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.

Talking to the Establishment

Talking to the Establishment is what Aeron Davis, a Professor of Political Communication at Goldsmiths London, has been doing for twenty years. In this little gem of a book he tries to pull together his thoughts and reflections on these interviews and extensive research on how today’s establishment works.

When people talk about the Establishment, they often imagine a socially coherent body managing the country in ways that serve its own collective interests. An elite network who predominantly went to certain public schools, who make big decisions of state over dinner in their private clubs. Even if outsiders entered into the upper echelons of politics, the civil service, business or the media, they inevitably became part of the Establishment network. To radicals the Establishment was a brake on social change, but for conservatives it provided the comfort that the country was in sound collective hands.

Davis argues that with the advent of neoliberalism in the 1980s, that cosy world began to fall apart. He even speculates that we may now be seeing the end of what we think of as an Establishment. He suggests the elite have lost coherence: that rather than look after the interests of the network as a whole (and for a conservative therefore the country), they look after the interests of themselves. They have become the reckless opportunists of the book’s title, getting what they can from the chaos they helped create.

In politics this idea is personified by the man on the front cover, who threw the country into the destructive mess that is Brexit simply for the sake of his own personal ambition. Press barons turned their newspapers into propaganda vehicles for the same end. But he also argues that we can see the same opportunism in business leaders who put personal returns over the interests of the companies they run. He finds that in the civil service the key ingredient for success is how good an individual is at self promotion, and he argues the same applies elsewhere.

A lot of this rings true for me, but Davis backs it all up with research and interviews. While austerity was what I call deficit deceit (using the deficit to scare people into accepting a smaller state) which served neoliberal ends, in the UK it was I suspect also simple political opportunism: a way to embarrass the Labour government with little thought about what it might do to the economy. In budget after budget, Osborne seemed more focused on wrong-footing the opposition than doing anything to revive productivity growth. You could easily call that reckless opportunism. 

As well as this overriding theme, there is acute observation on other matters as well. For example on how journalism has become churnalism, and the accompanying growth of the PR industry. The only time I have met Aeron was at a conference where I was talking about how the media had distorted the austerity debate, and I remember how taken aback I was when some in the audience suggested academics just needed better PR. But this also connects with the main theme, where self promotion is the name of the game.

I found the book an enlightening and thought provoking read which was difficult to put down. It is both a fascinating insight about how individuals in the elite saw recent history, but also a provocative interpretation of how our idea of the Establishment may no longer be valid.

The politics of ignoring knowledge

Simon Tilford has a post where he explores the roots of Brexit in a kind of UK exceptionalism. He argues that “the underlying reason [for the Brexit vote] is the hubris and ignorance of much of the British elite, not just the eurosceptics among it”. I want to expand on that. I do not think this ignorance and hubris is confined to the UK’s role in the world. It also extends to an attitude to knowledge of all kinds, and I suspect it is possible to date when this began to the revolutionary zeal of the right under Thatcher.

The Thatcher government that gained power in 1979 were going to do away with what they saw as Keynesian nonsense, and run the economy using money supply targets. Treasury civil servants produced a forecast that said their policy would lead to a recession, and this turned out to be what happened. The forecast when it was made was dismissed by the politicians in government as the product of outdated civil service advice reflecting a failed consensus.**

It is of course the prerogative of politicians to reject a consensus, particularly if there is a reasonable minority of experts who think the consensus is wrong. It is what happened next that was the problem. Monetarism was a monumental and predictable failure, but Conservative politicians and their supporters spent considerable effort and resources turning this failure into a triumph of Thatcher over an establishment civil service and academic economists. One example is the letter from 364 economists objecting to a deflationary fiscal policy in the 1981 budget. The right, and in particular the IEA, have successfully cultivated a belief that this letter was wrong when in fact it was right. The recovery (using the term as it should be used) was delayed by over a year by the 1981 budget. More generally the view was that social scientists or civil servants were probably antagonistic to the neoliberal project and could safely be ignored. They were, in Thatcher’s words, not one of us. [1]

The reality was that the Thatcher and later Major governments did subsequently often take note of what experts were saying, but the myth on the right prevailed. Before the Conservatives regained power in 2010, they thought very little of going against the advice of the majority of economists over austerity, although to be fair they were later supported in this by senior civil servants and the governor of the Bank of England. Policy based evidence replaced evidenced based policy. But this was the relatively sane wing of the party, as we discovered during the referendum campaign.

We know the EU referendum campaign largely ignored experts, whether they were economists, lawyers or experts in international relations. What I think surprised many is that the Leavers fantasy was not just a device to obtain votes, but actually reflected what the Brexiteers believed. Since the referendum the government has clung to the fantasy, and ignored or dismissed all the advice it was getting from its civil servants. (In two cases dismissed meant sacking or resignation.) As Steven Bullock says, the EU side are in despair that the UK has yet to work out a realistic position on many issues. Because large parts of the UK public, relying on the right wing press for their news, still believe in the fantasy, some in the main opposition party think their best strategy is to ape their opponents.

As a result, we are in a strange bifurcated world. One part consists of pretty well anyone who knows anything about the economics, politics or legal aspects of Brexit. They realise how hard Brexit will be, know how much damage it could do, and by and large think it will be disastrous for the UK. (Experts tend to recognise and respect knowledge in other areas.) The other part lives in a different world, the world of the media and politicians, where everyone still lives the fantasy.

In this respect, we are no different from what is happening across the Atlantic. Angus Deaton notes the tragic irony that in the year the great nobel prize winning US economist Ken Arrow dies, the Republican administration is ignoring one of his great achievements, which was to show why a simple market in healthcare will not work. The only ‘expert’ this Republican administration seems to recognise is Ayn Rand. If it is successful in replacing or sabotaging Obamacare, millions will lose coverage and thousands will die as a result. The experts (such as the CBO) who predict this are accused of inaccuracy by a White House that cannot even be bothered to check its spelling of 'inaccurately'.

May holding Trump's hand shortly after he became president was indeed symbolic. Those who justify ignoring experts often talk about them as ‘unaccountable elites’ who have ulterior motives in giving the advice they do. In reality ignoring expertise means dismissing evidence, ignoring history and experience, and eventually denying straightforward facts. It leads to the politics of barefaced lying, such as asserting that a new trade agreement can be negotiated in little over a year. [2] This disdain for knowledge is not a prerogative of the right: you can find it on the left among those who say, for example, that all social science is inherently value laden and therefore political. (Ironically often dismissing mainstream economics as a buttress of neoliberalism, the same economics that the right are so keen to discredit.) The difference is that that the knowledge dismissing right have power in the UK and US, and so we are suffering the consequences of their evidence-free politics.

[1] Sir Keith Joseph tried to abolish the Social Science Research Council.

[2] It seems finally that the government has accepted a reality that was obvious months ago to those who listened to experts. 

**Postscript 21/07/17 As Sasha Clarkson reminds me, one of that group now spends his time denying climate change.

Why are the UK and US more vulnerable to right wing populism?

Cartoon by @ThomasHTaylor

A week or so ago, anticipating Macron’s victory and following defeats of the far right in Holland and Austria, I asked on twitter why the US and UK seem to be more susceptible to right wing populism than elsewhere. It is a question that requires much more than a post to answer, but I thought the replies to my question were interesting.

Quite rightly, a large number of people questioned the premise. We have populist far right leaders in parts of Eastern Europe, for example. Maybe timing is also important, with the US and UK acting as warnings to other countries.

Nor should differences be exaggerated. Macron is quite unique in his achievements, and a runoff between Le Pen and the conventional right or left might have been closer. Trump lost the popular vote, and the Brexit vote was very close. What exactly is populism anyway: as someone said to me recently, elites use the label populist much as populists use the label elites.

On the other hand, one of the features of the Macron campaign is that he championed all the things that Brexit and Trump led us to believe were now politically unpopular and therefore to some extent compromised, especially globalisation and the EU. A number of people suggested specific features of European economies that might have cushioned the impact of globalisation more effectively: a stronger welfare state, for example, or stronger union power. One way of describing this is to say that neoliberalism has been less successful in Western Europe. Real wage growth has been poor in the UK and US, which may have a wider impact in electoral terms than higher unemployment in Europe.

Another set of suggested explanations focused on the rise of the very rich in the US and UK. Those who had recently achieved much higher incomes and wealth would be naturally keen to keep it, and would therefore do what they could to ensure democracy allowed them to keep (or increase) it. The obvious way to do this is through the media, although recent attempts at voter persuasion discovered by Carole Cadwalladr suggest it is not the only way. The UK press is perceived to be the most biased to the right among this sample of European countries apart from Finland. The US has talk radio and Fox news. These may persuade the non-partisan media to give undue coverage to far right individuals, which then increases their support. To the extent that the very rich are able to influence elections, we get what could be described as a managed democracy.

That in turn may be related to a remark by Matthew Yglesias: “You see in Trump vs Le Pen once again that authoritarian nationalist movements only win with the support of the establishment right.” (The centre-right candidate in the French elections, Fillon, recommended his supporters vote for Macron.) Brexit was enabled by a Conservative leader offering a referendum, and more importantly Brexit was encouraged by his party attempting to shift the blame for austerity on to immigrants. Trump has been embraced by the Republican party. This narrative fits with this past post of mine.

It seems to me that these various explanations are quite compatible with each other. Where what we might call neoliberal policies had been strong - weak unions, declining welfare state, stagnant wages - these policies created a very large group in society that were looking for someone to blame. In a managed economy that allowed the parties of the right either to use nationalism and anti-immigration rhetoric to deflect blame from themselves, or for the far right to capture those parties. As that rhetoric also hit out at globalisation it potentially was a direct threat to global business interests, but those interests could either do nothing about this or felt they could manage that threat.

One final set of answers to my original question focused on history. Europe still has enough memory of living under authoritarian nationalist governments to want to avoid going down that route again. (Macron’s vote was highest amongst the 70+ age group.) The UK and US do not have that experience, and perhaps nostalgia for empire (or WWII) in the case of the UK or watching an empire decline in the case of the US created unique tensions.

While these are dark times to be living through (and I suspect many others besides myself certainly think they are), for anyone interested in political economy they are also fascinating times.