The economy is to a large extent uncontrollable and unpredictable. It is ultimately ruled by market forces – production and consumption, credit and confidence. We can only have so much sway, whether we’re economists, politicians, or members of the ‘unenlightened’ public. Discussing the governance of economic change is a good way to get a handle on our relatively uncertain economic reality.

The question of politicians versus economists has been the subject of much discussion and dispute in recent years. The financial crisis and recession have seen countless grey suits boldly stepping up to solve our problems, offering all the solutions and delivering few.

Gordon Brown is a good example. Vaunted as possessing the economic expertise to sort out the crisis which began while he was in office, Brown allegedly combined political nous with financial savvy. Yet, despite his economic know-how, we are no closer to significantly influencing (or even properly understanding) our current financial predicament. Between 1999 and 2002, Brown decided to sell off 60 per cent of the UK’s gold reserves with the intention of lowering the portfolio risk of national reserves by diversifying away from gold. He failed to predict a significant upturn in the market trend, and the gold that yielded about $3.5 billion when sold in the early 2000s was reaching a value of $19 billion less than a decade later. This judgement has been much criticised by technocrats, and has contributed to a widespread lack of popular confidence in the economic aptitude of those in control.    

So, surely economists should be calling the shots? Admittedly, academic economists know what they’re dealing with – most likely more than anyone else. Informed individuals can effect positive economic development, as the recent posting of Britain’s fastest growth since 2007 under Mark Carney’s leadership of the Bank of England attests. Supported by his Canadian reputation as an economic wizard, his ongoing boosting of growth forecasts has apparently set the UK on the path to economic recovery. Economists’ in-depth knowledge and subject expertise is unparalleled, and their understanding of the evolutionary process of economics and financial motivation does, in theory, make them the best people to be in the driving seat. On top of this, it’s not exactly difficult to find examples of politicians making a mess of things economically. Politicians seem to repeatedly demonstrate that they do not have the right tools for the job. Economists, on the other hand, know their trade. 

The debate is not as clear cut as it might seem, however. We need to distinguish between the expertise needed for academic economic theorising, and the skills necessary for determining economic policy in a position of national authority. By definition, those who govern hold power, and understanding and effectively commanding that power needs to be the bottom line.

Is the nature of the academic world really compatible with power? Economists attempt to understand the world through carefully conceived economic models, models which they are typically unwilling to abandon at the drop of a hat. If we were to put them in charge of determining government policy, we would be placing in control an increasingly narrow intellectual strand of people, poorly equipped to respond to the rapid change and fluctuation of public expectation and demands. Governing economic policy, when it comes down to it, is more about managing power than technical expertise. Academic economists are slow to respond and to adapt their theories, and struggle with the need for compromise in high-pressure situations of national governance. They don’t understand power and, what’s more, they don’t want to. When all is said and done, technocrats are simply not the answer.

Politicians, on the other hand, are pragmatists. Look at Germany: Merkel is a prime example. Her actions during the 2008 liquidity crisis saw economic policy serving the needs of a political manoeuvre. While her decisions were arguably not the best economically, this case demonstrates the frequent need for political flexibility to govern economic policy. In a world of sudden and rapidly developing financial crises, the ideal financial outcome must sometimes be sacrificed on the altar of political pragmatism. Closer to home, Osborne’s actions are, for better or for worse, emblematic of adaptability and compromise when dealing with economic policy. His recent (and regrettable) redirection of spending cuts from Whitehall to welfare demonstrates the reality of economy and political unity.  

The failings and resultant unpopularity of politicians are no secret, but, ironically, this is at the source of their suitability. Politics is about trialling solutions to complex national problems, inevitably failing and dealing with the unintended, if often unpredictable, consequences. If there’s one thing politicians can do, it’s to deal with these failures. To use an example given by Cambridge political scientist David Runciman, both soldiers and politicians involved in military decision-making make errors and poor choices. The difference is that when it goes wrong for politicians, they can be voted out. They exist for the responsibility and blame to be placed on them, and by virtue of this, are best suited to all areas of governance.

Those who govern the economy must strike a balance between technical expertise and pragmatic leadership, but most importantly, they must be adaptable. They must not be afraid to try and fail, and try again. In reality, we do not have the luxury of delineating between political and economic leadership. They are inseparable in the game of government. An attempt to direct the national economy from an isolated, academic sphere without reference to the rest of government would be a failure to recognise their fundamentally interrelated nature.