The Real Lesson From Brexit

A widespread mistrust of experts can lead to political decisions, like Brexit, that might have negative consequences for the very people who vote for them. How to fix it?

 

Luigi Zingales
Luigi Zingales

One of the most important–and least discussed–aspects of the vote for Brexit has been the failure of most pollsters and newspapers to predict and understand the reasons for Brexit. Even the betting market, generally much more reliable, got it wrong. This phenomenon is not unique to Brexit. Most pundits and pollsters missed the importance of Trump. Why?

 

What we have observed in Britain and what we are observing in the U.S. with Trump is a growing mistrust of voters toward experts. In the Brexit debate it was hard to find any economist justifying a departure from the European Union. In fact, many were willing to make forecasts so pessimistic as to be accused of scaremongering. Not only did these forecasts fail to rally the vote for Remain, they probably contributed to the victory of Leave.

 

In the Financial Times Chris Giles lamented this phenomenon as an example of voters’ irrationality. I fear this has nothing to do with irrationality, but has everything to do with mistrust; a mistrust that, while exaggerated, has a very rational basis: the disconnect between the intellectual elite and the population at large–the very disconnect that caused pollsters, betters, and journalists to miss the mounting Brexit wave.

 

This disconnect inverts the very positive trend that characterized the 20th century: a closer connection between intellectuals and the rest of the population. This trend started in the United States at the end of the 19th century. The increasing diffusion of literacy and of secondary education created the scope for a media market and an academic sector that were not just catering to a restricted elite, but were speaking to and for a broader set of the population.

 

In those years, Louis Brandeis spoke of the need not just for corporate lawyers, but also for people’s lawyers, and he certainly was one. In those years the muckraking magazines were exposing the fraud and corruption of the political and economic elites. In those years scientists, economists, and intellectuals in universities were more focused on enhancing the progress of humankind, than on defending the interests of powerful donors.   

 

At the end of the 20th century and in the 21st this trend was not only interrupted, but inverted. Plummeting advertising revenues made newspapers much more dependent on economic powers. Large donations (or the prospects for such donations) made universities much more sensitive to the needs of a restricted elite.

 

Today wealth concentration allows a few rich individuals to singlehandedly fund think tanks, which have increasingly become loudspeakers of vested interests, rather than centers of elaboration of public policy. Campaign financing and future lobbying jobs are increasingly transforming elected officers from representatives of the people to “butlers of industrial interests,” to use a famous muckraking expression. 

 

The effects are there for all to see. Doctors are perceived to promote the medicines of the companies that sponsor their lunches, not necessarily the ones that are needed; scientists to minimize the effect of pollutants produced by companies that fund their labs; economists to defend the interests of banks that pay them hefty consulting fees. Even journalists, when they are not perceived to promote the interest of their advertisers and owners, are accused of turning a blind eye to their problems. How long, for example, did the papers, first in West Virginia and later at the national level, ignore the massive pollution of PFOA produced by DuPont?   

 

Even when there is no financial incentive distorting experts’ views, there is a cultural affinity between the experts and the economic and political elites. A combination of legacy admissions and selection based on the quality of the high school (and thus the census) the students come from has created an increasingly homogenous academic population at top colleges, detached from the vast majority of the country. Scientists, journalists, and intellectuals all belong to the same world and so inevitably look at the world from the same perspective.       

 

All these factors together lead to a mistrust toward experts. They lead to a presidential candidate who is proud not to rely on them and receives support for this reason. They lead to political decisions, like Brexit, that might have negative consequences for the very people who voted for it.

 

My ancestors in Sicily did not go to doctors because they mistrusted all experts: they thought they were all just trying to cheat them. They suffered the health consequences of this decision. Today the consequences would be much worse. In a world that is increasingly dependent on technical expertise to function, we cannot afford to mistrust most experts.   

 

Fault does not lie with the people mistrusting us. We need to rebuild that trust. It is not sufficient that most doctors, intellectuals, and journalists do a very fine job. We should have transparency rules in place to ensure that they all free from conflict of interest. We should have admission rules that favor not just ethnic diversity, but also economic and social diversity. We should have campaign financing rules that free our representatives from the yoke of vested interests.

 

In sum, we need to create the conditions to undermine this mistrust of experts. This is the most important lesson from Brexit.

 

Disclaimer: The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy.

6 comments

  1. A certain type of expert is trying to preserve and enhance the status of that same type of experts.

    Very meta, professor! And good luck!

    Your very first sentence clearly exposes the uselessness of “experts” – the ones who failed to predict the outcome of the Brexit vote are as valuable as psychics selling palm readings for $10 from their New York City basement apartments.

    Expertise is demonstrated by a person having done something previously very well, with the expectation that the result can be replicated. An expert at heart surgery, or chess, or archery, for example. There are exactly zero experts on the impact of the Brexit because it has never happened before. Therefore it is impossible for someone to have accurately predicted the outcome of such an event and then be able to replicate that prediction. Please name me the expert who predicted the GFC in such a way that it could be stopped?

    You can’t. There is no such creature as an “expert” on the future, only psychics and seers. Given that so many have been so wrong on so many predictions over such a long period of time, why should those who call themselves “experts” be trusted? The way to reduce mistrust of “experts” is for the people without real expertise to stop claiming to be “experts” – then we will know not to trust them, and will be left with only true experts to trust.

  2. So we are supposed to trust an “expert” when he says people don’t trust experts?! And for whats its worth here, albeit 12000 miles from the action, I know a lot of economists who were pro leave.

  3. Luigi, really like your blog and most of the articles.

    I’m not able to comment on the reasons why so many people voted for Brexit and ignored the advice of experts, but for myself I have very low confidence in the expertise of economic forecasters. This won’t be solved by ‘diversity’ or ‘funding transparency’, but by people with a track record of actually making successful economic forecasts over a period of time. Nate Silver had a section in his book, The Signal and the Noise, and likewise I’ve read similar accounts in the (London) Economist, and other places. Recently I read an article on the oil price forecasts of recent years by someone (I think it was a WSJ journalist) who had surveyed all the usual “experts” prior to the oil price falling. They were all wrong.

    It’s not rational to trust an “economic expert” with ability to forecast any of the kind of future events (GNP growth, oil prices, inflation, unemployment..) that they are held up to forecast, when they have no ability in this area. I would definitely trust them to look presentable on TV, to be able to produce graphs and pie charts, and to put forward plausible economic sounding arguments. They have a demonstrated ability in this area.

    Literature on forecasting accuracy?

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