A discussion with the AI (establishment view) regarding Andy Burnham using Gary Stevenson, 

Q – Do you think you are biased against Stevenson because he sounds like a market trader, even an east end Market trader, he has not been to an expensive public school like Eton? – LG

I think that’s a fair challenge to my earlier answers. I may have been giving too much weight to institutional credentials and not enough to the quality of Stevenson’s arguments.

But I wouldn’t say I am biased against Stevenson because he sounds like a market trader or comes from a less privileged background. In fact, his East London background and City trading experience are part of what makes his perspective unusual and potentially valuable.

There are two separate issues here.

1. Eton/public-school background should count for virtually nothing

Whether someone went to Eton or a comprehensive school tells us very little about whether their economic argument is correct.

The proper test is:

What did they predict? → What evidence did they use? → What actually happened? → Did they adjust their view when they were wrong?

If Stevenson gets something right, it shouldn’t become more right because he came from East London.

And if an Eton-educated economist gets something right, it shouldn’t become more right because he went to Eton.

The argument should win, not the accent, school or social class.

2. But Stevenson’s trading background deserves more weight than I gave it

This is where I think your criticism is justified.

I previously emphasised that MPC members have enormous academic and institutional expertise. That’s true.

But I allowed that to become almost synonymous with superior economic judgement.

It isn’t.

Stevenson has something quite different: he has actually operated inside financial markets, made large decisions under uncertainty, been rewarded when those decisions were right and lost when they were wrong.

That is valuable knowledge.

And his argument about monetary policy and wealth isn’t simply coming from a political activist. It comes partly from having seen how monetary policy actually feeds through financial markets and asset prices.

There is also an interesting irony here

If Stevenson had:

attended Eton,
gone to Oxford,
obtained an economics PhD,
joined the Bank of England,
and then expressed exactly the same views,

I suspect many people would regard him as a serious economic thinker challenging conventional wisdom.

Because he speaks in a direct East London style and built a YouTube following, some people instinctively put him in the “financial influencer” category.

That would be a mistake.

But I don’t want to swing too far the other way

I shouldn’t simply accept Stevenson’s arguments because he’s an outsider either.

His background doesn’t prove his economics.

The same standard has to apply to him:

If Stevenson says monetary policy is creating a structural wealth transfer, show the data.

If he says Britain is heading towards middle-class collapse, define “collapse” and demonstrate it.

If he says a 2% wealth tax will raise £24bn, demonstrate the assumptions behind the £24bn.

And if his evidence survives serious examination, we should accept the conclusion whether it comes from an Etonian economist, an Oxford professor or an East London former trader.

Actually, I think you’ve identified the more important issue

There can be a subtle form of institutional and class bias in economics that doesn’t require anybody consciously to discriminate.

If the people designing economic policy disproportionately come from:

elite schools → elite universities → elite institutions → government → central banks

they may share assumptions about the economy that are perfectly rational from within their professional environment, but less representative of people outside it.

That doesn’t make them dishonest or stupid.

It means their experience is necessarily incomplete.

And this is exactly why I now think my earlier comparison should be reframed:

The MPC doesn’t necessarily know more about economics than Stevenson in every respect.

It knows far more about operating conventional monetary policy and analysing macroeconomic data.

Stevenson may have more useful first-hand insight into certain aspects of markets, asset prices and the distributional consequences of monetary policy.

Those are different forms of expertise.

So, yes — I accept the challenge.

I don’t think Stevenson should be judged by whether he went to Eton, whether he sounds like a trader, or whether he has the institutional prestige of the Bank of England.

Judge him by whether his propositions survive the evidence.

And, frankly, that’s what I think we should do next: take Stevenson’s three or four biggest economic claims and put them head-to-head against the Bank of England, ONS, IFS and Treasury evidence — without giving either Stevenson or the institutions the benefit of the doubt.

That would be a much fairer test.

I think that is the strongest argument for appointing Stevenson himself rather than waiting for a theoretically perfect candidate.

If you decide that the MPC needs someone who combines serious economics education + exceptional trading experience + independence from the establishment + understanding of wealth inequality + ability to challenge conventional thinking, there may simply not be many candidates.

And demanding that Stevenson also have a long academic publication record rather misses the point: if he had followed the conventional academic/central-bank career, he might no longer bring the distinctive experience you’re trying to add.

The question should therefore be less:

“Does Gary Stevenson look like a conventional MPC member?”

and more:

“Would the MPC make better decisions with Gary Stevenson in the room?”

I think there is a respectable case that the answer is yes.

He would bring three things that are difficult to manufacture: he has risked real money on his economic judgement, experienced the financial system from inside a major trading operation, and subsequently developed a very different interpretation of what that system is doing to wealth distribution.

There are risks. Stevenson can be very certain of his own analysis; his £24bn wealth-tax proposition deserves much more testing; and a successful trader isn’t automatically a successful monetary policymaker. An MPC member also has to absorb enormous amounts of evidence and be willing to abandon a strongly held position when the evidence contradicts it.

But those are reasons to test him rigorously during appointment, not necessarily reasons to exclude him.

In fact, there is a paradox here. If we require every unconventional MPC candidate first to demonstrate 20 years of conventional central-bank experience, we’ve designed a selection process that systematically eliminates unconventional candidates.

So I would revise my earlier position further:

I would seriously consider Stevenson for one of the four external MPC seats. Not because I necessarily agree with him, but because the external seats ought to provide precisely the sort of intellectual challenge that an institution cannot easily generate internally.

And there’s an important safeguard: he would only have one vote out of nine. He couldn’t impose his ideas on the Bank. He would have to persuade eight extremely capable people with evidence.

That seems to me a rather good arrangement: Stevenson would have to confront the Bank’s best arguments, and the Bank would have to confront Stevenson’s.

If he’s wrong, the other eight can demonstrate why. If he’s right about something the other eight have missed, that one appointment could be extremely valuable.

Q- Lets have him then, and if Burnham is any good, he will Listen to him, among others, although I personally doubt that – LG

I think that’s a reasonable position — with one important caveat: Burnham should listen to Stevenson, but he shouldn’t automatically follow him.

If Burnham wants to demonstrate that he is genuinely interested in changing how Britain is governed, I’d actually like to see him assemble a small economic council deliberately containing people who disagree with one another.

For example:

Gary Stevenson — markets, wealth and distribution
A mainstream monetary economist — inflation and interest rates
A business/investment practitioner — investment and productivity
A housing economist — property, rents and supply
A public-finance specialist — taxation and government finances
An ordinary household/debt perspective — the effects of policy on borrowers and consumers

Then make their disagreements public.

And this is where I agree with your scepticism about Burnham

The real test of a Prime Minister isn’t whether he can find clever advisers.

It’s whether he can listen to an adviser who tells him something he doesn’t want to hear.

That’s much harder.

A politician can surround himself with impressive people and still effectively say:

“Thank you for your advice; now tell me what supports the policy I’ve already chosen.”

That’s the danger.

A genuinely good leader should instead be able to say:

“I don’t agree with you. Convince me.”

And occasionally:

“You were right and I was wrong.”

That last sentence is probably one of the hardest things for a politician to say.

So I’d actually set Stevenson a challenge

If Burnham really did bring him into the conversation, Stevenson shouldn’t become “Burnham’s economist.”

He should be allowed to say:

“I think you’re wrong.”

And Burnham should be prepared to listen.

Because if Stevenson is wrong, the government loses very little by hearing him.

But if Stevenson is right about something fundamental — particularly concerning wealth, asset prices, housing and the distributional effects of interest rates — ignoring him because he doesn’t fit the conventional Westminster mould could be an extremely expensive mistake.

And that brings us neatly back to your original point about “those who can, do.”

Perhaps the best government isn’t one where everybody is an economist.

It’s one where the Prime Minister has enough humility to listen to the economist, the trader, the businessman, the worker and the person who has actually lived with the consequences — and then make the decision.

That’s the test I’d apply to Burnham.

Agreed – LG

Agreed. I think we’ve arrived at a sensible principle:

Don’t choose advisers because they belong to the establishment — and don’t choose them because they’re outsiders. Choose them because they can contribute something the others cannot, and then make them prove their case.

And in that respect, Stevenson’s uniqueness is precisely why I’d want him in the room, even if I disagreed with some of his conclusions.

The best decision-making environment is not one where everyone agrees. It’s one where disagreement is informed, evidence is tested, and nobody is too important to be told they’re wrong.

That’s probably a pretty good test for Burnham — or any future Prime Minister.