How to understand economics and change politics
"95% of economics is common sense, but is made to look difficult with jargon and mathematics" - economist Ha-Joon Chang.
Can citizens be economists? This was the question posed at the launch of the RSA’s Citizens’ Economic Council earlier this month. But it should not be a question of ‘can’– democracy demands that they must.
Citizens need at the very least a foundational knowledge of economic principles and a grasp of different theoretical approaches in order to see promises made by politicians in their full context and to ensure that the democratic decisions they make are not driven solely by emotion, resentment or frustration.
The recent EU referendum in the UK and the current rise of Donald Trump in the US are just two examples of how debates around extremely important issues such as immigration and international trade are being brutally simplified into superficial slogans and promises – the Brexit campaign’s £350m NHS claim exemplifying the point exactly.
You’d be surprised by the number of Members of Parliament who don’t feel able to take part as much in debates on economic issues...
Of course, emotion will always play a part wherever you sit on the political spectrum but it should not be the only part of the decision-making process. Speaking at the RSA, Labour MP and former shadow chief secretary to the Treasury Seema Malhotra said: “With a little bit more information, and it doesn’t always have to be much, you can shift a conversation from being very superficial to one being much more advanced and I believe that is vital to us holding politicians to account effectively.”
She continued: “You’d be surprised by the number of Members of Parliament who don’t feel able to take part as much in debates on economic issues because they don’t feel as equipped themselves to be able to argue what might be better or worse for their own constituencies.”
Discussions on economics – including in which areas public money should be invested, with which countries we do trade deals with and in what areas should cuts be made – should not only be open to those that decided to study politics, philosophy and economics (PPE) at a redbrick university.
Economist Ha-Joon Chang is among those committed to dispelling “this widespread perception that economics is too complicated for non-economists”. He says: “95% of economics is common sense, but is made to look difficult with jargon and mathematics.” The Citizen’s Economic Council is supported by the Barrow Cadbury Trust and the Friends Provident Foundation, and will be made up of between 50 and 60 citizens all randomly selected by the RSA on the basis of their demographic characteristics. Over the next 18 months the Council will launch an online economics course accessible to all and will travel across the UK as part of an ‘inclusion roadshow’ that will bring debate and discussion on economic issues to ‘hard to reach communities’.
Matthew Taylor, CEO of the RSA, said: “The Council will promote improved economic awareness and literacy in citizens, rebuild public trust in decision-makers and their institutions, and renew public discourse – directly confronting the disempowerment and disengagement of citizens in the debate about economics by connecting them directly to policymakers and economists.”
The Citizens’ Economic Council is an important step towards promoting widespread understanding of economic issues – but for a shift to take place on a national scale, further fundamental changes need to be made including the way in which Westminster communicates economic issues to the public and in the way schools teach economic issues.
Paul Johnson, director of the Institute for Fiscal Studies concludes: "Economics and economic policy matters enormously to all of us whether we like it or not. The more we all understand it the better democracy we will have and the better policies politicians will enact."
Photo credit: Bryan Alexander