At the Battle of Copenhagen in 1801, Admiral Hyde Parker sent Horatio Nelson the order to retreat. Nelson allegedly raised his telescope to his blind eye, declared “I really do not see the signal”, continued fighting and won the battle.
I was reminded of this by David Davis’ admission that the government has done no research on the costs of leaving the EU without a trade deal. In truth, he’s right not to have done so. His critics are guilty of a naïve error. They assume that our rulers must be well-informed. But this is not the case. Instead, as Linsey McGoey has written (pdf):
Cultivating ignorance is often more advantageous, both institutionally and personally, than cultivating knowledge.
One is the sense in which Nelson proclaimed his ignorance. He knew better than Parker what his chances of victory were, so disregarded the order. Being deliberately ignorant of irrelevant or useless things can steel us for battle. I apply Nelson’s principle in my day job. I advise investors to follow simple rules – such as sell in May or buy defensives and momentum if you don’t want to be a passive investor – and to ignore much else. Obtaining more information can often detract from your performance by leading you to trade on noise rather than signal. Just as some horses run better with blinkers, so some people think better with them.
Davis is doing a similar thing. If you regard Brexit as an intrinsic good, you don’t need to know its consequences. And if you distrust experts, you’ll regard their estimates of those effects as noise rather than signal.
Let’s say Davis had good research which showed that the cost of a hard Brexit was high. The government could not then credibly threaten to walk away from negotiations with the EU, as the EU just wouldn't believe the government would damage the economy so much. Without such research, though, this threat becomes more credible. The government’s bargaining power is thus strengthened. Nobody messes with the local psycho.
A third sense in which ignorance works is a cliché of all conspiracy dramas: the ability to maintain plausible deniability. Back in 2012, the House of Commons Culture, Media and Sport Committee accused James Murdoch of an "astonishing lack of curiosity" for not wanting to know about the extent of phone hacking at News International. But there was nothing astonishing about it at all. Bosses who are willfully ignorant of what their underlings are up to can avoid appearing complicit in their misdeeds.
Ms McGoey says we saw the same thing in the run-up to the financial crisis: banks’ bosses had no desire to know the riskiness of what they were doing, and even sacked those who warned of such risks:
Ignorance has a double usefulness. First, widespread social silence enabled the perpetuation of highly profitable, however ultimately destructive, activities. Second, earlier silences were exploited in order to exonerate the actions of individuals claiming risks were impossible to detect. It was logical to claim ignorance both before and after the collapse.
Again, Davis is pulling the same trick. If there’s no official evidence now that a hard Brexit would be a disaster, then if this turns out to be the case he can claim that nobody – or at least nobody of any consequence - warned him.
Fourthly, wilful ignorance can be a way of maintaining a healthy self-image. As Donald Davidson has written:
Both self-deception and wishful thinking are often benign. It is neither surprising nor on the whole bad that people think better of their friends and families than a clear-eyed survey of the evidence would justify…Spouses often keep things on an even keel by ignoring or overlooking the lipstick on the collar (in Elster, The Multiple Self, p86)
Nobody wants to believe he is a stupid idiot whose cherished lifelong beliefs are wrong. We avoid this fate by ignoring relevant evidence.
My point here is a simple one. The idea that rulers – bosses or politicians – should be well-informed is inconsistent with the first rule of economics, that people respond to incentives. Incentives dictate that, quite often, ignorance is better than knowledge.