The moral science of Economics

I am sometimes on twitter – usually as a viewer rather than contributor – mainly because a year or two after I arrived on it I found myself with access to someone else’s account and tweeting as them as well…

I found twitter schizophrenia was not good for the soul and withdrew for another year or two. Now I’m gently returning as I appear no longer to be somebody else as well as me…

But the return may have been no better for the soul. When I suggested that “Government creates money out of thin air. Taxes prevent inflation. It’s not difficult”, I was taken to task by both the New Economics Foundation and Positive Money!

Of course I’m no economist. But I do begin to wonder when I’m told that “It really – really isn’t that simple…” whether there is not a little self serving pride here. If it is admitted that Economics was understandable by the plebs where would the high priests of economics be?

The economy is, as I’ve tried to explore before, an entirely human construct so why on earth should it be so complicated? Plant biology is complicated because it studies something we do not create. When the economy exists, and is created, so that we, as humans, can better live together then we need all to have a basic understanding of it. The economy otherwise does not have any real consent from the people. Every one of whom are – as Covid-19 is showing us – an essential part of it.

Quite by chance I stumbled on an edition of the, always interesting, Renegade Inc where the head of economics at the University of Bristol, Professor Sarah Smith, and the head of research and schools at ‘Our Economy’, Ali Norrish, were in conversation.

The ‘Our Economy’ idea was set up by Jonah Earle who, whilst at Manchester University co-founded the Rethinking Economics movement.

Although Professor Sarah Smith was trying to be inclusive and lamented the fact that economics was not taught at GCSE level (thank goodness, I thought) I found her pretty unreconstructed; “Economists work in important places”… “Economy seen by most as being about money”. And this last was particularly ironic given my original tweet. Money is either not mentioned in economics at all or is seen as way too complicated to discuss!

If we taught Civics at GCSE we could then discover what we want from our economy rather than thinking we have to know everything we need about the economy in order to understand it.

Apparently it was in 1903 that Cambridge University separated the study of Economics from the study of moral sciences.

Ali Norrish suggested that as she was an English, not an Economics graduate, it was usually a question of language and she was keen to make the economy properly understood.

She didn’t say so, but she should. The economy is actually for the benefit of us all.

Economic ‘science’ has been hijacked by the specialists – academic specialists and – especially – City specialists.

From what we now know of Economics, if science it is, it should certainly remain a distinctly moral one.

Comments

  1. Richard Bond -

    So, if E follows P and P follows P … PPE!

  2. Bill Hughes -

    Where did the New Economics Foundation and Positive Money think that money came from if not from the government or government licensed banks?

    1. Andrew Dickie -

      “Quite! A force of nature, probably, so reinforcing the quasi-religious approach to economics, as in ‘The Wizard of Oz’, allegedly written as a parable about the hidden workings behind the Wall Street and City financial confidence trick.”

    2. Peter May -

      I agree. But I think they were focussing primarily on the fact that I said ‘it wasn’t difficult’. They seemed to imply it was all desperately complicated and something the people shouldn’t bother their little heads about – which is how the misunderstandings and deceptions flourish of course.
      Reminds me of a friend who always used to say things are usually pretty simple – it’s people who make it so complicated!

      Having said that of course I realise that taxing to prevent inflation is not always going to be easy and will usually need careful thought but unless you get the simplicity of the actual system to start with then you’ve fallen at the first hurdle….

  3. Charles Adams -

    Peter, One could argue that economics is complicated because people are complicated. However I would agree with you that there is a tendency to over complicate because this gives a particular group monopoly power.

    Economics is not a science, but we can still try to be scientific which largely means starting from the data.

    1. Peter May -

      Agreed – as long as people agree on the data, and that doesn’t seem always to be the case – that is why I rather favour a what is the economy for? approach (blog coming!)

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