Economists have had their Michael Fish moment, so said Andy Haldane, chief economist of the Bank of England speaking at the Institute of Government last week. Having predicted a post-Brexit referendum crash that failed to happen, he believes the profession of economics is to some degree in crisis. But it raises a wider question: what weight should we put in the judgements of experts? Have we had enough of experts?
This is a question of much recent discussion, thanks to Michael Gove. But the question is not a new one. More than 100 years ago, Winston Churchill wrote that “nothing would be more fatal than for the government of states to get in the hands of experts. Expert knowledge is limited knowledge, and the unlimited ignorance of the plain man is a safer guide than any rigorous direction of a specialised character.”
(Sir Winston, not having gone to university, is perhaps entirely typical of modern day expert-sceptics. The recipient of his letter, HG Wells, was perhaps less typical of modern day expert-philes given that the letter was prompted by Wells’s advocacy of a very aggressive form of eugenics.)
Sir Winston’s later career offers mixed evidence. As First Lord to the Admiralty he championed the invasion of Gallipoli, only to be let down both by the experts charged with implementing it and his own inability to see in time that an imaginative idea was not in practice going to work. As Chancellor of the Exchequer, he approved the decision to go back onto the Gold Standard on the basis of the prevailing expert advice and overcoming his own non-expert reservations based on the minority expert opinion of Keynes. This is generally viewed to have been an awful mistake. Set against that, D Day was a triumph of expert planning.
Winston Churchill was far more anti-expert in his early views than Michael Gove, who is destined to become one of those politicians associated with something that he didn’t actually say. Michael Gove’s full sentence was: “The people of this country have had enough of experts from organisations with acronyms, saying that they know what is best, and getting it consistently wrong.” This is very different in meaning from the usually-reported truncated version.
Michael Gove, however, has done little to dispel the myth, allowing himself to be associated with the shorter and much more provocative formulation. Either he is stoical about being traduced or he figures that the anti-expert mood has some way to run.
If the latter, he is almost certainly right. His subordinate-cum-guru Dominic Cummings in an epic (in every sense of the word) blogpost took a lot of time to deride fake expertise. His central proposition on the point is as follows:
“Fields dominated by real expertise are distinguished by two features: 1) there is enough informational structure in the environment such that reliable predictions are possible despite complexity and 2) there is effective feedback so learning is possible.”
Politics, he argues, does not lend itself to expertise in this sense because it doesn’t have these features, so newspaper pundits are of very doubtful value.
Economics certainly has the second feature. That’s why Andy Haldane was so crestfallen. Whether it has the first feature is more debatable. Economists, including Andy Haldane, would argue that it has. Even being charitable, one would have to accept that it is a work in progress. Yet economists clearly have their merits as the table of predictions from the beginning of 2016 at the top of page, compiled by David Smith, Economics Editor of the Sunday Times, shows.
The newspapers made hay with Andy Haldane’s comments. Worshippers of the cult of ignorance cavorted with glee (not realising that they will be the human sacrifices if the experts are not completely wrong). Their suspicions about experts have all been validated and reconfirmed with a vengeance. Andy Haldane is just the latest public figure to find out that words sometimes really matter.
Yet Andy Haldane had two serious points to make with his comparison with Michael Fish’s missed hurricane. First, the 1987 storm showed that weather forecasting was working off inadequate models and the solution was not to abandon weather forecasting but to improve the models. Weather forecasting today is far superior to that offered 30 years ago. Similarly, a crisis in economic forecasting requires improvements to be made, not the abandonment of the whole idea.
And secondly, Andy Haldane was not backtracking from his general view. While economic weather forecasting might remain erratic, he remains confident that he understands the economic climate: “This is more a question of timing than of a fundamental reassessment of the fortunes of the economy,” he said. “There has been more resilience among consumers and in the housing market than we had expected. Has that led us to fundamentally change our view on the fortunes of the economy looking forward over the next several years? Not really”.
If he is right, the storm may well have been only delayed. But if by that time the insights of experts have been devalued still further in a continuing uprising against expertise we will be still worse placed to weather it.