Economic awareness needs to take centre stage in politics

Comment

An economist and emeritus fellow of Merton College recently asked in an essay entitled The Austerity Con, ‘How did a policy that makes so little sense to economists come to be seen by so many people as inevitable?’ David Cameron’s ‘long-term economic plan’ was rejected by a number of high-profile economic observers on both sides of the Atlantic, weeks and months prior to the election. These included the likes of Mark Blyth, more prominently Joseph Stiglitz, and, here in Oxford, Simon Wren-Lewis. For a perspective of scale in this condemnation, in March of this year CFM published a poll in which thirty-three prominent economists from various educational and research institutions across the UK were asked to evaluate the economic performance of the coalition. Only 15 per cent commended the performance of the government, while one-third gave it a thumbs down, and a further third “strongly disagreed” with the assessment that the coalition had completed its economic tasks satisfactorily.

Yet Cameron arguably won his majority on the back of an unrivalled reputation on  the management of the economy. How is this possible? For a start, Miliband and the political left have failed hopelessly in this last election to mobilise credible economic arguments in their favour. They’ve laid down and played dead. They have failed to offer any convincing or appealing alternative to the austerity measures proposed by the Tories. Most fatally, they have allowed the “profligacy” label attached to the Labour Party under Brown to continue to go awkwardly unchallenged.

But there are deeper structural problems at work here. The electorate should not need to be spoon-fed and guided in their economic opinions by political leaders (beyond, of course, elements of character and trust to fulfil their commitments). It is always overlooked that economics plays no significant part in the education of students in this country. It is available solely at sixth-form level and above, and even at this stage only as a niche optional choice. The majority of British sixteen-year-olds are going into further & higher education without having grasped basic economic concepts.

This is a bad thing for a number of reasons. It means that the electorate is not as capable as it might be – indeed, perhaps as it should be – of keeping its government economically in check. It needs to resort to the assessments of financial bodies & think-tanks, like the IFS, the IMF and the IEA in order to come to it’s own conclusions. (Indeed, many of these bodies were positive on Cameron. Christine Lagarde of the IMF supported the Conservatives in the “obvious” fact that “what happened in the UK has actually worked.”)

The electorate might also look to the assessments of high-profile economists or media outlets – both of which are highly unreliable and politically motivated sources in themselves. Individual economists have often held dangerously inordinate amounts of power over politics and political decisions. Thatcher famously held up Friedrich Hayek’s Constitution of Liberty and declared of her envisioned Conservative Party, ‘This is what we believe’.

Countries around the world have historically adopted dogmatic, if reformed, variations of Marxist economics. Keynes warned in the 1930s that politicians everywhere found themselves “slaves to some defunct economist.” Economics is not an exact science – but this is a reason to take it more, not less, seriously. A basic level of education in economics increases the ability of each voter to decide upon otherwise impenetrable issues, including the importance of the budget deficit, the funding of the NHS, and the UK’s waining productivity in its financial services sector. It is crucial that these are debated in moral as well as technical terms, and that they are debated inclusively and informatively in the public arena.

It is this writer’s opinion that democracy suffers if the electorate is ill-informed. Asymmetrical information suits politicians and not voters. It provides lee-way for broken promises, and allows governments to dress-up bad records as working policy. A deep educational over-haul needs to happen in this country. We need to take the study of economics more seriously, and see it not simply as a specialisation in further & higher education, but a cornerstone of our education, our politics and our freedom.

 

PHOTO/lendingmemo.com

 

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