An explanation was needed, one was found; one can always be found; hypotheses are the commonest of raw materials.Henri Poincaré, on Lorentz’s theory of aether. (Bourdieu 1988: 159)
On Monday, 15 September 2008, the investment bank Lehman Brothers filed for bankruptcy after the US government decided not to provide it with emergency liquidity. It had already done so in the preceding months for three other large financial institutions—Bearn Stearns, Fannie Mae, and Freddie Mac—and enough was enough. That week, stock markets across the world went into tailspin and governments rushed to scrap together bailout plans of bewildering proportions. The world economy entered its worst recession since 1929. Mainstream economists—who dominated thinking in policymaking, finance, and the social sciences—had told us this was just not possible. A few years before, Nobel Memorial Prize in Economic Sciences winner Robert Lucas Jr. had opened his American Economic Association’s presidential address with the following words:
Macroeconomics was born as a distinct field in the 1940s, as a part of the intellectual response to the Great Depression. The term then referred to the body of knowledge and expertise that we hoped would prevent the recurrence of that economic disaster. My thesis in this lecture is that macroeconomics in this original sense has succeeded: Its central problem of depression prevention has been solved, for all practical purposes, and has in fact been solved for many decades. (Lucas 2003)
Whenever there is a crisis, there are demands for an explanation. The 2008 global financial crash gave rise to countless diagnoses of what went wrong, which had to readdress the foundations of the economic order of modern capitalist societies. Suspicions on the sustainability of the financial industry and free markets took centre-stage in a way they had not since at least the 1990s ‘end of history’ era. While the immediate trigger of the near-collapse of the banking system was commonly traced to the expansion and bursting of the US subprime mortgage market, ascertaining its ultimate causes and consequences became the subject of much controversy. As such, the events of 2008 amounted not only to a market crash, but to a crisis of self-understanding, and could be considered a sudden trauma that demanded interpretation (Eyerman 2011).
Given these circumstances, both new and established political actors and policy experts were impelled to make their case in the public arena. Indeed, it became nigh unavoidable for them to do so, as explanations were widely sought by the public and offered by competitors. This unsettled environment could, lest we forget, create the conditions for momentous political, economic, and societal change. Disseminating one’s interpretation of the situation became a critical goal, as it could determine the decline or rise to prominence of one’s ideas and, not uncommonly, of one’s career (Campbell 2002).
In this milieu, expertise had a central part to play (Brooks 2012). The precipitous collapse of major financial institutions, and its drastic effects on national economies, spurred a plethora of technical and moral explanations of what happened, how expectable it was, and what should be done in its wake (e.g., de Goede 2009; Sinclair 2010; Lo 2011; Rohloff and Wright 2010; Thompson 2012). Even so, questioning traditional experts also became commonplace, as most failed to foresee (and some even declared impossible) what they were now advising on (Engelen et al. 2011). Years later, Bank of England’s Chief Economist Andrew Haldane said that the financial crash was economics’ ‘Michael Fish moment,’ in reference to a BBC weather forecaster who in 1987 dismissed warnings of an impending hurricane just hours before South East England suffered the worst storms in three centuries (BBC 2017).
In time, the initial confusion gave way to more theoretical discussions on the dangers of complex financial instruments, the sustainability of credit-driven growth, the role states and regulators should play in steering (or setting free) the economy, and on whether to prioritise tackling public deficits or stimulating demand. The crisis certainly energised debates on financial, fiscal, and monetary policy, and even prompted the comeback of the ideas of classical economists such as Smith, Marx, Keynes, and Hayek (Solomon 2010). In sum, the events of 2008 brought about a growing public interest in economics, both as a subject and as a profession (Fourcade 2009; Gills 2010). Because of the above, debates on economic policy after the crisis often went beyond economics narrowly understood, especially once it became uncontroversial that matters that had hitherto been the almost exclusive remit of economists could not be left solely to experts with bounded rationality (Bryan et al. 2012). Bluntly put, the crisis marked the beginning of the end of the ‘centrist,’ ‘technocratic’ divorce between politics and economics, and of the subordination of the former to the latter.
Around the same period, the most important online social media platforms were in their early days. What are nowadays household names such as YouTube, Twitter, and Facebook were in 2008 only a few years old and growing at full tilt. New forms of producing, consuming, and disseminating knowledge became ever more ubiquitous, which prompted political actors to supply increasingly more accessible and well-targeted content through these channels (Brooks 2012). These new means of communication offered abundant opportunities for individuals and organisations to broadcast their views to a more attentive public. Yet, that public was also more sceptical. The urgent need to make sense of the economy, just after the dominant view of economics had been found ill-prepared to do so, presented threats and opportunities to policy experts and politicians alike (Aupers 2012; Rantanen 2012). In this context, the mission of think tanks—institutions at some middle point between being academic bodies, media commentators, political actors, and lobbying organisations—was to inform the political debate and influence policy. These organisations and their public interventions are the subject of this book, through which I seek to contribute to the sociology of knowledge and expertise.
Why Think Tanks?
This book derives from a doctoral dissertation in sociology, which I undertook because I was curious about how the ideas of those whose job is to produce them change over time, especially after the foundations of their legitimacy have been shaken. My interest in the 2008 crisis was obvious enough, and the centrality of the UK in the global financial system made it a privileged backdrop. I decided to focus on think tanks mainly because of two reasons.
Firstly, because their very business is to propose and promote ideas that have a bearing on politics and policy. For these to find a wide hearing, think tanks need to be seen as credible ‘experts’ by their relevant publics or, in other words, to have some measure of expert (or epistemic) authority. Throughout this book, by expert authority I mean the capacity of an actor to be trusted to possess and produce knowledge which others can responsibly refer to and base their decisions upon (Pierson 1994; Herbst 2003). Traditionally, yet not always, expert authority is linked to being perceived as having some degree of cognitive autonomy, meaning an ideal condition for knowledge production in which pronouncements on a subject are thought to be based on reasoned argument alone. That is, actors are thought to have cognitive autonomy if their statements are perceived to be animated mainly by ‘truth-seeking’ rather than by what is economically, politically, or otherwise expedient. On that line, while some readers might be suspicious of readily applying the word ‘expert’ to think tanks, I do so because their objective is precisely to be seen as such. Thus understood, ‘expertise’ is, before anything else, a type of social relationship (Eyal and Pok 2011).
If ever achieved, the expert authority of a think tank is an unstable accomplishment that depends on its reputation across many audiences that might have very different world views, and which can change over time. That is the second reason behind my interest in these organisations. Their murky character, hovering over the edges of advocacy, academia, economic interests, and politics (Medvetz 2012a), renders think tanks a privileged index of their environment. Their ‘boundary-crossing’ makes think tanks noteworthy artefacts of modern politics, as their relevance depends on a complex bundle of capabilities and resources. Links to academics, journalists, charitable and corporate donors, third sector organisations, civil servants, and politicians can be critical assets for think tanks, shaping their image, fundraising capacities, and research outputs (McNutt and Marchildon 2009). In other words, think-tankers, whose goal is to be seen as politically and intellectually relevant and attract supporters, must learn to garner, use, and dispose of diverse types of resources in a rapidly shifting environment in which the ‘worth’ of these resources is never settled. They need to play several games at once, whose rules might change mid-game, and with the caveat that winning in some might mean losing out in others.
In more practical terms, this book focuses on how four theoretically sampled British think tanks sought to make sense of the economic crisis and convince others of their account of events. These are the New Economics Foundation, the Adam Smith Institute, the National Institute for Economic Affairs, and Policy Exchange. By analysing their publications, their annual accounts, their organisational structure, and their presence in the media, and aided by interviews with current and former members of staff, I trace the process by which they reacted to unfolding events and were transformed by the crisis of a decade ago. I report how think tanks intervened on public debates on economics and fina...