What's the story with economics?

Man on £20 note

What's morality got to do with it? Economics = numbers, doesn't it? In his regular column, Michael Blastland looks for the real story of economics.

How do you feel about economics?

a. It's all about money, a gospel of the spreadsheet that feeds greed and selfishness. It's a tool of the powerful. It even dares put a price on life.

b. It loves you no less if you're generous. It's honest in facing hard choices - like who to save and who not in healthcare. It has a moral commitment to freedom and studies poverty every bit as much as wealth.

c. It's a science, stupid. Cut the morality tosh.

Economics is a subject that polarises like few others. To some, it's an immoral calculating machine.

To others, it's an amoral - not immoral, but amoral - science, descriptive pure and simple.

To still more, it has a positively moral commitment to freedom by trying to increase people's choices.

What's puzzling is that morality so often comes thumping into it - when the subject has been taught for generations as if morality was someone else's job.

The economic historian Roger Backhouse says there was an historic split from "normative economics" - what we should do - to "positive economics" - the description of what we do in fact.

Some seem to blame this approach for the crash, implying that it somehow separated economic ideas from what people really are. Off goes the money into some virtual world that's nothing to do with me, back comes profit. So goes the parody.

An interesting question is whether this intellectual divorce might change in the light of the global economic mess of the last few years, in which much of the anger has been righteous. At least one leading economist, John Kay, thinks we should go back to talking about political economy, instead of economics, to show that moral values are still inescapably in there.

Weasel words

A few years ago, it seemed money needed no excuse. Now greed seems evil again. Well, to some it does, as they rail against bankers or corruption. To others the pursuit of self-interest is still the surest way to prosperity for all. What's more, they argue, it's also the most moral.

Because for everyone who sees self-interest, another will see self-reliance, a virtue. Some want higher tax for the common good; others see tax as theft or waste. "The common good?" Weasel words for dependency, they say.

Image caption Attitudes to the financial world have changed

And that's the problem with morality in economics. It makes the dry economic calculus for rational, utility-maximizing individuals a good deal more elusive. "Good" and "bad" sure complicate the sums.

But here's what's odd about those sums. With the exception of John Kay, who is prepared to consider the possibility that morality might cost, I've seldom met anyone who doesn't think their morality pays off.

If you think government should get off our backs and encourage self-reliance - for moral reasons of course - you probably think cutting it will be good for the economy too.

If you think the government should help people more, you probably also think with uncanny conformity that this would be good for economic growth.

Whatever our morality, it's efficient. Funny that.

Does it suggest that inside every economic rationale there's a moraliser trying to get out? Or that behind every moral belief there lurks self-interest?

But that's only one perspective on economics. We left hanging some of the others.

Over to you

Maybe economics is not really moral at all. Maybe it's mechanical, the study of a great sorting machine. Or maybe it's neither, the economy being more like a great animal, the sum of the wills and instincts of millions of capricious individuals, like you and me.

These three perspectives are how we tell the story of economics in a new BBC Radio 4 series.

The point is that there's not just one story of economics, which feels as if it means more separate things to more people than perhaps any other subject I know. The standard definition - the study of the allocation of scarce resources - scarcely scratches the surface. So what does it mean to you?

Michael Blastland presents The Story of Economics, a three-part series on BBC Radio 4, starting on Wednesday 16 March at 1630 GMT. Listen via the BBC iPlayer or download the programme podcast.