For a number of decades our economy has failed to work for ordinary citizens. Stagnant wages have been combined with underemployment and rising costs of basic goods like healthcare, education and housing. At the same time, a small minority of the population make obscene profits, while in the background we continue to hurtle headlong into an environmental emergency. However, despite there being no shortage of anger and anti-elite sentiment expressed in what is often referred to as the ‘culture wars’, no significant challenge to the dominant economic model has broken into the mainstream. The pound and the fury argues that behind this failure of imagination are a set of taken-for-granted myths about how the economy works – myths that stifle debate and block change. The book analyses these myths, explores their origin, how they circulate and how they might be dispelled at a time when, away from the public gaze, economic theory is opening up new possibilities of economic action. Possibilities that, as we emerge from the chaos of Covid-19, could lead to the radical structural changes we desperately need.
Chapter 3 shifts from the financial to the political sphere and is based on trips made to Whitehall to speak with civil servants working on economic policy. The chapter first provides some context by indicating the importance of economic communication in the political sphere as well as the civil service’s role in economic policy and communication. It then draws on time visiting Whitehall to outline the pressure to present economic knowledge in the political sphere as objective – when it is anything but – and describes the type of myth that stems from this pressure. Finally, before concluding, the chapter provides a case study that looks at how the argument constructed plays out in practice, through the setting of an economic policy: the minimum wage.
Chapter 4 looks at the media as a place that is supposed to form a bridge between the elite sites explored in the previous two chapters (finance and politics) and the ‘everyday’ people in chapter 1. The chapter starts by outlining the democratic role of the media and its importance in educating the public about the economy and holding elites to account. Having established the media’s importance, the chapter moves on to an ethnography of a financial magazine and the many conversations had with people working in economic journalism. The interview material and ethnographic observations show that the media promotes a self-serving vision of the economy that aids the myth stemming from the other elite spaces visited.
Chapter 5 gives the lie to the myth by dealing with some fundamentals of how our economy actually works. It shows what is wrong with the visions of the economy exposed in the previous four chapters, before concluding on a hopeful note, showing how it is possible to achieve a better future if we are able to dispel the paralysis of myth. It does this through first outlining the process of credit creation, to show that the economy is not a finite pot of money, but largely dependent on the creation of money by private banks. It then draws on some insights from modern monetary theory and other heterodox economic writers to show how the state could wrest control of the creation and allocation of credit away from the private sector and put it to use in order to create a greener and fairer economy.
Chapter 1 draws on conversations with hundreds of ‘everyday’ people about the economy, as well as recent research from other projects, to show that there is a significant democratic deficit when it comes to public understanding of the economy. Along with showing that the public has a weak grasp of how our economy functions, the chapter also demonstrates that underpinning the public conception is a vision of the economy as something akin to a ‘pot of money’. The chapter concludes by briefly outlining what is wrong with this vision of the economy by contrasting it to the accepted understanding of the economy taught in all introductory economics courses. This comparison makes it evident that myth is at work in the public understanding of the economy.
Chapter 2 explores the vision of the economy in the financial sector. It begins by outlining how important the financial sector is, not only in its capacity to shape the material conditions of our society, but also the ‘soft power’ it wields in its ability to influence public discourse about the economy. Based on time spent visiting London’s financial district and talking to its inhabitants, the chapter outlines how the sector operates on flimsy, hollow and self-serving representations of knowledge, before concluding by pointing to the type of economic myth that stems from this institutional context, and showing how it pollutes public discourse.