One of the most worrying aspects of this referendum campaign has been the rubbishing of economic experts’ opinions
Before I start a confession: the one thing that I am anti is referenda. There have been two major plebiscites on issues of “importance” in the UK over the last two years, Scottish independence and the UK’s position in the European Union. As a keen observer of the former I find my interest in the latter lukewarm at most. What both votes have shown is that decisions of complex importance cannot be debated in this type of way.
I acknowledge that these decisions are emotive and often rely on “heart versus head” but the one thing that sticks out to me is that the voting public feel they do not have enough information on what it means. And why should they? No one can predict the future and when you set it up in a binary vote it boils down to one side’s word against the other. You are essentially saying to the voter: you have one choice and you better make it now and you better make it right. This seems a crazy way to decide such an important issue.
What concerns me most though is the rubbishing of “experts” particularly economists throughout this debate. To say that since economists did not predict the financial crash they should not be trusted on any other matter is patently absurd. The financial crash in 2008 is what is known in economics as an “exogenous shock” i.e. a change in an external factor that could not be predicted and is therefore impossible to model. Leaving the European Union is a change in an “exogenous variable” which can be modelled with a lot more certainty. In addition, there is one area of economic modelling that has traditionally been more accurate than others and that is trade modelling. Given that the major economic impact of the UK in the EU is the trading links, and the London School of Economics conservative estimate is of a 2.3% loss in national income, it worries me that the economics of Brexit is even a debate.
Governments create “expert” bodies across a range of different areas to ensure that the approach it adopts is the best one. In construction, the creation of the National Infrastructure Commission was broadly welcomed since it theoretically meant de-politicising the decision on what the nation should be building and letting the experts decide. Additionally, economist Jim O’Neill was appointed to head the team to investigate how the pharmaceutical industry can develop a new strain of effective antibiotics. All very noble causes and ones that were entrusted to “experts.”
Why, then, for a decision of such immense importance have the usual norms been suspended with and “experts” opinions cast aside? Surely an independent economic council should have been assembled to provide a neutral report on the impacts of Brexit before it faced a public vote? At least that way, whatever the result, the whole science of economics would not have been trashed by glib statements and dubious assertions.
Michael Dall is an economist at Barbour ABI