economics

Four ways economists helped usher in the “post-fact” era

We are entering, it is said, a post-fact era. Populist politicians dismiss data and expertise out of hand, and the UK and US publics seem to nod along. Michael Gove, a UK MP campaigning for Brexit, summed this up simply: “people in this country have had enough of experts.”

This comes at a time when good-quality expertise and data have never been easier to access. Fact-checkers, explainer websites, data journalism and gigabytes of open data are all a click away.

And yet despite all this, in 2016 so far, numbers themselves seem to be under assault by a populist insurrection. We could blame populist anti-elitism, innumeracy, racism and xenophobia – and indeed we should. But economists (including economic journalists) must also consider our role.

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Growth slowdown (3): perhaps the mid-century growth spurt was just catch-up

(Back to the overview post)

This is much more speculative, but perhaps within-country divergence and convergence explains more of the time-variation in national growth rates than we realise.

One of the very useful reminders of William Easterly’s Tyranny of Experts is that the nation-state is often not the appropriate unit at which to consider big questions of growth and development. For example, if we look at per capita gross world product, there is no slowdown to explain. In fact growth seems to accelerate in the final quarter of the 20th century. The growth-pessimists will respond that this is merely ‘catch-up’, countries far from the technology- and productivity- frontier moving closer to it, rather than a pushing-forward of the frontier itself.

Of course they’re correct, but if that reasoning applies to the late-20th and early-21st century world, why should it not apply within the mid-20th century United States?

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Growth slowdown (2): GDP is a measure of a mid-20th century industrial economy

(Back to the overview post)

The invention of modern national accounting, which includes the construction of GDP estimates, is credited to Kuznets and others, who did pioneering work on measuring output in the 1930s and 1940s. Ever since it was invented, thoughtful economists have cautioned against using GDP as a measure of welfare; all the while most other economists do just that.The standard criticisms of national output are outlined in clarity by the Stiglitz-Sen-Fitoussi commission, or more poetically by Robert Kennedy:

 

I would express these specific criticisms in a common way:

GDP measures the things that seemed important in 1940.

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