The Lies We Were Told by Simon Wren-Lewis

Author:Simon Wren-Lewis [Wren-Lewis, Simon]
Language: eng
Format: epub
Publisher: Bristol University Press

5.7

WHEN ECONOMISTS PLAY POLITICAL GAMES

Wednesday, 14 October 2015

I saw you talking to those people the other day. You really should think twice before being seen to talk to people like that.

Similar lines could be taken from countless novels about class, race or some other form of social exclusion. When I agreed to be part of a group that would occasionally advise the new Shadow Chancellor John McDonnell on economic policy, I must admit I hadn’t expected something like that to be said to me by economists I respect. Political hacks would say it for sure, but economists interested in promoting good policy?

Just to be clear, McDonnell’s group places no restrictions on what its members can say in public about policy. We are not required to support or endorse Labour policy. Indeed, to the extent that Labour does adopt a policy that any of its members disagree with, the group gives those members a slightly higher public profile if we make that disagreement public. As the media generally fails to distinguish good economic advice from political spin, a direct channel like this group seemed like a good idea, with no cost to its members except their time. Except …

On Monday McDonnell announced a U-turn: he would no longer support Osborne’s new fiscal charter. The media focus, as ever, was on the ‘political shambles’ of a U-turn, with only the occasional suggestion that the charter itself was economic nonsense. A few economists on Twitter, however, suggested that this political shambles somehow reflected badly on the members of the advisory group. One described the members of the group being ‘branded’ by association. If other economists reading this sympathise with that view, you need to read on.

The new Labour position of not supporting the charter is likely to find general support among the advisory group. (We have not yet met.) Indeed a huge majority of macroeconomists would recommend opposing the charter. I have no idea if the views of any of the group had any influence on this U-turn, but if it did that means the group is having some influence, which has to be a positive thing. Indeed, as I know some of those making this ‘guilt by association’ charge actually oppose Osborne’s charter, they should welcome the fact that we may have helped change Labour’s position. Instead they are saying his change of mind reflects badly on us! It makes no logical sense, unless something else is going on here.

I am happy to give advice on macro policy to any of the mainstream political parties, whether I agree with their current macro or other policies or not. Over the past five or more years I have given public and private advice to Treasury officials working for the actual Chancellor. I feel strongly that governments should and can follow good macroeconomics whatever their political persuasion. For me to say I’m not going to talk to you because I do not like your policy on X would be as silly and childish as it sounds.

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