IAN McAULEY. Reclaiming the ideas of economics

Against all evidence there is a widespread belief that the Coalition is more competent in economic management than Labor. In part this is because it has appropriated the language of economics to suit its own ideological agenda.

For hundreds of years people held the idea that cholera and the black death were caused by a “miasma” in the air, even in the face of accumulating evidence of the workings of person-to-person bacterial infection. Millions were to die because that idea was so hard to dislodge.

In the realm of Australia’s political and economic ideas there is similarly an enduring belief, in defiance of accumulating evidence, that the Liberal Party (or more generally the Coalition), is much more capable of handling the economy than Labor.

It’s a belief not supported by data on Australia’s economic performance, or by the informed views of independent economists. Nor, at first sight, do electors seem to have much faith in the Coalition’s economic priorities when they are polled on economic policies that count in people’s lives. When people are asked which party does better in “looking after the interests of working families”, or “handling the economy in a way that helps you and people like you the most” polling consistently sees Labor well ahead of the Coalition

But when people are asked which party can best handle “the economy” the Coalition dominates. There is some gap between “the economy” as people experience it and “the economy” as some abstract concept. It’s as if “the economy” is some god that must be appeased, even if its behaviour is beyond human ken.

Our common sense may tell us that there is something wrong when, no matter how hard we work, the fruits of our labour are collected by others. We may struggle to find how we have benefited from our electricity suppliers and roads being sold to private investors. We may be puzzled by the contrast between the private affluence of corporate high flyers and the financial struggle faced by teachers, nurses and others who do tangibly useful work. We may not understand why high electricity prices are “bad” while high housing prices are “good”.

It is not for us, mere mortals, to understand these things, however. “The economy” is a god who moves in mysterious ways – ways that can be understood only by the priests in the sacred temples – the Soviet-style buildings on King George Terrace in Canberra and the bankers’ towers in Melbourne and Sydney.

“Trust us” is the paternalistic message from Liberal politicians and their acolytes in Treasury: we know that we must cut taxes and government spending, keep unions suppressed, and sell public assets. You may say you’d prefer better schools and hospitals to a tax cut, but we know better.

And like fundamentalist preachers who warn of unspecified suffering to be endured by those who might stray, they raise fear about the horrors of a Labor government, without ever explaining what those horrors may be.

Orwell, Economics

George Orwell (National Union of Journalists)

In this task one of the Coalition’s main weapons is language – taking everyday terms and ideas and twisting their meanings. The Coalition’s appropriation of language has successfully led Australians to believe in its economic competence. As Orwell pointed out, politicians shape language for their own purpose.

Just as totalitarian communist regimes appropriated terms such as “freedom-loving”, “solidarity” and “comrade”, so too has the Coalition taken terms such as “aspiration” and “individualism”, shaping them to align with their own ideology. Even technical terms such as “economic growth” have come to have ideological normative meaning – “economic growth”, whatever its source, becomes something unquestionably “good”, and every “job”, whatever its pay and conditions, is a good job. There are echoes of Orwell’s Animal Farm when the Coalition talks about debt: government debt “bad”, private debt “good”.

This appropriation of language goes back a long way. In the Australian political arena its most stark manifestation was Menzies’ use of the term “liberal” to describe a party that has always had a bent to authoritarianism and paternalism. But it has become more calculated and refined over recent years, particularly as the Coalition has moved away from articulating a policy platform (John Hewson was the last Coalition leader to try that) and towards employing the dark arts of advertising in the task of impression management – an impression about economic competence, preferably encapsulated in a three-word slogan.

What the Coalition offers doesn’t have to be true or even credible; it simply has to capture one’s uncritical facilities in those critical moments when people cast their votes. It’s the political version of the tactic once used by door-to-door insurance and vacuum-cleaner salesmen.

The bunch of people who make up the Coalition haven’t achieved this on their own. Worldwide many progressives and those who still describe themselves as “left” have abandoned the hard discipline of economics in favour of identity politics, leaving the economic high ground to be occupied by conservatives. (This abandonment of the economic high ground is something my colleague Miriam Lyons and I cover in our work Governomics.) In Australia the Coalition’s task is eased by the fact that it is in contest with a reforming party: a party of reactionary conservatism can appeal to fear and risk-aversion, as the Coalition does when it unashamedly defines its raison d’etreas “to keep Labor out of office”. No need to say anything more; in fact it has nothing more to say.

In this task it is helped immensely by its appropriation of language – using language so appropriated to define public ideas on its preferred terms.

Over the next few weeks I will write a number of short articles for Pearls and Irritations, dealing with one word or phrase at a time, suggesting how these terms can be taken back and used by those who seek to promote a more inclusive, sustainable and just form of economics.

As the Methodist philosopher George Whitefield said, it’s a pity that the devil has all the best tunes. The devil should not be allowed to have all the best language.

Ian McAuley  is a retired lecturer in public finance at the University of Canberra and a Fellow of the Centre for Policy development.

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4 Responses to IAN McAULEY. Reclaiming the ideas of economics

  1. DON OWERS says:

    Last year, international economists awarded William Nordhaus, the “Nobel Memorial Prize in Economics.” (This is not a genuine Nobel prize, but rather an award sponsored by Sweden’s central bank “in Memory of Alfred Nobel.”)
    Nordhaus is not an outright climate denier, he admits that economic growth increases carbon emissions but argues nations should not sacrifice growth to combat climate change. He discouraged carbon emissions reduction because, in his estimation, global heating just doesn’t hurt the world’s economy that much. “Don’t let anyone distract you from the work at hand,” Nordhaus told his students, upon winning the prize, “which is economic growth.”
    In his 2017 paper, just prior to his “Nobel Memorial” prize, Nordhaus claimed — based on his Damage Function — that a 3°C change in average Earth temperature would only reduce global GDP by 2.1%, and that a soaring 6°C change would only slow GDP by 8.5%. Nordhaus considers these economic losses acceptable, concluding that climate action is unnecessary. For this, he won his profession’s highest honor for what could be best described as a suicide note for the world.
    Despite the absurdity of his claim there are few politicians who do not follow his economic advice, and fewer still who would openly question the need for “growth”. They are all aware that Australia’s GHG emissions are increasing and that construction is responsible for 25% of our emissions largely because of the huge use of concrete, steel and energy. The announcement of a new highway or airport is accompanied by reams of banalities praising its economic advantages without a mention of the GHG emissions produced.

  2. Philip Ludington says:

    Thank you Mr McAuley for an incisive article. It is important to explain to the populace the mechanisms of the monumental con job being perpetrated on them in the service of an increasingly greedy, arrogant, selfish and wealthy ruling clique. More please.

  3. Greg Bailey says:

    A very good article, Ian. Terms such as “growth, aspiration, surplus, tax, choice, jobs’ have become mythologized to the extent that they represent deep meanings for the majority of the population, irrespective of the wider implications of each of these words and their implications. Responses to them are emotional rather than rational–”economic rationalism” is certainly an emotional term now, a is “economic management.” Emotional acceptance of these words means individuals do not have to explore their meaning in detail, nor analyse them in an historical or ethical sense.

    Mr. Jobsun Growth would be proud of this heavily charged vocabulary he had developed in conjunction with the main stream media. I look forward to your series of articles.

  4. Philip Carman says:

    At the dark heart of Tory/Liberal economic theory is the justification for selfish exploitation of…just about anything that’s within easy reach. People, land, resources, money, goodwill – you name it, they’ll squander it for gain, but only where that gain can be held as personal, rather trhan shared. Sadly in this country the labor movement has swallowed much of the capitalist/Liberal dogma, and regurgitates it in an effort to be seen as credble, rather than retaining an intent to be seen as empathetic, humane and reasonable and cooperative. Humans thrive when/because they cooperate, but the conventional wisdom now seems to be every man for himself (and his nuclear family) rather than everyman for the human family. The real pity is that are ceasing to thrive because they have lost the sense of cooperate or perish.

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