The preference for economic ignorance

Tomorrow's Business

Last week the Financial Times reported on its front page that Britons don’t understand economics.

The paper was quoting from an ONS funded report which found that folk are ok with interest rates and inflation, but find more abstract concepts such as GDP difficult.

Hm, some of us mused, if only the FT were in some sort of position to advance public understanding of the economy.

Maybe that’s a cheap shot; it is writing for an informed audience and takes quite a high level of understanding as read.

But the wider issue is that the economics profession including the press speaks mostly to itself. It’s a little club of “experts” fighting to show off their cleverness rather than explain anything to anyone.

In press conferences, former Bank of England governor Mark Carney used to visibly sigh at the self-aggrandising point scoring he found tiresome (I’m with him).

The commentary from actual economists isn’t a great deal better. They might say that educating the public isn’t their job, and maybe they’d have a point.

But that does leave almost no-one doing it.

I think at a high institutional level there is a resistance to explaining the economy.

If the public at large understood that the national debt isn’t remotely like a credit card, they might be rather resistant to cuts in services.

If they realised that banks can magic money out of thin air, they might want them to do the trick more often.

Henry Ford once said: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Ford preferred widespread ignorance. He is not alone.

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