Andrew Elliott

Stated Preferences Vs Revealed Preferences

“I’d love to be able to play the guitar.

“I wish I was slimmer.”

“I should pay more tax.”

How many times have we heard statements like these? Too many to count, I’d wager. In fact, you probably rolled your eyes when you read them. You’re sure to recognise such statements for what they are: nonsense.

If someone really wanted to play the guitar, they could. It would take lots of time and effort, but it’s possible. The same with losing weight. Paying tax is the easiest of all, you can simply donate to the treasury (not that many people do).

The point is that people say these things when all evidence suggests that they don’t really mean them. That’s why there is a specific term for these kinds of statements. Economists call them “stated preferences”. If someone says they want to do something, that’s a stated preference.

Handily, there’s also a term for the things people actually do. Economists call these “revealed preferences”. A stated preference might be someone saying that they’d love to be able to draw. However, their revealed preferences show that they don’t spend any time doing so, which would indicate that they don’t really mean what they say. This is the difference between a stated and a revealed preference.

Now, any economist worth their salt will always ignore, when possible, stated preferences. There will be some occasions when stated preferences are all that exist. For example, if revealed preferences are skewed by the law like they are in illegal drugs, but for the vast majority of the time, revealed preferences are the ones to look at.

Unfortunately, these days this is not usually the case. Most economists tend to be left leaning, Keynesian ideologues. People who want to do something. Sadly, the sorts of people who recognise that people can run their own lives better than anyone else rarely choose professions like economist. Or politician. This being the case, there is a tendency for most economists to ignore revealed preferences and just go by what people say, as that enables them to do what they want: interfere with things.

Take the recent sugar tax in drinks. Plenty of surveys were cited, stating people want to decrease the amount of sugar in their diets. So tell me, what was stopping them? Sugar free diet drinks have been available for decades. Why not drink those if you want to cut down? I love Coca-Cola. It’s a guilty pleasure. I rarely drink it as I like to keep in shape (which isn’t as easy now I’m in my forties), but every now and again I like to sip from a bottle of ice cold coke. Why should I be taxed more? More importantly, why should people who suffer from diabetes be taxed more when sugar can be life saving for them?

It’s the same with tax. I’ve seen so many surveys where people state that they should pay more tax. Well, why don’t they? I made an FOI request recently and received information back about how much money people voluntarily donate to the state. I discuss it in a recent podcast but, spoiler alert, it’s virtually nothing.

The Germans have a fantastic word that springs to mind: verschlimmbessern. It roughly translates as “the act of making something worse whilst trying to make it better”. This is what happens when economists and politicians look at stated preferences instead of revealed preferences, when they look at feelings instead of facts, and when something that sounds good to them takes precedence over something that has been proven to work.

Go back to the first few statements at the beginning of this article then ask yourself: Do we really want to base government policy on what people say?

Why people call themselves centrists

Centrism is one of those terms that people put a lot of effort into claiming. It doesn’t seem to matter where the political Overton Window is, people (and parties) always try to insist that they have the centre ground.

People tweet about how centrism is the best way. That being a centrist means realising your side doesn’t have all the answers. That centrism is somehow synonymous with reason, with the sensible middle ground. The non extreme view.

Here in the UK, there’s lots of talk about how Britain is crying out for a new centrist party.

Why is this?

I believe it is firmly routed in the way politics is taught in the West. Think about it, for a minute. What is everybody taught from a young age? Communism is on the far left and Fascism is on the far right. Most people, understandably, want to be as far away from those two abhorrent ideologies as possible. Certainly anyone who has any grasp at all of 20th century history. And where is the furthest away from both of those on the standard, left/right political spectrum? The very centre.

I believe this is the reason why so many people claim the centrist position, even when they all disagree where it is. They want to believe that their position is reasonable. That their views are what normal people should have (if only they had the same information as them, as if often the case). Stray from the very centre? That’s a slippery slope to extremism, my friend!

One of the problems here is, of course, that Communism, Socialism and Fascism are all so similar. The idea that they are somehow on opposite ends of the spectrum falls down with minimal scrutiny. One of the reasons for this is that the political spectrum is not just left/right. The political compass, with its four quadrants, isn’t perfect but is a lot better.

The additional axes on the spectrum detail the difference between authoritarianism and libertarianism, whether you believe in force or freedom. A fan of state regulation? Top half. Tariffs on external goods? Top half. Nationalisation? Top of the top half. Believe in free markets? Bottom half. Free speech? Bottom half. Think everyone should be able to run their own lives? Bottom half.

It’s that authoritarian/libertarian axis that’s far more important to me. It doesn’t bother me if you’re on the left or the right, as long as you don’t want to run everybody else’s life. If you want to live in a commune, feel free? As long as you don’t expect me to subsidise you. If you want to control my life, however, I don’t care which side you’re on.

The standard left/right paradigm doesn’t really have anywhere for classical liberals or libertarians, either. Where am I supposed to go? Liberals are usually branded right wing simply for being ‘not left wing’, but nobody can ever explain to me the connection between small government, freedom loving Austrian economists and totalitarian, big state fascists.

Ask a random person now where they’d put people who want small government & low taxes on the standard scale and I bet 99% of them would place them on the right – regardless of whether they attribute those things as positive or negative in political or social terms.  The same applies these days to freedom is speech.  Safe spaces, no-platforming, thought crime – these are features of the current left.  If you advocate true freedom of speech with no exceptions then you are automatically considered far right.

Ask those same people how those stances can lead to fascism and you’ll just hear crickets.

Maybe they’ll argue that by defending people who share (in their minds at least) abhorrent views, it somehow encourages and promotes those views and makes them spread.  Heaven forbid that the light of day would allow intelligent people to challenge and refute what is necessary, and present evidence to counter the negativity.

But what they miss entirely is that fascism was about not being allowed a voice, by having to adhere to the party line or be “disappeared” by the secret police.  Doesn’t sound like free speech to me.

And the idea that by thinking you may pay too much tax is somehow a route to racial superiority is as laughable as it is sad.  Fascism and the right wing have been wrongly equated for too long.  If anything left and right have now lost all meaning in political and social terms.

It’s no wonder people and their politicians have grabbed onto centrism with both hands as a way of distinguishing themselves from the extremists.  The trouble is though, freedom now seems to be an extreme ideology.  When did that happen?

The Leave Campaign Needs Donald Trump – But Not The Way You Think

Many Leavers have suggested we need someone like Donald Trump in the Brexit Campaign. Someone with a strong track record in winning negotiations. Someone confident who isn’t afraid to stand up to world leaders. I can understand the appeal. The same has been said of Margaret Thatcher, suggesting she’d come back from Brussels with them paying us for the privilege of a trade deal (and not the other way around).

Whilst I can completely understand this reasoning, I think there would be a better place for him. As EU President.

Just bear with me for a moment on this. Think about it. It’s a win:win situation.

As one of the EU Presidents, say, instead of Tusk (The inferior Donald T), Trump could be amazing. Firstly, almost all of Remainers would switch sides. One of the reasons they love the EU is the big state, big government approach. What they’ve never appreciated is the EU has the potential to be led by the “wrong people”. Think back to the USA under Barack Obama. SJWs & leftists were all for state control until their party lost the 2016 election.

If Trump was in charge there’d be no more calls for a People’s Loser’s Vote. Oh no. Remainers would be trying to leave as soon as possible. There’d be marches in the streets with people wearing Never Trump t-shirts, setting fire to the EU flag, stamping on Make Europe Great Again hats. It would be marvellous.

Secondly, if, as I’ve said before, we don’t actually end up leaving, who better to lead the EU than a small state, free trade entrepreneur? He’d be slashing regulation, tearing up unnecessary legislation and breaking down trade barriers like there was no tomorrow. Now, I know Trump has put up tariffs on some items in the US, which I disagree with wholeheartedly, but the end game for him has always appeared to be completely free trade. He’s said as much himself on numerous occasions. As a fan of unilateral free trade I disagree with his tactics, but agree with his end goal.

So yes, a Trump or a Thatcher would be great on our side, but they’d be even more value on the other.

Why another Brexit referendum is a bad idea

There’s been lots of talk recently about a “People’s vote” or, as I’ve heard it more accurately described, a “Losers’ Vote”. The arguments are as follows:

More information has come to light since the referendum.

People should be able to change their minds in a democracy.

The first point shouldn’t really need arguing against, but I will. Of course more information has come to light! New information is known every day! Are we supposed to wait until every registered voter knows every single thing about the EU (and can prove it by passing a test) before we vote? The EU is so overwhelmingly large that no single person could ever know how it all works, so this is a problem that can never be solved.

In any referendum, you draw a line in the sand and say “We’re making a decision, now.”. This is what happened in 2016 and we should stick by it. If we have a “People’s Vote”, more information will be known the day after. Should we organise another referendum when that happens? No.

The second point is a sneaky trick Remainers use to try and con Leavers. They use weasel words and will tell you that they love democracy, which is why they want more of it. They’ll probably ask you if you’re afraid of more democracy and ask you why you don’t trust the people. Where were these people for the 41 years prior to 2016? I don’t remember any of them calling for more democracy then.

And how much more democracy do we need? How often should we have another referendum? We haven’t even had time to implement this first one. Should we have one a year? A month? How about every 5 minutes? This is another reason why democracy is a bad thing. It’s far too easy to have too much. Don’t know what I mean? Should we use democracy to decide which car we all drive? How about what clothes we all wear? And for those who don’t know my views on this, I’m not talking about replacing it with authoritarianism, but freedom. Which would of course mean leaving the EU without even needing a referendum.

SO this brings me to my main point about the referendum. If we’re going to use democracy to decide these things, then we shouldn’t have another vote until we’ve given this one a good go. I would suggest at least ten years after we’ve actually left, as that’s enough for another two terms in government.

Currently, the government is massively pro-remain, as is parliament in general. If we have referendums too often, it gives the government (and the wider parliament) the ability to screw up the implementation and ask for another vote, which is exactly what Remainers are trying to do right now.

I don’t believe that Brexit was a vote purely to stick two fingers up at politicians. Of course it’s quite nice to do that, but I genuinely think that the British People wanted to leave the European Union for perfectly rational reasons. A consequence of that was voting against the establishment. Can you imagine the precedent it would set if we let them screw up every decision we made that they didn’t like? What would it say for future referendums? You can vote any way you like, but we’ll mess things up in a such a catastrophic way that you’ll want to go back to the way things were every time.

We need at least ten years after we leave before we even think about asking the British People for another say. We need whoever is in government now , whoever is in government when we leave and whoever is in government in the term after that to make a good go of Brexit. The only ballot a politician fears more than a referendum is a general election. Politicians should fear being voted out more than they fear another Brexit referendum. The only way to do that is not to have one for a sufficient amount of time.

Why don’t socialists donate to the government?

It seems that every day some virtue signalling celebrity comments on how they should pay more tax. We discuss this very issue in the latest edition of Sounding Board.  If you haven’t listened already, it’s available here.

In it, we analyse statistics from the British Government on how much people actually donate to the treasury. Spoiler: virtually nothing.

It would appear then, that these are just weasel words, designed to elevate the sayer’s status without actually doing anything or backing them up with actions. A couple of days after publishing the podcast, as if by magic, one such person ended up on my Twitter timeline.

This was his original tweet:

Classic virtue signalling. “I’d willingly pay more tax”. I thought I’d see if he actually did.

Well, colour me shocked. No extra, whatsoever.

So there we go. It’s always, always the same:

“I should pay more tax.”

“Great! Here’s how.”

“I didn’t mean just me. I’m not unless we’re all forced to.”

If you ever encounter anyone saying they should pay more tax, point them in the direction of the treasury.

Charlottesville Counter Protests – A Success Or A Failure?

On Sunday, August 12th 2018, A second white supremacist rally was held in Washington DC. “Unite The Right 2” was planned as a sequel to the first rally, one year ago in Charlottesville, Virginia, where far right protestors and far left counter protestors clashed violently, resulting in the death of a young woman (and many more injured).

The first rally had hundreds in attendance, possibly up to a thousand. Angry young men with their tiki torches, chanting. This year? Approximately twenty people showed up. Not even a single bus load. They were vastly outnumbered by counter protestors from around 40 anti-racism organisations.

Now, you may think this is a good thing. That the far right have been, as near as makes no difference, eliminated. But have they? Interviews with protestors state that many of their colleagues did not attend due to fear. The protests last year became very violent due to clashes with Antifa, the so called anti-fascist organisation, who have a history of administering extreme violence in their black face masks against anyone (including young women & the elderly) who isn’t far left, and other counter protestors.

So what has actually happened? Has Fascism been eliminated? Of course it hasn’t. It’s been driven underground. Which is one of the worst things that could have happened. This is exactly why we need free speech. Free speech is how individuals and groups improve their opinions. They can air their thoughts, debate, argue and have alternative opinions given to them. They can then strengthen their opinions, or perhaps change their minds when presented with other evidence. None of this can happen now for white supremacists. So how are these people ever going to have their minds changed, now that they can’t speak in public? How can young, foolish individuals ever hope to change their dumb opinions under these circumstances?

Pushing things underground never works. Look back to prohibition in the 1930s. How well did that work? Or the war on drugs. How’s that going? Pushing opinions underground never works, either. In Britain the British National Party (BNP) were a growing political movement, some years ago. Although labelled “far right”, their policies were firmly in the left wing (mass nationalisation, etc.). They were just extremely racist. The BBC invited their then leader, Nick Griffin, onto Question Time, the popular political programme. There was uproar from the left wing. People went crazy and petitioned the BBC to change their mind as they shouldn’t give such a man a platform. To their credit, the BBC went ahead with the programme. Nick Griffin came on and made himself look like a fool (without any help from the weak panellists also on the programme). Support for the BNP evaporated, almost overnight.

The way to change people’s minds is to engage with them. To converse, to debate, to counter. We should be shining a light on people with white supremacist opinions. We should be inviting them to debates, to share the stage with us. If you don’t think your opinions will stand up to scrutiny from a white supremacist, maybe you should ask yourself why.