The fall of the technocratic expertsSunday 23 October, 10.00 - 11.30 , Pit Theatre Battle for the Economy
At the beginning of June, when Brexit campaign leader Michael Gove said, ‘people in this country have had enough of experts’, his particular target was economists. Having failed to predict the last financial crisis, he said they were not to be trusted. By the end of June, Gove was comparing leading economists who warned of ruin for the British economy after Brexit to German scientists denouncing Einstein in the 1930s. He later apologised, but where does the credibility of the IMF, the 10 Nobel-prize winning economists, the former chancellor of the exchequer and the Bank of England stand now? All of them predicted economic ruin for a Britain outside the EU. Rather than the public lacking economics literacy, has the economics profession shown itself to be out of touch, or even incompetent? Does the ‘dismal science’ actually provide any insights at all?
Gove’s dismissal of experts put him for some on the side of astrology against astronomy, homeopathy against medicine. But rather than Brexit being proof of a sinister strain of anti-intellectualism, perhaps it is evidence that the economy has not been delivering for most people. Dissatisfaction with stagnant living standards, with joblessness, or with insecure, low-paying jobs meant few felt they had a stake in protecting the status quo that economists were at pains to secure. Andy Haldane, the chief economist at the Bank of England, admitting in a speech in Port Talbot that, ‘typically, the Bank’s regional visits have tended to focus on company contacts in the public and private sectors’, and that after meeting people beyond that bubble, he realised that many have a starkly different perspective on the state of the economy. Indeed, Lord Rose, then head of the Britain Stronger in Europe campaign, predicted in March that Brexit would mean wages going up - taking it for granted that this was a bad thing. So does the very idea of what’s ‘good for the economy’ obscure different interests within society? To adapt Margaret Thatcher, is there perhaps ‘no such thing as the economy’? Yet often political goals, such as whether to be in the EU or not, are often expressed in terms of their effect on ‘the economy’ and economic policymaking is viewed as a technical rather than a political activity.
Is there something about economics that makes it inherently unpredictable? Why the tendency to outsource decision making to experts rather than simply consult them? Was it a mistake for New Labour to grant independence to the Bank of England in 1997? Or maybe the whole economy would be better off under some form of technocratic control than left to the vagaries of all politicised popular choices? Will the new Conservative government’s revival of the previously unfashionable concept of ‘industrial policy’ be enough to convince the public that economic experts can help improve their lives rather than just provide an intellectual fig leaf for establishment interests?
deputy editor, City A.M.
author and commentator on politics and finance; editor of Reaction
principle research fellow National Institute of Economic and Social Research (NIESR); senior fellow, UK in a Changing Europe; author, 50 Capitalism Ideas You Really Need to Know
board member, Centre for Economics and Business Research; economic advisor, British Chamber of Commerce
CEO, Clerkswell; author, The UK After The Recession