Politics is a field where success is judged not on what you know, but what it seems you know. Few are shocked when the façade drops and it is shown what politicians are made of: political advisors, spin, and buzzwords. Zack Goldsmith’s lack of Bollywood knowledge is not too different to the amount politicians actually know about their office. After all, the past two Secretary of States for Justice both have had no experience in the legal sector, nor any qualifications in law. But this political hubris applies particularly in economic policy, for it is here that the mantra ‘perception is reality’ becomes most prescient.

Over the past few years, the Conservatives have been given a free hand to shape the discussion on economic policy. They have managed to construct a narrative that goes against conventional economic thinking quite successfully. Their claims about the budget deficit under the Labour government is a clear case in point. The Conservatives linked the economic crash of 2008 to the overspending of the Labour government at the time. Their strategy could be perhaps symbolised in this clip of Boris Johnson stating that David Cameron was a “broom that is cleaning up the mess left by the Labour government”. Labour did not help themselves when the Chief Secretary to the Treasury left a memo for his predecessor, which said, “there’s no money left”. This, however, was not true, as the crash was purely a result of mismanagement in the banking sector. My history lecturers have particularly been critical of the budget deficit narrative, as it is contrary to historical facts to claim that budget deficits inherently cause market crashes. Regardless, after two election victories, it is clear that their strategy worked. The Conservatives managed to make a lot of political capital out of it and portray Labour as financially incompetent.

The budget deficit narrative became such an economic trope that the interjection of former Bank of England Governor Mervyn King that Labour was not to blame for the crash had little impact on public perception of the party. It became so unquestionable that Labour did not have the intellectual self-confidence to counter their false argument. Miliband’s concession of prioritising cutting the budget deficit in his 2015 Manifesto was practically an admission of defeat to the Conservatives. After the election, Liz Kendall’s acceptance of the budget narrative in her leadership bid was demonstrative of how entrenched it has become in British politics. It does not seem to matter either that the Conservatives are hardly doing better at it. They recently passed a law that binds future governments to maintain a budget surplus when the economy is growing. This law has no practical value, as any future government can remove it from the constitution. But its value is not practical: it’s theatrical.  

The act extends beyond the budget deficit narrative: it is within the intrinsic nature of policymakers. Debates on policy have been littered with phrases like ‘long term economic plan’, which have little, or no, meaning. As one commentator said, “This isn’t a plan, it’s words plucked from the air”. ‘GDP growth’ is another hot phrase that is thrown around with little understanding. It is commonly associated with better living standards. This causation is based on the assumption that greater production of goods would mean that there would be more income for British residents. And then there is the added assumption that such income generated would actually distributed. These assumptions may be right but are currently being challenged by commentators. However, the nuances are lost to the voter who is swayed more by rhetoric than effective critique of policies.

On other occasions, the government literally lower the bar for success, such as their redefinition of child poverty which reduced the numbers of those within that category.  It does not help that economics as a discipline is rendered inaccessible for most people because of the overcomplicated vocabulary it uses. The prominence of Oxbridge education amongst the political elite does not do much to salvage the situation. Oxbridge students are socially conditioned to pose as experts on subjects after only a week’s worth of studying. Thus it is not that surprising that these attitudes diffuse into British politics. But it means that a Chancellor of Exchequer with a history degree can get away with his policies by choosing his words wisely rather than actually knowing any economics. (That I am myself a history student probably supplements that fact as well).

But, of course, politicians are not the only culprits here. The same culture can be found within the Bank of England. It is a worrying sign that the most read book in the library of the Bank of England is an A-level textbook by Alain Anderton. One would hope that those operating the levers of power would be well-read in the subject beyond secondary school. There are differences between the Bank of England and the government in how they operate. Some facets of the Bank of England, most specifically the setting of the interest rates, would be better described as a poker game. The governorship of Mark Carney seen a pattern of him bluffing to raise the interest rates and then subsequently backing off when the market puts enough pressure on the pound for Carney to retract his statement. At the moment, Carney is playing it safe by ruling out any indication of increasing interest rates. This is why for the past two years the Bank of England has not changed interest rates at all. Of course there may genuine economics behind Carney’s decisions (though that may not say much as it is based on unrealistic models and applications of econometrics). But it ultimately operates as a bluffing game where success is determined by who blinks first.

Economic policy is the main platform governments are judged on, but it is a faulty one. It is a platform that is stabilised by the public’s indifference and ignorance, a platform that relies on good storytelling than actual economic policies. There needs to be a revaluation on how economic policy is assessed and understanding who frames the conditions of success. Otherwise we risk our economy being run by economic actors in the truest sense.