Angrynomics: a review

Picture the typical angry voter. If you’re like me, your image will not be a twentysomething saddled with huge student debt, extortionate rent and a dull job but rather some russet-trousered gammon with no real complaint.

Much as I liked it, this is one issue I have with Mark Blyth’s and Eric Lonergan’s Angrynomics. “People have every right to be pissed off” they write, “but please, be pissed off about the right things.” For me, though, our politics is characterized by too little of what Eric calls “legitimate public anger” and too much tribal anger. (The book is written as a dialogue between Eric and Mark, which is nothing like as annoyingly twee as you might expect).

This, I suspect, reflects some important cognitive biases. One the one hand, several of these cause people to accept injustice: a status quo bias, resignation, the just world illusion and so on. But on the other, as Ben Friedman showed, recessions make us more intolerant of outsiders and cause increased solidarity with “our own” – hence the rise in tribal anger since the financial crisis.

Whilst I’m disappointed with their failure to explain why we have the wrong sort of anger, Blyth and Lonergan are surely bang right to see that many western economies have suffered a massive political failure:

We have an abject failure of policy. Rather than presenting a major programme of economic reform, the global political elite has offered nothing substantive, instead choosing either to jump on the bandwagon of nationalism or insist that nothing fundamental is wrong…The political classes - bereft of ideas – are now desperately peddling old ideologies and instincts, or pursuing bizarre distractions like Brexit.

This problem is not confined to the UK and US. Blyth and Lonergan are rightly scathing about the response to the euro crisis.

Another thing I really like are their policy proposals. These are usually the weakest sections of many economics books, but not here. Tougher bank regulation, a National Wealth Fund (using low government borrowing costs to buy equities from which to pay dividends for all), dual interest rates and the option of central banks writing (pdf) everybody a cheque are all fine ideas well advocated.

But, but, but. If there’s one thing we’ve learned from recent years it is that the quality of an idea and the chances of it being adopted by politicians are two different things.

Our problem is not a lack of good policy ideas. We’ve plenty of these: to Blyth and Lonergan’s list we might add a green new deal, citizens income, universal basic services, job guarantee and worker coops among others.

Instead, our problem is that our political-media system functions as a device for selecting against good ideas and in favour of charlatans and grifters. Like Blyth and Lonergan, politics and the media distinguish between righteous anger and tribal atavism – but they do so to favour the latter. And too many in the Labour party connive in this: it’s strange how “legitimate concerns” are always about immigration rather than poverty wages.

I’m not sure, then, that the problem of anger in politics can be solved merely by economic policy ideas. These have little chance of adoption without a political revolution to establish institutions and modes of debate which select for good ideas rather than against them. We need, therefore, forms of deliberative democracy. These – and I fear only these – would enable the sensible policy ideas of Lonergan and Blyth.

But this raises a question. What chance do we have of such reform, given that our existing institutions serve extractive capitalism so well by diverting anger away from its proper target?

Comments

[WHS]

"Good policy ideas", i.e. ideas I agree with.

[Bill Bedford]

We should be really careful about "good" policy idea that are backed by the institutions that serve extractive capitalism.

[Lee]

Democratic Indication, Clause 50

All topics
All may propose
All may discuss
All may vote

All Voices start to be heard.

www.vote.uk

A salve because it is inclusive and does not suffer delusions of grandeur. Discussion rather Imposition. No Londinium elitism.

What happens if money is created by the democratic system into hands of those in need. That is without sanctions. No delays.
Is it demand on stick?

[Abhinav]

Hey Chris, just wondering if you've engaged much with Radical Xchange much? The Posner and Weyl book which led to its foundation contains some policy suggestions to address some of these problems(Harberger Taxes, Quadratic Voting, Data Collectives etc.) but Weyl eventually went on to create a community where they're trying to create some underlying principles to design civil society institutions to protect the public good that aren't technocratic(capitalist or statist) such as Taiwan's Gov Zero movement. Here's a talk Weyl gave about it https://www.youtube.com/watch?v=n4cFKD1lFj0

[Robert Mitchell]

"as Ben Friedman showed, recessions make us more intolerant of outsiders and cause increased solidarity with “our own” – hence the rise in tribal anger since the financial crisis."

This keeps coming up, but the New Deal and the Great Financial Crisis seem to be exceptions. Also, the Easterlin Paradox does not seem to agree with Friedman's reading of history.

Friedman's story seems like a compelling tale, yet Roosevelt and possibly Obama used recessions to decrease tribal anger.

Personalities are more important than Friedman's broad macroeconomic causal inference.

[chris]

@ Abhinav - thanks for asking. I reviewed Posner & Weyl here:
https://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2018/09/radical-markets-a-review.html
One of their ideas - companies paying for data - is shared with Blyth & Lonergan.

[ltr]

Having read the review twice, to be sure, I have no idea what the review or the book is about. Discussing a single idea in some depth would have given me enough access to the book and would have made the review meaningful.

I love these essays, but this essay is empty.

[Abhinav]

@Chris - thanks. That's a good review, and one that I think Glen would largely agree with as well. Regarding your point that they do not explicitly acknowledge that their ideas are a challenge to neoliberal economics he's spoken about it more here https://www.youtube.com/watch?v=5Lqn1eVUzf4

[ltr]

Abhinav:

Regarding your point that they do not explicitly acknowledge that their ideas are a challenge to neoliberal economics...

[ Please explain this. I am lost. What do their ideas challenge? ]

[ltr]

Abhinav:

Regarding your point that they do not explicitly acknowledge that their ideas are a challenge to neoliberal economics...

[ Why should I read an angry book that does not challenge the prevailing economic structure? Anger is uninteresting to me, but understanding economic structures is interesting to me. ]

[Francis]

Immigration is what causes this country to have poverty wages.

[Hugh Mann]

"it’s strange how “legitimate concerns” are always about immigration rather than poverty wages"

Aren't they two sides of the same coin? Although it's not "just" the increased numbers, having different groups means workers are more divided too. No wonder employers love it.

[Blissex]

«Our problem is not a lack of good policy ideas. We’ve plenty of these: to Blyth and Lonergan’s list we might add a green new deal, citizens income, universal basic services, job guarantee and worker coops among others.»

If so, why does a plurality of voters continue to our into power governments strongly opposed to these policy ideas?

From what I hear millions of families think that the policy ideas of the past 40 years have been excellent, and keep voting for them, as rapid inflation of asset prices and rents, and deflation of labour costs, have resulted in booming living standards for them.
And that is not the result of cognitive biases, it is really true that the many millions of those who have been longer assets and shorter labour have had booming living standards for forty years, and so they are right to think that the main policies of Thatcher, Blair, Osborne were the best for themselves.

«Instead, our problem is that our political-media system functions as a device for selecting against good ideas and in favour of charlatans and grifters.»

But whether fronted by charlatans and grifters the ideas of the past 40 years have been voted for by a plurality if not a majority, who regard them as pretty good ideas. Perhaps that plurality or majority is also largely made of charlatans or grifters, but then we no longer have a political issue.

I continue to find our blogger's Candide-like talk of good/bad idea and cognitive biases rather strange when it seems to me that material interests and their effective pursuit have been so common.

[Blissex]

«Immigration is what causes this country to have poverty wages.»

Great way to fall for tory propaganda. Immigration from countries with similar wage levels is very unlikely to impact negatively wages here, so it cannot be immigration as such. Immigration from countries with much lower wage levels and living costs does impact "wage inflation" (as the Governor of the BoE recommended it to T Blair with that motivation) but it is one of the many tools used to deflate wage costs.

The overall problem is that worker political power (brutally put: how many MPs are "sponsored" by worker interests) and thus negotiating leverage are weak, and that's largely because of very successful coalition building between the upper class and the upper-middle and upper-working classes.

[Postkey]

“ . . . The mass immigration of the past decade wasn’t caused just by the absence of transitional controls on new EU member states. It was the result of a policy of encouraging immigration to generate economic growth – a policy NuLab copied from Bill Clinton’s America. In a
speech about the policy, then Home Office minister Barbara Roche said:
‘The evidence shows that economically driven migration can bring substantial overall benefits both for growth and the economy. In the United States, as Federal Reserve Chairman Alan Greenspan has commented, the huge recent inflow of migrants – 11 million in the 1990s – has been key to sustaining America’s longest-ever economic boom.’”
http://www.lobster-magazine.co.uk/free/lobster68/lob68-view-from-the-bridge.pdf