The language of deception
How politicians use econobabble to cloud public debate
Before taking on the role of “managing the Australian economy”, Malcolm Turnbull was a lawyer. Tony Abbott dabbled in journalism and the priesthood, Ben Chifley was an engine driver and John Howard was a suburban solicitor. Paul Keating managed a rock band. You have to be a lawyer to become attorney-general, but you don’t have to be an economist to be the prime minister. Indeed, you don’t even have to be an economist to be the treasurer.
Although most politicians have no training in economics, and sometimes lack even the most superficial knowledge of how the Australian economy works, they are often highly skilled in using economic language to bamboozle or silence the public. They use words like productivity when they mean profit. They say things like “The economy is overheated” when they mean “The wages of low-paid workers are growing faster than I think they should.” Words matter.
Economics is far more complicated than political slogans such as “Repay the debt” suggest. Questions such as “Should we have a deficit or shouldn’t we?” don’t have a simple answer. And economics is far less capable of predicting the future than the politicians and bureaucrats who spend mountains of taxpayers’ money on flawed “forecasts” would care to admit.
Catholic priests used to say mass in Latin, knowing full well that their mostly uneducated audiences had little idea what was being said. But the purpose of such sermons was not to explain or persuade. The purpose was to silence. How can you disagree with something you don’t understand?
Economists often speak in Latin and ancient Greek. We love to wear folk down with a few deltas and gammas, before finishing them off with a bit of ceteris paribus. One of our best tricks is to use words that sound like English but which have very specific meanings in the field of economics. We use simple-sounding words like “efficiency” and “unemployment” to draw the unsuspecting in. Then, when people admit to thinking that unemployment is measured by the number of people on the dole (it’s not), or to thinking that efficiency means reducing waste (not to economists, it doesn’t), we slam the door on their fingers.
To be clear, I’m not suggesting for a minute that only economists should be allowed to be prime minister or treasurer, or to run a business. That would be as dangerous as it is undemocratic. My point is that the vast majority of people who talk confidently about “what the economy needs” have no more knowledge of economics than the average citizen. What they possess is confidence, not credentials.
The primary purpose of the econobabble that fills our airwaves is to keep ordinary Australians out of the big debates about tax, fairness, climate change and the provision of essential services. Like the congregation at a Latin mass, they can’t follow what the high priests are saying. And that’s just the way politicians and so-called business leaders like it.
Using econobabble is a terrible way to encourage a productive public debate. But it’s a great way to stifle one, and to confound and confuse Australians. That’s the reason we hear so much of it.
Like any discipline, economics has its own professional language – jargon – which can be used either to speed up conversations between experts or to keep the uninitiated out of their deliberations. When non-economist politicians use economic jargon while talking to non-economist voters, you can be pretty certain what their objective is.
Just as a patient having a heart attack in an emergency ward is unlikely to understand what the doctors are saying to each other, so too someone listening to two economists argue about the relative strength of monetary policy transmission mechanisms will miss the significance of much is what is said. But a good doctor also knows how to use an entirely different vocabulary to explain to the patient what happened, what was done about it, and what it all means for the patient’s future.
Anyone who really understands their subject matter can explain it to someone else. If they really understand it. And if they really want the other person to understand it, too.
Like economics itself, jargon isn’t dangerous. But econobabble is used to limit the menu of democratic choices that we are offered. Politicians rely on it to make themselves seem smart and to make the public feel dumb. The strategy has worked a treat for the last few decades.
Governments and citizens alike should be concerned about the impact of changes in government policy on businesses. But the notion that Australia, one of the richest countries the world has ever known, can’t change its laws without consulting with “the market” is as absurd as it is alarming. In effect, we are regularly being told by our own leaders that Australia can’t change its laws unless some very rich people, most of whom live in other countries, say it’s okay for us to do so.
The trick only works when, like a monster in a horror movie, “the market” seems close enough to be threatening but not so close that we can see it is made of papier-mâché. The vague, lurking but formless presence of “the market” is far more ominous than reports about what happened to the weighted average price of shares in south-east Asian stock exchanges today (AKA the Hang Seng).
The nightly news gives us a regular reminder that “the market” is watching and judging us. It might seem common sense that if we collected more tax, as they do in Norway, we could have health and education systems just as good as Norwegians have. But econobabble limits the options in front of us. “What? You want to spend more money on health and education? Just imagine how the market would react to such a suggestion! You must be mad!”
Of course, in reality the market doesn’t want anything. The market doesn’t judge us, or anybody. The market is a metaphor, and it can no more judge our actions than Zeus or Apollo. The really scary question is whether or not the people going on about “market sentiment” know this. As the saying goes, the best patsy doesn’t know they are a patsy.
Whether the econobabblers are talking about “what the markets want” or “what the economy needs” or what a “responsible government must do”, their language and metaphors are systematically used to limit the range of options that are “sensible” or “pragmatic” or (most frequently) “responsible”. Consider the following statements, both of which convey the same economic information:
- The budget deficit has grown rapidly in the last three years, even as the economy has grown strongly.
- Over the last three years, the government has invested heavily in the new infrastructure that rapid economic growth requires.
Just as there is nothing “irresponsible” or “unsustainable” about an individual borrowing to buy a house, or a company borrowing to invest in a profitable new project, there is nothing irresponsible about a government borrowing to invest in the infrastructure that a rapidly growing population and economy need.
But for someone who would prefer to see governments collect less tax from him or herself and spend less money on others, droning on about the way that taxes “destroy incentive” or about how welfare payments “discourage work” sounds a lot less selfish, and is far more effective politically, than stating the simple truth. As JK Galbraith once said, “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
This is an edited extract from Econobabble: How to Decode Political Spin and Economic Nonsense by Richard Denniss, published by Redback Quarterly and on sale now ($19.99).