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.

Trump, Brexit and balance

It is with a dreadful sense of inevitability that I’m watching what is happening in the US general election between Clinton and Trump. Just as the media in the UK normalised the flat out lies of the Brexit campaign, so the media in the US is normalising Donald Trump.

In both cases this stems from an obsession with balance. With the Brexit campaign the media balanced the lie about £350 million a week to the NHS with Remain’s claims (based on analysis using consensus economics) about the economic damage that leaving the single market would do. With the US general election, Trump's stream of well documented lies are balanced against seemingly baseless insinuations about Clinton.

This is not about what you read in the New York Times or the Washington Post. Their audience is generally not the electorate that could vote either way. The Financial Times provided exemplary coverage of Brexit issues, and the non-tabloid press as a whole was not too bad. With Brexit the critical electorate were those that read the tabloid press, just as in the US it is those that watch cable news. Those sources deliberately and relentlessly distort news to favour one side.

Without major changes to how the media is regulated in the US and how the press is regulated in the UK, there is little that can done about this particular media bias against truth. So the best we can hope for in the meantime is that the big ticket events like debates, or widely watched programmes on the non-partisan media like the evening TV news in the UK, offer some redress to the partisan nature of much of the media. Which is why the failure of Matt Lauer in questioning the two candidates is so important.

The concept of balance needs to be rethought by media organisations. Facts, and lies about them, should be above balance. The consensus views of experts like academics should be above balance. Standing up for both is not a journalist expressing an opinion, but a journalist doing their job.

The media likes to think of itself as the protector of free speech, and of holding authority to account. But that matters little if at crucial points in the democratic process the media either distorts reality or hides the truth. If you think that is an exaggeration, how else could you possibly get a result like this:

“Trump has his largest edge of the campaign as the more honest and trustworthy of the two major candidates (50% say he is more honest and trustworthy vs. just 35% choosing Clinton)”

If you are reading this in the UK and thinking this could only happen in the US, who do you think was trusted during the Brexit campaign?

How to avoid Brexit

My initial fears about how the EU referendum would play out appear, unfortunately, to have been realised. The debate over the size of the economic costs has been turned into Project Fear by Brexit campaigners (with the media’s help), leaving most voters to believe they would be no worse off if we left. Media coverage has been dominated by Conservative politicians and political commentators, rather than those with some expertise who might have been able to convince the public that the costs of Brexit were not just another macroeconomic forecast. Among all the tedious noise of claim and counter claim, one apparent fact stands out: we cannot control EU immigration from within the EU. How can Conservative leaders who have pandered to popular concerns about immigration with impossible targets now convincingly turn around and say immigration isn’t really so important? To do so would lack credibility, so they have not even tried.

Just as in the Scottish independence referendum, it is going to be up to those who are not Conservative politicians to save the day for Remain. One way to do that would be to take the immigration issue and play on the general public distrust of politicians. [1] Ask this: if we Leave, why do you think those in charge will really cut immigration from the EU? After all, net immigration into the UK from outside the EU is at least as high as from the EU, and the UK has complete control over non-EU immigration. Yet non-EU immigration has hardly fallen since 2010, and is itself way above the government’s own target.

There is a simple reason that Conservative politicians have not brought non-EU immigration down, and that is because the costs to the economy of doing so clearly outweigh the benefits. They continue to pretend they are trying to bring immigration down (and doing some harm in the process) only because immigration is a convenient scapegoat for the impact of their own policies.

If we cut immigration, it would not ease pressure on public services, because on average migrants - because they are young - pay more in taxes and utilise public services less than non-immigrants. In fact the reverse would happen: a larger government deficit would see more cuts to the NHS and to tax credits. As Conservative MP Dr Sarah Wollaston, who defected from Leave to Remain, said: “If you meet a migrant in the NHS, they are more likely to be treating you than ahead of you in the queue.” Yes of course we could train more doctors and nurses, but the politicians in charge of Leave and who would be running things after Brexit have been reducing the share of national income spent on the NHS.

Cutting immigration might in itself directly improve the pay of low earners if the numbers of jobs remained the same. But the number of jobs would not remain the same. Both UK and overseas companies would take their jobs abroad so that these companies benefited from being inside the single markets. The net outcome for British workers would almost certainly be worse. [2]

Leaving the EU does not give UK voters control over their border and who comes in. It gives control to the politicians running the Leave campaign. Politicians who have so far cut spending on the Border Force budget. In particular do you trust Boris Johnson, whose main interest in supporting Brexit is that it will let him rather than George Osborne be the next Prime Minister, and who has argued in the past that low immigration could lead to economic stagnation?

This referendum is about trust. Do you trust 9 out of 10 economists who say that Brexit will be bad for the economy, or do you trust the politicians who say they will cut immigration if you Vote Leave, but have failed to significantly reduce immigration from outside the EU over the last six years?

[1] This line of attack is partly suggested by this post by Jonathan Portes, but also by the finding here that although immigration is the main issue for those voting leave, they are somewhat divided on how much Brexit will solve the ‘migration problem’. See also this and this. A worthy but ineffectual alternative is to stress the benefits of immigration head on. Desirable though that might be in the longer term I don’t think you can turn around the ‘received wisdom’ in 10 days. An unwise alternative is to emulate what the Conservatives did, which is to say that we need to convince the EU that migration needs to be controlled more strongly than it is at present.

[2] I suspect arguing about the size of the impact of immigration on low pay (is it large or small) will achieve little, particularly as reasonable opinions differ. It is a bit like arguing over the £350 million a week figure: it plays into Leave’s hands by focusing on the negative (there is a negative effect of immigration on low pay, and there is a net contribution to the EU).

The Media and Brexit redux

In this post I complained about how little attention the visual media gave to the fact that the overwhelming majority of economists thought that Brexit would involve significant long term costs. All I have now is more evidence to back up the argument in that post.

First, I was not alone in these thoughts. Here is Andrew Scott talking about his foreboding concerning the Brexit debate: “I just really wasn’t looking forward to the debate because I knew that it would stifle what are the really important issues, it would become partisan rather than insightful and that the economic voice and argument was vulnerable to being politically sidelined.” [1]

Second, the argument that there will be long term costs with Brexit has not, as yet, convinced most voters. In this poll, which is not unique, only 22% of voters thought they would be worse off as a result of Brexit. It seems unlikely that voters are unaware that David Cameron and George Osborne have claimed they will be worse off, but quite rightly they may be very distrustful of what politicians say. Virtually no voters will have examined the economic arguments on both sides and made up their own minds. Crucially, unless they read one of the broadsheets, they will have no idea that there is such an overwhelming consensus among economists. 

Third, we now have more evidence besides letters that there is indeed an overwhelming consensus among economists, thanks to the Observer. True, not quite as overwhelming as I had imagined, but 9/10 counts as a consensus for economists.

Fourth, there is polling evidence that the public do have a high level of trust in what academics say. Here is the relevant data (source):

So to sum up, most people do not think they will be worse off after Brexit, economists (including academics) overwhelmingly do think people will be worse off, and people have a high level of trust in what academics say. I can only think of one plausible explanation that is consistent with these three facts, and that is that people do not know what the overwhelming majority of academic economists think. [2]

In a vote that could well be close, you cannot argue that this failure to transmit information is unimportant.

One of the structural issues that help produce this problem is what you could describe as the politicisation of truth which comes from the overriding need to be unbiased. The visual media rely on either side to bring the relevant information to the table, because to do otherwise might seem biased. If a statement is made by one ‘side’ and disputed by the other it is contested, whether it is true or false. [3] 'Contested' is the word I heard a BBC reporter yesterday describe the £350 million a week claim, even though the UK Statistics Authority and one of their own fact check websites say it is false. So if one side does not headline that the overwhelming majority of economists think Brexit will involve significant long term costs, this fact - if it is reported at all - can get lost in the endless and tedious sequence of political claim and counterclaim.

This politicisation of truth did not begin with this referendum. The Leave campaign chose to headline a figure which they knew to be wrong. They did so because they also knew it would do them no harm. They knew it would do them no harm because no one in the media other than the broadsheets would have the nerve to describe it as a lie. They knew that from observing how the media has worked in the past. 

[1] Here is an example of how the media tries to fit this consensus among economists into their standard confrontational model. Now I have no objection to economists being challenged, but it is a shame that all this interview seemed to be about was Tony Yates trying to get across the concept of a counterfactual. Just one question along the lines of why do you think that on this issue economists are so united might have been interesting for viewers

But I do object strongly to the preamble. All the statements made were either wrong or beside the point. (1) that the 364 economists were wrong is the opinion of some but not others - it is not a fact. (2) the ‘establishment’ may well have thought we should stay in the ERM in 1992 but did the majority of economists think we would be worse off coming out? I certainly did not, and published a paper saying so. (3) it was the evidence from economists in the 5 tests analysis that convinced Brown to say no, not the other way around!

So rather than examining why there is such a consensus view among economists we get a rather poor interview about the value of counterfactual analysis, and certain opinions passed off as facts without any opportunity to challenge them. If anyone in the media asks me why academics appear reluctant to appear on TV, I shall show them this.

[2] Some people have a kneejerk reaction against complaints involving the media. In reading Andrew Scott’s piece an analogy occurred to me which I think might help here. Until the financial crisis, most macroeconomists (not all) tended to view the financial sector as a simple ‘transmission system’ rather than thinking about it as a system with its own incentives and dynamic. That was a huge mistake. Equally criticisms of the visual media which amount to ‘they are all biased’ are about as informative as saying the problem with the financial sector is that everyone in it is too greedy. More sensible critiques in both cases look at the way the sector works, and the incentives actors with each system face.

[3] Equally if something is stated often enough by one side and is not contested, it becomes a fact.