In my forthcoming book Creative destruction I describe the way that economic policy has been depoliticised since the 1980s. The fatalist perspective associated with Margaret Thatcher’s TINA – ‘there is no alternative’ – applied as much as anywhere to the workings of the market economy. The acceptance of TINA indicated the demise of left-right political contestation for changing and improving society through differently organised economic systems.
Politicians of all stripes embraced this TINA outlook and reduced the scope of economic policy to managing the economy. The primary goal was ensuring stability. Much of this management function was assigned to technocrats, including souped-up regulators, expert-led commissions and central bankers. This outsourcing by politicians of their economic responsibilities to unaccountable bodies and institutions reinforced the conservationist, status quo orientation of economic policy that has proved so damaging to economic performance. Pro-stability measures have tended to stunt the functioning of creative destruction and helped entrench our zombie economy.
Ironically, this depoliticisation of economic policy has gone alongside the elevation of economic ends as the customary way of discussing many contemporary, political issues. This happens even, or perhaps, mostly for matters in which the economy has only limited or indirect relevance. We have the paradox that as economic policy is taken away from politics, politics acquires an economic prism, or is – an ugly word – economicised.
Issues which should be discussed in their own political, intellectual or cultural terms are instead attributed an instrumental economic purpose. For example, the role of education is today most often discussed in its supposed economic effects, and especially its capacity to boost ‘human capital’. Education’s claimed ability to enhance people’s prospects of employment has taken over from its earlier epistemological association with the transfer and development of knowledge.
This economicisation of non-economic issues has been all too evident in the mainstream commentaries first over Brexit, and then with the election of Trump. Right from the start the EU referendum was predominantly discussed from the economic implications of Remain versus Leave, even though only about 5 percent of British GDP is attributable to exports into the Single Market. And it is not as if all, or most, of this would disappear after leaving the Single Market. Just as America, China, Russia and every other non-EU country has access to the EU market – with or without preferential trade agreements – so will a non-EU Britain. And this doesn’t reckon on all the potential opportunities for exporting more to non-EU countries once Britain is outside the protectionist EU Single Market and Customs Union.
Nevertheless, despite the relatively minor economic implications of staying in or exiting the EU, economics was at centre of the mainstream referendum debate. The more essential issues of sovereignty, democratic control of British laws, and cultural developments were demoted in favour of a narrow discussion about how much or how little economic damage would be done by Brexit. And this hasn’t let up since 23 June. Even in the recent parliamentary debate on triggering Article 50 the economy remained central, with most opponents of the Act emphasising a harmful impact on jobs and prosperity.
Following the same economicising fashion, the dominant explanation for the referendum result, as well as for the election of Donald Trump, was attributed to economic considerations. People voted populistically, it is claimed, mainly because of their personal financial and economic positions. The supposed ‘excesses’ of globalisation and technological change have brought economic insecurities to many, triggering these backlashes against the political class.
Yet in both countries there was no straightforward line between economic circumstances and voting patterns. Populism has been growing in some relatively prosperous regions including in Poland, Switzerland, Holland, Denmark, Lombardy and Flanders. Moreover, personal economic insecurity is hardly a new sentiment. It has been building since at least the early 2000s and reinforced by the limited and partial post-2010 recoveries. This continuity of hardship can’t explain populist votes now. Instead, cultural insecurities and the sense of being ignored or patronized were much bigger drivers of anti-establishment voting than people’s economic precariousness. But the framework of economicisation obscures this.
The paradox of the co-existence of the depoliticisation of economic policy with the economicisation of contemporary life is explained by how they are both expressions of the same post-1980s trend of anti-politics. The exhaustion of party politics by the 1980s and their replacement by TINA’s acceptance of the status quo led to the depoliticisation of public life. As a direct consequence most economic policy was removed from the terrain of government politics.
Expressing the same anti-political influence, the ‘neutral’ prism of economics was used to displace people’s deep-felt concerns and avoid having to address them politically. Politics became accountancy. Decisions are to be taken not through debating different competing ideas and values, but on the technical output of a cost-benefit analysis.
Better, for example, to avoid a discussion about academic standards by turning education into being a technical and, presumably, agreeable promoter of employability. Easier, though not very effective as it turned out, to scare people with a deterministic economic threat of leaving the EU than to engage in a debate over the fundamental, contentious, and potentially consequential issues of how democracy is working, of national sovereignty and the cultural unease brought on by decades of multicultural policies. Easier too, to blame the impersonal ‘economic’ forces of globalisation and automation for people’s populist voting than engage with the political and cultural reasons for the huge gulf that has opened up between the comfortable elites and many of their constituents. Economicisation allows elites to evade confronting difficult political issues. And when people vote the ‘wrong’ way – that is not the way the elites want – they can be branded as irrational or stupid or, at best, one-sided for ignoring the real, neutral, incontrovertible economic ‘facts’.
My book motivates an extensive public debate on the radical policy steps needed for substantial economic renewal. Part of this debate should pursue a more discriminatory take on where the economy is relevant to our lives from where it is being used to sublimate other more important discussions. In particular, we should not allow core issues of democracy and popular control to be sidelined by apolitical speculation about economic causes or consequences. Economics does not determine our future. Nor should we go along with it being used to make spurious technical judgments about how we should respond or act in a multitude of non-economic matters.