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Wednesday 16 December 2020 4:45 am  |  Updated:  Tuesday 15 December 2020 9:21 pm

Economics has a lesson for Remainers and lockdown-lovers who refuse to let facts change their minds

By: Paul Ormerod

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Should we all embrace the highly tentative, uncertain and experimental nature of successful decision-making?

Christmas is a time to be charitable.  

So let’s spare a thought for those who fought against the referendum result. 

Unlike the great unwashed, who simply didn’t understand the issues they were voting on, they had all been expensively educated at the right sort of schools and universities.

From the time the vote took place in 2016 right up until the day of Boris Johnson’s decisive victory in the election a year ago, a ruthless campaign was waged to nullify the vote.  

How smart do they look now, all those Amber Rudds, Dominic Grieves, Gina Millers and Jo Swinsons?

They could have accepted the result and voted through one of the many versions of a deal proposed by Theresa May. Most of these involved a close and ongoing alignment with the EU.  

Instead, they will end up with an arrangement which is the stuff of their nightmares.

Spare a thought, too, at this festive time for the hapless first minister of Wales, Mark Drakeford.

Towards the end of October, he placed Wales in a short “fire-break” lockdown to try to reduce its high infection rate. Sections of supermarkets were cordoned off by government diktat because they sold “non-essential”  items.

The seven-day moving average of daily new cases did indeed fall in Wales from around 300 per 100,000 to well under 200. But within a month of lifting the fire-break, it had risen even higher, to some 350. In the old mining valleys of South Wales, the new case rate is now 600 and rising.

Drakeford did what any self-respecting Corbynite would. He blamed the electorate.

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On 10 December, speaking on BBC Breakfast, he remarked: “Not everybody has been willing to abide by the restrictions that are still necessary. We have seen people having house parties, people inviting large numbers of people back to their own houses when that is absolutely not allowed within our rules.”

His words recall the leaflets put out by the old East German Communist government in June 1953, after the workers’ uprising had been brutally suppressed by Soviet tanks. The people, they declared, had forfeited the confidence of the government. It could only be regained by “increased work quotas”.

The Welsh government followed the advice of experts in epidemiology, for whom no lockdown appears to be sufficiently strict. 

But these experts did not anticipate that lockdown would make ordinary people less, rather than more, likely to behave in ways the experts deem appropriate.

These two vignettes — lockdown and the anti-Brexit movement — illustrate fundamental principles expounded by Friedrich Hayek and Herbert Simon, both Nobel laureates in economics.

They stressed the need to recognise the highly tentative, uncertain and experimental nature of successful decision-making. It is an evolutionary process, rather than one which can be optimised.

Good policy proceeds by trial and error. Rather than try and find the best possible solution — such as overturning the Brexit result — choose one which seems reasonably satisfactory.

Another key point is that failures need to be abandoned quickly. Lockdowns no longer seem to work, but experts continue to be fixated by them.

The works of Hayek and Simon should fill the stockings of Remainers and epidemiologists alike this Christmas.

Main image credit: Getty

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Jim ONeill, economist and former Goldman Sachs chairman, sitting on a yellow sofa in front of large windows.

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