Did economists fail us over Brexit?
‘Most economists think the British public shot itself in the foot, and did so against expert advice’
You may have heard the jokes about economists equivocating and squabbling. Ronald Reagan had the best one, about an edition of Trivial Pursuit designed for economists: “There are 100 questions, 3,000 answers.”
But mainstream economists did not disagree on the EU referendum question. A fortnight before the British public voted by a slim-yet-definite margin to leave the EU, the Centre for Macroeconomics, a research group, polled a group of expert economists, asking them what they thought the overall economic consequences of such a vote would be. The response was unanimous, and the only point of contention was whether Brexit would be bad, or very bad.
Leave voters did not seem to take this unprecedented warning very seriously; nor were they moved when nearly 200 economists signed a letter to the Times; nor were they dissuaded when three of the country’s leading economic institutes issued a sober analysis in a joint statement. All these were independent views, separated from the sometimes-political world of the International Monetary Fund or the Treasury. Yet they were ignored.
In short, most economists think the British public shot itself in the foot, and did so against expert advice. So should the profession have done things differently? Or would further expert views have been drowned out in the media maelstrom?
Most newspapers had a strong preconceived view, for or against. The BBC attempted to be impartial, but many critics complain that the corporation gave too much airtime to the fringe views of a few pro-exit economists, and failed to challenge obvious falsehoods. (I should declare my own BBC role: I presented a short radio series fact-checking the referendum campaigns.)
But Paul Johnson, head of the well-respected Institute for Fiscal Studies, thinks economists have a case to answer. “It is always a mistake simply to look at the media as a scapegoat. The real failings were with my profession.”
Perhaps. But the campaign left little room for subtle analysis of the difference between a single market and a free-trade agreement, or the “lump of labour” fallacy that each immigrant worker deprives a local of a job. Even the baldest falsehoods could not be expunged.
The Leave campaign’s most prominent claim — “We send the EU £350m a week, let’s spend it on the NHS instead” — was untrue and exposed as false repeatedly by the head of the UK Statistics Authority. Yet, if a recent Ipsos Mori poll is to be believed, 47 per cent of people came to believe it.
John van Reenen, the outgoing director of the LSE’s Centre for Economic Performance, doesn’t think the profession should be too down on itself. “I’m proud of what we did,” he says, and had economists engaged more “in my frank view, it would not have made a jot of difference.”
Van Reenen has a point; there is a limit to how much experts can achieve by simply presenting the facts.
Dan Kahan is a Yale law professor who studies the way we debate controversial political issues such as climate change and gun control. He points out that our reasoning about such issues is often bound up with passionately held emotions and values. For example, people who oppose government regulations are often instinctively sceptical about climate change, fearing that it is a Trojan horse for state control; alternatively, people who distrust large corporations instinctively embrace the scientific evidence on climate change, yet tend to dismiss scientists who say that genetically-modified food is safe. Giving people evidence that threatens deep beliefs is often counterproductive, because we start with our emotions and trim the facts to fit them.
A possible solution, argues Kahan, is to recruit experts who confound people’s stereotypes — a sharp-suited City economist explaining that EU laws protect workers’ rights, perhaps. Another possibility is to acknowledge people’s values before presenting the evidence — for example, the desire to preserve a community’s character in the face of immigration. And Kahan and his colleagues have also found that when evidence is presented by a diverse group of experts, people receive it with a more open mind. Perhaps the problem is that economists don’t seem very diverse.
Ultimately, there is no substitute for sustained public engagement — a lesson scientists have learnt the hard way. After years of bruising anti-scientific backlashes, they realised they were being ignored on issues such as genetically-modified crops or vaccines because they shied away from media appearances. Charlatans and activists stepped into the vacuum.
So, in 2002, the Science Media Centre was established, with a mission to ensure that when science or pseudoscience hit the headlines, respected scientists would be available to speak to journalists. “It’s a long slog,” says David Spiegelhalter, a statistician and risk-communication expert at Cambridge university. But he says the SMC has led to better science reporting.
Should economists do likewise? Perhaps. But the conduct of the campaign will not make that easier. Economists who did step forward to explain the issues were dismissed as corrupt or incompetent in the crudest terms. Nobody could be blamed for wishing to duck such mud-slinging. But if the events of the past few weeks have shown us anything, it is that public life is too precious to be entrusted to politicians alone.
Written for and first published at ft.com.