Chris Johns: Lies on economics show beliefs impervious to facts

Steve Ballmer, the former chief executive of Microsoft, has set up a website that he hopes will provide us with the facts we need to make up our minds. It's an interesting piece of philanthropy for a billionaire retiree but one that might explain why his period in charge of the software giant is rarely described in glowing terms.

One of the first things a reasonably observant chief executive learns is the list of lies that people tell themselves – and their bosses. Our beliefs and behaviour are rarely influenced by mere facts.

One the great fibs of corporate life is the classic “I embrace change”. People say this all the time, mostly because they think that this is what their superiors want them to say. Sometimes they even believe it to be true. But it is a feature of the human condition that we resist change of any kind with every fibre of our being. Particularly in the workplace.

Most of the time we are utterly unaware of this aspect of our nature but anyone who has ever tried to manage any kind of change process will understand just how powerfully and creatively most people will place obstacles in the way of doing things differently.

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Open-mindedness

The other great lie heard in offices around the world is the assertion "I am completely open-minded on this issue". Those with intellectual pretensions will often follow this up with a quote from the great economist John Maynard Keynes who (allegedly) said: "When the facts change, I change my mind. What do you do, sir?"

If Keynes said this I suspect he was unusual, if not unique: few of us change our minds when confronted with facts that suggest we should do so.

Mr Ballmer is whistling in the wind with his well-intentioned project. There is abundant evidence that we don’t change our minds. If we do, it is rarely and randomly: the last thing that prompts a change of heart, let alone mind, is a confrontation with the truth.

Mr Ballmer would, perhaps, be better advised to fund research into where we get our beliefs from and why our opinions have such an uneasy relationship with facts or objective truth. There again, philosophers have been wrestling with epistemology for quite a while now and seem to be no nearer a conclusion than was Plato or Socrates.

Important people now hold facts in contempt. The president of the United States responds to any particular truth that he doesn’t like by labelling it “fake news”. I would like to see Ballmer investigate not why self-absorbed narcissists say things like this, or why they are wrong, but why so many of us are willing to believe them.

Of course, there is always that debate about what the facts actually are. Objective truth can be a slippery concept once you think about it.

The Nobel prize-winning physicist Richard Feynman once famously asserted that nobody understands quantum mechanics. Which, on one level at least, suggests that we don't understand anything at all. And, as soon as we start to think about economics rather than the nature of the universe, we become certain that we don't know anything.

In economics, at least as it appears in much of the mainstream media, opinions are offered as facts and facts are treated as opinions. Forecasts, for example, are usually reported as something handed down via a papal encyclical: the International Monetary Fund should retitle its twice-yearly publications of its view of the future as Veritatis Splendor.

Simon Wren-Lewis, an Oxford economics professor, has a particular beef with the way the British media reports economic truth. In the run-up to the most recent general election (in 2015), the Tories asserted that tax-and-spend Labour governments under Blair and Brown had left such an almighty mess of the economy – and especially the public finances – that more austerity was both inevitable and nothing to do with the Conservatives. Wren-Lewis asserts that this was objectively untrue. And the venerable professor is right: the only thing messing with the UK economy was the global financial meltdown.

The “crisis” in public-sector finances had little or nothing to do with previous Labour governments. It is also untrue that the UK economy has now recovered from that financial crisis: lots of numbers can be quoted here but I suspect this where eyes start to glaze over. But it is objectively true: a huge slice of UK economic activity has gone missing.

Brexit referendum

If that general election saw great whopping lies told – and believed – in a way not seen before, the Brexit referendum refined that process.

A fun debate can be had between consenting adults over the biggest Brexit lie. More cash for the NHS? Immigrants reduce wages and jobs? But rather than focus on these kinds of things, the media filters everything through the lens of GDP since the referendum: we got the forecast downturn completely wrong, so everything else we say about the economy must be fake.

Britain faces another general election for all sorts of reasons. The Daily Mail captured it with a remarkably Leninist headline: "Crush the saboteurs". Tony Blair agrees and thinks this is about a mandate to deliver the hardest of Brexits, albeit on a more elongated timescale. Hopes for that softer outcome are well wide of the mark.

But it’s also about facts: if it wasn’t for Brexit and the election, we would, finally, be seeing headlines about slowing GDP growth, falling real wages, a soft property market and big falls in retail sales.

As Wren-Lewis powerfully argues, the facts are changing, more slowly than we thought but very much in the direction we feared. But here is the crucial bit: while the facts change, the Brexit narrative remains the same. The coalition of the media and the hard Brexiteers of the Tory party remain in the ascendant and are shaping beliefs independently of the evolving facts.

Explain that to me, Mr Ballmer.

@skiduffer