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Economic insight and analysis in the English-speaking media is woeful
One of the unexpected benefits of the global financial crisis is that economics has become much more widely discussed. This is good—modern economic ideas lie behind many of our social and environmental challenges.
To be useful though, any public debate needs to be well-informed. People should understand what economics is for and what it can achieve. Unfortunately, much of the insight offered in the popular English-speaking media and specialist economic press is dreadful.
Readers are encouraged to think that economics is a well-grounded subject, governed by a set of simple, almost self-evident, rules. Growth is the goal. Costs should be minimised and returns maximised. The consumer is “king”. State intervention is bad. Competition is good. The “invisible hand” is in charge.
There is little debate about the role economics played in the financial crisis. If economic growth depends on ever-rising use of resources, it cannot continue indefinitely when these resources are scarce. Cost minimisation has allowed us to ignore the effects of environmental degradation and the fact that our grandchildren will pay more in real terms for raw materials than us. Free trade means that developing countries have been tricked into selling their raw materials on the cheap. The growth of the last 20 years has actually increased income inequality globally when modern-day economists had promised it would do the opposite.
The poor level of discussion about the sources of the west’s economic misery has helped politicians pretend that there is a quick fix to the problems, even five years into the crisis when there is little to suggest that their policies are achieving very much at all.
This means that the citizens of many countries in the western world are not just ill-informed. They are also badly ill-prepared for what is to come.