Thomas Piketty speaks to students and guests during a presentation at King's College on April 30, 2014. Photograph: Getty Images.
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The Piketty row shows we should focus on the moral case against inequality

Our boldest claims should be reserved for the values we hold, not for uncertain data.

There's an old saying in philosophy, as follows. There are only two answers possible to any given philosophical question: maybe, or, no one can know. Given that philosophy is about the nature of things, you might suppose this would be a description of our condition more generally. When things are complicated, we can only make guesses (even if really good guesses), or accept the limits to our understanding.

This is an insight that seems to have been lost in modern economics. The idea of limits to what we can say we know sometimes appears to have been abandoned. Despite the scientific methods of modern economics, at times there appears to be an absence of scientific doubt.

Perhaps it is because economics and politics are so closely intertwined. The political benefits accrued from attaching yourself to the economic consensus of the day are legion. Having credibility amongst academia, and therefore business, and therefore the public who listens to both, has electoral consequences. The economy is so often cited by the public as their primary issue of concern. So getting economic policy 'right' is the bedrock of creating an electable policy platform.

So far, so straightforward, then. You can’t run the country unless you can run the economy. And to run the economy you need to show how you would push or pull the levers available to generate better results. Unfortunately, this is where the politicians' rush to economic certainty is at risk of ignoring constraints inherent in the dismal science. There are two important functions economist perform to assist policy makers. Firstly, there is the collection and interrogation of historic data to discover patterns and stories about how economies function. Secondly, there is the use of these insights, coupled with theoretical assumptions, to make economic models of future performance.

And this is where the row about the Thomas Piketty’s book on wealth has created a storm across the pages of broadsheets and blogs perhaps underestimates the limits to certain kinds of knowledge.  The FT’s Chris Giles wrote this account of the mistakes he says Piketty makes. Branko Milanovic amongst others responded.

Part of what Giles says is that there are transcription mistakes; particular data sets incorrect because of slip ups. That’s surely a fair enough criticism. But some of what he points to is measurement issues. And I would have little criticism of the points he makes. What I would point out is the unwillingness of some to recognise that there might be no complete, definitive, answer to the distribution of wealth in the past. We cannot travel back in time and ask public officials to ask different questions. As Giles puts it in his article, "While this post is clear about what is wrong with Piketty’s charts, it is much less certain about the truth."

Politicians who, like minister Matt Hancock ("Ed Miliband based his whole anti-business approach on a French economist comprehensively demolished by Chris Giles"), seize on Giles’s article as some kind of knockdown demolition of arguments against inequality underestimate the complexity of the task in hand.

It is good that writers, and serious economists, debate, question, and doubt.  It is not right for politicos, in search of a quick win, leap on the conclusions of one economist, as if the question is answered, now and for all time.  We do not act with intelligence and integrity if we do so.

In much more limited way, over the past year, colleagues and I have fought a battle with ministers and the ONS to correct or improve the questions in the Labour Force Survey that measure the use of zero-hours contracts. We knew because of data inconsistencies that there was likely more use of such contracts than appeared from ONS estimates. So we needed alterations to the data collection that would get closer to the real picture.

But in changing the survey’s methodology, the later information cannot genuinely be compared to data collected in the past.  There may have been a sharp increase.  The number may have been more than we thought all along. I may have my own guess. Others could estimate. No one can actually know, now. Likewise, there may be matters concerning inequality about which we should conclude it is unlikely we’ll ever know the answer.

On the forecasting side there are issues too. An economic forecast is a set of assumptions, married with data sets capturing the current economic position, to give a description of likely future outcomes. "Likely" is an important side-constraint here. In the end, despite the mathematical validity of the structure of the model, it’s a human being who has established the model’s assumptions, and weighted the evidence, that drive its predictions.

There is lots of writing about this, but very recently Steve Van Riel has described some of the prediction biases the human mind can bend towards. Furthermore, models suffer in exactly the same manner as historic analyses given the issues with data collection described above. Our ability to predict the future depends on our understanding of what happened in the past. And as we’ve seen, what happened before isn’t always exactly clear.

George Osborne perhaps nodded to some of these issues in the creation of an independent Office for Budget Responsibility. And that’s why Labour has suggested that the OBR independently audit the costings of spending and tax commitments made by all major parties. However, whatever the value of independence, in itself it doesn't make the model any better. The forecast is still beset by the same constraints as any other, whether independent of ministerial department or not.

So how should politics respond?  In short: humility. Why is it so unacceptable to say that we don’t always know the answer? Matthew Taylor has written about open policymaking that acknowledges that some courses of action will be uncertain, and may need to alter as more information and evidence becomes available. Of course, this might appear to be problematic.  Politics is about making bold claims. But I maintain it is not good politics to go around making unscientific claims. In so far as the rigour of science can be brought to bear on economics, we need to express much more scientific doubt and accept the possibility of new information, new data, or a new picture emerging.

Our boldest claims should be reserved not for perceived proof of our point against our political enemy, but for the values we hold. Let the public know what we stand for, and for many of us, that will include a moral argument against inequality. Especially the kind of extreme inequality that leaves some in slums whilst others reside in great comfort. Or inequality that means the talents of some  are unlikely ever to be realised, frustrating the ambition of those who happen to be born poor, and depriving the wealthy of the contribution that could be made those not so fortunate.

Whilst there may be compelling economic reasons that such inequality is bad for everyone, rich or poor, to be lead by the evidence means remaining open to new data that demonstrates the opposite. To hold moral values requires no such commitment. It is a deep seated value in so many of us that people, underneath it all, are fundamentally the same, of the same worth and dignity.  Which is why extreme inequality is wrong, and cannot ever be right. This cannot be altered by a new data set, or next year’s survey. It is true as long as we are all human.

Alison McGovern is Labour MP for Wirral South.

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Justin Trudeau points the way forward for European politics

Is the charismatic Canadian Prime Minister modelling the party of the future?

Six months after Canadian election day, Justin Trudeau’s Liberal party continues to bask in the glow of victory. With 44 per cent of support in the polls, the Liberals are the most popular party amongst every single demographic – men and women, young and old, and people of all educational backgrounds. 

While most European mainstream parties only dream of such approval, this is actually a small dip for the Liberals. They were enjoying almost 50 per cent support in the polls up until budget day on 21 March. Even after announcing $29.4 billion in deficit spending, Canadians overall viewed the budget favourably – only 34 per cent said they would vote to defeat it.

Progressives around the world are suddenly intrigued by Canadian politics. Why is Justin Trudeau so successful?

Of course it helps that the new Prime Minister is young, handsome and loves pandas (who doesn’t?) But it’s also true that he was leader of the Liberals for a year and half before the election. He brought with him an initial surge in support for the party. But he also oversaw its steady decline in the lead up to last year’s election – leadership is important, but clearly it isn’t the only factor behind the Liberals’ success today.

Context matters

As disappointing as it is for Europeans seeking to unpack Canadian secrets, the truth is that a large part of the Liberals’ success was also down to the former Prime Minister Stephen Harper’s extreme unpopularity by election time.

Throughout almost ten years in power, Harper shifted Canada markedly to the right. His Conservative government did not just alter policies; it started changing the rules of the democratic game. While centre-right governments in Europe may be implementing policies that progressives dislike, they are nonetheless operating within the constraints of democratic systems (for the most part; Hungary and Poland are exceptions).

Which is why the first weeks of the election campaign were dominated by an ‘Anybody But Harper’ sentiment, benefitting both the Liberals and the left-wing New Democratic Party (NDP). The NDP was even leading the polls for a while, inviting pundits to consider the possibility of a hung parliament.

But eight days before election day, the Liberals began to pull ahead.

The most important reason – and why they continue to be so popular today – is that they were able to own the mantle of ‘change’. They were the only party to promise running a (small) deficit and invest heavily in infrastructure. Notably absent was abstract discourse about tackling inequality. Trudeau’s plan was about fairness for the middle class, promoting social justice and economic growth.

Democratic reform was also a core feature of the Liberal campaign, which the party has maintained in government – Trudeau appointed a new Minister of Democratic Institutions and promised a change in the voting system before the next election.

The change has also been in style, however. Justin Trudeau is rebranding Canada as an open, progressive, plural society. Even though this was Canada’s reputation pre-Harper, it is not as simple as turning back the clock.

In a world increasingly taken by populist rhetoric on immigration – not just by politicians like Donald Trump, Nigel Farage, Marine Le Pen and other right-wingers, but also increasingly by mainstream politicians of right and left – Justin Trudeau has been unashamedly proclaiming the benefits of living in a diverse, plural society. He repeatedly calls himself a feminist, in the hope that one day “it is met with a shrug” rather than a social media explosion. Live-streamed Global Town Halls are one part of a renewed openness with the media. Progressive politicians in Europe would do well to take note.

Questioning the role of political parties today

Another interesting development is that the Liberal party is implicitly questioning the point of parties today. It recently abolished fee-paying, card-carrying party members. While this has been met with some criticism regarding the party’s structure and integrity, with commentators worried that “it’s the equivalent of turning your party into one giant Facebook page: Click ‘Like’ and you’re in the club,” it seems this is the point.

Colin Horgan, one of Trudeau’s former speechwriters, explains that Facebook is “literally a treasure trove for political parties”. All kinds of information becomes available – for free; supporters become easier to contact.

It was something the Liberals were already hinting at two years ago when they introduced a ‘supporters’ category to make the party appear more open. Liberal president Anna Gainey also used the word “movement” to describe what the Liberals hope to be.

And yes, they are trying to win over millennials. Which proved to be a good strategy, as a new study shows that Canadians aged 18-25 were a key reason why the Liberals won a majority. Young voter turnout was up by 12 per cent from the last election in 2011; among this age group, 45 per cent voted for the Liberals.

Some interesting questions for European progressives to consider. Of course, some of the newer political parties in Europe have already been experimenting with looser membership structures and less hierarchical ways of engaging, like Podemos’ ‘circles’ in Spain and the Five Star Movement’s ‘liquid democracy’ in Italy.

The British centre-left may be hesitant after its recent fiasco. Labour opened up its leadership primary to ‘supporters’ and ended up with a polarising leader who is extremely popular amongst members, but unpopular amongst the British public. But it would be wrong to assume that the process was to blame.

The better comparison is perhaps to Emmanuel Macron, France’s young economy minister who recently launched his own movement ‘En Marche !’ Moving beyond the traditional party structure, he is attempting to unite ‘right’ and ‘left’ by inspiring French people with an optimistic vision of the future. Time will tell whether this works to engage people in the longer term, or at least until next year’s presidential election.

In any case, European parties could start by asking themselves: What kind of political parties are they? What is the point of them?

Most importantly: What do they want people to think is the point of them?

Ultimately, the Canadian Liberals’ model of success rests on three main pillars:

  1. They unambiguously promote and defend a progressive, open, plural vision of society.
  2. They have a coherent economic plan focused on social justice and economic growth which, most importantly, they are trusted to deliver.
  3. They understand that society has changed – people are more interconnected than ever, relationships are less hierarchical and networks exist online – and they are adapting a once rigid party structure into a looser, open movement to reflect that.

*And as a bonus, a young, charismatic leader doesn’t hurt either.

Claudia Chwalisz is a Senior Policy Researcher at Policy Network, a Crook Public Service Fellow at the University of Sheffield and author of The Populist Signal: Why Politics and Democracy Need to Change