The Afterword

Musings on the byways of popular culture

Menu

Navigation

You are here: Home / Forum / How much do you know about ecomonics?

How much do you know about ecomonics?

by 111 Comments

Being a poncey arts graduate I know absolutely nothing. I tend to assume that people in charge of things do, mostly so that they can use that knowledge to shaft the rest of us. But no, public life is full of people pontificating about economics at a pub-bore/do-your-research level who are only really experts in pushing a certain agenda.

We had a Prime Minister for six years in David Cameron (allegedly a graduate in Politics, Philosophy and Ecomonics from “The Greatest Unbiversity In The World” ©) who did not know the difference between the national debt and the structural deficit. I very much doubt the two blonde PMs could either.

According to a new report, the reporting of economics is part of the problem. This stood out for me:

Confronted by a complex situation, with a limited understanding of the issues involved, one respondent to the review suggests that reporters rely on simplistic political narratives – party intrigue, or Westminster gossip; meanwhile, assumed authorities are deferred to for the actual economics.

This rings a bell. How much reporting of politics is about anything other than personalities and factions, essentially a soap opera with uglier characters?

And how much do you know about economics? Genuine question!

I am not interested in this because Laura Kuenssberg comes out of it badly*, but it makes you wish for the good old days of Peter O’Hanra Hanrahan.

https://www.theguardian.com/commentisfree/2023/jan/31/bad-economics-bbc-tory-austerity-uk-politics

0

Comments

  4. More than I used to. I applied to do PPE at Oxford – would probably have been a near contemporary of the Piers Gaveston member, but I didn’t, as they say, have the maths. Even having done it at A-level, I feel at the first hurdle presented with a supply and demand curve in the college interview. I went on to do just P&P at Southampton. Great fun it was too, and probably less pressure, though also fewer opportunities to behave like a Brideshead twat.

    I’m rambling. The long and the short of it is, I didn’t study economics, and managed without it for most of my life. But, probably since I moved to Germany and had to teach business English to Deutsche Telekom and DHL staff, it’s figured more in my life. Firstly through presenting students with podcasts from the Economist and articles from the FT, then from trying to understand why the global financial system almost collapsed in 2008, what to think about austerity, and then why Brexit was such a stupid idea – all questions with a strong economics element.

    I have a shelf of books about economics that either attempt to explain it or present narratives about it and actors within it – Freakonomics, The Greed Merchants, Poor Economics, The Spirit Level, The Super Rich Shall Inherit The Earth, The Almighty Dollar, The Undercover Economist, Postcapitalism, The Value of Everything, Doughnut Economics, and Slow Down. Some of these I have even read.

    As I mentioned on a previous thread, podcasts by Economics Professors, Mark Blyth and David McWilliams are a regular listen for me, and give clear-eyed independent views on macroeconomics, which I find fascinating. Microeconomics is an area I have not ventured into at all.

    I wouldn’t say all this reading and listening makes me anywhere near an expert on economics, but it does help me understand the finance/business section of the news within a wider framework. What I like as well is that there are a lot of good convincing arguments against the neo-liberal consensus that has squatted over UK and US economies since the early 80s, justifying the consistent extraction of wealth from societies, at the same time as pushing the foot to the floor in pursuit of unsustainable growth.

    Was that TMI?

  5. Did it for A level and lots more as part of my degree. Generally I found it quite interesting. One of my ever growing list of retirement projects is to brush it up actually as it’s always in the news these days once way or the other

    • This is my experience. Did A levels alongside the advent of the first Thatcher government’s wholesale adoption of monetarism, which had the effect of sweeping all the accepted post-war Keynesian principles aside. Continued with economics as an element of my first (Humanities) degree in the early 80s. I’ve retained enough knowledge to follow some if not all of the economic aspects in current affairs reporting.

  6. It was one module of my Engineering degree 33 years ago, I can’t remember if it was 10 weeks or 30. I still have a book – possibly unopened – on the shelf. And yet, I still know more than Thick Lizzy.

  7. Pretty much nothing, beyond reading a couple of John Lanchester books. at a macro level there seems to be little agreement on what ‘good’ economics looks like leading me to suspect, even I lack any authority to do so, that a lot of it is kite flying theory that only works in its own bubble.

  8. About 20 years ago my job involved explaining what was happening with people’s pension funds. The fund managers employ in-house economists who assist the fund manager and also explain to bigger investors (as well as the media) what is going on. So I’d use their written material and sometimes give them a call if there was something in particular. I did this for 12 years.

    If there was a huge downturn, like the Global Financial Crisis of 2008, I have to make it my business to understand it to the best of my ability because soon I will be on a factory floor, or in a meeting room explaining to people why their pension funds have gone down. At the beginning of one such meeting, I was asked if I’d like a drink of water or a cup of tea. “Enjoy it – it’ll be probably be your last!” he said.

    These meetings used to terrify me but I ended up enjoying them. The reason why I stopped doing that job was that my then employer (a bank) was pressurising me to bring colleagues along to flog credit cards or personal loans. I saw this as inappropriate because the whole point of saving money for the future is to get yourself into a better position and if you can reduce your reliance on debt, then that’s even better. As you can imagine – a bank needs people to lend money to, so this concern fell on deaf ears.

    I’m glad I’m not doing that now. Even back then a meeting could be hijacked by someone who chuckles knowingly and says modestly “you could say I know a thing or two about economics and how the world really works”. This would then involve him telling everyone to pull their money out of the company scheme and invest in certain shares, property, gold or reversible trouser bonds. “HE isn’t allowed to tell you about this stuff…but I can say what I like!”.

    These intended derailments hardly achieved anything because the men (always men) who did this had established themselves as the office prat already and the majority weren’t interested in his latest reckons. Nowadays such people have a vast network of dark-webbed supporters to fluff them up when faced with the inevitable disinterest from the sheeple.

    So – on a good day I can explain to people what has happened and why their funds in their employer’s pension scheme went up or down. What I am not able to do is predict what will happen in the future. I will never be drawn on what interest rates are going to be next year or what’s going to happen to house prices. I am happy to quote an an economist (and will have that to hand) but personally, I don’t know.

    The Liz Truss debacle is interesting because it does show us in real time how sensitive our economic system is. As a politician, you don’t even touch it with a bargepole because of the mayhem that can follow. So is it fit for purpose? Presently, corporates can thrive while inflicting hardship on their customers and there is seemingly nothing that can be done because That’s the System. This is the tail wagging the dog.

  10. Another C at A Level here.

    Typically, as soon as I handed my papers in my mind erased itself. I was never really interested so dismissed it.

    I can recall Demand Curves. And Supply. Something about ‘Giffen’ goods aswell.

    I’m not very good at Hard Sums either.

  11. A very long time ago I did an ONC and HNC in Business Studies which involved quite a lot of economics, most of which I have forgotten.
    What I do remember is regularly being told when given an assignment that there was no right or wrong answer but that you had to back up your argument.
    I was also told that you could make up your sources because no-one ever checked.

  12. I know, because Laure Kuenssberg told us, that you should compare government spending to a household budget. The bit I don’t understand is the household budget equivalent of quantitative easing.

  13. I do know that when the shit hits the fan the non-interventionist small government right-wingers invariably resort to a Keynesian approach and intervene, pump money into the economy, saving the banks, as did George W Bush since they were too big to fail, as the book on the crash is entitled. Ideology only goes so far.

  14. The Freakenomics books are good – as long as you can get past the Ivy League feel of the whole thing.

    The section on abortion laws in New York State was an education for me. The book establishes a link between accessible abortions via Roe vs Wade and a dramatic dip in crime in young people 16 or so years later. An unpalatable connection perhaps but when then Mayor Guilani claimed the decrease was down to his recent zero-tolerance policing approach, he very much enjoyed the widespread international acclaim – in the absence of any other information.

    The unpalatable part of it is that there were less unwanted children growing up and this in turn meant less vulnerable young people for the gangs to attract. No politician would argue this as a benefit of accessible abortions – and they still don’t, particularly in the US.

  15. I’ve never studied Economics but I think I have a fairly basic grasp of the simple concepts – supply and demand etc etc.

    That said, I still get confused with a lot of what’s reported and why they are doing this, that and the other. I guess my problem is that I try and relate it all the my personal finance – I have this amount of money and so this is what I can spend etc etc. Even after doing (simple) finance courses at work through my career (I was an engineer who ended up in management) I still struggled with how it all worked at a corporate level – e.g the company was run in debt which was okay as long as they could pay the interest and the markets were seeing revenue growth etc etc.

    The big one that I still struggle to understand is after the financial crisis in 2008 when the government bailed out RBS by buying up their stock. I understand why they did it and that it was the right thing to do, but surely if they bought all that stock when the company was on the verge of bankruptcy (i.e. very low stock price), surely when it all recovered they should have made an absolute fortune ?

    I did read this book by the Bank Of England on the plane back last year – easy to read and I did understand as I was reading (just that i cannot remember any of it now!)…..

  17. The thing i find confusing about Economics is how even basic Laws like Supply and Demand don’t always make sense.

    The fact that there continues to be a supply of Liz Truss which not even the most rabid blue rinse Tory now demands is an excellent example.

    • Another vote for that above. Half a degree for me but still very good indeed. The Freakonomics books are great too as are Harford other books.
      V interesting subject.

  19. I did a degree in French and German. One of the books we studied in the second year was “Du contrat social, ou Principes du droit politique” by Descartes.
    As background reading for this, we were actually supposed to read some economic theory. The book in question was “Man and Society volume 1” by John Plamenatz. Does anyone know it? Anyway, it completely lost me. I’ve very glad I didn’t attempt an Economics degree.

  20. I got a grade B for A level economics and won the school prize as nobody got an A – which I think said something about the teacher. Dropped it for a combination of history/politics/lit at uni, which I’ve felt did me no good at all career-wise, and if doing it all again would likely focus on economics.

    One strong perception I’ve developed over the years is that tax cuts are much more likely to boost a national economy if they’re focused on people at the bottom of the income ladder as they are much more likely to spend the extra money. Give them to people at the top and they’re more likely to hoard it or spend/invest overseas. I just don’t believe the line about helping multi-millionaires to become even richer being good for all of us.

  21. By happy coincidence, I showed the clip in the OP to my kids on Friday, whereupon it was met with much rejoicing.

    In answer to the OP’s question, I’m currently Chancellor of the Exchequer, so…. not much.

  22. I did a degree in it, having taken both the A level and O level. I was more interested in sociology at the time but despite going to a poncey grammar school, (or possibly because) it was economics or something like latin.

    I chose a course that was modular, which had the benefit that it had breadth that courses more concentrated on classical theory didn’t. So although that meant doing a year of accounting & finance (joke about double entry booking to follow) and quite a lot of maths, I was able to balance this with modules on marketing, business organisation (a career in HR beckoned) as well as microeconomics (how economics impacts individuals, single companies) and macroeconomics (how economics impacts whole countries, global markets etc).

    My recall of what I was taught is patchy, and was taught before Thatcherism and her monetarist ideology became the clarion call for the right wing, worshiped to this day by Truss et al. It would be interesting to see how the global financial collapse and the writing of people like Tim Harford, Levitt’s Freakeconomics etc have been integrated into teaching.

    It’s increasingly difficult to separate economics from politics. Both the US and the UK have had extensive periods of monetarist led economic polices that espouse tax reductions as the way you promote growth. Even back in 1980 when I first came across this it seemed like a thinly veiled excuse for holding on to more money at the expense of society more widely, and so it has proven, with the “trickle down” benefits somewhat akin to having someone piss down your leg and tell you it’s the rain that will nourish the crops that have already failed. Sadly it’s also like herpes which means once you’ve had it, it will be the devils job to make it go away. I’m a Keynes fanboi to this day in case I’d left any room for doubt.

  23. I win! I’ve got a degree in economics!

    But it was forty years ago, and the world and economic theory have both changed in that time, so I’m not going to claim any great expertise. I don’t think you have to read The General Theory of Employment or Capital to understand what Keynes or Marx were on about, and some of the books mentioned here will summarise them and others well. Duncan Weldon’s book Two Hundred Years of Muddling Through is a good introduction to both theory and how it worked out, or didn’t, in practice in the UK.

    In answer to the original post, I think there is a strand of political coverage which reduces it to character and speculation about who’s going up and who’s going down. This seems to have got worse since about the eighties with more media space to fill, and journalists chatting to other journalists, and also the news as a source of entertainment on panel shows and comedy. Ian Hislop and Armando Iannucci both complain about the cynicism about politics– how much of their own TV work has promoted the idea that all politicians are the same, and has led to this atmosphere?

    But there is another side, with the kind of analysis which Ros Atkins gives on the BBC News Channel or David Aaronovitch’s Briefing Room on Radio 4, or the FullFact website. All go beyond personality politics.

    If the question is how David Cameron knew so little about economics despite his degree, a book by James Ball and Andrew Greenaway called Bluffocracy explains some of this. They are both PPE graduates themselves, and point out that after the first term most students drop economics as too difficult and stick to the essay writing of the PP. This is part of their broader criticism of British government, politicians, and senior civil servants, in that it promotes the idea that what you need at the top is someone who has developed analytical and critical thinking from studying arts subjects, which means they can go from job to job without any deep understanding of anything. A fairly widespread snobbery that still exists against anyone studying STEM subjects.

  24. I have an Honors degree in economics with a politics major. Then after a bout of teaching spent 30 years at the Stock Exchange so I know a fair bit, certainly enough to read and understand the articles in the Economist.
    Here’s a joke. 3 people are marooned on a desert isle and a can of baked beans washes up.
    The labourer says lets bash it open with a rock.
    The scientist says lets soak the rim in saltwater til it rusts.
    The economists says “ now assume you have a can opener”.

  25. I’m a scientist, me. We were invited to do some economics in the first year, with a bloke giving one lecture a week to help give us some insight, I suppose, into the likeliness of ever being able to secure grant funding for our research, should we be dedicated enough to ever get to that position. I can’t think of another reason why we were offered such a dull though frankly quite imaginative series of lectures that seemed to consist mostly of explaining to us a process of guesswork. I recall I lasted for about six weeks until the pull of an extra hour’s table footy in the Union bar just became too strong to resist.

  26. What do I actually know about economics? Not much at all, really.

    I’ve read a few books on the subject, and I’ve generally tried to read from opposing views/orthodoxies, rather than just swallowing whole someone else’s dogma. But it’s quite apparent to me that dipping a toe in the water doesn’t really cut it for this subject. It’s fun to express opinions on it, but that’s all it really is – a bit of fun, rather than actual insight.

    Over the last few years, there have been a few occasions where I’ve chanced upon Internet discussion of some of the comparatively few (non-economics) areas in which I am relatively expert, or of which I had at the time insider knowledge. Stories that made the news, got a lot of attention on reddit and/or, extremely occasionally, cropped up on here.

    Almost without fail, those experiences taught me that the loudest and most confident voices are generally well wide of the mark, and even the more considered opinions are materially off target. Invariably, there were either factors that went completely unconsidered, or background information to which the public was not privy, thereby rendering external analysis fundamentally flawed. In all cases, people appeared to be lead mainly by what they wanted to believe.

    These experiences are actually kind of sobering when considering one’s own “insights” on most of the things we speak about in the public realm. No matter how bright we are, no matter how erudite our arguments, we’re generally arguing passionately from a position of comparative ignorance.

    That doesn’t mean it’s not worth having the arguments, but it is a thought worth keeping at the back of your head. Sometimes it takes a modicum of education/information to arrive at the stupidest possible conclusions, because you need that false sense of intellectual security to generate the necessary certainty.

    If am quite certain that if someone with real knowledge of economics surveyed pretty much anything I’ve ever said on the subject they would find my opinions wanting. That’s the politest way I can put it.

    Confucius say: “Real knowledge is to know the extent of one’s own ignorance”. Or was it Socrates?

    So: what do I know about economics?

  27. I’ve always wondered if I suffer from some form of numerical dyslexia. My dad manfully tried to help me with maths including private tuition. It just didn’t make sense or stick. Times tables were OK but if someone asked me what 9 x 8 was I would have to really think about it and probably go 10 x 8 is 80. 80 – 8 is 72. I wish you could see the look on my face trying to do that now. Like Deram on hearing Hold Me Now.

    So I know fuck all about economics. Making sure my household budget has more in than out is the extent of my fiscal knowledge and from what I’ve been told before managing the UK budget doesn’t work like that. This thread has been very useful…

  28. I studied health economics at postgraduate level 10+ years ago. I come from a pharmacy background and thought this would add to my career opportunities in my later career which it has.

    The one thing I found most irritating was the concept the the health economist would only ever advise and never make a decision/recommendation.

  29. When I did labour economics in year 4 of my degree the first thing our lecturer said was “The first thing to understand is no one knows anything. It’s all guesswork”.

  30. I remember an economist writing immediately after the tragic Christchurch earthquake in 2011. He said that petrol prices in the region need to be doubled and fuel supplies rationed so that people can’t panic buy and leave the area. He had graphs and everything. Oh FFS.

    When I challenged him on how, practically, this would be done…he argued that most people would agree with the move once they had taken in his argument. If you can visualise your house destroyed in a city of rubble with several aftershocks a day – you will steal petrol to get out of there. Fair to say that your overall state of mind isn’t conducive to taking in a presentation from an economist. He acknowledged that, politically, it would be a difficult thing to do – but he asserted that he was right.

Leave a Reply