Winner of the New Statesman SPERI Prize in Political Economy 2016

Tuesday, 20 March 2018

Beliefs about Brexit


I have nothing to say on yesterday’s agreement that cannot be found in what Chris Grey or Ian Dunt writes. The difference in tone between the two seems to me to depend on different assessments of how far down the road the Irish border issue can be kicked. What I want to do instead is ask why public opinion seems oblivious to the failures of all those claims before the negotiations that ‘we hold all the cards’ compared to the reality that the UK has largely agreed to the terms set out by the EU.

I think as good a place to start as any is this poll result from ORB.


The view of the overwhelming majority of economists, and all the analysis from serious academics, the OBR, IMF, OECD, and now even the government, is that leaving the EU will involve significant economic costs. Yet despite all this the poll above shows as many people think we will be better off leaving as think we will be worse off. This is the kind of polling that should stop everyone in their tracks, much like the polls before the US election that said more people trusted Donald Trump than Hillary Clinton.

The result in this poll is all the more incredible because so far people are worse off as a result of Brexit. They are worse off because a depreciation immediately after the vote led to higher import prices that have not been matched by rising nominal wages. We have moved from the top to the bottom of the OECD growth league table. A belief that we will be better off has to involve Brexit in some way reversing what has already happened.

I can think of two classes of explanation for this apparent paradox. The first is that people are fully aware of what experts and the government thinks, but ignores this because they simply do not trust experts. Instead they fall back on simple ideas like there will be less immigrants after Brexit so they will be better off. Ideas that experts also say are wrong, but where experts are again ignored.

If that is the line you want to take, then it has a clear implication. The implication is never hold a referendum on anything. It is not normally a good idea to take decisions where you ignore all expertise.

There is however a second and much simpler explanation for the poll result shown above. I know about the view of the overwhelming majority of economists, the analysis from serious academics, the OBR, IMF, OECD and now even the government, and so do most people reading this blog or who read the Financial Times and a few other newspapers. But do people who pay far less attention to economics and politics know this? How would they know this?

They will know very little about it from reading the papers that campaigned so hard for Brexit in the first place. At best the information will be reported in a dismissive way with some reference to how economists always get things wrong. (Hence, by the way, a distrust of economists, because most of the media is either unable or unwilling to make the distinction between conditional and unconditional forecasts.) Against such reports will be a constant stream of comment and reporting extolling the imagined benefits of Brexit.

This propaganda could be countered by informed and informing reporting by broadcasters. Unfortunately, with the exception of Sky News, the standard of reporting by broadcasters on Brexit has been very poor. In particular the BBC treats Brexit like any other Westminster based issue, with an additional touch of nationalism. We hear a great deal from May, Fox, Johnson etc, with virtually no expert analysis of what the true state of negotiations are.

I’m not an expert on international trade, but because I read some of the now numerous people who write stuff on Brexit who are experts, or who have made themselves experts, I feel I am reasonably well informed. I have never seen the same level of expertise from the broadcast media. If I just listened to the BBC or read any newspapers bar two or three, I would know almost nothing about what was really going on in the negotiations.

Let me give a personal example. I missed the importance of the Irish border until September last year. I do not think I was unusual in this respect. I suspect I did so because I was influenced by the UK line that this issue was really a phase 2 problem, a line we heard over and over again on the MSM. What the MSM rarely did was ask what people in Irish Republic felt about the border, and hence why it got to be a first stage issue in the first place.

Once I realised its importance, I could see that the Irish border issue would have a fundamental influence on any final deal, and so could many other experts. But the BBC in particular seems unable to incorporate expert opinion, either directly or indirectly, into its coverage of the negotiations, in much the same way as they failed to do so before the referendum. As a result, most voters are left with bland and uninformative coverage. I see the same Brexiter MPs over and over again being interviewed by the broadcast media, but I cannot recall any occasion in which they have been reminded of the false claims they made before the vote.

The idea that the media can heavily influence popular opinion is not new. It has been widely acknowledged that people think crime is always rising, and overestimate the number of immigrants in the UK, the extent of benefit fraud and so on. These mistakes are almost always in the direction you would expect if people were far too influenced by newspaper headlines. We also now have published papers that demonstrate that the media influences rather than just reflects voters views. (See here for Fox News, and here for the UK press. Here is another study that also finds the Murdoch switch to Labour had large effects. Here is a study about how the media influenced attitudes to welfare after the 2011 riots.)

I also think this is not the first time in recent memory that the media has failed to accurately report what was going on and what experts thought. Before the 2015 election the media accepted the idea that getting the budget deficit down was the most important goal of macroeconomic policy, and that the economic fundamentals were strong. Few experts would agree with the former, and the latter was simply false. What I call mediamacro swung the election for the Conservatives.

The UK government wants a Brexit that will involve the UK not just ending free movement, but leaving the Single Market for goods and services and leaving any customs union with the EU. It is a form of Brexit not dictated by the referendum result but by the wishes of the Brexiters in the Conservative party. The only people who can stop this happening are other Conservative MPs, but many have said that these MPs will only be able to defy their government if public opinion swings against Brexit.

But that is not going to happen. So far the shift in the public’s view of Brexit has been small, and is largely down to previous don’t knows making up their mind. This is not surprising if as many people think they will be better off after Brexit as think the opposite. The most obvious explanation for this is that people remain unaware of the overwhelming expert opinion that they will continue to become worse off after Brexit. That in turn represents another victory for right wing press propaganda, and another critical failure from most of our broadcast media.





25 comments:

  1. Thank you for your numerous posts highlighting the media’s shortcoming in explaining expert opinion to the public. It makes me wonder about the reliability of the media in other matters. I hope journalists pay attention to your posts and find a way to improve.

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  2. Maybe .. but it seems to me that an as likely explanation is that brexiters know full well it's gone tits up but will swear it's all going fine, this is what we voted for etc etc till they are blue in the face.

    They just won't admit they have been idiots.

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  3. A few comments, inspired by the discussion here: https://twitter.com/sjwrenlewis/status/976030341965209600

    I think it's easier to comment on the blog, so to avoid length limitations. I'll be brief, but would be very happy to expand (on request).

    Rob Ford and others outline "entrenching" of views. This effect is likely to be very strong on some people (making their view unassailable by evidence), but I don't think it applies to significant proportions of the population. Most people wish to live their lives and don't have (or can't make) time for analysing or pay too much attention to the details.

    IOW, Yes, headlines matter and matter a lot.

    I think two elements of media influence are very relevant (much more than entrenching), meaning that I broadly agree with the OP, but not completely.
    1. The rhetoric about "The Will of the People" is powerful and accepted by both Labour and Tories. In turn, this requires people to make an additional effort when changing their mind: to accept that Brexit was a bad idea goes against deeply rooted attachment to a misconceived/oversimplified idea of Democracy.
    2. Even if signs of collective change of mind exist and are growing beyond the margins of error, MSM is stubbornly ignoring them. It is much, much easier to change your mind if you feel you are following the general mood, much harder if you think you are undermining the "Will of the People" (1.) AND concurrently are doing it against the general trend.

    The main conclusion doesn't change: MSM should air more substance and less Tory press releases. However, two other consequences follow:
    A. Labour could gain a lot by changing its simplistic soundbite "we respect the referendum result". But alas, they are currently accepting the framing offered by (right wing) MSM and that doesn't help their cause at all (because it forces them to ignore or dismiss facts and evidence).
    B. It is up to all of us to make it clear that we expect better coverage, at least from the BBC. The channels to do so exist, we should all make an effort to use them.

    CODA: shameless self-promotion follows.
    On 1. please see: http://sergiograziosi.wordpress.com/2016/11/13/fascism-for-dummies/
    On A.: http://sergiograziosi.wordpress.com/2018/01/13/corbyn-brexit-and-the-clever-long-game-that-doesnt-exist/
    On 2. and B.: https://twitter.com/GraziosiSergio/status/975463322945507329

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  4. Two things about experts. One is that I don't think the public really understands who is an expert. They can't really distinguish between an academic who has studied his field for years and someone who just writes opinions on the subject. The situation is not really helped by the media who tend to present all such 'experts' as equal and never really point out where they might have a particular axe to grind (who pays their salaries is particularly relevant).

    Secondly in a situation where you don't know who to believe it is essential that you keep score. What did these people say last year and has it come to pass? People don't bother to do this and are instead are impressed by how confidently 'experts' can state their current opinions. Again the media don't help by not asking the 'why should we believe you?' question.

    I am a great believer in that the truth will out in the end but it can be a painfully slow process. With Brexit it is unfortunate that the consequences are unraveling rather slowly. I keep thinking there might be a tipping point such as would be caused by someone like Nissan announcing they closing their UK factories.

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  5. I wonder if the Thatcherites from the 1980s kept the BBC nationalised rather than privatising it because it allowed them to keep an efficient eye on liberal social democracy.

    The Conservative elite could watch who appeared on the BBC and what they were saying and then their politicians and press could counter those positions without needing to watch other sources of information.

    But as the BBC has become increasingly Conservative, the use of the BBC to the Conservative Party as a way of watching the left becomes proportionally diminished.

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  6. I suspect Prof. Daniel Kahneman has the correct answer in this interview before the referendum:

    "British voters are succumbing to impulsive gut feelings and irrational reflexes in the Brexit campaign with little regard for the enormous consequences down the road, the world's most influential psychologist has warned.

    Daniel Kahneman, the Israeli Nobel laureate and father of behavioural economics, said the referendum debate is being driven by a destructive psychological process, one that could lead to a grave misjudgment and a downward spiral for British society.

    "The major impression one gets observing the debate is that the reasons for exit are clearly emotional," he said.

    "The arguments look odd: they look short-term and based on irritation and anger. These seem to be powerful enough that they may lead to Brexit," he said, speaking to The Telegraph at the Amundi world investment forum in Paris.

    "Professor Kahneman, who survived the Nazi occupation of France as a Jewish child in the Second World War, said the risk is that the British people will be swept along by emotion and lash out later at scapegoats if EU withdrawal proves to be a disastrous strategic error.

    ...

    "They won't regret it because regret is rare. They'll find a way to explain what happened and blame somebody. That is the general pattern when things go wrong and people are afraid," he said."

    https://www.telegraph.co.uk/business/2016/06/05/british-voters-succumbing-to-impulse-irritation-and-anger---and/

    People simply find it very hard to admit to themselves that they have made a dramatic error. We still have the scapegoat finding exercise to look forward to.

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  7. A very good post, Simon, but there’s another factor too, which is that almost whatever the economic outcomes of Brexit - which will be bad - the notion that Brexit has been a success will not dislodge itself. There are two or three reasons for this. One is straightforwardly empirical - outside the affluent SE, the economy has been struggling for a decade, and the levels of economic distress are already considerable. The second is that we can never, in our micro-eco omit choices, really understand what the alternatives might have been: we decide to buy TV set A rather than B, and even is B would have been the better buy, we never experienced it. So with Brexit: it will simply become a normalised ‘fact’ against an always theoretical alternative. Thirdly, the Brexit supporting media will simply spin minor successes, and (back to first reason) against an already grim economic reality, will make many people grateful for minor successes.

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  8. To be picky, predicting FX movements difficult at the best of times. Yes immediately after the referendum the pound fell sharply, and yes that created inflation, but since then the pound has been relatively stable and is within the range of what might have been expected without the referendum. As time passes and the pound remains stable, it is increasingly difficult to argue that the UK worker is worse off due to the performance of the pound since the Brexit vote than would otherwise have been the case.

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  9. Where I work the lines were drawn before the vote and have changed little since, if at all. Those who thought the UK held all the cards ("they need us more than we need them...") still do, despite how it's played out since. They think if we get a bad deal it will be because we played those cards badly, ie, we "get sold out", whether through incompetence or betrayal.

    Partly this is due, as you say, to the way media deals with the news (I tend to be able to work out which paper people read from what their line of argument is for example). Partly because when challenged people tend to react by adopting it into their world view rather than adapting said view to fit. Even scientists tend to do that with their theories after all, even if they are more rigorous. And partly of course it's an emotive issue where often reason simply isn't all that important.

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  10. I agree with the overwhelming majority of what you write. However, in fairness, I can think of a number of occasions when Brexiteers have been asked to justify there pre-referendum claims, but only on programs shown on Sunday mornings and attracting small audiences of political junkies.

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  11. True, people in the know generally said there would most likely be large costs associated with Brexit. I think the problem is that there are experts and there are experts. For example there were experts who gave very reasoned and informed explanations about the likely costs of Brexit (but that it was impossible to quantify and for many the effects would most likely to be felt in the long term) and the type that for example who said there would be no labour movements from the Eastern Bloc with expansion and that forecast to the last pound the costs of Brexit per household - both of the latter insulted the intelligence of the General Public). And unfortunately it was the latter class of expert whose opinions were printed, posted and broadcasted.

    NK.

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  12. A number of polls indicate that Leave voters would regard adverse economic consequences and even a relative losing their job as a price worth paying to secure Brexit. https://yougov.co.uk/news/2017/08/01/britain-nation-brexit-extremists/

    A glance at the comments below any article in Conservative. Home also indicate that the motivation for Brexit is not primarily economic.

    It could be that these respondents regard it as a hypothetical question and would respond differently if they actually expected to suffer economically but I get the distinct impression that for a significant number of voters Brexit is seen as a struggle for national independence and well worth making sacrifices for.

    The fact that most of these respondents are older wealthy pensioners and will not suffer much themselves, while those who will lose out are younger Remain supporters doesn't bode well for national cohesion.

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  13. Your simple explanation hits the nail on the head I believe. And it's not just that they don't read the material it's that many would struggle to understand the issues, which are not straightforward. This is not a patronising comment but a simple statement of fact, albeit an unfortunate one, because it is important that people do engage with these issues.

    The other point is that this is a decision for the long term. The last referendum was 43 years ago and a lot has happened in the EU since then and a lot will happen in the next 43 years. It's my view that the EU itself will slowly crumble and will not be the same organisation in 20 years as it is now; the Euro will in my view be the proximate cause; immigration issues can be solved at the end of the day but the Euro can only realistically be abandoned and this would bring down the EU. Despite Brexit the evolution of the EU may well take it in a direction that we would be much happier with and I would not at all rule out rejoining a European grouping but it would not be the EU.

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  14. There may be another explanation. Brexiteers, of which I am one, are looking long term. Short term, sure there will be a bumpy ride. But long term who knows? Australia is not part of a trade bloc. It does okay. New Zealand is also able to negotiate trade deals, and exist happily outside of the EU single market.

    Forecasting long-term performance is notoriously difficult, but Brexiteers can point to the views of our two best exporters: Dyson and JCB, as pro-Brexit. They both seem comfortable with us following the Canada, NZ, Australia, Japan, model of independence.

    Long term is a long time! Decades. Neither the press, nor economists, have focussed primarily on that time frame, so the public seek guidance from other sources of information (entrepreneurs, the prosperity of similar nations).

    The other observations about the press and public opinion are well put.

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    1. Dyson is not an exporter but an IMPORTER – their vacuum cleaners are made in Malaysia!

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  15. Perhaps people no longer believe Very Serious People? I mean, not even the IMF believes the IMF knows what it's doing. For years the OBR continually predicted a return to productivity growth, and then it gave up -- just as productivity growth started to rise quickly again. Economists pinned their prestige to the ludicrous notion that a vote to Leave would cause a collapse of consumer spending because people would simultaneously be acting in self-harming and self-interested ways. I could continue... And it's been like this for fully a decade now. Economists seem far more interested in defending their status than in working out how and why they get things wrong. Forgive us for not taking what the profession says on trust anymore.

    Also economists seem to focus on pretty meaningless things such as headline GDP numbers. On current trends we may be seeing a rebalancing of the economy. House prices stalling in London, up in the Northwest. The best manufacturing figures in decades. Less free trade and less of a reserve army of labour likely means that wages at the bottom end will rise -- and even if that is more than compensated for by a loss of earnings at the top end in London, does that necessarily mean the country will be worse off? Inequality imposes its own costs.

    As was said before the vote -- That's your GDP. Not ours.'

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  16. This all fall apart because of your false premise. By what measure are Dyson and JCB our 'best exporters'?

    Rolls Royce (aero engines)
    GlaxoSmithKline
    Airbus UK
    BP
    Mini (German owned but massive exporters) and many other car manufacturers

    And that's just off the top of my head...

    AFZ

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  17. > "It is a form of Brexit not dictated by the referendum result..."

    Come on, you know this is a rubbish argument. The referendum couldn't possibly have covered an assessment of what every possible permutation could be and of course the final "form" is as much or more down to the EU as it is the UK.

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  18. brexit is insanity on steroids

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  19. I stumbled into this blog via Alphaville and haven't the time to engage on the economics. However, your analysis displays the same fundamental flaw that most economics commentators make; namely that Brexit is about economics when all the polling suggestions it isn't.

    It is not that people don't believe it will make them poorer (although i doubt it) it is just that isn't what drove the vote. The EU is fundamentally a political project to 'end wars in europe' and people can see that.

    Economic integration is a means towards this end and always has been, and this has lead to a lack of political legitimacy and consent, wholesale loss of sovereignty in key policy areas and ever higher financial contributions to a pampered Brussels (and Strasbourg) elite non of whom we can vote out. I won't be-labour how much Juncker is paid, his obscenely low tax rate he pays or his pension pot in seven figures, but that we are paying for this really did drive people to vote Leave.

    All in all, your analysis is too narrow!

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    1. I disagree – it is really not the EU but NATO that has kept the peace in Europe (most notably between Greece and Turkey – which would almost certainly have gone to war again otherwise, and the latter of which is not in the EU).

      The real purpose of the EU is to provide a borderless economic space large enough to sustain modern industry once the major European nations could no longer provide such space through colonialism. This problem of insufficient economic scale was the reason why most of the countries in 1930s Europe which lacked colonial empires ended up as impoverished dictatorships.

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  20. Excellent post.

    I think Steve Bannon may be right - changing the culture, changes the politics and frames the responses to these kind of questions. As a result even where the evidence is overwhelming, too many people ignore it.

    It may take a cultural shift opinion to something more realistic .

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  21. I think that a large part of the problem here depends on what people mean by "better off". Even the phrase "economically better off" is ambiguous.

    First, the average UK voter would not describe a situation in which the country gained 400,000 good-paying jobs, all of which were filled by immigrants, as "better off". In fact, they would probably describe this with terms like "a social problem", or "a housing shortage".

    Second, the average UK voter would not describe a situation in which the UK economy increased by GBP 200,000,000,000 per year, such that all of the benefits went to people who live or work in the City of London, as "good".

    The news media can be pretty clueless at times, and they often spew outright propaganda, but there are other problems at work. . .

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  22. There is of course a third possibility, namely that the electorate is fully aware of the costs associated with Brexit and believe it to be a price well worth paying for lower immigration, greater sovereignty etc. In fact I believe that this is very much the case.

    The problem with this is that these views are not necessarily robust. When your average Leave Voter from Sunderland loses his job, his perception of cost changes. A cost “worth paying” is only worth it as long as somebody else is being made redundant.

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