On BBC Question Time on Thursday there was an exchange between an audience member and a Labour politician – Richard Burgon – that revealed how poor economic literacy deepens the democratic deficit. The audience member, a man who said he earned more than £80,000, rounded on Mr Burgon and called him a liar for claiming that Labour’s manifesto pledge of raising income taxes for those with salaries like his and larger would only affect the top 5% of the population.
Yet Mr Burgon did not lie and the Labour party is right: 95% of workers earn less than £81,000. The man was undeterred, with a heartfelt plea that he was “not even in the top 50%” of earners. In fact, anyone with an annual salary of more than £25,500 would be in the top half of UK wage earners. Plenty of heads nodded along with the questioner’s falsehoods, underlining perhaps the post-truth nature of our times that many consider it better to be sincere than to be correct. The back-and-forth also exposed how mainstream economic stories have been successful in convincing people that there is no alternative to help the country.
This is certainly a bad thing for society, but especially so for one trying to parse a blizzard of election campaign slogans. Yet without having a grasp of the economics, voters are limited in the degree to which they can understand the forces affecting their lives. In 2017 polling for Ecnmy, an economic education charity, found only 4% of the UK population felt the information in the news about the economy was “completely reliable and trustworthy”. That may be why Jeremy Corbyn can shrug off suggestions that Labour’s policies are a “blueprint for bankruptcy” or a “tax blitz”.
The political focus on “the economy” has led to almost all policy being justified in terms of its effect on it. The orthodox economic framing sees people as competitive, selfish individuals who make maximising, rational choices. This is not borne out by the evidence. Humans are collective and cooperative beings who prize equity. Yet we have a system based on individualism rather than collectivism. Outcomes for a rising proportion of the population have either, like average wages, worsened or, in the case of life expectancy, flatlined.
We are in a bleak place. This may be why politicians are falling over themselves to claim that, under them, the state will intervene on the side of the public. A government has the power to intervene decisively to ensure an equitable distribution of opportunities and outcomes. It can legislate for social organisations to help produce a just society. Yet when Mr Corbyn unveiled a plan to make the British state a little bigger than Germany’s, City fund managers retorted that the rich had paid their fair share of tax and that they could flee if Labour ever got into power. This scare tactic aims to reinforce the public’s lack of education about economic matters and persuade them to accept propaganda from vested interests. Politicians play a pivotal role in communicating ideas to the public. But too many prefer to peddle the orthodoxy as an economic necessity rather than as a political choice.
To challenge this requires an appealing alternative. Since 2010, austerity policies have reduced the income of the bottom 40% of the population, with the poorest households down £800 a year. The voters who Boris Johnson is hoping to deliver him to Downing Street have suffered – and will suffer – from his party’s policies. Little wonder Mr Johnson wants to heighten a cultural Brexit division in politics. Economics dominates public debate while being seen as an abstract authority over which people have little control. This has helped fuel post-truth politics, encouraged by politicians who want to exploit the lack of understanding of economics. To create policy in the interests of the public will need politicians who can convincingly rethink – and are unafraid of rethinking – the economic consensus.