Stumbling and Mumbling

The impact bias against Labour

This week’s prize for an epic lack of self-awareness goes to Philip Hammond, who told us that a Labour government would lead to “a collapse in business investment and a crash in the value of the pound, causing a shockwave of inflation”.

Even if he has a point – which he hasn’t – this provokes the reply: how will we tell the difference from a Tory government?

The Tories have given us not one, not two but three of the worst economic policy errors of modern times: austerity; the vote to leave the EU (which was due in part to austerity); and then the pursuit of a hard Brexit. They have set the bar for economic competence lower than a snake’s belly. Even if you think Labour’s policies leave much to be desired*, they clear this low hurdle.

How, then, can anyone believe otherwise?

One answer, of course, is motivated reasoning: it’s easy to believe what you want to believe.

Another is ambiguity aversion. To people accustomed to 30 years of neoliberalism, Labour looks like an uncertain prospect even if it is offering what is really only mildish social democracy – and people hate uncertainty.

A third answer is that Tory policies favour the 1% whereas Labour’s don’t, and these have massively disproportionate political influence. They also – unlike the poor – have an over-inflated sense of entitlement and take umbrage at Labour’s challenge to those entitlements.

But there’s a fourth thing I’d like to emphasize. It’s adaptation. Many people have adapted to Tory mismanagement but not (arguendo) to Labour mismanagement. And the old adage – and Steps song – is right: better the devil you know.

Some economic research is relevant here. Reto Odermatt and Alois Stutzer show that people adapt to even devastating events such as widowhood and disability; this confirms research by Andrew Clark. And – what is relevant – they fail to see that they will adapt. They expect that changes will hurt more than they in fact do. Psychologists call this the impact bias.

Some work by Christoph Merkle corroborates this. He surveyed UK stock market investors just before the crisis and found that they said that big losses would make them miserable. After incurring those losses, however, investors were much more content than they expected to be. We’re prone, he says, to loss aversion illusion.

All this is of course another way of saying there’s a status quo bias: we prefer current bads to prospective ones, even if the latter are milder. This is because we fail to see that we've adapted to our current situation and fail to anticipate future adaptation.

In this sense, when Labour policies are compared to Tory ones, we don't compare like with like and so judge Labour more harshly. We give the Tories an easy ride because we fail to see that we've adapted to their incompetence without anticipating we'll also adapt to Labour's. This bias is exacerbated by a tendency to attribute feared policies as well as real ones to a future Labour government; a failure to appreciate that Labour's worst policies will be abandoned or watered down; and by an under-estimation of the resilience of the economy to bad policy. 

I fear, however, that this isn’t just a cognitive bias but also a media one. Listen, for example, to this (14’55” in) hilarious exchange between posh people who know nothing. Which brings me to a point I’ve made before: the BBC is biased not so much because it’s chock full of right-wing gits, but because of more insidious subtle biases to which it is insufficiently alert.

* I’d describe them as macro good, micro bad (with the exception of McDonnell’s wholly admirable support for coops), but it takes a lot of Harberger triangles to fill an Okun gap.

Ducking questions about capitalism

Theresa May’s speech this morning was trailed as a defence of free market capitalism. If that’s what it was, it failed because she failed to answer the big questions.

May said:

A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created.

This is true. The excellent economics course devised by Wendy Carlin and Sam Bowles begins from this very fact. But it is a fact upon which Marxists agree. Marx and Engels wrote that

[Capitalism] has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals…The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. 

The question is: can this continue? Marx – following classical economists’ forecasts of a stationary state - predicted that it wouldn’t, and that capitalist property relations would turn into “fetters” which constrained growth. The fact that we’ve had a decade of falling real wages and stagnant productivity is consistent with the possibility that Marx was right. Maybe a falling rate of profit, fear of competition, capitalist hierarchy and state-backed monopolies are constraining growth. If so, we might need something close to the overthrow of capitalism to restore growth.

Do we? May doesn’t even consider the question.

Nor does she ask its correlate: why exactly have wages and productivity flatlined for so long? If it’s not because of structural capitalist stagnation nor presumably because of fiscal austerity then why? And if there are policy changes that can remedy these, why have they not been implemented since 2010? Yes, Ms May speaks of progress in financial regulation. But does she seriously think this is sufficient to end financial crises – that we’ve finally achieved an end of history in which crises are abolished?

Yet another question is: do we really have a free market economy? In many sectors, the answer is: no. Banks and utilities are far more like rent-seeking state-aided oligopolies than the textbook perfectly competitive markets. There’s a reason why Labour wants to renationalize railways and utilities and not your local greengrocer: it’s because some are monopolistic and others aren’t. Labour’s nationalization plans are not an attack upon markets – at least not on well-functioning ones.

Which raises a further question: what is the relationship between capitalism and markets? Yes, historically the two have been correlated. But this is not a logical necessity. Capitalism is about who owns productive assets; markets are about how goods are allocated. Capitalism can actually undermine free markets, as bosses seek monopoly profits and as crises and stagnation undermine public support for markets.

It is theoretically possible to have markets without capitalism; see, for example, Gary Chartier and Charles Johnson’s book, Markets Not Capitalism (pdf). In fact, in my not wholly idiosyncratic notion of socialism, markets would be healthier than they are under today’s capitalism.  

Which leads to another question: are the Tories really able to defend free markets any more? The problem is that, as Phil says, they are the allies of the most “socially useless section of capital”: rentiers, low-wage bosses, tax-dodgers and a few financiers. This is not the group we should look to for an advancement of healthy markets.  

I like to think that there should be a case for free markets. This requires that they operate in frameworks that constrain rent-seeking and exploitation. It’s not at all clear that the Tories can make such a case.  

* To his credit, Tim Worstall has always been clear about this.

McDonnell's Marxist critics

It’s sometimes said – usually by those who know nothing about Marxism – that John McDonnell is a Marxist. In one sense, this is the exact opposite of the truth: it is not McDonnell who is the Marxist, but his critics.

To see what I mean, remember that there are several differences between Marxism and social democracy. Not least of these is the question: can capitalism provide adequate living conditions (both material and non-material) for workers? Social democrats believe it can with the right policies and institutions. Marxists say it can’t.

Now, McDonnell’s main policies are social democratic ones. Higher corporate and personal taxes, more infrastructure spending and borrowing and nationalized railways and utilities are all compatible with the continuation of capitalism. They merely tweak the mix of public and private sector activity towards the former. Anybody in western Europe, or who remembers the 1960s, should be familiar with this.

Let’s, though, assume (for the sake of argument) that McDonnell’s harshest critics are right and that these tweaks would be very damaging: that higher borrowing would raise interest rates and crowd out private sector capital spending; that higher corporate taxes would deter investment; that higher minimum wages would destroy jobs; that higher top taxes would have big adverse Laffer curve effects; and that regulations such as bans of zero hours contracts or high credit card charges would cumulatively depress economic activity.

What this amounts to is exactly the attack that Marxists make against social democrats – that they cannot reform capitalism to greatly help workers.

In fact, such criticisms go further than I would. True, I’m sceptical about higher corporate taxes and minimum wages, and I doubt that trend growth is as malleable as McDonnell thinks. But I resist CapX-style hyperbole because I suspect that developed economies are more resilient to bad policy than many people think. (We'd be out of luck if it were otherwise.)

Of course, these attacks on McDonnell would not be Marxist at all if they were accompanied by positive defences of capitalism. If we lived in an economy in real wages were growing and jobs improving, McDonnell’s critics could argue coherently that unreformed capitalism was delivering rising living standards and that social democrats and Marxists were both wrong.

But this is not the world we live in.  Real wages are lower than they were ten years ago; productivity is growing at close to its slowest rate since the start of the industrial revolution; job prospects for diligent but non-academic people are worsening; and working conditions are bad for many and deteriorating even in once-good jobs.

Capitalism as it currently exists is failing working people. If this fact is accompanied by claims that social democratic reforms will fail, then we have the Marxian conclusion – that capitalism opposes the interests of working people.

Can rightists escape this bind?

Maybe. They need to show that other tweaks to capitalism would work. And I mean seriously so: fantasies about deregulation and platitudes about increasing opportunity aren’t good enough.

So, here’s my challenge to McDonnell’s rightist critics: can you really show ways of making capitalism work (again?) for working people? Or are you just going to continue to support we Marxists?

Brexit & austerity

Nick Clegg spoke for many critics of Labour’s ambiguity towards Brexit when he said:

You cannot end austerity if you don't end Brexit. Ending austerity and proceeding with Brexit are incompatible with each other.

There’s some truth in this. Brexit means slower economic growth than we’d otherwise have, which in turn means less growth in tax revenues and hence in potential public spending.

The question – one which is surprisingly rarely asked in all political contexts – is: how true is it?

To get an idea of this, let’s remember some basic fiscal maths. The primary deficit (that is, government borrowing excluding debt interest payments) required to stabilize the ratio of government debt to GDP is given by the equation:

D*[^(r-g)/_(1+g)]

Where D is the debt-GDP ratio, r is real interest rate and g the real annual growth rate.

Let’s put some numbers into this. Let’s say that g is 1.5%. This is 0.8 percentage points less than its rate over the last 50 years, to reflect the damage done by Brexit: the OBR assumes it to be 2%, so I’m being more cautious than them. And let’s say that 20-year index-linked gilt yields rise by a percentage point to minus 0.5% by the time Labour takes office in 2022. The OBR envisages D being 83.6% then.

Plugging these numbers into our equation tells us Labour could stabilize the debt GDP ratio with a primary deficit of 1.6% of GDP. But current plans are for a surplus of 0.9%.

Labour could therefore borrow 2.5% of GDP more each year and still stabilize borrowing, even If we assume Brexit hurts economic growth. Clegg is therefore mostly wrong. Ending austerity and proceeding with Brexit are not incompatible – unless you assume a very big hit indeed to growth from Brexit or a very large rise in gilt yields.

Note here that I’m using bog-standard orthodox economics: I’m not arguing here that Labour need monetize borrowing.

How, then, might we rescue Clegg’s claim?

You could argue that fiscal policy should aim at reducing the debt-GDP ratio if (as the OBR assumes) the economy is on its trend path in 2022. This, though, requires you to argue that the current ratio is too high, which I think takes some doing and is independent of the Brexit debate.

Alternatively, you might argue that much bigger borrowing would be inflationary. This, though, runs into two objections. One is that the flat Phillips curve suggests that higher aggregate demand might add less to inflation than previously thought. The other is that, to the extent that inflation does rise, it can be offset by tighter monetary policy. To argue against ending fiscal austerity thus requires you to argue for the mix of loose money and tight fiscal policy. This is a worthwhile debate, but it’s largely orthogonal to Brexit*.

In fact, from one perspective Brexit makes a Labour government more necessary. Insofar as Brexit reduces trend growth, we need policies to offset the damage. The Tories offer nothing here, whilst some of Labour’s policies do: infrastructure spending; a state investment bank, encouraging coops and so on. Granted, we should be sceptical here not so much because these are lousy policies but simply because it’s so damned hard for governments to raise long-term growth. But we should at least try, and Labour at least recognises the problem.

* FWIW, I think there’s a case for a mix of tighter money and looser fiscal policy, in part to get us away from the ZLB quicker, and in part to dampen down house prices, high levels of which are an economic menace.

Labour's understandable Brexit confusion

It’s insufficiently appreciated that political differences are due not just to different values but to differences in what people think important. 

To take an obvious example, leftists are concerned about inequality whilst many free market rightists tend to be relaxed about it.

Conversely, the free market right worries about the deadweight costs of regulation whilst the left is less concerned by those and more troubled by the costs of austerity. As James Tobin said, "it takes a heap (pdf)  of Harberger triangles to fill an Okun gap." By the same token, (some) Tories are troubled by high government borrowing whereas lefties – for now at least – are not.

Immigration, I suspect, is another example. Some rightists – and leftists of the Blue Labour tradition – are concerned by the cultural effects of immigration. And although some on the left positively celebrate multiculturalism and a (perhaps partial form of) diversity, many more of us are just relaxed about it: much of my writing on immigration has been motivated less by positive support for it than by a desire not to see immigrants mistakenly scapegoated for the failures of austerity and capitalism*.

Which brings me to Brexit. Until last year, I hadn’t given any thought at all to whether the UK should be a member of the EU or to what form leaving might take. I simply took membership for granted. And I suspect that in this, if not in much else, I am a typical lefty.

From this perspective, the allegation that Labour is confused about Brexit is both true and unsurprising. The party has given the subject little thought, and has no recent intellectual tradition of doing so: yes, membership was an issue in the 70s and early 80s, but it was settled for almost 30 years until the Tories raised it. 

Equally, though, Labour’s conference organizers are right not to want to vote on the matter. To do so would make the party appear divided to no very good purpose. Labour’s approach to Brexit should be as far as possible to present itself as an innocent bystander. Its attitude should be: “this is the Tories’ shit; they should shovel it.” Brexit has for years been a low-salience issue for Labour though not for the Tories. 

Which raises a puzzle. It’s no surprise that the Tories are making a mess of Universal Credit; the party has traditionally had little interest in welfare except to want to, ahem, sharpen work incentives. What is odder is that it should also be fouling up Brexit given that many in the party have for years thought about little else**. Which goes to show that there’s a surprisingly big difference between being obsessed with a subject and being knowledgeable about it.    

* In fact, immigration and inequality have something in common. The best defence of them is that both are mostly harmless by-products of freedom – though as an empirical matter, I believe this is more true of immigration.

** There might be a parallel here with the mess the Russian communist party made of economic policy after 1917: having wanted revolution for years, the party didn’t know what to do with it.  Yes, there’s nothing conservative about the Tories.

Another thing: All this raises the possibility that the BBC can be biased. If, for example, it reports (say) government borrowing more than it reports stagnant living standards and inequality, it’s reporting will be biased towards Tory issues.

The intelligent state

What’s the best way of protecting vulnerable workers? Two things I’ve seen recently poses this question.

First, Daniel Pryor notes that higher minimum wages do destroy some jobs, such as those of young unskilled ones in jobs that can be automated. And then James Bloodworth points out that banning Uber from London would cost the jobs of some drivers, many of whom are highly-indebted.

What we have in both cases are examples of how regulations have ambiguous effects. Minimum wages both raise the incomes of the low-paid and also put a few out of work. Cab regulations both protect customers from dangerous cabbies and destroy some jobs*. And in both cases, the cost is borne by the most marginal and vulnerable workers.

This is not to say such regulation is a bad idea: it’s perfectly possible that the benefits outweigh the costs. But it does pose the question is: can we do better?

Yes. The best way to help workers is to create conditions which increase their bargaining power – which give them the option of using Johnny Paycheck’s words: “take this job and shove it”. Such conditions would involve a mixture of over-full employment**; a jobs guarantee; stronger trades unions; and a citizens’ basic income which allows workers to either walk away from lousy jobs or to work only a few hours.

Such bargaining power has an advantage over regulations – flexibility. It would allow there to be low wages or poor employment conditions where workers wanted them and where the alternative was no job at all whilst empowering workers to do better for themselves in other circumstances. It harnesses the laws of supply and demand to raise wages, and also the dispersed local knowledge of particular workers so they can distinguish between situations where high wages would destroy jobs and where they wouldn’t.

In fact, such policies and institutions have another virtue. In generating a tight labour market they would raise productivity by forcing employers to economize on labour by investing, innovating and generally upping their game. It might well be no accident that the biggest rises in productivity in history occurred during the years of post-war full employment.

What I’m calling for, then, is an intelligent state – one that devolves regulation to workers who know how to implement it in response to particular localized conditions***.

Which poses the question: why don’t we have such a state? One reason is that managerialist ideology overstates the knowledge that central authorities can possess and under-rates the importance of dispersed knowledge. Another reason, though, is that I’m calling for workers to be fully empowered, and a state that has been captured by capitalists is inherently hostile to such a scheme.

* TfL is not revoking Uber’s license because of its poor employment practices, but many lefties are welcoming it for that reason.

** Although unemployment is very low, the very fact that wage inflation is so low tells us we are not yet at this point.

*** Also, an intelligent state wouldn’t regulate Uber out of existence, but rather compete it out of existence by setting up apps for cabbies to use themselves in more cooperative ways, as the NEF has suggested.

The harm of high housing costs

The Resolution Foundation points out that people are spending three times as much of their incomes on housing today than they were 50 years ago, and that 30-year-olds spend more of their income on housing than did their grandparents at the same age.

You can see this as an inter-generational injustice. But there’s another question here: are high house prices bad for the economy generally? I suspect they might be, for several reasons:

First, sharply rising house prices are associated with increasing household debt, which increases the chance of a financial crisis which has long-lasting adverse effects upon growth. As Mian, Sufi and Verner conclude (pdf):

An increase in the household debt to GDP ratio predicts a subsequent reversal in debt and lower subsequent GDP growth. The predictive power is large in magnitude and robust across time and space.

Secondly, housing is prone to the Baumol disease. Because the housing sector has lower productivity growth than other sectors, a shift in spending towards it tends to reduce overall productivity growth. To put this another way, if younger people weren’t spending so much on rent, they could spend more on other things, which would stimulate output, innovation and entrepreneurship in more dynamic sectors.

Thirdly, years of rising house prices have encouraged a culture of investment in bricks and mortar. This has diverted potential entrepreneurs into “property development” and away from perhaps more socially useful activity; has encouraged people to regard their house as their pension and so diverted capital away from business investment and formation; and might have encouraged early retirement and a loss of skilled labour*.

Fourthly, high house prices give people an incentive to protect their investments, and this breeds the sort of nimbyism which can delay infrastructure investment.  

Fifthly, high housing costs encourage people to commute long distances. Not only is this bad for their well-being, but it can also depress their productivity.

I’ll grant that there are some offsetting considerations. In the past, high house prices have been a source of collateral for entrepreneurs; thousands of people have taken out second mortgages to start businesses they’d otherwise be unable to. However, with so many energetic young people now locked out of home ownership, high house prices are perhaps less likely to stimulate entrepreneurship in the future.

Also, you might argue that it’s not wholly a bad thing that people are forced to rent. Andrew Oswald has shown that high home ownership impedes labour mobility and so raises frictional unemployment. I’m not sure how relevant this is, though. Big differences in rental costs across the country can also reduce mobility: many people can’t afford to move to London, even if they were stupid enough to want to.

My point here is that we shouldn’t simply be asking whether high housing costs are an unjust burden on young people. We should also consider the possibility that they damage the whole country’s economic prospects. Slower long-term growth means there’ll be less to spend on (among other things) the NHS, so even those of us who have benefited from high house prices up to now might suffer in future. Torsten Bell might well therefore be right to speak of a “housing disaster”.

* I’ll be retiring early thanks to the house price boom of 1994-2008 – not that it’ll be a loss.

Corbyn's success: centrists' failure

For months the Times has been running a series of columns on how centrists are befuddled by Corbynism. Nick Cohen improves upon those pieces.

His piece contains a big truth – that Corbyn “won the left-behind middle class.” Not only are Labour members disproportionately professionals, but also Corbyn’s Labour polled well among the AB social group.

This happened in large part because, as Rick said, the middle-class isn’t as posh as it used to be. Younger professionals especially have become proletarianized. They have high debt, no hope of buying a house and stressful and oppressive working conditions.

In this context, calling Corbynistas middle class is to look at class the wrong way – as a social gradient rather than a property relation. A lot of Corbyn’s support derives from the propertyless – those who are the victims of capitalist stagnation and oppression and not its beneficiaries. As Nick says, it comes from people "unable to meet the basic middle-class membership requirement: the ability to buy a home."

This poses the question: if Corbyn is as deplorable as Nick thinks, why are so many decent intelligent people supporting him so enthusiastically?

It’s not because they are fucking fools. It’s because centrists contributed to the economic trends which have given us cheesed-off professionals, and those people are embracing Corbyn as an alternative to the policies that have failed them so badly. Centrism did so in several ways:

 - New Labour’s endorsement of managerialism has created a proletarianized professional cadre who lack autonomy at work – and this managerialism might also have contributed to the stagnation in productivity that has given us a decade of flat real wages. (To his credit, Nick has attacked this trend; he just hasn’t connected it to the popularity of Corbyn).

 - In acquiescing in the increased income, wealth and power of the 1%, centrists tolerated inequality between the ultra-rich and “middle class” sorts in the 10^th-20^th percentiles. As Tim says, this bred a resentment among the latter. (Personally, I think the resentment justified, but that’s by-the-by).

 - Centrists have offered little solution to the unaffordability of housing, which has given us a propertyless “middle class”.

 - The Lib Dems’ acquiescence in austerity, and the Labour right’s failed attempt to triangulate it, meant that centrists are associated with the squeeze on living standards, especially in the public sector. They are, of course, also responsible for high student debt.

Moralizing about Corbyn misses the point – that his support has definite economic roots in stagnation; the pulling away of the 1% (or 0.1%) from other professionals; the rise of immaterial labour; unaffordable house prices; and degradation of erstwhile good jobs. It also misses the point that centrists contributed to these trends, or at least acquiesced in them. Support for Corbyn is a reaction against all this. 

Worse still, attacks upon Corbyn distract liberal centre-leftists from what should be their biggest job – of redefining centrism to make it appeal again. It’s difficult to sell capitalism to people who have no capital and little hope of getting it. Until centrists grasp this fact and correct the errors that led us to this mess, Corbyn might well remain popular, for all his faults.

Update: on re-reading Nick's piece, I realize I was too harsh on him, and have tweaked this accordingly.

UK vs US capitalism

Frances Coppola says that in developed economies:

Wages have not kept pace with productivity for the whole of the 21st century. Workers' wages simply don't reflect their marginal productivity any more.

However, this is perhaps not so true in the UK as it is in the US. My first chart compares the real wages of full-time men in skilled trades (which I'm using as a proxy for median wages)* to labour productivity. This shows that since data began in 2001 real wages have indeed lagged behind productivity.

However, most of the gap is because real wages fell between 2008 and 2013. Since then, wages have actually risen faster than productivity.

I suspect the story here is that sterling’s fall in 2008 cut real UK incomes, and wages suffered from this.

My second chart is consistent with this. It shows that the shares of wages and profits in GDP haven’t budged much over the last 20 years. Although the share of wages in GDP fell after 2009, this only reversed a rise in the mid-00s. The wage share is now much the same as it was in the late 90s.

This is a marked contrast to the US, where the wage share has fallen this century.

The difference, I suspect, lies in the fact that monopoly power has risen in the US but not in the UK. The US has seen a rise in “superstar firms” (pdf) in recent years whereas the UK has not: there’s no UK equivalent of Apple or Microsoft. Yes, I know, some people quibble with this. But the evidence for it doesn’t lie only in academic studies. It’s also in the stock market. In recent years, the US market has out-performed the UK. One reason for this might well be that investors have been attracted to US companies which offer what Warren Buffett calls economic moats – things that allow firms to fend off competition.  

In saying this, I’m not denying that UK workers are exploited; they are (pdf). Nor am I disputing Frances’ dismissal of marginal productivity theory. My point is simply that, right now, there is a difference between UK and US capitalism. Whereas US capitalism is a story of increasing monopoly, the UK story is more one of stagnation.

* Average wages might be distorted by changes in very high wages. There is also annual data on median wages from the ASHE, but these contain a few breaks in the series, although they show a similar picture to my chart.  

Economic roots of post-truth politics

Here’s a conjecture: the rise of “post-truth” politics (defined by the OED as a process whereby “objective facts are less influential in shaping public opinion than emotional appeals”) is in part the product of deindustrialization.

What I mean is that in manufacturing, facts defeat emotions and opinions. If your steel cracks, or your bottles leak or your cars won’t start, all your hopes and fancy beliefs are wrong. Truth trumps opinion.

Contrast this with sales occupations. In these, opinion beats facts. If customers think a shit sandwich is great food, it’ll sell regardless of facts. And conversely, good products won’t sell if customers think they’re rubbish. Opinion trumps truth.

(Finance is a mix of these. In trading and asset management, beliefs are constantly defeated by cold hard facts. In asset gathering, sales and investor relations, however, bullshit works.)

Isn’t it therefore possible that a shift from manufacturing to other occupations will contribute to a decline in respect for facts and greater respect for opinions, however ill-founded? In 1966 – when employment in UK manufacturing peaked – 29.2% of the workforce were in manufacturing. This meant that millions more heard tales from fathers, husbands and friends about how brute facts had fouled up their day. A culture of respect for facts was thus inculcated. Today, however, only 7.8% of the workforce is in manufacturing and many more are in bullshit jobs. This is an environment less conducive to a deference to facts.

How people live shapes how they think. A world in which many people work in manufacturing might, therefore, have different beliefs to one in which they don’t.

You might object here that the UK has been deindustrializing since the 60s, so why should “post-truth” only have emerged so recently?

In part, it didn’t. Lies are as old as politics. Saatchi and Saatchi’s famous 1979 poster “Labour isn’t Working” was a picture not of jobless workers but of Tory party volunteers. And Kelvin Mackenzie’s Sun did in the 80s pretty much what Breitbart does now.

Also, culture can persist long after the economic circumstances which created it fade away.

And also, it is only recently that the technologies have emerged to facilitate a post-truth media. Breitbart or the Canary probably could not have emerged in a time when you needed to spend millions on printing presses and when the established press had strong brand loyalty.

So far, so much conjecture. What sort of facts would support or disconfirm this?

I can think of two supportive facts. One is that post-truth politics seems (I might be wrong) to be less strong in countries where manufacturing still looms large in culture if not in economics, such as in Germany or Japan.

The other is that pre-industrial societies tend to have less scientific cultures than industrial ones. For example, in 17^th century England people believed some very strange things. It’s a commonplace that the Industrial Revolution grew from the scientific revolution and Enlightenment. But mightn’t the causality run both ways? Maybe the Industrial Revolution strengthened respect for facts and evidence, a respect that’s declining in our post-industrial age.

Now, I stress all this is just a theory. Feel free to offer some discorroborative evidence. But it has a worrying implication.  What I’m saying implies that post-truth politics isn’t just a bad thing done by bad people and followed by silly ones. It might instead have a strong economic root and those who deny this and consider it merely a moral failing are guilty of what Phil calls structural naivete. If so, then we might be stuck with post-truth politics for a long time.