In the month or two leading up to the UK general election on 7 May 2015, a range of economists and economic groups put a lot of effort into providing information and assessments of the relevant economic policy issues.1 But it seems nobody listened. David Cobham2 asks why this was and how we should respond.
The Institute of Fiscal Studies (IFS) published detailed comments on the political parties' tax and benefits plans and on the parties' projections for the public finances. The National Institute for Economic and Social Research (NIESR) included in its February 2015 National Institute Economic Review analysis of the parties’ fiscal plans plus papers on topics from the macroeconomic record of the coalition through growth, education and productivity to welfare. The Centre for Economic Performance (CEP) at LSE produced 17 election briefings on a wide range of subjects included mental health, crime, inequality and Brexit as well as the topics listed above. Simon Wren-Lewis’s mainly macro blog included a number of posts discussing relevant material, with some focus on what he identified as 'mediamacro myths'. The website Coalition Economics published nine short articles on aspects of economic policy by, in most cases, the authors who had analysed those areas of policy for the spring 2013 issue of the Oxford Review of Economic Policy on the economic record of the 1997-2010 Labour government (edited by David Cobham, Chris Adam and Ken Mayhew). Think tanks such as the New Policy Institute also published reports of different kinds. Significant articles on austerity were published by Paul Krugman (Guardian, 29 April) and Martin Wolf (Financial Times, 28 April). No doubt this list could be extended.
Mention should also be made of the Centre for Macroeconomics survey (www.cfmsurvey.org) at the end of March, which found that the ‘great majority of respondents disagree with the proposition that the coalition government's austerity policies have had a positive effect on aggregate economic activity’. That result was consistent with the bulk of the economic analysis produced, which was critical of the Coalition government’s policies, though it did not necessarily endorse many or all of the policy proposals of the Labour opposition.
However, the abiding impression from the election debates was that serious economic analysis simply did not figure: one side continued to trumpet the claims that the last Labour government had left an ‘economic mess’ and its own ‘long-term economic plan’ was working, the other side disputed the latter but not the former, and all parties insisted their opponents were economically incompetent but themselves announced fiscal plans which were incomplete or even incoherent. The media largely failed to examine the claims about the causes of the financial crisis, and made only limited and unsuccessful attempts to get the political parties to spell out their fiscal plans.
We are left therefore with a puzzle: economists seem to have spent more time and trouble than in previous elections trying to provide arguments and information for the debates on economic policy, but that effort seems to have had very little impact (in the REF or any other sense).
How should we understand this? A range of answers can be suggested.
First, it has become commonplace since the election to argue that the Labour party should have confronted back in 2010 the narrative that the coalition promulgated about the causes of the crisis and the economic legacy of the Labour government.3 Had Labour done so, the other parties — notably the Conservatives, on the one hand, and the Scottish National Party, on the other — would have had to defend their points rather than repeating their dubious claims as if they were established facts, and that would have raised the role of economic arguments and the level of debate more generally, as well as (arguably) strengthening Labour’s position.
What makes Labour’s apparent decision not to do this all the more strange is that Labour was attacked over and over again through the 1980s and even the 1990s for allegedly mishandling economic policy between 1974 and 1979, allowing excessive public expenditure and high inflation, and it should have learnt a lesson from that.4 It is also striking that, while the Blair-Brown Labour governments probably took more advice on more issues from academic economists than any government before, Labour has made rather less use of economists since 2010, though it is not clear why. On the other hand, the Coalition parties, and the Conservatives in particular, seem to take domestic economic policy advice, if at all, from other places and to have few known academic supporters.
Second, it is possible that the UK press, which sets the agenda and the tone for the broadcast media as well (notably for the Today Programme on BBC Radio 4, but even on these issues for Channel 4 News), was more partisan than in the 1997, 2001 or 2005 elections.5 This could have been due in some cases and in part to the press’s opposition to Ed Miliband’s commitment to tougher press regulation, but it may also have been the case that significant parts of the press are just more right-wing than they have been in the past. In particular, while the Financial Times’s endorsement of the Conservatives in 2010 can be seen as ‘time for a change’, its opposition to Labour (Martin Wolf apart) in 2015 and its discussion of the election outcome afterwards has been often partisan and occasionally even tabloid.
It’s worth noting here that, unlike perhaps what exists in the US,6 most UK academic economists are not party-political in the sense of being loyal to Conservative or Labour (or Liberal Democrat or SNP). Instead, it seems that UK economists tend to be critical of the government whatever it is. Thus many, perhaps a majority, were anti-Labour in the 1970s and this carried through to the early 80s, but many became anti-Thatcher by the end of the 80s and there was probably a majority highly critical of the Major government by the mid-90s). Anecdotal evidence also suggests that UK economists became significantly less sympathetic to the Blair-Brown governments as time passed. So the media do not have an easy justification for dismissing economists as partisan, and that is not generally argued.
Third, it is possible that the reputations of economists and economics have been so badly affected by our failure to predict the financial crisis, reinforced by our sometimes cack-handed attempts to answer the Queen’s question on this, that we are no longer listened to.
This has been exacerbated by the perception that we have retreated into mathematical formulations and theory disconnected from policy issues, with research which is long on modelling and derivation but short on new insights, as has been argued by a range of commentators in the aftermath of the crisis. There is a big contrast here between economics and say physics or medical research, where scientists and journalists between them do a lot to provide non-technical accounts of the hunt for the Higgs boson particle or steps towards new cancer treatments: economic research is rarely reported except with respect to Nobel prize awards, although most of it must be much easier to explain to a lay audience than the Higgs Boson.
It seems likely that all three explanations have some validity, and of course they interact: elements of the third provide justification for the press's dismissal of economics as irrelevant. We would all like to live in a world in which political debate was more honest, less partisan, more objective and better informed. But of the three explanations above the only one that economists can do much about is the last: we need to improve our engagement with public opinion. That certainly does not mean abandoning 'high theory' for applied policy analysis, but it also does not mean just doing more to spell out our theoretical and empirical findings in non-technical terms.
We need to reframe our concerns and reshape our presentations so that we and others better understand the balance between high theory and policy analysis, and our research should reflect a wider awareness of the history of our subject and the economic development of the world. It turns out, in other words, that it is not just for teaching purposes that we need to rethink the way we do economics.
2. Heriot-Watt University, Edinburgh
3. There were voices within Labour that argued this, but they seem to have lost the argument, see http://www.theguardian.com/politics/2015/jun/03/undoing-of-ed-miliband-and-how-labour-lost-election. The spring 2013 issue of the Oxford Review of Economic Policy was aimed in part at confronting that narrative.
4. Labour's Economic Policies 1974 -79, edited by Michael Artis and David Cobham, Manchester University Press 1991, attempted to offer an objective assessment of that government’s record, partly in response to the distorted views of it that were then prevalent.