Friday, June 24, 2016

Brexit, Economists, and Empathy

When a fiasco as tumultuous as Brexit is visited upon the world, one of the most basic and predictable human impulses is to point fingers. Already the opinion-sphere is alight with stentorian treatises about every prospective social cause for yesterday’s vote in Britain, from apathy to xenophobia. What these missives have in common are two things: their proclivity to blame the voters themselves, rather than the conditions which led to their vote, and the absence of any call for prescriptive adaptation on the part of the policymakers whose actions created those conditions in the first place. This tendency to acquit the table-setters of bad group-think is as durable as it is counterproductive—going back at least as far as 1930s-era Germany—and it has to stop.

Most policymakers are, either by profession or at least by implication, economists like me. And most economists bring along to the party a highly specialized set of sensibilities which I believe have served as a key trigger, not just for the Brexit vote but for the wider pattern of disaffected contrarianism we’ve observed with mounting unease on both sides of the pond for quite some time.

To begin with there is the technical nature of economics as a paradigm. Unlike its social-scientific brethren, economics is hung on a frame of objective assertions, supported by pillars of abstruse mathematics. By such means, social constructs like inflation and the labor force can be seen to behave according to the same dynamics as fluids in a giant beaker. Most of a first-year Ph.D. macroeconomics curriculum, believe it or not, is predicated on a shared understanding of differential equations: the same branch of mathematics by which physicists and chemists make predictions about Brownian motion and heat transfer.

As an orderly metric for the postulation of a social agenda, the appeal of this approach is as sexy as it is elusive: In economics there simply are no messy qualifications for the best way forward. The math is inviolate. Depending on one’s point of view, this is either the worst possible way to take up the big and messy problems of a body politic, or the only one. But only those of us who take the second option in this divide, get to be economists—and thus to make the policies that affect us all.

The accidental consequence of such a polarized filtering exercise is the feedback loop it engenders within the discipline: particularly in the work we tend to do and value. Suppose for example that a common economic union between the United Kingdom and the nations of continental Europe can be shown with sexy math to benefit all persons of all the nations involved, at least hypothetically. Further suppose that the necessary redistribution of such created wealth, in order for the policy-benefits to actually be universal, would require grubby political discourse with no paradigmatic right answer. What happens in such a scenario, is that the modern economist espouses the policy anyway. He then also refrains from speaking to that policy's own negative consequences--on the otherwise unbelievable grounds that these ill effects are somehow someone else’s problem. In such fashion, the transformation of this hypothetically universal good, to an actually universal good, is abdicated to other, lesser disciplines than ours. After all, we’re the scientists here.

Worse, any after-the-fact objections raised along these very lines (be they from displaced farmers in Upstate New York or displaced textile workers in Manchester and Leeds) are themselves messy and political, and would therefore be unscientific to engage. So instead we economists treat these objections as baseless pot-shots aimed maliciously at the larger policy’s glorious aesthetic: There is a greater good, the math tells us so, and anyway I’m not your congressman. Don’t trouble me with how this is going to affect you personally, because to do so would cheapen my cachet to sit at the grown-up table in the faculty caff. Away with your uneducated selfishness. Come to your senses.

Since the 1970s, the economies of the developed world have undertaken one such grand experiment in hypothetical universality after another—from deregulation of airlines, banking, and agricultural supports, to NAFTA and the Euro. Many individuals have benefited from these policies, and the data on winners and losers is unavoidably messy. But across the great industrial powers, two trends are nonetheless self-evident: GINI indices (which measure income inequality) are dramatically worse, and the vigor of the public sector to ameliorate this income inequality has been systematically abridged, often in order to redress the unforeseen consequences of those same grand experiments. Born into a world with well-funded education systems and thriving economic infrastructure, the non-elites of today are told with a wistful cluck of the tongue that such resource-deployments are “unrealistic” in the messy wake of Euro-stabilizations and Wall Street bailouts.

In consequence, many among the planet’s working classes have come to perceive our modern economic paradigm as intensely, all but preternaturally retrogressive. And the tone-deafness with which we economists have responded to their suffering has been at once a chief antagonizing influence, and an inseparable element of our clubby self-identity as scientists. “You disagree with us,” so goes the argument, “because you do not understand.”

Perhaps. But the problem with such a dismissive response strategy is that you can only wield it so many times before your audience begins to respond in kind—not so much to the truth-value of your position, as to the high-handed disempowerment it represents. Thus has it come to things like this. The traditional working class has been asked to absorb intensely strident personal consequences for a greater good with almost no articulated specifics (because those would be messy to talk about too, of course); they’ve been told that their strident personal consequences are someone else’s problem to clean up; and then, just to make a day of it, they’ve been high-handedly dismissed for their objections, to boot. In such an environment it should come as no surprise that this same traditional working class has now gathered itself, almost by default, into a singular message of rebuke against the established paradigm itself. “The British people are sick of experts,” Michael Gove said recently. And boy howdy.

I don’t have to explain what happens next in this movie, of course—with the resulting rhetorical vacuum filled by a radicalized populism that at times seems to exist purely for the sake of its capacity to exasperate the cronies and the swells. See also, Jesse Ventura, Sarah Palin, Rob Ford, Bernie Sanders, and, alas, Donald Trump. Disempowerment has begotten populism, populism has begotten high-handed dismissal from the purveyors and beneficiaries of the established paradigm, and dismissal has begotten Brexit and Donald Trump. But the chain-of-accident on this unfolding disaster starts with disempowerment. Make no mistake.

One might be forgiven for thinking that the smartest guys in the room would be at least smart enough to adapt both their empathy and their messaging, but the early returns on this score aren’t terrific, either. “We now live in a post-factual democracy,” opined one learned writer for the London Financial Times—at a stroke blaming the Brexit vote on mass, factless stupidity, instead of on his own camp’s failure to structure an effective case (which, if he’s so right, really shouldn’t have been this hard, now, should it). Already the chorus of scholarly lament has begun to tune its voice, and already that lament is being offset with insistence that other electorates can’t now possibly be so dumb.

This is a false dichotomy of the highest and most egregious order. In arguing that stupidity is the sole motivator for voting behaviors such as Brexit and the rise of Donald Trump, establishment-types acquit themselves by presuming implicitly that there is no way to simultaneously empathize with disempowered constituencies, while also liberalizing trade, modernizing immigration, and stabilizing the world’s finances. Which is self-evidently and actionably false. Instead of responding pro-actively to address how the best ideas of our profession should have come into such disfavor, economists and other policymakers have ceded both the blame and the hope to an increasingly savvy and well-organized vox populi. As a long game, this response offers little for any of us, either in terms of the necessary corrections to trajectory and tone, or in terms of our chance at realizing the benefits from any wider policies yet to be proposed. The more the swells scream "with us or stupid," the more the disempowered working class will choose to see itself as neither.

Surely we can do better. Surely the same academy which championed deregulation of the airlines, the savings and loans, corporate agribusiness and the investment banking sector, can marshal enough of our courageous intellectual advantage to take away a few basic lessons in conflict mitigation and political messaging. Surely we can find room in our big tent to internalize the so-called “externalities” of our big ideas, and to do it before the fact instead of after. Surely. But then, the first step in solving such a problem would be admitting that we have one.

I just hope it’s not too late.

Dave O'Gorman
Associate Professor of Economics
Santa Fe College
Gainesville, Florida

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