Experts and Elites

It’s like 2016 all over again. Lots of forecasts of how much poorer we will be under different Brexit scenarios, which if the last time this happened is anything to go by will be ignored or dismissed by around half the UK population. Perhaps I should call for a total and complete shutdown of pronouncements by experts until our country's representatives can figure out what the hell is going on.

More seriously, what has led to this apparent distrust in the words of experts? I want to focus on experts in particular, rather than the more general concept of elites, and even more specifically experts from academic institutions or places directly tied to them. Will Davies has a nice account of the many reasons why distrust in politicians in the UK has increased, but a lot of what he has to say does not really apply to academia.

I have to admit to being completely partial in believing that once society starts ignoring what the evidence says it is on a road to ruin, and academics in the sciences (including the social sciences) have as their raison d'etre trying to understand evidence. And to be fair, much of society understands that. As an IPSOS MORI survey consistently shows for the UK, academics (‘professors’) regularly come close to the top of groups that people trust most.

Furthermore, if anything public trust in professors or scientists has been growing rather than falling over time. The same is also true of social trust in the UK, contrary to many popular accounts.

These results suggest that there has not been any recent decline in how much academics are trusted. But if you replace ‘professors’ by ‘economists’, levels of trust decline sharply. [1] And for good reason. I would have fairly low levels of trust in probably what most economists I see in the mainstream media say, and this is because I most frequently see economists in the media who are not academics. They are typically doing one of two things. The first is making up stories (sometimes plausible stories, but still based on zero evidence) about market movements. The second is describing macro forecasts: a necessary but highly unreliable activity.

Many journalists do not understand the difference between these kind of forecasts (‘unconditional’) and the kind of analysis presented on the economic effects of Brexit (‘conditional’). The analogy I tend to use is between a doctor telling you that you are more likely to die of a heart attack if you eat too much fat (‘conditional’), and a doctor trying to predict your exact time of getting a heart attack (‘unconditional’). This failure to understand the difference between the two activities is the first major reason why academics who say Brexit will reduce living standards are not trusted as much as they should be. It is predominantly a failure of the media rather than economists themselves.

I sometimes wonder, however, if certain journalists and politicians deliberately choose not to understand the difference between the two because it suits them to remain ignorant. This brings me to the second reason that academic economists may be ignored or dismissed over Brexit, and that is because certain elites have an interest in doing so. Here is Stewart Wood reacting to Jacob Rees-Mogg’s comments on Mark Carney after the Bank released some of its Brexit analysis.

The Bank’s analysis is of course not beyond criticism. [2] But the attacks of the Brexiter elite are quite deliberately not economic in character but political: Rees Mogg claimed Carney is a second rate politician (a second rate foreign politician!) and his forecast is designed to produce a political outcome (‘Project Hysteria’). The idea is to suggest that these projections should not be taken as a warning by experts but instead as a political act. Once again, I’m not suggesting we should never think about what an experts own interests might be, but if you carry this line of thought to the Rees Mogg extreme you undermine all expertise that is not ideologically based, which is exactly what Rees Mogg wants to do.

This I think is the second reason why the view of the overwhelming majority academic economists that Brexit will be harmful is going to be ignored by many. Since Mrs Thatcher and the 364 economists, the neoliberal right has had an interest in discrediting economic expertise, and replacing academic economists with City economists in positions of influence. (Despite what most journalists will tell you, the 364 were correct that tightening fiscal policy delayed the recovery.) Right wing think tanks like the IEA are particularly useful in this respect, partly because the media often makes no distinction between independent academics and think tank employees. Just look at how the media began to treat climate change as controversial.

But isn’t there a paradox here? Why would members of the public, who have little trust in politicians compared to academics, believe politicians and their backers when they attack academics? In the case of Brexit, and I think other issues like austerity, these elites have two advantages. The first is access. Through a dominance of the printed media, a right wing elite can get a message across despite it being misleading or simply untrue. Remember how Labour’s fiscal profligacy caused record deficits? Half the country believe this to be a fact despite it being an obvious lie. What will most journalists tell you about Brexit and forecasts? My guess is that forecasters got the immediate impact of Brexit very wrong, rather than the reality that what they expected to happen immediately happened more gradually. Why will journalists get these things wrong? Because they read repeated messages about failed forecasts in the right wing press, but very little about how GDP is currently around 2.5% lower as a result of Brexit, and real wages are lower still.

The second is that the elite often plays on a simple understanding of how things work, and dismisses anything more complex, when it suits them. Immigrants ‘obviously’ increase competition for scarce public resources, because people typically fail to allow for immigrants adding to public services either directly or through their taxes. The government should ‘obviously’ tighten its belt when consumers are having to do the same, and so on. In the case of the economic effects of Brexit, it is obvious that we will save money by not paying in to the EU, whereas everything else is uncertain and who believes forecasts etc.

As the earlier reference to Mrs Thatcher suggests, there is a common pattern to these attacks by elites on experts: they come from the neoliberal right. If you want to call the Blair/Brown years neoliberal as well, you have to make a distinction between right and left. The Blair/Brown period was a high point for the influence of academics in general and academic economists in particular on government. As I note here, Iraq was the exception not the rule, for clear reasons. Attacks by elites on experts tend to come from the political right and not the left, and the neoliberal right in particular because they have an ideology to sell.

[1] See this YouGov poll. Thanks to John Appleby for finding this for me. 

[2] For example, including a ‘worst case’ No Deal scenario designed for stress testing banks in a graph alongside more standard projections of the impact of the Withdrawal agreement is just asking for misinterpretation of the former.

Did centrism beget populism?

Warning: amateur political science below

Stewart Wood has a well argued piece in the New Statesman, saying that it was the move by left and right towards a common centrism that laid the foundations for populism. Although parts of his argument ring true, I find others less convincing..Labour certainly moved to the centre and beyond in terms of its economic policies. The Conservatives moved to the centre in terms of social policy. But on economic policy, the Conservatives moved strongly to the right with austerity. Senior Labour thinkers still seem to have a blind spot on austerity.

Let me start by looking at the country that now has populism in spades as a result of electing Donald Trump as President. To argue that the Republican party has been moving to the centre over the last 30 years is obvious nonsense. The traditional centre right virtue of fiscal rectitude went out of the door with Ronald Reagan, and was completely ignored under the second Bush. The Republicans only extol the virtue of cutting budget deficits when they are not in power. When they are in power, they want cuts in taxes for the rich, increases in military spending but cuts in other government programmes.

Margaret Thatcher was considered pretty right wing when she was in power. Many of her key achievement in terms of her own agenda, such as a diminished union movement and shrinking the state through privatisation, were not reversed by Blair and Brown. It is difficult to argue that the Cameron/Osborne duo made any attempt to undo the Thatcher legacy. Instead they tried to go beyond it, by shrinking the state to a size relative to GDP not seen since the end of WWII. They did it under the pretense that they were forced to because otherwise the markets would no longer buy government debt. This was a colossal deceit. There no evidence that markets were concerned about government debt, and strong evidence that they were not. [1] This deceit should have become clear when Osborne cut taxes at the same time as continuing to cut spending.

Let me use a diagram to illustrate what I mean. [2] (The vertical axis could also be labelled 'identity' as well as 'culture'.) No doubt we could discuss the detail of the size and direction of the arrows, but I think this is roughly right.

In the US, the Republicans had moved steadily in a downward, socially conservative right wing direction, whereas the broad church that are the Democrats have largely remained in the same place (unless you go as far back as the southern Democrats). One possible argument is that this move by Republican politicians helped create the Tea Party. Republicans have always pretended their policies would help ordinary people, whereas in reality they have helped a rich elite. This has laid the ground for a populist leader who was prepared to move economic policy in certain respects away from the right (in particular advocating protectionism). The growing loss of respect of Republicans for their party elite allowed voters to ignore the views of senior Republican leaders in selecting Trump as their candidate.

In the UK David Cameron moved the Conservatives to become much more liberal, by in particular supporting gay marriage. (When I argued in an earlier post that the Conservatives had moved to the right, I was surprised how many comments I got back telling me this was nonsense, and naming gay marriage as the main reason why.) In the UK this left a large gap in this political space, which UKIP - the first successful mass party in England since the SDP - filled. As Jonathan Wheatley showed, UKIP members are social conservatives, but are much more left wing than the Conservatives in terms of economics.

Labour moved to the right under Blair, while remaining socially liberal. I agree with Stewart Wood that this alone was important in preparing the way for populism. As well as the lack of a major industrial policy, they did nothing to curb a rampant financial sector or reverse the gains of the 1% that were a feature of the Thatcher period, a point emphasised by Jean Pisani-Ferry in respect of both the UK and US. I think New Labour’s position is better described as liberal rather than neoliberal: New Labour substantially increased the amount of resources (as a proportion of GDP) going to the NHS, and they also did a great deal to try and reduce child poverty. Labour moved further right (and more neoliberal) as they became more accommodating towards austerity. It was hardly a surprise that party members tried to pull the party back by electing Corbyn as leader.

As I argued here, Brexit was a perfect storm where the economically left behind united with social conservatives. With Labour no longer seen as representing the working class, this allowed the right wing media (with the support of the Conservatives) to help convince the left behind that their problems were a consequence of immigration. The Leave campaign was populist in the sense I describe here: advocating a superficially attractive policy to some that would leave everyone worse off. Much the same is true for Trump, who won the electoral college by convincing the left behind that he really could bring back their traditional jobs, something he will be unable to do in any kind of general way.

So the idea of growing centrism in the US makes no sense, yet it is they who have just voted for a populist President. In the UK it only makes any kind of sense if you think in one dimensional terms.

[1] This is essentially because the Bank of England was pledged to buy whatever it took in the way of government debt to keep interest rates low.

[2] I think the first time I began thinking in this two dimensional way was this post, but more recently I used it to analyse the forthcoming French election.