HAYES IN THE HOUSE: By MP John Hayes
Named after the well-known incident in 1987 when the eponymous BBC weather forecaster failed to predict the hurricane which subsequently had devastating effects, a ‘Michael Fish moment’ has become the description for forecasts which turn out to be wrong.
So, when Andrew Haldane, the Chief Economist of the Bank of England, recently admitted that the discipline of economists is in crisis, he called the failure of forecasters to predict the financial meltdown of 2008 a ‘Michael Fish moment’. He also conceded that the Bank’s dire warnings that leaving the EU would have an immediate negative economic impact had also proved to be wholly inaccurate.
Like other more thoughtful economists, Mr Haldane has realised that the notion that humans are wholly rational is the central flaw in economic modelling. Anyone considering the decisions they have made, and the way they have made them, could have told him that. No great work of art that offers an insight into the human condition is based on a reductive, rationalist view of human nature.
At last leading thinkers are beginning to expose the paucity of the idea of ‘rational man’. In ‘Thinking Fast and Slow’, the Nobel Prize winner Daniel Kahneman distinguishes between two types of decision-making: fast thinking, which is automatic, emotional and frequent, and slow thinking which is logical, calculating and infrequent.
In practice, Kahneman and others are substantiating truths about human nature that great conservative thinkers have always known. It was the 19th century statesman Edmund Burke who wrote that “we are generally men of untaught feelings …… we are afraid to put men to live and trade each on his private stock of reason, because we suspect that this stock in each man is small.”
It is because we are creatures of ‘untaught feelings’ that society, and our perception of our place within it, is so important to understanding actions. Burke grasped that a sense of “fellow-feeling” is what makes us human, that morality flows from sentiment, not from logical deductions derived from abstract laws.
It’s no coincidence that so-called experts who persist in viewing the world through a prism of rational thinking are repeatedly at odds with popular sentiment, particularly on issues such as immigration and national identity. By contrast, the popular will is the expression of the time-honoured values held dear by people now, as they always have been.
By abandoning their rational worldview, tomorrow’s economists may have fewer ‘Michael Fish moments.’