Stumbling and Mumbling

The bias against emergence

chris dillow
Publish date: Fri, 12 May 2017, 02:01 PM
chris dillow
0 2,773
An extremist, not a fanatic

John Humphrys gave us a good example of the BBC's bias this morning - and it's not the sort you might think.

In discussing the Bank of England's forecast that real wages will continue to fall this year, he asked (2"10' in): "are we going to keep getting poorer because of Brexit?"

Now, I think Brexit is one the stupidest things this country has done for years. But it alone is only a minor cause of falling real wages (at least for now!). Three facts tell us so.

First, real wages have stagnated ever since 2007 - long before Brexit was heard of.

Secondly, we haven't suffered a deterioration in the terms of trade. These have actually risen since May. Yes, import prices have risen. But so have export prices. Exporters are seeing fatter profit margins. Insofar as they share these with workers, real wages should rise for at least some workers.

Higher inflation alone cannot explain falling real wages. They merely pose the question: why aren't workers getting protection from inflation in the form of nominal wage rises?

The answer, as Mark Carney said (pdf) yesterday, is that productivity is falling - which means a smaller pie for everyone - and that labour market slack gives employers' the power to hold down wages.

Granted, these aren't the whole story, and Brexit might be holding down wages by increasing firms' uncertainty. But they are a big part of the story. Why, then, did Humphrys ignore them and focus on Brexit?

I fear that we have here is another example of a bias against emergence. Political journalists especially focus upon conscious political actions to the neglect of emergent processes. Brexit is a political choice whereas other, perhaps bigger, influences on real wages are the complex unintended products of millions of dispersed decisions. So Humphrys pays the former more attention.

This is not an isolated example. Political journalists discuss fiscal policy as if government borrowing were set by Chancellors and overlook the (large) extent to which it is the counterpart of global emergent processes such as the savings glut and corporate cash-hoarding.

Nor is it confined to journos. Leftists sometimes blame rising CEO pay on bosses' greed, as if the rest of us would turn down pay rises, and under-estimate the extent to which it is the result of partly-emergent processes such as globalization (pdf), deunionization, agency failure or managerialist ideology.

In this respect, the BBC has what John Birt and Steve Richards called a "bias against understanding." In downgrading the importance of emergence, it stops viewers and listeners from understanding social phenomena.

If this bias merely led to ignorance, it wouldn't be so bad. But it might have a more systematic effect. If we underweight emergence, we overweight the role of conscious individual agency. This causes us to exaggerate what politicians and business leaders can achieve if only they display strong leadership. And that, in turn, helps to sustain inequalities of income and power.

More articles on Stumbling and Mumbling
Discussions
Be the first to like this. Showing 0 of 0 comments

Post a Comment