Tuesday, November 13, 2018

Brexit, Keynes and facts that don't change

Facts don’t change and there is no evidence that John Maynard Keynes (1883-1946) ever wrote or said "When the facts change, I change my mind. What do you do, sir?” Neither is the quote "If the facts don't fit the theory, change the facts," attributed to Albert Einstein (1879-1955), authentic.

Samuel Brittan (b. 1933), the former economic commentator of the Financial Times (1966-2014), has written that the Keynes “banal misattribution drives me up the wall. What he probably said was ‘When I change my mind I say so, what do you do?’

Both eminent biographers of the Depression-era British economist, Lord Robert Skidelsky and Donald Moggridge of the University of Toronto, found no evidence that Keynes made the comment on facts while the authorised representative of the Albert Einstein Estate, has denied that the German scientist had said the quote on facts. It wrote on the Einstein Twitter account that anyone who may want to quote Einstein in the future should check: ‘The Ultimate Quotable Einstein.’

The facts

Facts don’t change but new evidence or new facts can emerge. An Irish Times editorial on Brexit says today: [“When the facts change, I change my mind,” said Keynes. In this case, the “facts” never were facts at all. A second referendum would not affront democracy; it would shore it up.]

The main Brexit facts based on objective evidence were available in 2016 and a number of new facts have emerged (see below). Facts sometimes require contexts such as official economic data that is polluted by tax avoidance or inadequate measurement which can turn a US trade surplus with China to a deficit that triggers a trade war.

The nature of science means that theories backed by evidence can remain unproven.  A half-century ago scientists commonly believed that they had to find as many examples as possible confirmed by research to support their theories. However, Sir Karl Popper (1902–1994), an Austro-British philosopher and professor at the London School of Economics championed what was called falsification. He famously wrote: "No number of sightings of white swans can prove the theory that all swans are white. The sighting of just one black one may disprove it."

Donald Trump in the past has called climate change a “Chinese hoax” but NASA, the US government agency, says “the current warming trend is of particular significance because most of it is extremely likely (greater than 95% probability) to be the result of human activity since the mid-20th century and proceeding at a rate that is unprecedented over decades to millennia.”

NASA says the evidence for rapid climate change is compelling.

Galileo Galilei (1564-1642), the Italian astronomer, physicist and engineer, who was terrorised by the Catholic Church’s Inquisition, wrote in a letter, “For in the sciences the authority of thousands of opinions is not worth as much as one tiny spark of reason in an individual man. Besides, the modern observations deprive all former writers of any authority, since if they had seen what we see, they would have judged as we judge.”

Brexit facts

Just 33% of the UK voting age population supported the exit from the European Union and David Cameron, the prime minister, and his Cabinet colleagues who supported the Remain campaign were reluctant to highlight how vulnerable the UK economy was, with a high dependence on foreign-controlled companies.

Cameron also made a stupid decision not to take on Boris Johnson directly on television, because of the prime minister's apparent interest in Tory unity. 

1) The concept of Global Britain was bullshit to anyone interested in facts — Germany was able to achieve an export ratio to economic output of 47%, which was 50% higher than the UK level without being constrained by EU membership;

2) Britain is unique among the Group of 7 indusrialised countries in its reliance on foreign investment. The Japanese and German-owned car manufacturers could over time move from the UK while about 60% of goods trade is into multinational firm supply systems;

3) The EU accounts for almost half of British exports and apart from a persistent trade surplus with Ireland, the UK has deficits with most European countries;

4) According to the House of Commons Library, the UK’s trade surplus with Ireland was £12.2bn in 2017. This was the UK’s second highest trade surplus, after the surplus with the United States. Ireland was one of four EU states the UK had a trade surplus with, in 2017 — the other three were with Luxembourg, Sweden, and Denmark.

5) A new fact since 2016 is the incompetence of the British government in particular in handling negotiations on the exit from the EU.

Related

Similar economic structures fuel Ireland’s high Brexit risk

Brexit, the lost empire, and dodgy modern UK economy