Winner of the New Statesman SPERI Prize in Political Economy 2016

Saturday, 8 April 2017

Brexit and the BBC

Simon Jenkins is completely wrong when he says that the Brexit “campaign was ironically [the BBC’s] finest hour”. The exact opposite is true. The BBC treated the referendum like a general election, with a rule book which said focus on the two campaigns and ensure any coverage is even handed. It mattered not that this produced a blue on blue campaign where opposition politicians were hardly heard. It mattered not that this allowed the Leave campaign to state facts that were simply untrue: by and large journalists kept their head down. It mattered not that their viewers wanted more information about the EU and the BBC has a duty to inform. The BBC had a good campaign only in the sense that they played by rules they designed to keep them out of trouble.

The area where this BBC failure mattered most was the economy. The Remain campaign, for better or worse, focused on the economic costs of leaving. They were on strong ground, with a near unanimous view among economists that Brexit would hurt the UK economy in the longer term. A view that was backed up by international institutions like the OECD or IMF. Yet the BBC’s rules meant that this view had to be treated as just one side’s opinion, to be always and everywhere offset by an opposing opinion from the other side.

In essence the BBC’s key mistake was to not treat the consensus among economists as knowledge. Knowledge that their viewers should be informed about and the reasoning behind it explained. The view that Brexit would reduce average incomes was no more of an opinion than man made climate change is an opinion. They are both almost certain facts. That the BBC did not treat it that way meant that Leave won the vote.

That this lost the referendum is unquestionable. Many surveys pointed to a belief among Leave voters that they would not be worse off after Brexit. Surveys also showed that most Leave voters were not willing to pay anything, in terms of loss of personal income, to reduce immigration. That is not because immigration does not matter to them, but because for many Leave voters it mattered because they believed reducing immigration would improve their access to public services. In that they were completely wrong, but the BBC failed to tell them why they were wrong.

I mention climate change because almost the same fate befell this science. The non-partisan media’s default mode is to treat anything that is politically contentious as a clash of opinions, and with some politicians adopting a climate change denial view, the BBC began to treat climate change as a clash of opinions. But the BBC is open to reason and pressure from scientists. So when scientists complained about the BBC treating climate change as a controversial opinion rather than knowledge, the BBC changed their policy. Debates between climate change scientists and climate change skeptics were largely dropped. When man made climate change was in the news, it was to be treated as a fact: as knowledge.

I have heard no good reason why the consensus views of economists about trade should be treated differently from climate change science. What the BBC’s policy in effect says is this. Forget that society spends large sums of money on research in economics: at the end of the day this research has less worth than a politician’s opinion. Forget we teach large numbers of students about economics in our universities. What is good enough for university students is not good enough for BBC viewers. It is an untenable position for the BBC to have, yet they will continue to hold it until it is challenged, and the only people who can challenge it are economists

The key difference between climate change and economics is that scientists have more institutional clout than economists. The Royal Society in the UK has a staff of over 150. I fear economists have a hopelessly naive and individualistic view about how public policy works. That naive view is that the better ideas will win out. Policy makers will come to economists and choose the policies that most economists think are best. They often don’t. The BBC will represent the consensus view of economists as knowledge: it didn’t.

This is not a one-off, some kind of soon to be forgotten nightmare. I have argued that the 2015 general election was very similar. What I call mediamacro continues to represent austerity as economic common sense, and it represents the government as if it was equivalent to a household. We are now having to tell our students to ignore what they hear in the media.

This is not about individual economists learning media skills. It is about having a collective voice that can, at the very least, speak up for the consensus when it exists. In the UK the Royal Economic Society (RES), rather than the Observer newspaper, could organise polls of academics on key policy issues to establish when a consensus exists. This is better than relying on the selective surveys that already exist. A few angry letters from the RES to the BBC are not enough. We need to force the BBC to defend what they did publicly. If they say they fairly represented academic opinion, we should challenge that by looking at the data. We need to start defending economics, because I do not think anyone else will do it for us.







23 comments:

  1. The trouble with climate change and economics is that for quite a few years now our economists seem to have been on diesel.

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  2. I do not have an opinion on BBC coverage of Brexit or anything else because I don't watch BBC (or any other television for that matter).
    However, I would like to point out two things:

    1. (Almost) Nobody argues that there is no climate change. What many (scientists and non-scientists) argue is that climate change isn't necessarily a bad thing.

    2. No economist argues that making free trade more difficult is good. That is, all economists agree that Brexit (which is going to make free trade with Europe more difficult) ceteris paribus (i.e. all else equal) will make Britain worse off. However, all else (in particular the legal and regulatory framework) will not be equal and unaffected by Brexit (unless the current and all future UK governments choose to keep all existing laws and regulations required by the EU and also adopt all new legislation drafted in Brussels). Therefore, it is very well possible that overall Brexit will turn out to have a positive effect on incomes in Britain. ... And this is why also (albeit, a minority of) well-trained economists were in favour of Brexit.

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    1. Actually quite a few people try to deceive the public into thinking that there is no climate change. Donald Trump suggested climate change is a Chinese hoax, many US Republican politicians, for example, James Inhofe, Ted Cruz, Lamar Smith, and European racist politicians hold similar views.

      A large blog of the mitigation sceptical movement is Watts Up With That. One of its main contributors, Eric Worral, asked me how I knew the Earth was not cooling. Another regular contributor, Tim Ball, claims not to believe CO2 is a greenhouse gas.

      On the other hand, scientists who accept that climate change is real, nearly always accept that it is naturally a problem when the climate changes, which our infrastructure is build for and our agriculture has been optimized for and which our nature expects. A good read on this is the IPCC report "Climate Change 2014: Impacts, Adaptation, and Vulnerability."

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    2. your analogy fails on a key point - "many" scientists don't argue that climate change isn't necessarily a bad thing - I have a deep and long standing involvement in climate change issues and while there may be a few scientists who don't believe climate change will be anything other than catastrophic catastrophic there are virtually no climate scientists with this view.

      I'd suggest the same applies to economics

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    3. What you are saying is simply not true. Ted Cruz, for example, explicitly said that the climate is changing and he also explained why he doesn't believe this is a bad thing. Here's the video-proof (see min 2, 20 sec): https://www.youtube.com/watch?v=5j_LBDmtPtw

      ... as to the IPCC: They suggest a temperature increase of about two degrees centigrade over the next hundred years, resulting in a sea level rise of about a foot and a half. .... I see no reason why this is a problem and "my nature", as you call it, certainly doesn't expect the climate to stay the way it is forever.
      I actually find it rather too cold here. I wouldn't mind a bit of global warming. Here's a nice text investigating the rationale for and against action against climate change: http://daviddfriedman.blogspot.de/2009/07/does-climate-catastrophe-pass-giggle.html ... and here is one on that "overwhelming consensus" among scientists: http://econlog.econlib.org/archives/2014/02/david_friedman_14.html

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    4. Our contention is that Brexit will make the average Brit poorer, period. It doesn't mean that the income won't grow; it means, over any period of time, that income will be lower than it would have been, were it not for Brexit.

      That is the exact sense in which ceteris paribus is used. The 'but other things are not equal' just means the observed path of average income will be the aggregation of many effects. There is no reasonable scenario where Brexit has a positive impact on average income.

      The best scenario is one where the positive impact of all other factors is bigger than expected -- but that doesn't mean Brexit has a positive impact on income. To answer causal questions, you need to think in terms of counterfactuals.

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    5. @Stephane: "Our contention is that Brexit will make the average Brit poorer, period. It doesn't mean that the income won't grow;"

      Yeah, I got that ... Again: Brexit will have an effect by making trade with the EU more difficult (this is a negative effect on incomes) ... then Brexit will also have an effect on thousands of laws and regulations ... this effect will either be positive or negative .... But it may well turn out to be the case that the second effect is positive ... furthermore, it may be the case that the second effect is positive and(!) more than outweighs the first (negative) effect ... In this case the net effect of Brexit would be positive.

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  3. It's time to say that if you are still working at the BBC in 2017 then you are one those who isn't doing their job properly.

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  4. It also relies on the BBC employing people who know what they are talking about. In the days of the coalition I watched Hugh Pym, former Chief Economics Correspondent, seriously ask when the whole National Debt would be paid off.

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  5. The difference between economics and climate change science is that the latter IS a science. No rational expectations there.

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    1. We all have good reasons to suspect that characterizing economic decisions under uncertainty as the result of minimizing a quadratic function of squared forecast mistakes is not a very good approximation of what anyone does. However, if we are talking about large groups of people with costly mistakes and opportunities to profit from the mistakes of others, it can be a very good approximation.

      A lot of financial variables are very hard to predict (to a point where it's hard to find trading strategies that would have outperformed the average market performance, accounting for transaction costs, over long periods of time).

      The REAL question underlying the value of a model is not if it manages to capture every detail, but if it can capture enough of underlying dynamic to help us make better decisions. You can have a theory that exaggerates certain features, yet allows for great insights. Usually, when we do get rid of suspiscious hypotheses, it is because of the impact on explanatory power -- for instance, perfect price flexibility gets traded for things like calvo pricing in DSGE models because we're trying to mimick the inertia of inflation rates.

      In all cases, the real question always is very pragmatic: Is this model a sufficiently good approximation to the underlying dynamics to help us reach some given goals? The other important point here is that we're often the only ones with a systematic way to answer policy questions. In those cases, the alternative to economics is an anything goes attitude where everybody's guess is acceptable.

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  6. Given that the government had chosen to put the choice to the country and MPs had supported this by a ratio of 6:1 it was incumbent on the BBC to treat both options as viable, and failure to do this would be seen as trying to unduly influence the result. So surely the real target of you and your fellow economists ire should be the MPs who voted to have the referendum in the first place.

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  7. Yes, we are lucky in the UK that privately-owned TV news companies like ITN and Sky are so unbiassed that it is not necessary for our privately-owned newspapers to even bother mentioning them when it come to bias on TV.

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    1. Hi Anon, from Anon,
      I think you are mostly correct. However, starting from the point, Brexit is a valid option does not mean that journalists have to accept the stories told by representatives of either side as facts. From talking to others most thought that T.V. journalists checked the validity of the evidence presented by either the 'for or against'. Rather than merely asking the questions and then divulging themselves of almost all journalistic responsibility.
      Perhaps it might be more accurate if before each interview the BBC stated something along the lines of: we will now ask the most pertinent questions we believe need asking, but viewers need to verify the veracity of any claim made by parties to the interview. The public may then ask, is it the best use of resources for us to have to sort through reams of data, sometimes on topics we have no expertise of; rather than, the BBC's research department, who have specific experts covering most specialisations, and generates/reports on most the data the public would have to spend hours trying to assemble.

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  8. Strangely during the last Scottish referendum they did treat the economic consensus that independence might be risky with great respect.

    How odd?

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  9. Academic economists should form a pressure group to lobby the media and be there to issue statements on matters such as the budget immediately. The default seems to be to refer to the IMF who still focus on avoiding partisanship at all costs on issues such as austerity.

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  10. Why do this only for the UK? To continue the analogy with climate science: could economics make a report that describes the global consensus of economics, the full range of reasonable understanding, just like the International Panel on Climate Change assessment reports?

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  11. For me, the epitome of BBC failure in the referendum campaign came when 24 (I think it was) Nobel winners along with many other scientists warned on the dangers to scientific research if the UK left the EU. This was countered by someone in the Leave campaign saying "No it won't." The only quote in the subsequent news summaries was of the denier, not the people who knew what they were talking about.

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    1. Can you give a reference for your statement? My recollection is quite different; see, e.g. the article entitled "EU exit 'risks British science'", http://www.bbc.co.uk/news/science-environment-35668682.

      I heard the associated piece on the Today programme on Radio 4 last year; Sir Paul Nurse (Nobel Laureate) was *far* more convincing than the 'Scientists for Britain' person put up by the Leave campaign.

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  12. To people who doubt the usefulness of economics, I urge you to consider under what circumstances even 'bad' answers in some absolute sense can be useful. The bar in terms of public policy is to better capture the relevant dynamics than the intuition of politicians -- note that only few of them actually have any kind of statistical background.

    I would say the average opinion of economists, especially those who specialize in the specific policy problem you consoder at the moment, is by and far your best approximation to what will happen. In some cases, it is prety good; in others, it is pretty bad; but it usually is much better than licking your finger to guess the wind speed...

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  13. " We need to start defending economics, because I do not think anyone else will do it for us."

    Aw diddums. Is the poor macroeconomist hurt because people are being nasty about him and his friends and not listening to what they say? Then try to be as useful as the science of weather forecasting. And grow a pair.

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  14. And yet...

    The Function of Government Spending since you like nice symbols.

    https://medium.com/modern-money-matters/the-function-of-government-spending-9123e71737c1

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  15. The BBC was chief cheerleader for Project Fear and still is. Do you write for a USA audience who didn't see or hear the day to day terrorisation of the British public on the various media. The British were fed up to their back teeth with Barack Obama and his cohorts splurged all over the beeb saying, PROJECT FEAR, PROJECT FEAR, etc.

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