Tories, NDP need Economist Party

Justin Trudeau took over as leader of the Liberals two years before his first election. In two years’ time, the Conservatives’ Andrew Scheer and the New Democrats’ Jagmeet Singh will also be leading their parties in their first elections as leader. As we have already seen, two years is a long time, enough for a party to make some fundamental changes in its approach to policy. The Liberals’ approach to economic policy in 2015 was markedly different from its previous efforts, and this change was largely due to an infusion of intellectual capital from the Economist Party. As a social scientist, I hesitate to ascribe the Liberal victory to these policy shifts, but it does raise the question of whether or not the opposition parties will draw some sort of lesson from the Liberals and attempt a similar collaboration with the Economist Party.

I’m not sure who first came up with the idea of an Economist Party of Canada, but as far as I can tell, it first appeared in a 2010 Andrew Coyne column. It’s become a sort of shorthand for the collective viewpoint of academic economists, and is essentially an artifact of social media. Before platforms like blogging and ( especially) Twitter became available, public debate was dominated by economists who work at the sort of institutions that issue press releases, and those places usually have messages they are trying to sell. Social media has made it easier for the media — not to mention the general public — to get unfiltered access to expert opinion on economic issues.

For non- economists, the seemingly monolithic consensus of economists’ opinion may be disconcerting. Certainly many partisans have convinced themselves that economists are resolutely biased against whatever party it is they happen to support. This impression is wrong in two ways.

Firstly, the consensus of expert opinion isn’t about the answer to a question so much as it is a consensus on the analytical tools used to address it. The basic starting points of any economic analysis are usually principles such as “people respond to incentives” ( or, more trenchantly, “people aren’t stupid”) and “things add up” (that is, there are feedback effects). There are many ways to construct models based on these principles, but when the data are sufficiently informative, a consensus on methodology will turn into a consensus on conclusions. Economists are famously disputative about policy issues when the data are fragmentary or non-existent.

More importantly, the partisan leanings of academic economists span a broad spectrum, and include a diversity that may surprise some people. If economists have a reputation as being i rredeemably right- wing among our colleagues in the humanities and in the other social sciences, the explanation is simply that conservative — and Conservative — economics professors are represented in the academy in a proportion not entirely dissimilar to that of the population as a whole.

Not all of us hold rightwing views: survey data suggest that the median economics professor in the United States is a moderate Democrat. The main difference between the views of economists and those of the rest of the population is that economists are more sanguine about — if not supportive of — markets. ( It should be pointed out that reliable information about academic economists’ political leanings can only be obtained by asking them directly; they can almost never be inferred from their research.)

This diversity explains why an official Economist Party will never get off the ground: even if economists can agree on the mechanics of how a policy measure would affect the economy, they wouldn’t necessarily agree on the political question of whether or not the policy goal is one worth pursuing. The Economist Party is not so much a player in politics as it is a consultant, offering advice about the best way to achieve policy goals. In effect, we probably identify more with the people in the permanent, non- partisan civil service more than we do with their partisan masters.

I’ ve written elsewhere about the transformation of the Liberals’ economic stances under Trudeau’s leadership (including firm support for free trade and an appreciation of the efficacy of cash transfers); what could the Economist Party teach the opposition parties?

For the New Democrats, the lessons are essentially the same as the ones the Liberals absorbed, only more so: the tradition of antipathy towards economics is much stronger among New Democrats than it ever was among Liberals. To be sure, progress was made under Tom Mulcair, but Jagmeet Singh may be hard- pressed to resist the temptation to retreat into anti- economics. If that instinct can be controlled, an obvious strategy for the NDP is to counter the Liberals’ theme of the middle class with one focused on poverty and low incomes. This won’t be easy — the Canada Child Benefit and the proposed Canada Housing Benefit are strong Liberal ramparts on that front — but economists can contribute here, if asked.

The Conservatives, on the other hand, find themselves in a peculiar bind. For one thing, their pro- market credentials are strained by their continued and perplexing opposition to taxing carbon in favour of a byzantine mix of regulations. If the Liberals don’t balance the budget by 2019-20, the Conservatives could present themselves as the more responsible manager of public spending, but it will be difficult to promise any sort of significant tax cut without further weakening public finances. Another tack might be to rejig the tax and transfer system to favour families, and again, the Economist Party can offer some expertise here.

If the New Democrats and the Conservatives resist the urge to retreat into populism, they could do worse than to collaborate with the Economist Party. Doing so certainly didn’t hurt the Liberals.