Tuesday, 31 May 2016

Andrew Scott has Economists Entitlement Syndrome

Professor Andrew Scott shares his views on Brexit with us. Aren't we lucky? I urge you to read it in full just for the comedy value. The first paragraphs are given over to impressing upon us how clever he is so that we are by no means unsure of his status as a supreme being with all the answers.

He then tells us "I just really wasn’t looking forward to the debate because I knew that it would stifle what are the really important issues".

But who in a referendum gets to decide what the "really important issues" are? The is a decision for the people based on their priorities. For me democracy trumps all other concerns. Second to that is our standing internationally as an independent state and only then do I come to the economics.

Scott says "My first problem (and I stress this is all written from the perspective of a professional economist) is that the whole referendum strikes me as being like a bad exam question. Basically the overwhelming majority of economists answering the question will come up with the same answer – Remain is good for the economy and Leave is bad."

But the question on the ballot paper is not "is leaving the EU bad for the economy". It is whether we want to remain or leave. The actual question being asked is whether we want to be ruled by a supreme government for Europe. In that estimation the economics are only a part of the decision.

Scott tells us that "Broadly most economists believe (subject to a bunch of caveats around scale and limits) that trade in goods and services and the free flow of capital and labour are a good thing, that uncertainty is bad, transitions are painful and that as a small, open economy the UK is better placed to maximize its global trading activities through the EU rather than as a standalone."

But then any analyst worth their salt knows that there is no standalone option. Nothing is done in global forums without forging a consensus and building coalitions. Moreover, Efta is increasing looking like the weapon of choice for saner Brexiteers. That has distinct advantages in terms of agility and flexibility, being able to act as one or sign agreements independently. I have read little from economists that really speaks to that.

Norway enjoys that agility and has booming salmon exports because of it. Were they in the EU they would be competing with Scotland and other producers for the diplomatic runtime of the EU. Having ignored whole avenues of debate they each crunch over the same basic flawed assumptions and from their collective groupthink they arrive at the same answers.

But here we get a clue from Scott as to why. "It’s a bad and uninteresting exam question where nearly everyone comes up with the same answer". Uninteresting he says. That's their problem. A complete lack of curiosity of what the alternatives are and what the potential is. They have taken the bog standard Brexit strawmen scenarios and run their models on then without questioning if these proposals accurate reflect what would happen in the event of a leave vote.

I dispute the very idea that it's uninteresting. For my part I have had to develop a base level of expertise on regulations, looking at everything from ballast water discharge to car wing mirrors. I've had in depth debates about Norwegian salmon exports, defence cooperation, the finer interpretations of the word democracy. I've crunched over some wider philosophical and spiritual debates surrounding the various cultural concerns. Also globalisation of regulation and trade agreements has featured heavily. That is a wholly unexplored area among "professional" economists.

If the miscreants in the LSE have found it uninteresting that is more a reflection on them. They only want to deal with what they understand - which tends not to be the regulatory aspect that is now central to all trade activity. They are dinosaurs obsessed with bilateral trade deals, mainly concerned with tariffs.

Scott says that it's usually that case that when "everyone agrees on something it means they are right". But by the same token, if they are all working on the same base assumptions, and if the assumptions are wrong then all of them are wrong without exception. Scott seems entirely blind to that possibility. He also thinks economists are repressed.

"What is also depressing from a professional perspective is how the fact that the vast majority of economists support Remain doesn't seem to filter through into the public domain or debate."

Oh really? On what planet? All we've heard is persistent scares from offices of prestige. Does Scott live in a cave? We got the message loud and clear. We just don't believe you. We think that there are some elements in this equation that don't factor into an Excel spreadsheet. We do not suffer the same deformation professionnelle as bubble dwelling academics.

But then, asks Scott, "Why when there is such agreement is this not more apparent in the media? In some cases, and the BBC seems the best example, the desire to be impartial means equal air time given to both sides of the debate. If air time was based on the proportion of economists supporting Remain the balance of reporting would be very different."

They just don't get this referendum business do they? There are two sides to this argument in the most basic terms. Is Scott saying that economists should be privileged individuals entitled to more air time? If so he is saying opinion is fact - which is not true.

He whines "Why, in a debate that seems to have economics at its core, has more coverage been given to the consensus views of business people, historians and even actors than that of economists?" And that's what this is really all about. Special pleading from an academic class who genuinely believe only they are qualified to answer this forty year old political dispute and that the economics trumps all other concerns. If that were true, why even bother having a democracy at all?

"One possibility" Scott suggests "is because if study after economic study reports negative effects from Brexit the news value diminishes. It’s also likely that the public is beginning to expect or even tire of the usual approach of writing a letter with a long list of signatories in support".

Bingo. That ship has already sailed. We're bored rigid of it because that's all we have heard for months - which buries Scott's' claim that economists are a marginalised victim group. We have heard what they have to say. Some of them are wrong. Some of them are lying. Some of them want to remain at any cost and are not remotely interested in the alternatives. And that is why they are ignored. It is no less than they deserve - and if you want the short version of Andrew Scott's opinion in pictorial form, it looks rather a lot like this...

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