Economics must not be left to economists

Mervyn King, the governor of the Bank of England, has stated that he would like to see economics become boring again. Although his instinct is understandable it is profoundly mistaken.

It is easy to look back with nostalgia at those halcyon days – just a few weeks ago – when stockmarkets seemed to go up most of the time. No doubt everyone in the investment industry, except perhaps short sellers, is yearning for such happy times to return.

But King’s oft-repeated desire for economics to be boring means something different. What he is really saying is that economics should be left to clever chaps like himself. It should not be the subject of debate by the mass of the population. In other words, he is saying economics should be apolitical. In his view the masses cannot be trusted.

Leave aside for a moment the fact that such a conception of economics is undemocratic. That it disenfranchises the mass of the population and leaves important decisions in the hands of unelected technocrats such as King. It is also the wrong approach to economic decision-making.

Although Britain has its particular institutional structures, the same argument applies worldwide. Economics should be taken out of the hands of the technocrats and once again become a subject for popular debate.

What is needed now more than ever is a debate about how to deal with economic problems. It is necessary to discuss how to respond to recent volatility in the short term. Over the longer term it is also vital to work out strategic priorities.

The truth is best achieved through rational debate. Each side can put its case and the one which is right should be the most convincing.

Such a procedure also ensures that the right questions are asked. Technocrats tend to get too bogged down in technical detail. They easily lose sight of the bigger picture. Having a broader debate among the public ensures that questions that are important to most, such as raising popular prosperity, receive a proper airing.

A good first step would be to abolish the independence of the Bank of England. New Labour’s move to make it independent in the first place was always anti-democratic. Now the downside of taking politics out of economics should also be apparent.