Stumbling and Mumbling

Overton windows & cognitive bias

chris dillow
Publish date: Thu, 11 Oct 2012, 10:09 AM
chris dillow
0 2,773
An extremist, not a fanatic

Imagine some Tory were to say something like this:

We need a change in sexual morality. If women were to refuse to sleep with men who didn't want to work or were poorly educated, incentives to work and learn would be sharper and the country would therefore be richer.

I suspect such remarks would invite scorn and ridicule. But they are consistent with economic theory and some empirical evidence, and with a long history of women taking Lysistratic nonaction.

Now contrast those remarks to something Cameron said yesterday. He opened his speech by claiming that he entered office facing the challenge "to make an insolvent nation solvent again."

If we understand "insolvency" literally - as an inability to pay debts - this is imbecilic gibber. There was no question in 2010 of the government being unable to pay its debt. Even if we give him the benefit of the doubt and interpret him as meaning that debt was on an unsustainable path, it's probably wrong. Labour's last Budget envisaged the primary deficit falling to 0.7% of GDP in 2014-15 - sufficient to stabilize the debt GDP ratio if real interest rates are below trend growth rates, which they probably are now. If financial markets had feared government insolvency or debt unsustainability, index-linked gilt yields in 2010 would not have been below one per cent.

This brings me to a paradox. Cameron's silly remarks have not provoked the contempt which our hypothetical Tory's would have done. Why not?

Partly, it's because political reporting, for the most part, is too deferential to bother testing the factual accuracy of Prime Minister's remarks.

But I suspect what's going on here is an example of the Overton window at work. This is because of a form of the representativeness heuristic. Cameron can get away with wibble about insolvency because a big deficit is popularly associated with debt trouble which in turn is associated with insolvency. But people forget that the associations are weak - especially for governments able to print their own money.

By contrast, our hypothetical Tory cannot get away with his remarks because economic growth is not associated with social norms but with things that look more like they might have something to do with what businesses do - orthodox economic policy, the confidence fairy and so on.

My point here is that the Overton window, conjoined with cognitive biases, serves to legitimate silly remarks whilst excluding more intelligent ones. And it's not just leftist ideas that suffer from this debasement of political discourse.

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