Nobel economics prize winner Richard Thaler on Brexit

The nobel prize winner said leave supporters voted with their guts rather than analytically. Thaler also said immigration was misunderstood and that referendums were not ideal for complicated choices.

Those of you not keen on experts, look away… Richard Thaler who has just been awarded the Nobel Prize in economics said that rather than weighing up the pros and cons of EU membership in an analytical way, the people behind the leave campaign “are voting with their guts”. The behavioural economist made the comments in the run up to the referendum vote last year to MarketWatch. He added people voting to leave weren’t thinking about the financial details because these could be taken care of “later”.

The people behind the leave campaign are voting with their guts. There’s no spreadsheet. This is much like a divorce without a prenup. You’re voting to leave, and then we’ll take care of all the financial details later.

There are a lot of issues like immigration that are highly emotional both here [the US] and in Europe that are misunderstood by the general public. The UK would be in a horrible mess if they didn’t have any immigrants.

Personally, I think that a vote to leave is a highly risky move. Most voters aren’t really thinking about it in a very analytical way.

Richard Thaler, professor of behavioural sciences and economics at the University of Chicago

Thaler also made an interesting point on the use of referendums in the Financial Times saying “a good rule of thumb is that the more complicated the decision, the less desirable a referendum.” Given the current state of affairs and growing uncertainty over Britain’s post-Brexit future, it’s fair to say the choice to leave the EU is incredibly complex.

In the MarketWatch comments, he went on to say “there’s a tendency when push comes to shove, for people to stick with the status quo”. On this, he was proven wrong. However, his comments about leave supporters wanting to “take care of all the financial details later” still seems to ring true over a year after the referendum.

As The Times reports, Theresa May is expected to tell MPs today that following on from her speech in Florence, the “ball” is now in the EU’s court to make progress in Brexit talks. But the EU is still waiting for concrete proposals only alluded to in her speech. Ongoing Tory infighting is also proving to be another challenge for the EU in Brexit talks. Not only does the government still seem to not know what it wants from Brexit, it’s not even certain Theresa May will still be prime minister at the end of the year.

In an opinion piece in the Guardian, Tory MP Bernard Jenkin has accused the EU of blocking future trade talks. But talking to Sky News, he admitted “it is very hard for [UK] officials to know what to do when there’s a certain amount of disagreement in the cabinet.” So if UK officials don’t know what to do, how are EU officials meant to know how to proceed?

The Tories seem to just be deflecting attention away from the lack of progress within the government over its own position on Brexit.

And on the topic of Nobel prize winners, this piece by Kazuo Ishiguro (winner of the prize in literature) is also worth a read.

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