Cut taxes? No, give handouts. Go for growth? No, fight inflation. Increase debt, curb debt. Raise interest rates, lower them.
Two members until recently of the same cabinet seem at opposite extremes of the economic spectrum. Both studied economics at Oxford. They must have attended similar lectures and read the same books. What’s their problem?
During the financial crash of 2008, the Queen made a rare visit to the London School of Economics. She turned to its professors and asked the question consuming the nation: why did no one see it coming?
The economists were aghast. This was not their job. It was all very complicated. The maths was awry. When they later wrote to the Queen, they confessed to “a failure of the collective imagination of many bright people” and “a psychology of denial”. If the Queen had been a real monarch she would have sacked the lot of them.
We now face a disaster similar to 2008. The causes may be unforeseen – Brexit, Covid and sanctions against Russia – but it is the job of economics to guide policy through such risks and uncertainties. Modelling should be able to handle 13% inflation, a quadrupling of energy prices and a collapse in the public sector jobs market. Economics calls itself a social “science” but its practitioners stand round the ailing economy like medieval doctors, arguing over leeches versus potions.
During the Covid pandemic, university virologists rallied instantly to the UK’s aid. Options were assessed, solutions modelled and tested. When anti-vaxxers and others tried to shut down the accepted science, debate ensued, a consensus formed and policy guidance was evidence-based and clear. Only time will tell how far it was right.
The latest dispute between Rishi Sunak and Liz Truss turns on whether the cost of living crisis is best met with caution and help for the neediest, or by slashing taxes and “going for growth”. Both cannot be right. Truss claims that her “£30bn headroom” makes her tax-cutting plan plausible. This would appear reckless, particularly in view of the Times’s calculation that the figure needs to be nearer £80bn. But there is no evidence offered. Her argument is sustained by rhetoric and cliche.
YouGov may suggest that 64% of the public are for Sunak’s solution of handouts and caution and just 17% for Truss’s, but how can they possibly be informed? A subject critical to every walk of life is now barely taught in schools. The economics I studied at university has become enslaved to mathematics and rendered itself irrelevant. Boris Johnson appears flanked at press conferences unattended by government economists or expert committees. Neither Truss nor Sunak can plead in aid to the social “science”. As in 2008, economics is a profession absent without leave.
Britain’s premiership is being decided not from a shop window of policies and ideologies, but by two politicians from the same party in a primary election in bitter disagreement. Their argument has them flying free, rubbishing each other without their audiences fit to understand a word they are saying. Where is the Queen when we need her?
Simon Jenkins is a Guardian columnist
