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.