Please stop saying people don’t vote against their economic interests. They do it quite deliberately, all the time.

I’m hearing the same argument uttered over and over again  – ironically by both sides  – in the Brexit debate.

Remain supporters keep saying ‘no-one in Britain voted to be worse off in the referendum campaign’, on the presumption that folk don’t vote against what they believe is in their economic interest.

Leavers, for the same reason, believe that they’ll get a great deal in their Brexit negotiations because ‘it’s in the remaining EU member countries’ economic interests to do so’

Both sides are of course wrong. People make quite deliberate decisions against their economic interest every day. The reason why political folk don’t realise this is because they are brought up in a culture of Fiscal and Monetary economics. The real world works rather more like Behavioural Economics.

There is a simple illustration of this. Put 2 strangers in a room.  Say to the first, “Here’s £100. You can keep most but not all of it – you just need to offer some of it to this other person and they must accept your offer”.

Most people don’t offer 50:50, or even 51:49. They offer rather less. And if they go too low, the other person, who knows the overall deal, decides pretty smartly to tell them where to get off.

By normal rules of logic, they shouldn’t do that.  Whatever they are offered, it is in their economic interest to accept (even a penny would be an increase on what they came into the room with – nothing).

But an innate sense of what seems fair quickly kicks in and the offer is declined.

That, of course, is what the communications  and strategy folk on our side of the EU referendum never understood. They thought  – many still think – that as the economic benefits of staying in the EU were so clear, to reject them meant a voter either didn’t understand them, or believed the fibs of the Leave camp that the economic advantages were better the other way.

Behavioural Economics suggests a rather different, more visceral response  “sure I’ll be a bit better off if we stay in – but you over there will be loads better off – and that’s not right”.

Which is why economically challenged areas were more likely to vote Leave. Not so much a gamble that they might be better off if Britain leaves the EU and more of a rejection of a deal which contravenes the very British notion of fair play.

It’s frankly cold comfort that David Davis, Liam Fox et al, have a similar paucity of understanding of this whole concept as they go into those Brexit negotiations. But no one should think just because the numbers make one case, that winning the argument will follow. The world doesn’t work like that.

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36 Comments

  • Thank you, Richard Morris.

    There is a price to pay for democracy – and I am willing to pay that price.

  • Thanks for the reminder Richard.

    Sometimes people do this because we are stubborn, and sometimes because we are ultruistic. Sometimes because we are vain. There’s the whole “they need us more than we need them” thing, but there will be some who just prefer the idea of going alone, and are prepared to pay a bit extra for it. The big question for them is – how much extra? And just because some people are willing and able to pay extra, why should everyone else go along with it, including those who have less money in the first place?

    The big question is how much extra are people prepared to pay? And for how long? If that many people really are prepared to pay extra, then why did we have those buses?

    If you stop people in the street and ask if they are prepared to pay extra for ethically and environmentally sources food and clothes, most people will say yes. Yet when it comes to doing the shopping and faced with the reality of the price difference, many of those go for the bargain, and tut at being ripped off by the more expensive item.

  • Eddie Sammon 4th Dec '16 - 12:34pm

    This is a good article. If we aren’t willing to walk away from the negotiating table because “WTO (World Trade Organisation) terms are worse” then we risk getting offered a deal almost as bad as WTO terms because they know we won’t walk away.

    Also, in the opinion polls, remain always polled better on economic prospects, but still lost, so evidently people sometimes do vote for make themselves poorer (at least in the short-term).

    This is not about the merits or not of brexit, it’s about negotiating tactics in the brexit negotiations.

  • paul barker 4th Dec '16 - 12:41pm

    The point is how much ? Undoubtedly a big chunk of Leavers were willing to pay something but thats still a minority of Voters. Often voters who vote to pay a price expect that the cost will fall on others – let “Them” pay.

  • The question is, how big is that cost going to be on a per person basis?

    Most of the calculations of loss of GDP growth from leaving the EU failed to make it clear that the lower GDP figure would be spread across fewer people, due to the impact of lower net migration. Thus 4-5% loss of total GDP growth over 15 years could be much lower – say 1-2% on a per capita basis. Add in the differential distributional impact between professional and less skilled workers – many studies say migration has hit unskilled workers’ wages – and there is actually a rational, logical way in which many people could have voted to leave on economic grounds alone.

    Plus, I think the Remain campaign lost by never having anything positive to say about the UK’s long term future or position in the EU, for which you can’t really blame them. After all, we’re not (and never would have been) part of the Euro, Schengen, the developing EU army, moves to set up a European fiscal policy etc. etc. The only positive argument they had about the UK’s future in the EU was that the UK was guaranteed not to be part of these things, which isn’t exactly a ringing endorsement of the EU project, is it?

  • @ Paul Barker

    “Often voters who vote to pay a price expect that the cost will fall on others – let “Them” pay.”

    Exactly. That is the position of many Remainers as well. They aren’t affected by any of the problems that arise from a particular political choice (i.e. EU membership), so they have no empathy with those who vote differently.

  • As someone who has nothing to lose working at a Luxembourg based company for tax on minimum wage with terms conditions and wages being undercut. I have nothing to lose from Hard Brexit and that is what I want. From there we can discuss Erasmus et al but I’m looking after my own interests first.

  • Andrew McCaig 4th Dec '16 - 3:37pm

    Eddie,
    The deeper analysis n of the polls and the British Election Study shows that Remain voters believed that leaving would be bad for the economy, but Leave voters generally did not… Mainly because they believed the opinion of their next door neighbour was more valuable than the opinions of “experts” (that is also what the analysis showed, it is not speculation)

    I think many voters in the referendum did indeed vote in line with what they perceived to be their self interest (£350 million per week for the NHS, for example, but also perhaps “punishment budgets”). As far as one can tell, most Leave voters AND most Remain voters listened only to the arguments of their own side and dismissed the other

  • Laurence Cox 4th Dec '16 - 4:44pm

    @Richard Morris
    You might make exactly the same argument about the Article 50 negotiations. The optimum outcome in terms of Fiscal and Monetary Economics is probably for the EU to accept some restrictions on immigration to the UK and access to the single market in return for an annual payment into the EU budget. However Behavioural Economics will probably lead to the UK being offered a binary choice either of no restrictions on immigration or trade on WTO terms. The EU negotiators may very well think that they will lose from the reduction in trade in the latter case, but the UK will lose even more.

  • Except
    Economically Challenged area were not more likely to vote leave. The Bulk of the leave vote was suburban middle England. Whilst the remain vote included a lot of inner city areas which are much poorer, as well northern Island and Scotland both more economically challenged than England . Dagenham is not more economically challenged than Tower Hamlets. In my neck of the woods Groby and Glenfield are not poorer than Highfields. The truth is the vote was mostly about the sovereignty and mass immigration.

  • David Allen 4th Dec '16 - 5:48pm

    Good article, and it’s worth pursuing the argument further.

    As Richard explains, if Joe is told “Offer whatever you choose to offer”, and Joe offers Bill only £10 out of the £100 available, then Bill is likely to say “Get stuffed!” But what about an alternative game, when Joe is told “Roll the dice, and they will decide what Bill is to be offered”? If Joe rolls the dice, and the dice come up with “£10”, what will Bill say? He will probably say “Oh well, OK then”, won’t he?

    So what’s the difference? Well, in Richard’s version of the game, Joe has shown Bill that he is mean and greedy, so Bill is motivated to seek revenge by saying “no”. But in my modified version of the game, Joe has not actually shown any meanness or greed, so Bill has no adverse feelings towards him. Bill will therefore shrug his shoulders and accept the meagre reward which came up on the dice throw.

    And why is this important politically? Well, the argument was between Remainers who like being in the EU, versus Leavers who hate it. And, all the independent experts said “It will hurt us economically if we leave”. Now, you might have thought that the independent expert comments would have helped the Remainers. But they didn’t. They did the opposite.

    The Remainers said “Give us the European future we want, or you’ll get badly hurt.” Whereas the Leavers said “Give us the independent UK future we want, it’ll hardly hurt at all!” Now, which of those “appeals” sounds “nicer”? The Remain “appeal” sounds like a mean, nasty threat. The Leave “appeal” sounds comparatively gentle – at worst, a reasonably plausible sales pitch.

    We lost because “Bill” thought we were being nasty, mean and threatening in our endeavour to get the result we wanted. So Bill said “No”!

  • Richard Morris,
    I get the point of the article, but you state that economically disadvantaged areas were more like to vote leave. I don’t think that’s really true for the reasons stated. Not only that I would point out that the young are by and large more economically disadvantaged than the their parents. That’s all I was saying.

    David Allen,
    Remain lost because there were more people who wanted to leave the EU. The assumption often made is that months of debate made a huge difference. When really, people had probably mostly made up their minds last year and were likely just screening everything out by the time of the vote.

  • David Pearce 4th Dec '16 - 7:31pm

    I see it has already been picked up, but there have been a few pollsters asking people deeper questions about why they voted and what they believe, and 90% of those who believed remain would leave them better off voted remain, while 90% of those who believed leaving would leave them better off voted leave. It is an amazingly clear cut result.

    There was quite a bit of questioning why people voted leave which came up with all sorts of answers, such as sovereignty or immigration. However, the line of reasoning of voters seems to have been to consider which way they would be better off, and vote that way. If they thought it wouldnt make much difference (about 1/3), then they worried about these other issues.

    The inference to be drawn from this is that if voters beliefs over the economy are proven wrong, they will change their vote. Either way, of course, but potentially the government may end up trying to push through Brexit against the wishes of the nation, when the economy goes bad. But also, voters will demand retribution if Brexit goes through and they then find they had been misled to their financial disadvantage.

  • David Pearce 4th Dec '16 - 7:42pm

    There is a window of opportunity available to any party which has been the most pro remain at the point Brexit is shown to be a bad idea. Libs need to position themselves to take advantage of it. It may never come, but it would be foolish in the extreme to miss it if it does. There is little or no downside to this, because the party is already badged as pro EU, and would be appealing to the 48% chunk of voters who are remain rather than just the 10% or so who report as lib dems. We just saw the benefits of supporting remain at Richmond. If Brexit goes well then conservatives will ride that victory and little else will matter.

    Amazingly, there is also the possibility of winning Sleaford, if UKIP and conservative split the leave vote between them. The conservatives have a big majority, but it could bleed both ways to UKIP and libs.

  • “There is a window of opportunity available to any party which has been the most pro remain at the point Brexit is shown to be a bad idea. Libs need to position themselves to take advantage of it.”

    I would agree with this, particularly given that David Davis and Boris Johnson have had to face up to the reality of leaving the EU and are clearly starting to change tack, which may result in the endorsement of the decisions Margaret Thatcher and John Major made in taking us into the EU ie. a total U-turn. 🙂

    Given Richard Morris’s observations on the electorate, I’m not sure how the politicians are going to carry that one off and keep their seats…

  • Mark Goodrich 5th Dec '16 - 5:12am

    Just as a footnote, I probably voted against my economic interests as well. I get paid in dollars which has meant a major and very predictable pay rise following the vote…. I think the country will be better off if we stayed in but for me personally, I doubt it.

    Still, as indicated above, polls indicate that relatively few people deliberately voted against a belief that they would be worse off. I think polls will gradually come round to a negative view of Brexit as reality sinks in. Will take a while.

  • The problem with this analysis is that if financial self interest is ruled out as a primary motive, the alternative motives for voting against the EU are largely pretty unappealing.

  • So obvious that it really ought not need saying, but clearly it does. We should also keep in mind people are likely to be bad judges of what’s in their own economic interest whether it’s the strongest motivator or not.

  • Is the framework of this article not a little bit of a false premise? I don’t see it as voting against ones own economic interest but rather of how much people are willing to pay for the perceived benefits. Each individual will have their own value and it will demand a different price according to each person’s situation. The question therefore becomes how much bad news and damage has to be done before the mood of the country starts to swing. Yes. the Libdems may be able to take advantage of this situation but if too much damage has been done it may become a poison chalice. The challenge to us is to lower the value of the perceived benefits by developing an argument which addresses the wants of the leave voters without the price of leaving the EU. We are allowing the cost of issues such as immigration to be blamed on the EU without challenging the governments mismanagement in this area. We need to be able to say not only is the price is too high but ‘this is a price you didn’t need to pay’ and hopefully will not have to pay. We need to have policies to address these areas or we may be resented for being right. The government is playing a very strange game in the supreme court at the moment and I can only think this is strategy for damage limitation for their party.

  • When I was in a well paid job, I knew that I was likely to pay more tax and have less net income under a Liberal Democrat government than a Conservative one. I still voted Liberal Democrat because I believed it was better for the country, and I don’t want to live in a place where the less well off or otherwise disadvantaged are made to suffer to benefit the rich.

  • Denis Loretto 5th Dec '16 - 11:50am

    I think the simple fact is that no-one really knows whether or not brexit will eventually hurt or benefit the UK economy and even less how it will affect individual standards of living. We remainers are convinced that it will harm but we do not absolutely know that and it was a grave error to base our campaign on the idea that we could convince leave leaners of that. The alarm that now consumes me is the rise of exactly the kind of populism and narrow tribal nationalism which has led to so many wars and conflicts in the past. Italy worries me perhaps even more than the UK. The avoidance of this was the real raison d’etre of the EU and hardly anyone campaigned on that crucial point.

  • Thanks Richard very thoughtful. I think the effect of the right wing tabloid headlines played a big part. Day after day, week after week month after month etc you couldn’t avoid newsstands containing a variety of anti EU headlines. They were/are unavoidable and, unless you are politically aware (nerds like us) the message permeates not least because they are professionally created with that in mind.

  • David Allen 5th Dec '16 - 5:10pm

    David Pearce said:
    “90% of those who believed remain would leave them better off voted remain, while 90% of those who believed leaving would leave them better off voted leave. It is an amazingly clear cut result.”

    Well, no it isn’t, because it begs the question – Why on earth should ordinary voters, called upon to play the role of amateur pundits addressing a complex and highly speculative question on the economic consequences of a Brexit, behave in the way that they did?

    That is to say, they didn’t answer “Blimey, haven’t a clue mate”, as no doubt most of them would have done to a question like “Is quantitative easing a good or a bad thing?” Instead, they came up with very strong opinions, split nearly 50/50 each way. Why?

    The only credible answer must be: Because they weren’t trying to be economic pundits. They switched Peston off. They made a decision on the basis of what kind of country they wanted to live in. (Which was actually quite a good basis for making the decision.) And then they convinced themselves, or kidded themselves, that of course the kind of Britain they wanted was going to be the kind of Britain that would succeed. Yes, Brexit voters really did convince themselves that Britain would thrive in the global economy by selling warm beer, Stilton cheese, and Brighton rock!

    Voters follow genuine self-interest when they know quite clearly what their self-interest is. Yes, farmers do vote for farm subsidies, it’s a no-brainer. But when voters don’t really know which side their bread is buttered, they are surprisingly unwilling to listen to people like Peston who would genuinely like to give them unbiased advice. Instead, they go the way they feel.

    Left-liberals seek valid, effective policies which they can justify by logic. Trumpites ignore all that and just seek to tap into the way people feel. The Trumpites are winning.

  • Arnold Kiel 5th Dec '16 - 5:25pm

    Dear Richard,

    some people may, but not 52% who on average are economically weaker than the 48%. Had just 5% of them understood the economic risks and voted differently as a consequence, remain would have won.

    The real tragedy of those who will suffer economically (knowingly or by surprise) is that they get nothing in return, because the benefits of Brexit are somewhere between nonexistent and intangible. Sovereignty and control, apparently powerful promises, mean nothing: they are just instruments that must be used for greater societal benefit (wich is normally measured in GBP).

  • David Allen’
    As a leave voter. I did not think that Britain would thrive selling warm beer and stilton. I do think that Britain is perfectly capable of living outside of the EU and that the EU is just a pseudo super state that has been a dismal economic and social failure ever since its inception on November 1st 1993. But fundamentally, I voted leave because I actively resent being turned into a European Citizen without ever being asked if I wanted to be one. I don’t.

  • David Allen 5th Dec '16 - 7:39pm

    Glenn, you confirm my picture precisely. You “fundamentally” resent the EU, so you voted Leave. As a secondary consideration, you argue that Britain is “perfectly capable” of coping economically outside the EU. But then, you’re believing the economics you want to believe, aren’t you?

    Before you explode in fury, let me admit as a Remainer that I am not so different! Fundamentally I want to be a European and global citizen who shares the planet with friends and doesn’t retreat into mid-Atlantic isolation or worse. So yes, I confess it’s almost a secondary consideration for me that Britain is heading down the economic Swanee if we Brexit. Yes, I too believe the economics I want to believe, I guess.

    Well – So, Leavers are going to resist with every fibre of their beings the conclusion that Brexit is turning pear-shaped. They will look at our massive forced devaluation, and simply reassure themselves that things aren’t as bad as Cameron painted them. So hey, those Remainers were scaremongering, and hence, we smart Leavers should defiantly be scared of nothing, never mind how bad Mr Peston might say it is. Oh well…

  • Simon Banks 5th Dec '16 - 11:03pm

    There certainly are people who think mainly about their own interests. After the Brexit result I saw a board outside a pub with a jeering message that suggested the owner thought of the referendum purely in such terms. Well, there happens to be another good pub down the road.

    But there are plenty of examples of people deliberately voting for things that don’t benefit them. A pensioner votes for more money for education or for action on climate change with any benefits unlikely to be seen in their lifetime. We also mistakenly often assume “benefits” means financial benefits. Many UKIP supporters I’ve met are comfortably off and are not suggesting immigration or the EU have hurt them in the pocket: they just dislike the way the country – and the world – is going: gay marriage, black faces, terrorism, corner shops closing, the mass of confusing information 24/7.

  • David Pearce 6th Dec '16 - 8:27am

    P.J.,
    You are right to point out that several people are now asking quite why the government is so determined to press its legal case on the constitutution. However, from their perspective I think it better to deal with potential legal challenges now rather than risk them half way through negotiations. But there is still the outside possibility the case will concluded that scotland has an absolute veto on Brexit. Which would indeed nicely get the government off its hook.

  • David Pearce 6th Dec '16 - 8:42am

    David Allen,
    you may be right that when people are asked about their views, there is a degree of rationalisation that their instinctive choice for other reasons is bound to benefit them financially. But it doesnt change the fact that what they want is to be better off financially. If what they wanted was to be worse off, then they would have rationalised that.

    If it transpires that their belief is wrong, they will still be persuaded to change their vote, whether their previous belief in financial benefit from it was because of their knowledge of economics or just because it was what they wish for.

    Equally, if it transpires that leaving the EU makes not a jot of difference to immigration levels, they will be upset about that too. The government continues to be dishonest in arguing it will bring in immigration controls, but simultaneously saying the nation needs immigration. Conservatives have no intention of limiting immigration, they are trying to keep up this pretence which has existed throughout the last 6 years. Very few interviewers have ever pinned them down on why no one has shut off immigration form outside the EU, or why Leave actually campaigned to increase it!

    My own conclusions were that pretty much on every count leaving the EU would have the opposite effect to that claimed by Leave, which is why I went Remain. The devil is in the detail, and almost all the staged debate was on too superficial a level to see this.

  • David Pearce 6th Dec '16 - 9:02am

    Glenn,
    I wanted to post back suggesting there are exagerated claims on both sides. Britain would still be wealthy if it leaves the EU, even if it has a 10% or 20% drop in real wealth and permanently lower growth. On the other side of the coin, it is not supportable to claim the EU has been a failure, because its members are some of the richest countries on earth and have only grown richer year by year while being members. As members we have been some of the richest and most luxuriously cared for humans ever to have lived. All of us, even the poorest live better than such people have normally lived.

    But I found i couldn’t post just that. The EU is more than the sum of its parts. It is a survival capsule for people who have this kind of lifestyle and want to keep it in a hostile world. Leaving that capsule might work out if the global economy is benign, but signs are not good for that. Worst case scenario from leaving is very bad indeed.

  • David Allen 6th Dec '16 - 1:12pm

    David Pearce, I think you’re saying that you believe there are a lot of mini-Camerons out there – that is to say, people who are viscerally Eurosceptic, but willing to recognise economic facts when these are staring them in the face, and hence capable of voting in their best financial interests. Well, clearly there are a few people like that. Equally clearly, there weren’t enough to carry the day. That’s why we Remainers, who rationally expected a lot of “buyer’s remorse” from Leave voters once they were told by Boris et al that the £350 million was just an invention to win votes, have been sadly disappointed. There has so far been very little “buyer’s remorse”, and unless and until the economic sky actually falls in, there won’t be. Visceral feelings will prevail over financial figures on bits of paper.

    I think though that you might be on stronger ground when it comes to the more emotive subject of immigration, where we are not merely talking about figures in print, we are getting closer to visceral feelings. As you point out, the ultimate betrayal of Leave voters by the Leave campaigners and by Theresa’s born-again Leave believers will come when the lying b*stards, having “taken back control”, will use that control to INCREASE immigration. Many of them speak for the sweat-shops, who would like to recruit fewer cheap-ish Poles, and replace them with more even cheaper Bangladeshis!

    Sadly however, in order to bring the immigration con to fruition, we first must actually leave the EU, and probably also the single market. Buyer’s remorse, therefore, will only kick in with a vengeance after we have signed the virtually irrevocable contract to leave….

  • Let’s hear it for regulation!
    When the great myths, especially of the single market – square cucumbers, straight bananas etc – were being attacked, regulation became the biggest source of aggravation with the EEC / EU. It is still there, more in the background now, but I suggest that without it, Remain would have won. There is an absolutely cast iron example of an argument which have little or no effect whether we are “in” or “out”. We would still need some degree of product standardisation to sell into various markets at home and abroad, we would still need regulations on farms to reduce fertiliser / nitrate pollution, we still need limits on fish to be caught, to reduce rate of decrease of stocks, still need to discourage greenhouse gas emissions to prevent the burning of our planet etc. People “want their cake and eat it”. They can’t achieve that.

  • David Allen’
    I never explode in fury. I’m actually sort of wry and self amused . And also mostly a Left leaning liberal. Years ago there was a scandal about Mormons allegedly converting dead people . That’s how I see EU citizenship. Basically. I’m perfectly happy being a little Islander and a Brit and don’t like big grandiose projects.

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