Misinformation: How the Tories Won

by Benjamin Studebaker

The Tories have absolutely demolished Labour, winning an absolute majority in the House of Commons:

2015 UK election results

The Conservatives (aka the Tories) are blue, Labour is red, the SNP (Scottish National Party) is yellow, the Liberal Democrats (Lib-Dems) are orange, UKIP (UK Independence Party) is purple, the other colors belong to various regional Irish and Welsh parties. The situation would have been even worse for the left under proportional representation–UKIP won 13% of the vote, but only 1 MP as it was unable to win majorities in constituencies. Combined, UKIP and the Tories won about 50% of the vote, while Labour and the SNP won around 35%. The left was thoroughly trashed, and this raises a lot of questions going forward–can the union be preserved when Scotland is dominated by a party to the left of Labour while England goes to the Tories? Will British conservatives embrace electoral reform to make it harder for the left to prevail? Who will replace Ed Miliband as leader of the Labour Party? But these questions are for another time. Today, all I want to talk about is why this happened to the UK, and why it has been happening to countries on both sides of the Atlantic for decades.

Earlier this week, I wrote a post about how the Tories messed up Britain’s economy, and then I wrote a follow up post, handling some of the most common counterarguments I saw around the internet. To my surprise, the post become immensely popular in the UK, acquiring over 700,000 hits before the polls closed. This totally amazed me–apparently many people had not heard this sort of argument before, or if they had, they had not heard it presented in such a compelling way. I was honored to receive the attention and the shares (on Facebook, the post was shared more than twice as many times as Paul Krugman’s excellent piece on the same subject). This blog only has a few thousand followers. Never before had I received this level of attention or had this level of influence on a major impending political decision.

Yet it all came to naught, and predictably so. Social science research has long indicated that people who already have an opinion about political issues are likely to suspect research that disagrees with them of biases that may not be there, and to read material that agrees with them in an uncritical way. There are extensive lists of cognitive biases and logical fallacies that human beings are naturally prone to make. Entire books have been written on the subject. 700,000 people may have read my post, but the number of people who changed their minds and acted differently as a result was negligible. This is easy enough to see if you read the comments. They are mostly either extremely warm and positive or extremely negative and hostile. Most of the critiques were addressed in the post or in the comments or in my follow up, but people kept making the same false claims anyway. Often the criticisms consisted of basic misreadings of the post, sometimes they confused the meanings and significance of different economic indicators (some people can’t tell the difference between the total debt, the total deficit, total spending, and these things as they relate to GDP), sometimes they just insulted me on the basis that I’m American or an academic, or that my degrees are in Political Science, not Economics–never mind that my MA thesis (which received top marks, by the way, and was good enough to land me a PhD offer at Cambridge) focused heavily on political economy, specifically on the way income inequality damages economic performance and undermines democracy.

One of the studies that played a significant role in my MA thesis was Unequal Democracy by Larry Bartels. In this book, Bartels discovered that democrats and republicans have differing effects on inequality and on economic performance–during the period of 1948 to 2005, democratic administrations have tended to hold inequality even or reduce it slightly, while republican administrations have tended to expand it rapidly. At the same time, democrats have managed to deliver better income growth rates to people at nearly every income percentile (except perhaps for the very top 1%–Bartels did not measure for this group, but the trend line would imply that it would do better under republicans):

Yet during this period, republicans won more than half of all the presidential contests. How did they do that? One cause, proposed by Bartels, is voter myopia. Even though most voters tend to do worse under republicans than under democrats, republican incumbents have mysteriously produced much higher growth rates in the year leading up to elections than democrats have:

Voters are bad at evaluating the economic performance of the government over the course of an entire term–they tend to give priority to how things have been going very recently, caring more about the short-term trajectory than the long-term performance. If you want to get re-elected, one really effective strategy is to drive down growth rates in the first couple years of your term and then engineer a recovery toward the end. The voters will credit you for the recovery and ignore the recession. I’m not saying this is necessarily intentional or planned, but because conservative parties and candidates focus on doing austerity or prioritizing inflation, they tend to do anti-growth policies early in their terms and then reverse course later on. In the early 80’s, the US went after inflation by jacking up the interest rate, triggering a recession–but by the time Reagan was up for re-election, the rates had gone back down and growth looked good again. Here’s the interest rate in Reagan’s first term:

And here’s growth for the same period:

By comparison, here’s growth during Jimmy Carter’s term:

For most of Carter’s term, growth is between 4 and 6%, but at the end of his term Iran has a revolution and the oil price skyrockets, wrecking growth and pushing inflation skyward, causing him to lose reelection. Reagan comes in and delivers awful growth rates and a recovery that doesn’t materialize until 4 or 5 years after the Iranian revolution, but because the growth is there when he runs in 1984, he wins comfortably. Eve today, Carter has a horrific reputation in the states and Reagan is considered solid on economic issues. You can see the same thing in the UK during Thatcher’s term. Here are the interest rates:

Here’s growth:

The reelections are in 1983 and 1987. See how the interest rates rise in the first couple years after each election but then fall during the run up to the new election? See how growth falls early in the term, but is always on an upward trajectory right before the election? Thatcher loses office in 1990–the conservatives replace her with John Major. Why? Growth continually fell from 1988 to 1990, because interest rates kept rising and because Thatcher started massively reducing government spending as a percentage of GDP during the mid to late 80’s:

Major wins re-election 1992 by bringing the UK out of recession:

He does this by raising spending:

And by lowering the interest rate:

Each time during the 80’s British voters were made to forget about years of bad economic performance with decent growth rates during the years immediately before the election. The Tories were able to blame the 70’s on Labour policy when oil shocks played the primary role in creating economic instability (first the embargo in the mid-70’s, then the Iranian revolution in the late 70’s).

In the same way, the Tories have now blamed the economic crisis on Labour when that crisis resulted primarily from US economic policy mistakes that the Labour government could not have prevented. They focus on the last year of good numbers, ignoring that because of Tory policy, Britain was unable to recover until years after the crisis, and its recovery was slower than most other OECD countries. A number of different excuses are made for this view–many conservatives claim that Labour spent too much, forgetting old facts that are swiftly being lost to history:

  • Before the crisis, UK spending was well-within what is considered usual–UK debt to GDP was lower than America’s and lower than Germany’s.
  • The Tories also supported spending increases before the crisis–they also favored tax cuts and low interest rates. It’s all in their 2005 manifesto.
  • The major spending increases during the last couple years of Labour’s run were necessary to bailout the financial system and prevent a catastrophe, and the Tories would have done the very same thing.

The public only pays attention to short-term performance and forgets crucial facts that were known to everyone only a few years ago. No person who had paid the least bit of attention to British politics would have told you in 2005 that the Tories were against tax cuts and spending increases, but now it is considered common knowledge that the Tories are economically responsible and Labour is not.

The Tory narrative is easy to follow. You don’t have to know much about what’s going on to believe it, and it fits the modern media model where long-term, chronic issues are ignored in favor of short-term results and immediate crises. Everyone reports that UK growth figures were better this year than Germany’s were, but no one reports that Germany is still in a much better position relative to where it was 5 or 7 years ago than Britain is now. It’s easy for people to think of government spending the way they think of their own pocketbooks. It’s hard to show people how and why the government’s relationship to money is very different from that of a business or household. Not only do people have to understand the arguments, but they have to understand the basic concepts underlying those arguments. How many voters even understand how the interest rate affects economic growth or inflation? How many even understand what a multiplier is, let alone the research about how big it might be? How many know how a devaluation works, or know what a liquidity trap is? The Tories tell a great morality story about a profligate and irresponsible Labour Party that creates a horrible economic crisis from which only the Tories can save everyone. The left has to explain why that simple story isn’t true to people who may not even have the foundation necessary to understand the building blocks. Add to this that people are very resistant to changing their minds about anything and that they are likely to suspect us of cooking the books or delivering biased data, and we can see how it’s incredibly hard to get people to support the economic policies that are in their own long-term interests.

We have a really serious problem, not just in the UK, but everywhere. At this point in our history, it has become too difficult for ordinary people to understand how the economy works in a way that would allow them to consistently choose the parties and policies that would best protect their interests. If things are going well in the six months before the election, the incumbent is very likely to win regardless of what came before those six months, and if things are going badly, the incumbent is very likely to lose in the same way. This is stumbling about in the dark, not informed voting. Our democracies rely on a totally unrealistic level of popular political wisdom–on unbiased study, on information-seeking, on quality deliberation. As the right’s narrative gets simpler and reality gets more complicated, we are finding that it is increasingly impossible to ensure citizens have anything close to this, and the left is hardly even trying to raise consciousness, focusing instead on vague appeals to compassion, which only fuels the perception that the left is emotionalist and unserious. There is an alternative–we could try to change the political system to make it less dependent on voter wisdom in the first place. That’s what sophiarchism is all about.

Not that I expect any of this to change any of your minds, of course.