There are many things to quibble with in Paul’s piece. The claim that the economics profession was united in opposing Brexit was both confused (the relevant surveys didn’t ask whether respondents were in favour of leaving – merely whether they thought there would be a GDP cost from doing so) and exaggerated (the 90% figure widely quoted was for those believing there was a short-term economic cost, which would include me for example – it was 72% that believed there would be long-term economic harm). I’m not convinced there was actually materially more consensus in the economics profession about Brexit than there was in the late 1990s about whether the UK should join the euro.
But let’s ignore that sort of quibble. It’s undoubtedly true that the considerable majority of economists believed leaving the EU would lead to economic harm, over both the short and longer term. Voters didn’t believe them. The survey evidence suggests that voters believed there would be economic costs over the first five years, but over a 20 year plus timescale either there would be economic gains or no change. There was no point at which Remain held a lead on the economy with voters in the sense of there being more voters that believed the economy would suffer over the long-term than believed it would improve or be largely unaffected.
Why didn’t voters believe the considerable majority of economists instead of believing people like me? Actually – they did believe us about the short-term. They think economists have some ideas about that. But they flat disbelieved what most economists said about the longer term. Why?
First, voters grasp that the point of involving ordinary non-technical experts in democratic decision-making is that they should make decisions themselves. If it were simply a matter of going with whatever most experts said, we wouldn’t need a universal franchise. Voters choose which experts to listen to – which they know sometimes means going with the minority – or go with what they themselves consider intuitively plausible.
The latter route – voters going with their own judgement – will be particularly attractive if voters do not believe that the experts know what they claim to know. I believe that that is what happened here and that voters were clearly right. Voters didn’t trust the experts because the experts didn’t deserve to be trusted, because they were claiming expertise about things they didn’t know much about.
Voters remembered that most economists recommended we should join the euro. They remembered that few economists grasped what was happening in the financial crisis, even when it was well underway. They noted that bodies like the IMF had warned that the UK was playing with fire just when recovery had begun.
Many economists miss the point of this sort of critique. They say: “Just because forecasting is difficult doesn’t mean that ours isn’t the best forecast to believe.” That would be correct. But I think what voters grasp is something deeper, namely that economic outcomes depend upon things economists make assumptions about in their forecasts but don’t themselves have expertise in knowing.
That was absolutely the case in the Brexit debates. Economists asserted that leaving the EU would lead to a less open economy, that the UK would do no extra trade deals with the non-EU world, that if we remained in the EU there would be no price to pay in terms of inappropriate regulation harming the UK economy or our being drawn into future Eurozone bailouts, that there were no economic gains in terms of getting rid of the CAP or CFP or better regulation. And they just didn’t know that.
I think voters grasped – perhaps intuitively in ways they could not articulate – that the economic consequences of leaving the EU depend upon political outcomes that economists are in no position to claim superior expertise about. Why should anyone think John Van Reenen or Angel Gurría have better expertise in what sort of political deals the UK could do by 2030, or what would be the political consequences of remaining inside the EU, than Boris Johnson or Michael Gove have? The economists who claimed such certainty that Brexit would have bad outcomes were claiming things that depended upon matters on which they had no particular expertise themselves and certainly no more expertise than their opponents.
That is the real lesson the economics profession should take from Brexit. If you claim to be an expert in something, you’d better be an expert in it. If you aren’t actually an expert in the questions you are pontificating about, don’t be surprised if voters see through it and don’t believe what you say.