George Akerlof and Robert Shiller, in their recent book Animal Spirits, argued that economists tend to focus on what is seen as a departure from the accepted model or norm rather than focusing on what might actually be the real world situation. For example, the authors speculate on why economists dwell on the fact that US unemployment during the Great Depression got as high as 25% rather than considering why 75% of workers were able to remain gainfully employed.

I was reminded of Akerlof and Shiller’s point when pondering the recent shift in the apparent support for the Liberal Democrats. The Lib Dems have moved from third place to first place in one weekend opinion poll and as a result the outcome of the election is thrown open. Political commentators talk of this being a “game changer” or even the start of a completely new chapter in British politics.

Of course, the Lib Dems might not be able to sustain this level of support for very long. But whether they do or not, what interests me is the way in which this shift in support has been portrayed over the last few days. The shift in Lib Dem support is being seen as a huge change, yet if one looks at the opinion polls – which we should remember have a relatively small sample size – only between 8-10% of people appear to have shifted their views.

Indeed, it is possible to present the change in Lib Dem support rather differently: this week they are opposed by only 70% of the electorate compared with 80% last week. This certainly doesn’t sound like a “game changer”. A more sane response to this small shift would be to conclude that Nick Clegg and the Lib Dems are now only as unpopular as Labour and the Conservatives. On this basis I’m not sure they deserve congratulating quite yet.

12 thoughts on “We’re now as unpopular as you”

  1. Posted 20/04/2010 at 13:05 | Permalink

    Yes, but when you put it that way, then it sounds as if it might actually be easier to maintain!

  2. Posted 20/04/2010 at 14:13 | Permalink

    If one takes the view, as I do, that in a genuinely free market with laissez-faire, one would expect almost everyone who wants a job to be able to get one, the implication is that ‘unemployment’ should mainly comprise ‘frictional unemployment’ (people moving between jobs, etc.) of perhaps 3 per cent of the potential work force. With that presumption, to me it seems perfectly reasonable to wonder why unemployment in the Great Depression in the US was as high as 25% at its peak, and lingered on above 15% for some ten years until 1939.

    If the LibDem bounce turns out to be a nine-days wonder, that is rather different from ten years of very substantial unemployment.

  3. Posted 20/04/2010 at 15:44 | Permalink

    Unemployment results from the government’s confusion between consumption and production in that they assume that consumption is equal to production. Their policy of general liquidity that diverted capital from production to consumption and created both recursive asset inflation, and a reduction in competitiveness. This is the broken joint in Keynesian logic. It assumes that increasing liquidity can be put to increases in production. Production means that an activity increases output while decreasing man hours, and costs. The problem for any state is to put captial, not behind consumption, but behind increases in production that cannot be achieved by the private sector.

  4. Posted 20/04/2010 at 15:48 | Permalink

    … This concentration of capital will create new jobs, and ongoing competitiveness, from which redistributive capital can be siphoned. Private sector production increases will lead to some unemployment. Uncontrolled breeding and immigration will lead to unemployment, and particularly disadvantage second quintile workers. (A step above the bottom). So the state can divert this process by participating in funding international (export) competitiveness. The state must adopt a policy of investment, not liquidity or redistribution. Because only investment allows redistribution.

    (And the government, which consumes such a vast amount of GDP is simply a redistributive system.)

  5. Posted 20/04/2010 at 15:54 | Permalink

    A free market is a bounded market, because there are LIMITS to private investment. Since all borrowing is, under fiat money, borrowing from the middle and lower classes, and they (as we have just demonstrated) carry the risk of borrowing, then the reward for that investment should be returned to them. As such the state should borrow to create productivity increases (power, transportation, technical innovation, resource exploitation, and education) and return a portion of the profits to the citizenry as redistribution. Laissez faire both puts the citizenry at risk without reward, concntrates capital in the hands of a state sponsored class, and deprives the citizenry of opportunities.

  6. Posted 20/04/2010 at 15:57 | Permalink

    That is how to prevent ‘ten years of very substantial unemployment’. The party that accomplishes it is meaningless. The party that ignores it is meaningless.

  7. Posted 20/04/2010 at 16:21 | Permalink

    “this week they are opposed by only 70% of the electorate compared with 80% last week”

    Why, there could have been an accompanying increase in the number of those who consider the LibDems a second-best option, but who still wouldn’t quite vote for them. Or of those who sympathise with them, but who still think a vote for them is wasted.

  8. Posted 20/04/2010 at 16:26 | Permalink

    In what *I* would describe as “laissez-faire” there would not *be* a “state sponsored class” and most of its former members would have seen lots of their previously state sponsored wealth been taken away somehow as *unjustly* acquired and fallen into the hands of those it was exploited away from with state connivance.

  9. Posted 20/04/2010 at 20:42 | Permalink


    Thats all well and good, but you’re punishing the merchant class (and a lot of tradesmen) for crimes created by the political class. Punish the state. THen put the state to use investing. It will slowly impoverish the capitalist class. It wont sate your silly emotions. But it will work.

    There is an old bit of humor: a russian, a brit, an american farmer meet a Genii who grants one wish to each. American says “I want a better tractor than my neighbor” Brit says “I want the same tractor as my neighbor.” Russian says ‘kill my neighbors horse”.

    If you can’t be an american, at least be an englishman. Don’t be the russian. It’s just stupid. Put your vindictiveness against your state

  10. Posted 20/04/2010 at 21:32 | Permalink

    Whoa there Curt! First, it’s Jock (so ultimately I’m not really an Englishman, though born in Hull I suppose I can claim it when the tartan curtain finally arrives!).

    Secondly, a no-state libertarian/market-anarchist society is not going to “punish” anyone for *justly* acquired property. But insofar as wealth and property has been previously accumulated with the assistance of the state, and usually against the interests of the citizenry in general therefore, their claims to that *unjustly* acquired would be in many cases indefensible. And from then on truly freed trade, freed from even the possibility of having markets skewed by the state would see everyone better off. Jock

  11. Posted 20/04/2010 at 22:03 | Permalink

    Small point, but beyond about 1000 people the size of poll samples doesn’t really matter as long they’re truly random (a big assumption, of course). Please don’t use it as an argument against the validity of the polls.

  12. Posted 21/04/2010 at 06:26 | Permalink

    GF, you are right to suggest that true randomness is a big assumption, as is evidenced by the fact that the four polls released yesterday all have different results. However, my argument was not about the validity of polls, but rather against the false significance given to small changes between them.

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