What counterfactuals (don't) tell us

Imagine if Labour had won the 2015 general election. What would the country look like now?

We’d probably have had less austerity and therefore higher incomes and perhaps higher interest rates. House prices might be a bit lower, but still unaffordable for many young people. The rich would probably be taxed a bit more and whilst there would have been no “hostile environment” policy there would be migration controls.

Much of this, though, is uncertain. What there would certainly be, though, is lots of moaning. The left would still be complaining about inequality, slow wage growth and under-funded public services, and the right about high taxes and the nanny state. And of course, there’d be complaints about the low-levels scandals and incompetences that are an inevitable part of even tolerably decent governments. Gordon Brown was massively criticized (often rightly) whilst he was Prime Minister even though in retrospect he looks like a political giant compared to who followed him.

And there’s one thing there wouldn’t be – relief. Nobody would be saying today: “For all his faults, at least Miliband hasn’t given us a chaotic Brexit; the lower incomes that result from a weaker pound; and harsh austerity.” Nor would anybody be saying: “I’m alive today because Labour didn’t extend Tory cuts.” And nor would those centrists who today are bemoaning Brexit be celebrating Miliband saving us from it: they'd be complaining about something else instead. 

The point about counterfactuals is that nobody sees them. This trivially obvious fact has (at least) two implications.

One is that we don’t praise governments sufficiently for avoiding really bad outcomes. Leftists, for example, don’t give New Labour enough credit for simply not being a Tory government. We should judge governments not just by what they do, but also by what they don’t. One of the great achievements of a Miliband government would have been the non-policy of not having a Brexit referendum: that, remember, was an attempt to exorcise the Tories’ neuroses; it was not a priority for Labour. (Similarly, one of the great successes of the Wilson government of 1964-70 was that it kept us out of the Vietnam war).

 The other is that governments are insufficiently criticized for policies that impoverish us relative to a plausible counterfactual. Simon estimates that fiscal austerity has cost £10,000 per household, compared to what we’d otherwise have. But nobody feels this as a deprivation in the way they would a £10,000 bill they could see. Equally, even if Remainers are right and Brexit does make us worse off than we’d otherwise be, few people will experience this as a direct loss. There’ll be no Jim Bowen in 2030 inviting us to look at a more prosperous economy and telling us “here’s what you could have won.”

Perhaps, though, there’s something else here. Our counterfactual mediocre-ish Miliband government would be copping lots of flak even though it would be vastly preferable to what we have. This tells us that we cannot judge the quality (or not) of a government by the amount of criticism it attracts, not least because so many hyper-ventilate about the smallest mis-step. Pundits are noise, not signal.

Comments

[JWH]

Question for those who know more than me: could the Windrush scandal have happened under an imagined Milliband government, and if not, why not?

[Sesh]

If Remainers are right, won't there be a fairly obvious comparison to be made with, eg, Germany or France in 2030, which would allow the Jim Bowen example you are thinking of?

[TickyW]

@Sesh.

Agreed. Britain's economic ranking in 2030 could reveal the counterfactual. The UK is now the 6th largest economy in the world. If in 2030 it ranks 12th (say) whilst that of France and Germany's more or less stays the same then it's valid to infer a Brexit effect.

[Sesh]

@TickyW: I very much doubt anything as drastic as that is possible: other countries currently in the top 12 below the UK include Italy, Russia, South Korea, Canada and so on. These are not only pretty significantly smaller currently, but also don't have extraordinarily large growth rates themselves (unlike the ~8-10% numbers pa for China and India)

So even if the UK had basically no growth from now until 2030, I doubt it could fall so far in the rankings. However, it could potentially fall pretty far behind France and Germany, particularly in terms of income levels. I'd imagine this might be quite visible in terms of quality of life. Particularly because comparisons with near neighbour countries can be more easily experienced directly (through travel, etc).

[Jim]

"Equally, even if Remainers are right and Brexit does make us worse off than we’d otherwise be, few people will experience this as a direct loss. There’ll be no Jim Bowen in 2030 inviting us to look at a more prosperous economy and telling us “here’s what you could have won.”"

The same applies if we stayed in the EU, and Brexit would have made us better off. Even more so in fact, because at least if Brexit makes us worse off we'll see the effect in comparison to other similar EU countries. But if we stayed and remained roughly in step with our neighbours we'd never know that we could have done considerably better than them by leaving.

[e]

@ JWH
Its fair to note the Windrush scandal groundwork was cast by NewLabour. Labour's right-wing and Tory wets share conservative underpinning – seems to embrace hostility/a willingness to scapegoat. But would any Labour government have added ruinous Conditionality regulations while at the same time restricting access to legal redress? I think not. NewLabour was neo-liberal not fascist.

[Cash Advance]

Much of this, though, is uncertain. What there would certainly be, though, is lots of moaning.

[Martin S]

“There’ll be no Jim Bowen in 2030 inviting us to look at a more prosperous economy and telling us ‘here’s what you could have won.’”

If there’s relative decline, won’t this be obvious to anyone who takes a foreign holiday? “Here’s what you could have had: France.”

[Dipper]

It is extremely unlikely to the point of vanishingly unlikely that Miliband could have won a majority. The nearest he could have come to winning is a minority government relying on the SNP. so the first thing that Miliband losing has delivered us is not having the UK government held hostage by Scottish nationalists.

Would have though this quite obvious, surprised that the OP and comments have not mentioned it.

[Neil]

2030? The UK is already looking like a dump as compared to the Netherlands.