John Van Reenen was disappointed but not surprised by the UK’s vote to Leave the EU. Whilst his own research predicts serious economic and political damage in the case of Brexit, he thought a Leave vote was a real possibility ever since David Cameron committed to a vote in 2013. In his last post as Director of LSE’s Centre for Economic Performance, he gives his verdict on the campaigns, the media, politicians, and being a derided expert.
There are multiple reasons for the Brexit vote, but by far the most important one can be summarised in a single word: immigration. In the last few weeks before the vote, the Leave campaign was ruthless in focusing on our fears of foreigners. Sadly, with the exception of London, this has been shown time and time again to be a great vote winner all over the world.
The British people have suffered tremendously since the financial crisis. The real wages of the average person fell by about 10 per cent between 2007 and 2015. This is not about inequality – poor, middle and rich have all lost out. It has been the longest sustained fall in average pay since the Great Depression and it has made people very angry with the establishment – and rightly so. As LSE’s Professor Stephen Machin, the new Director of the Centre for Economic Performance has shown, the areas with the biggest falls in average wages were the places most likely to vote for Brexit.
These wage falls and poor job prospects have nothing to do with immigration and everything to do with the financial crisis and slow recovery. But because immigration tripled since 2004, lots of people know of a friend or family member going for a job and a European migrant getting it. So it is easy to point a finger at foreigners as the cause of labour market problems. This is the ‘lump of labour fallacy’ in action – the false idea that there is only a fixed number of jobs to go around.
We have also been living through a period of sustained austerity with public services under severe pressure. People often find it hard to get a place in a good school for their kids or a doctor’s appointment. Since immigrants are also using public services, it is tempting to blame them for being ahead in the queue. Again, this is completely wrong as immigrants pay more in taxes than they take out in welfare, so they are on net subsidising public services for the UK-born. The fact that the government has chosen to use the fiscal benefits from immigration to pay down the budget deficit is hardly the fault of immigrants. But it is difficult for people to see this benefit. What is visible is competition for constrained public services, just like competition for jobs.
The stigmatisation of foreigners as a cause of our economic problems plays to deeply-based cultural fears. This is not simply bigotry, although some of it is. The anti-immigrant feeling would be there even if wages hadn’t fallen and public spending hadn’t been suffering years of austerity. But these real pressures helped lend credibility to the complaints. After all, what else is immigration but globalisation made flesh?
The media
Most of the British press has been unrelentingly Eurosceptic and anti-immigrant for decades. This built to a crescendo during the Brexit campaign with the most popular dailies like the Sun, Mail and Express little more than the propaganda arm of the Leave campaign.
The main alternative source of information for ordinary people was the BBC, which was particularly awful throughout the referendum debate. It supinely reported the breath-taking lies of the Leave campaign in particularly over the ‘£350 million a week EU budget contribution’. Rather than confront Leave campaigners and call the claim untruthful, BBC broadcasters would say things like ‘now this is a contested figure, but let’s move on’. This created the impression that there was just some disagreement between the sides, whereas it was clearly a lie. It’s like saying ‘One side says that world is flat, but this is contested by Remain who say it is round. We’ll let you decide.’ The public broadcaster failed a basic duty of care to the British people. There was a need to tell people the truth for probably the most important vote any of us will have in our lifetimes. And the BBC failed.
The BBC also failed to reflect the consensus view of the economics profession on the harm of Brexit. A huge survey of British economists showed that for every one respondent who thought there would be economic benefits from Brexit over the next five years, there were 22 who thought we would be worse off. Yet time and again, there would always be some maverick Leave economist given equal airtime to anyone articulating the standard arguments.
The Economics profession
There is much hand-wringing by economists over the role of the profession in the Brexit debate. It would certainly be a great thing if more academic economists were involved in talking to the public. Basic fallacies like thinking there is a fixed number of jobs, so immigration (and population growth for that matter) must be bad for unemployment are rampant. So more public engagement would certainly help. More support must be given to colleagues who help spread the economic news as there is a clear cost in time spent on public engagement versus time spent on other academic activities – research, teaching and admin.
Improving economic literacy cannot be solely accomplished by academics. This is an issue of basic skills that needs to be tackled in schools. As importantly, it needs to be addressed in the media where most journalists also seem painfully ignorant of basic economics.
But in the Brexit campaign, I doubt more effort by economists would have made any difference to the result. The economic consensus was clear. I directed the Centre for Economic Performance and no one could have tried any harder than we did to get the message out. This included being on TV and radio, blogging, travelling all over the country to give talks from Sunderland to Shropshire and even being livestreamed on Facebook with Grime Rapper, Big Narstie.
The problem was the press generally attacked or ignored us and the broadcasters gave equal weight to the small band of pro-Brexit economists. And of course, even when the message was presented clearly, many people would not listen or believe it. The usual clichés about not predicting the financial crisis were dutifully rolled out. As if the medical profession’s failure to predict the AIDS epidemic means that you should ignore your doctor’s advice to give up smoking. No, we cannot predict the date you will die of lung cancer, but if you smoke we can be pretty sure your health will suffer.
It should not be surprising that economics did not carry more weight in the vote. Academic economists receive relatively little attention in the media and have never been held in particularly high regard. And when the media does give space, it rarely uses academics preferring to rely on City economists and think-tankers, despite the fact that polls suggest that academics are more trusted than all other groups except friends and family.
Politicians
The basis for increasing populism all around the world is economic insecurity caused primarily by the worst recession and recovery since the war. But some blame must also be apportioned to the UK’s current crop of politicians, who are surely the worst in living memory. David Cameron called an unnecessary referendum in order to steal some votes back from the far right. It was obviously going to become a vote on general grievances to kick the establishment, rather than about EU membership.
The weakness of Labour leader Jeremy Corbyn has precipitated a civil war that seems likely to end in his party’s disintegration.
The depths to which Leave politicians and their cronies stooped during the campaign deserve a special mention though for helping to destroy any semblance of rational discussion. Lies over the £350 million a week sent to the EU and the UK’s veto over Turkey becoming an EU member were repeated ad nauseum. I never thought I would experience such an Orwellian nightmare in my country. These lies, which were not robustly challenged in the media, cannot be punished in another general election and indeed, they have been rewarded by plum positions in the new government. And it worked: people ended up believing them.
For me, the nadir came a few days before the vote when one of Leave’s leaders, Michael Gove the Justice Secretary, compared me and my colleagues to paid Nazi scientists persecuting Einstein. This was apparently in response to a statement we signed (including 12 Nobel laureates) warning of the economic damage from Brexit. At least one of these derided experts had grandparents murdered in the concentration camps, so one can imagine how Gove’s statement – supported by Boris Johnson – made them feel.
Although this is a particularly nauseating episode, it simply capped off a frankly disgusting campaign, one where the Leave side simply impugned the motives of ‘the experts’ rather than seriously engaging with the substance of the economic debate.
The coming flood?
There are many other notable features of the Brexit vote – including the fact that Remain had a voting majority for those under 50 years of age and also in London, Scotland and Northern Ireland. It is shocking that a constitutional rupture can be made based on 37 per cent of the eligible voters. We take decades debating and prevaricating on major infrastructure projects like Heathrow and Hinkley Point, yet are prepared to gamble with something even more important for our futures on a simple one-off in-out referendum.
The referendum was won on a drumbeat of anti-foreigner sentiment. It’s the same tune being played by demagogues in every corner of the globe. It’s the same tune that was played in the 1930s. It’s the same old beat that rises in volume when people are afraid. In the UK, it’s echoed by a rabidly right-wing press and unchallenged by a flaccid establishment media. Mixed by a band of unscrupulous liars and political zealots, it has become a tsunami of bile that has downed and drowned a once great nation. The only question is which other countries will now be swept along in this poisonous flood.
Please read our comments policy before commenting.
Note: This article originally appeared at our sister site, British Politics and Policy at LSE. It gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics.
Shortened URL for this post: http://bit.ly/2avVc2n
_________________________________
John Van Reenen – LSE
John Van Reenen has been the Director of the Centre of Economic Performance and a Professor of Economics at LSE since 2003. He is moving this month to be a tenured Professor at the Massachusetts Institute for Technology (MIT) jointly in the Department of Economics and the Sloan School of Management. His most recent publications are a book on the long-term economic effects of Brexit, on innovation and climate change and on productivity and trade.
Well, congratulations. This is one of the finest post-June 23rd Remain whinges I’ve read. The very first line of this piece – that immigration was “by far” the top issue why we voted Leave – is incorrect. Polls report that sovereignty, our ability to democratically decide our own laws and policies, was the most important issue for Leave voters. Immigration wasn’t the #1 issue, never mind “by far” the top one.
Most of this article is devoted to discussion of immigration – not the issue, sovereignty, which is more important to Leavers, as perhaps Remainers know they don’t have many convincing arguments as to why foreign politicians we haven’t elected should decide our laws. Not that there is really a convincing argument for why Britain shouldn’t have control over immigration, either.
First point (and this has to be said) is that if we want to have an adult discussion about the topic we have to ditch the grandstanding. You aren’t really prompting a reasoned dialogue in this response, you’re posturing and that never ends up in a sensible discussion. I’m also going to say (and again this has to be said) that I’m going to respond here in a way that hopefully prompts a discussion, not to defend the author of this piece who can no doubt defend himself.
So with that said, let’s discuss the idea that there’s something wrong with associating the leave vote with the immigration issue. When people make these arguments they usually base them on the Ashcroft poll which had “the principle that decisions about the UK should be taken in the UK” as the top issue and immigration/border control as the second most important issue for leave voters. The problem with that argument is that the Ashcroft poll is fairly leading in its construction. Ask anyone if they think “decisions about the UK should be taken in the UK” and they’ll be inclined to agree with it. It’s a woefully simplistic statement if it’s meant to conceptualise what EU membership is actually about – namely the principle that states cooperate in *some* areas that are deemed mutually beneficial (namely negotiating shared rules that facilitate trade) while everything else is left at the national level. That’s precisely what the EU is and UKIP/Eurosceptics have spent the last 15-20 years trying to fool the electorate into thinking that somehow EU membership entailed Brussels ruling over every aspect of our lives (using incredibly flimsy soundbites about the percentage of EU laws coming from Brussels or a wilful misrepresentation of what the doctrine of “supremacy” means).
In the same poll 33% of leave voters stated that immigration was the number one reason why they voted to leave, 64% put it as one of the top two reasons and 86% said it was in the top 3. Quibbling about whether the rather vague statement about sovereignty contained in that poll or immigration was more important is largely besides the point (unless your only intention is to pedantically take issue with a sentence construction – and as I said, I’m not defending the author). What is clear is that immigration was a key issue and I don’t see much reason why we should ignore it.
There would appear to be an attempt at scene setting and the establishment of “facts” to support the thrust of the article.
Comments on various paragraphs are as follows:
1. In this paragraph the claim is made that immigration was the most important reason for the vote to leave and , just in case any reader should have missed the implications in that claim, the same paragraph goes on to say that the “the leave campaign was ruthless in focusing on our fear of foreigners”.
These are not facts, they are assumptions. Neither claim is true nor is there is any evidence to support either of them.
3. There appears to be a straw man element introduced here, as it is stated that “These wage falls and poor job prospects have nothing to do with immigration and everything to do with the financial crisis and slow recovery”.
An implied “fact” and untrue, no one blamed immigrants for causing the financial crash.
4. Here it is claimed that “immigrants pay more in taxes than they take out in welfare”.
This claim is based on one paper which has been criticised for the series of assumptions it made throughout before arriving at its conclusion. Other studies have been undertaken by other organisations making different assumption about some of the subject matter, which have arrived at very different conclusions.
There is no evidence that this claim is fact.
6. Here certain newspapers are accused of being little more than the propaganda arm of the leave campaign.
The same could be said about those newspapers who supported the leave campaign.
7. “The main alternative source of information for ordinary people was the BBC, which was particularly awful throughout the referendum debate” – “It supinely reported the breath-taking lies of the Leave campaign” etc. etc. the paragraph continues in this vein. The poor BBC is used to being criticised by the “losing” side. It has been said ad nauseum but needs to be repeated here, the BBC is there to report the news, not decide which news it considers to be true, nor is it there to filter the news for “ordinary” people, who have previously shown themselves very adept at accessing news from a wide variety of alternative sources and not exclusively from the BBC.
One of the “lies” the BBC is accused of supinely reporting is that of the £350million a week budget contribution. According to the Office of National Statistics, the EU billed the UK for £19.6 billion in 2015, or almost £376 million each week.
14. UKIP cannot be reasonably considered to be the “far right” and referring to the UKs current politicians as “surely the worst in living memory” is a personal view, not fact, as is stating that the referendum “was obviously going to become a vote on personal grievances”.
17. The turnout of eligible voters is not a reason to disregard the outcome of the referendum, we do not do so for local or general elections and we have had Governments of various hues who have been elected on very low turnouts. Low voter turnout has been debated over and over again and unless we go down the road of making voting mandatory, something we have consistently said we will not do, then we have to abide by the democratic will of those who bother to turn out and vote for what they believe in.
18. This whole paragraph consists of a personal view.
“Here it is claimed that “immigrants pay more in taxes than they take out in welfare”.
This claim is based on one paper which has been criticised for the series of assumptions it made throughout before arriving at its conclusion. Other studies have been undertaken by other organisations making different assumption about some of the subject matter, which have arrived at very different conclusions.
There is no evidence that this claim is fact.”
What studies? If you want to make this argument about Dustmann and Frattini then make it properly by citing specific methodological flaws and alternative studies with a different conclusion.
——
“Here certain newspapers are accused of being little more than the propaganda arm of the leave campaign.
The same could be said about those newspapers who supported the leave (sic) campaign.”
Well no, actually, there simply isn’t a pro-EU newspaper of any standing in the UK that presents propaganda to the level that the Express does. Pretending “both sides are as bad as each other” is just weaseling out of calling a spade a spade. Comparing the Express to say, the Times, the FT or the Economist and claiming they’re all just as biased as each other is utter nonsense on almost every level. There’s a difference between having a view and churning out propaganda – witness the Express headline today which calls the Bank of England cutting growth forecasts by 2.5% over the next three years an “Economy Boost”.
————–
“One of the “lies” the BBC is accused of supinely reporting is that of the £350million a week budget contribution. According to the Office of National Statistics, the EU billed the UK for £19.6 billion in 2015, or almost £376 million each week.”
It’s faintly ridiculous that even now we have people trying to defend the £350 million figure. That just indicates a complete lack of perspective on your part – that you can’t even bring yourself to admit a particularly bad argument for leaving the EU isn’t true (every leave argument has to be correct because we’re engaging in some blinkered “us vs them” brand of trench warfare).
If it really has to be pointed out (and it doesn’t) saying “we send £350 million a week to Brussels” without factoring in the rebate is flat out wrong on a factual level because we don’t “send” the rebate money to Brussels in the first place. It’s also completely misleading if we don’t factor in the money that flows back to the UK. Likewise suggesting that we’d have an extra £350 million to spend simply by leaving, without factoring in the effect in other areas such as the 2.5% of growth we’re predicted to lose by the Bank of England in the next three years, is nonsense. Even many of the leave campaign said this before the referendum so I’ve got no idea why you think there’s some merit in continuing to defend it.
Warren –
These studies are easily accessible on the web if you are interested in reading and analysing them.
“Well no, actually, there simply isn’t a pro-EU newspaper of any standing in the UK that presents propaganda to the level that the Express does”
Well yes actually, I disagree with your point of view.
As with your previous comments on this and other threads, you actually add no value to any discussion.
I have no interest in exchanging comments with someone who appears to only be interested in making offensive personal remarks.
Please do not reply to this or any other comments I may make.
That isn’t a substantive response – you haven’t raised a single point in return and have engaged in pointless deflection about the tone of how the comment was written rather than addressing the arguments contained in it. Which is, of course, fairly standard behaviour for online Eurosceptics – paste a series of widely debunked arguments and run away/cry foul when someone actually takes them at face value.
If you have something substantive to offer (a citation for the first point, something more legitimate than “I disagree” for the second, a legitimate defence of the £350 million soundbite – of which there are none) then go ahead. What you’re doing at the moment is little more than low-grade whining at the fact someone disagrees with you.
@Karl
you are free to disagree
Enoch Powell disagreed when he was called a bigot after making his “river of blood” speech
Nigel Farage disagreed that UKIP MEP should be called “frauds and scroungers”, when their European Parliament session attendance and vote participation rate showed that they were twice less likely than average with close to no amemdments successfully passed over a period of several years
… yet, they take all the salaries and bonuses from the cash register, and employ an above-than-average cast of doubtful (and incredibly work-shy) “assistants” to up the bill for the taxpayers
yeah, people disagree
that doesn’t make them more honest, or less unsavory
incidentally, I’d very much like to hear you tell us which paper in the UK is pro-EU
because, as a continental European living in ireland for for over a decade, I haven’t found a single one that can objectively be called that
sure, some papers (usually of records) can have sympathetic stories to the EU, but “pro-EU”, without that arrogant english smugness of “we know better” … nah !
80% of the british press is right-wing, (especially if you make it by circulation numbers), and virulently europhobic
The Sun, The Express and the Daily Mail are one extreme end, where they not only routinely use (false) scare stories, when lacking, they’d invent new ones.
by their format and campaign longevity they are rightfully called daily UKIP (and before that BNP)
you certainly have pro-Labour papers (think Guardian, New Statesman, Mirror …), but pro-EU ?
no, without several conditionalities
that just shows how warped the public discourse is
“As with your previous comments on this and other threads, you actually add no value to any discussion.”
so say the troll, as he leaves the scene haughtily …
The FT is pro EU, although it can be said it ceased to be a British outfit since it got sold to the Japanese.Then there is the Grauniad.Which is, I would say, pro EU.
Very nice piece. Missing in the list of those responsible for this disaster are the individuals such as Murdoch, Banks, the Koch brothers in the US and others less prominent, that bankroll and control the media and the politicians themselves – witness the recent phone-hacking scandal that gave a glimpse of the degree to which Murdoch could bully politicians, government and and police and bend them to their will. Missing from debates on Brexit, Trump, global warming, or other man-made disasters in the making, is the role of this small core of powerful people with a disproportionate influence over the course of events. These are people selected (if not bred) to be efficiently greedy and ruthless, simply because if they were less so they would be superseded by competitors who are. They are mad – rationality would tell them that it is against their interest to destroy the world they live in, the societies and governments that run the airports that their private jets land on, the medical system that cures their ailments (or trains the private doctors that do), the police that protects them from having their guts ripped out. The mechanisms that have kept these forces at bay are weakened in particular by their control of the political debate. This perhaps is the major factor in the recent decrease of resilience of society and inability to ward off or repair disasters such as Bexit.
If you’re a hammer everything looks like a nail. If you’re an economist everything looks like an economic argument. I voted based on the principle of accountable government, or lack thereof. I’m not saying everyone cared about this sort of thing but as some of the other comments point out, the polls showed that non-economic issues mattered to a lot of voters. The remainers refused to believe it and therefore never made positive arguments on the subject. In a close vote this may well have made the difference.
I agree with the majority of the economic arguments delineated about, but sometimes something matters more that economics.
Another factor you’ve missed regarding why the UK standard of living has declined so badly since 2007 — a rapidly worsening current account deficit resulting from the exhaustion of North Sea Oil.
Thanks Scott A, you’re right, sometimes some things matter more than money and, for me, leaving the EU was one of them.
The referendum is over, we voted to leave and the people who wanted to remain should stop moaning and move on.
Yes, let’s just ignore the fact you’ve destroyed the economy peddling hopeless arguments, ignore the fact you want to stop our friends and colleagues from elsewhere in Europe being allowed to live and work here, join hands and sing Kumbaya.
You should never be allowed to forget what you’ve done to the country. We aren’t on the same team, we’re enemies who happen to share a piece of land.
Destroyed the economy? bit premature aren’t you.
There is nothing to stop people from Europe applying to work and live here in the future and there is nothing to stop those who are already “working” here applying to continue to do so (as long as the agreement is reciprocal for Brits working in Europe).
We haven’t “done” anything to the country.
There is a valid case for Brexit, namely that we so much want to be able to determine all by ourselves all matters that affect us that it is worth the UK leaving the EU, despite all the disadvantages that are most likely to result. But of course, apart from a very few honourable individuals whose voices were drowned out, the Leave campaign never made that case. Instead it promised painless pie in the sky for everyone after “independence day”, and glory days for the UK such as we had before the first world war and dismally failed to repeat when on our own after the second despite the massive relative advantages we then had over most of the competition. It is notable that there was a majority for Remain in all age groups below 50; the majority for Leave came primarily from those over 50, and especially pensioners who have no jobs that a Brexit would put at risk. Tough on the younger generations who will have to fund their pensions (including mine), but if the Leavers could get what they wanted by falsely appealing to the “Stop the world, I want to get off” attitude among the disaffected, they can’t be criticized – can they?
Since the UK relies far more on the export of services (e.g. financial, insurance, accounting, legal), rather than of goods, for the great bulk of the foreign earnings it vitally needs to finance all its imports, Brexit will mean we lose a major proportion of these to EU competitors who will be delighted to take advantage of our foolishness unless the businesses affected migrate across the Channel or to Ireland (or Scotland perhaps?), which many surely will. We will of course thereby also lose billions in tax revenues that will not be recoverable from elsewhere for many years if ever. The people who will suffer most from that are likely to be precisely those who aimed to give the remote politicians in Westminster a bloody nose by voting to leave. That harm could only be avoided by our going for the “Norwegian option”, in which the UK’s service providers and manufacturers would keep free access to the single market. But we would have to accept in return free movement of (EU) people, all EU single market legislation, and paying a substantial annual sum to the EU. Which is of course very largely what we have now, save that we currently still have some degree of control over the “price” for single market access. These issues will no doubt start to be properly debated in public for the first time over the next few months; better late than never, but what a daft way to run a country.
Karl,
Can you remind me when and by whom the Maastricht rebels (aka John Major’s “bastards”…) were told that they had lost the arguments, lost the votes and that they should now shut up, accept the majority view and move on?
Why are you asking me?
Debt is paid down not deficits.
The problems in the Labour party reinforce the disconnect between elite establishment remain politicians and the people generally..little of that is Jeremy Corbyn’s fault.