’s allowance and may also claim housing benefit and child benefit. People who are “inactive” include those claiming disability benefits.”

The ONS survey can be found here. The fact that the Telegraph chose not to report was that 1 in 5 UK nationals was unemployed or inactive (excluding students). The reason that this is such a high figure is that ‘inactive’ includes mothers staying home to look after children, another fact that the Telegraph decided not to report.

The real story therefore is that migrants of working age are more likely to be working than UK nationals of working age. Other things being equal, this means that they will be paying more taxes and therefore contributing proportionately more to public services that UK nationals. By selecting which facts to report to their readers, the Telegraph turned this into a story about how many migrants were not working, and the amount of benefits they were collecting. In doing this, they were following in the proud traditions of the Mail, Sun and Express. 

Would you call this journalism or propaganda? There are a great many good journalists who would not want this described as the same as what they do, and it fits the definition of propaganda I gave exactly. Propaganda distorts the truth, and in a country like the UK good propaganda does not need to resort to lying about facts to achieve its goal. And of course it matters a lot. I suspect that stories like this are one of the reasons the state can treat migrants so badly in this country.