There are some truths that politicians find it hard to express – and this warps our political debate. This is my reaction to a piece by Janan Ganesh.
He accuses Labour and the Tories of an “indifference” to economic growth, because both parties believe that the vote for Brexit was a “cry for something more than the soulless quest for 2.5-ish per cent annual output expansion”. Such an interpretation, he says, is wrong:
The British did not brave the costs to vote for exit. They just did not believe there were costs.
As these costs become apparent, however, he warns, the country will become angrier.
For me, this is half-wrong and half-right.
It’s wrong because, as Simon says, economic growth will be higher under Labour. Its looser fiscal policy and lack of a daft migration target will raise growth, relative to what we’d see under the Tories.
True, Labour hasn’t hammered this message home. But this is because it’s a hard sell. It’s difficult to tell voters that migration controls will make them poorer. And the message that looser fiscal policy means faster growth unless fully offset by monetary policy might be basic economics. But it’s hard to get across when imbecile mediamacro demands that the “sums add up.” This is all the more the case when the country’s “leading” economic thinktank, the IFS, judges manifestos in what John Weeks calls a misguided “partial and static approach.”
I fear Janan is right to say that voters haven’t chosen to pay the cost of Brexit. But again, this raises the same problem of a truth that can’t be said by politicians. Pointing out that voters were wrong means you'll be seen as an elitist technocrat whose out of touch with the people. Yes, the LibDems are saying this – but look at their poll ratings. Politics is dominated by a mental model which sees voters as sovereign consumers. This means politicians can no more tell voters they’re wrong any more than companies can tell customers they are. Even when it’s true, it’s god-awful marketing.
I also agree with Janan that weak growth has fuelled public anger and will continue to do so.
But here’s the problem: at whom will this anger be directed? So far, it has been at immigrants: for me, it’s pretty clear that stagnation contributed to the demand for Brexit. That fits the pattern described by Markus Brueckner and Hans Peter Gruener and Ben Friedman – for weak growth to breed insularity, intolerance and rightist extremism.
Worse still, this might remain the case if Brexit depresses growth. When people are confronted with evidence that they are wrong, they often don’t simply change their minds but become more entrenched in their views. As Tim Harford says, facts don’t necessarily change people’s minds. If we get Brexit, lower migration and weak growth, many voters won’t infer that Brexit is to blame. Instead, they’ll blame “elites” for mismanaging Brexit, and will demand even-tougher migration controls.
In this context, I regard the albeit slim chance of a Labour election victory with only tempered delight. My fear is that if it fails to stimulate growth sufficiently to offset the effect of Brexit or just on-going capitalist stagnation it, as well as migrants, will suffer the nasty backlash.