Spinning Brexit — THANKS TO MOTIVATED REASONING, WE DON’T LET FACTS GET IN THE WAY OF OUR BELIEFS
Mathematical aptitude does not inoculate people from biased thinking. In fact, being math-smart can actually make you more likely to interpret statistics to fit preexisting biases. I thought about this while I was watching an interview with Nigel Farage on CNBC. (Some of his quotes made it into a later CNBC.com story.) CNBC asked Farage, leader of the movement in favor of the UK leaving the European Union, about the drastic losses in the value of the pound (at a 30-year low vs. the dollar) and UK and European stocks (down 8–10% in three trading days even after a rally).
Nigel Farage could have said the market was getting it wrong, blaming the drop on uncertainty rather than the merits of Brexit and claiming the future economic impact would be positive. He partly did this: “London cannot be a global financial center if it’s kept inside cloying regulations of the European Union.” “We’ve got the opportunity to go global.” “We’ve got the opportunity to be the Singapore of the European Union.” But he couldn’t leave it there, making his argument about the future.
For most of the interview, Farage tried to spin an incomplete recital of statistics to make it seem like he was already right. (Maybe it was a coincidence, but he paired these statements with blustering incredulity at bankers and the media.) Asked about the stock market value wiped out after the vote, he said, “Please, can we just end this complete rubbish? FTSE is up 3% today [the third day of trading after the vote]. It’s 12% up from February. Can we all grow up, stop this absolute scaremongering nonsense?” He repeated the 3% and 12% gains, along with “Stop this media hype nonsense.”
What about the pound reaching a thirty-year low against the dollar? “Sterling entered a declining market, a bear market, in July 2014. I actually know about these things. You know why? Because I once had a proper job.”
According to Farage, the culprit (or at least the focus of attention) should be how bad things were before the vote. “Look, these banks have been badly run anyway for over a decade. They got themselves in a terrible mess back in 2008. They barely recovered from it…. There is a declining global economy. Indeed, in Britain, our growth forecasts are down, not because of Brexit, because actually the economy is not doing as well as we thought, because government borrowing is running way ahead of any expectations.”
Motivated reasoning is an irrational thinking process in which people will seek out confirming evidence and reinterpret contradictory evidence to fit their beliefs because they are motivated to confirm their world-view. It also makes it easier for people to hold contradictory beliefs, like the stock market is doing great (up 12% since February) but there’s also a “declining global economy” and Britain’s “growth forecasts are down”.
I blogged in 2013 about some amazing results about motivated reasoning by Dan Kahan as part of the Cultural Cognition Project. Kahan and his colleagues created identical data sets for two hypothetical studies, one about the effect of a skin cream and one about the effect of limiting handguns. The subjects who tested better at math were most likely to manipulate their interpretation of the gun-control data to fit their pre-existing beliefs.
Nigel Farage tried to present a reality that the performance of the financial markets on June 28, 2016 (the date of the interview), was part of a long-existing pattern. If you look at the charts, the drop in the value of the pound and in stock valuations were huge, immediate, and negative right after the vote. You have to ignore a lot of information to believe they were continuations of negative — or positive — trends long before the vote.
Even so, because of the way our brains work, Farage actually has a chance of convincing people in this fashion, or certainly, at least, strengthening the beliefs of people who already thought this way.
