Opinion, Politics

Opinion: Why we need to understand the ‘nonsense’ of economics

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By Ben Townsend

After a few drinks last Christmas, I entered into the annual “festive fracas”, an obligatory political stand-off at the dinner table that often blurs the line between diplomatic and grossly offensive. My foggy memory recalls tackling issues with a friend of the family such as untrustworthy newspapers, authoritarian television licenses, and costly broadband packages.

The argument was eventually killed off after we realised that the booze was talking for us, yet, with the topic of finance a backbone to our disputes, my opponent concluded with a comment that I felt encapsulated a much wider issue.

“The economy needs reform, I don’t understand it at all. It’s just complicated, metaphysical nonsense.”

While it arguably makes little sense to advocate the reform of something you don’t quite understand, the point was pertinent. Economics is not accessible to the average person. It’s an opaque subject, seemingly alienated from the vast majority of us, only the hobby of the elite, rich or highly intellectual. However, this could not be further from the truth.

The thing is, economics has always been ‘nonsense’. Ever since traders moved on from swapping bread for fish, currency has taken the loose form of an idea, a promise or the promise of a promise (etc.). Any economic system, whether capitalist or not, physical or electronic, requires a society that signs itself off to the idea of currency, one that is mutually assured. In recent times, this concept has simply become more complex, with the internet and computer technology taking a firm hold.

It doesn’t take much prompting to bring a certain subject to mind when talking about 2008 — the financial crisis rocked the western world. Such tragedies occur due to the nonsense of the system being played by irresponsible hands. Once the fragile web of mutual trust disappears, so do vast swathes of economic stability. At the time, hardly anyone saw the crash coming, but now the warning signs are identifiable and economic insight is available to anybody, if they know how to find or use it. Tragically, most don’t.

Shouldn’t it be important to understand why Trump and China are constantly at odds? Or why the European Union was both a good and bad idea for the UK? What about how various oil and arms deals are dictating who moves where on the world chessboard, or how globalisation is fuelling far-right agendas across the continent? Economics is a monolithic subject that requires respect and careful attention. It’s all well and good reading the news, but to know why these events are happening, and perhaps how to prevent them in the future, would be far more beneficial for our society.

It’s a well-worn argument, but schools should be (or be allowed to be) brave enough to wrestle with more relevant subjects, rather than the actual nonsense that constitutes the current mathematics curriculum in the UK. Not, perhaps, converting pupils into banking oligarchs or Wall Street wolves, but just giving them a basic understanding of economic principles, and subsequently, how those, in reality, affect all our lives. It’s certainly something I wish I had early experience with – perhaps then I wouldn’t have failed the subject as dramatically as I did…

Economics can finally be studied after school, around the mature age of 16. Even then, neither popular culture nor the media support an interest in it; the economy comes across to most as less exciting than a dusty pile of charts and figures, or the greying eyes of an elderly, pin-striped man staring at his Financial Times on the tube. If theoretical physics can be made accessible (as it has of late), explained with simplistic, narrative flair, making faces such as Brian Cox and Stephen Hawking household favourites, then so can the exciting world of international trade.

It amazes me that there are no popular apps, guides, figures or organisations that promote a basic knowledge of the subject. Somehow, despite the surge of interest in niche academic studies and ‘smart thinking’, economics has been sidelined, despite the fact that it essentially dictates how this world rotates.

However, there are some exceptions. The book The Almighty Dollar, by Darshini David, one that I just finished reading, achieves the goal of popularising this subject with style. Picking it up, I was drawn in by the premise — that by following the journey of a single dollar around the planet, you can (almost) explain how the world economy functions in a nutshell. It’s an exciting, well-informed and easy to understand read, highly recommended.

More books like this are now slowly beginning to crop up. The Big Short, a brilliant film (adapted from a book by Michael Lewis) based on the true story of savvy investors who made bags of money out of the financial crisis, also explained the associated economic concepts in simple, amusing terms. We need more of it.

It’s true, our current economic system needs reform. It has expanded far too quickly, ripping apart the inequality gap and playing a dangerous gamble with our future at the same time. Many economists predict another imminent financial crisis if we don’t start watching our backs. This time, the effects could be global. However, to implement change, or at least protect ourselves from the next market bubble to burst, we need to understand the economy first. Perhaps then we can argue against it from across the dinner table next Christmas.

About the author / 

Ben Townsend

Don't panic.

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