Demystifying three myths Scotland is told about its economy

OUR objective is to help demystify Scotland’s economy. There’s a lot of defogging that has to be done.

As part of a growing counter-movement, Scotland’s biggest economics festival takes place in Dundee from March 22-24. Over thirty sessions will cover aspects of the Scottish, UK, and global economies. Academics, activists, economists, policymakers, politicians, and the public will be on stage and in the audience. All of the participants will come together to discuss “people, place, and planet”, to state clearly that there is an alternative.

Over the past few months, the Scottish public has faced an economic onslaught designed to dull the senses. Myths are being rehashed, and a narrative is being spun to justify austerity. No matter who wins the upcoming General Election, a continuation of the UK's economic decline is all but guaranteed. Three myths have become most troublesome for our economy and our democracy. They need to be challenged.

At the heart of this sleight of hand are politicians and mainstream political and economic commentators who deeply misunderstand how our economy works.

Myth One

The primary means of control is the story of government finances. The idea that this Conservative administration has “spent all of the money” is no more true than it was when Labour left office with a note that said: “I'm afraid there is no money.”

Myth Two

Secondly is the growth genie. According to the spin, growth in terms of the amount of things we produce, known as GDP, will make us all wealthier. This is another tale for the ages.

Our economy has doubled in size since the late 1990s, yet income and especially wealth inequality have increased significantly. Jobs, and therefore everyday life for millions of citizens in the UK, have become more precarious. Our infrastructure has crumbled. So, too, has one of our most precious institutions, the national health services across the UK.

If growth is good, where exactly is the evidence?

Our growth-dependent society is like a cat chasing a little red dot of light on the floor. Deep down, it knows it will never catch it, but it has become so conditioned that it continues trying.

Growing the economy is not only a false dawn but a damaging goal. Growth has become an end, not a means. We stopped asking: growth of what? for what purpose?

Myth Three

Finally, we continue to rely on “the market”, the belief that all good things come from this institution, raised above all others, to be the most effective way to manage all of our resources.

Through a continued drip-feeding of opinions (evidence is much harder to find than opinion), we have been persuaded that the best way to continue to survive on this planet is to allow this one institution, the market, to solve the climate crisis. This invisible hand will lift us up and place us in a world within its planetary boundaries where all will inevitably work out well.

These are three deeply limiting ideas that cloud our judgment and limit our imagination. If there is no alternative, as the mainstream maintains, we must continue to make changes at the margin or tweak things at the edges. Lower taxes by a few per cent and all will be well. If only we could increase growth by X per cent, everything would be well. Let us free more market forces; the difference will become clear: this time.

However, this approach is to flick peas at a charging rhino.

We are told that our individual preferences shape our economy. They do not. The goods and services offered to us are shaped by the desires and decisions of those with power. We consume what they produce. This is also true of ideas.

The desire of any elite is to “reproduce its established order”, and their ideas will do nothing to reshape that established order.

People are increasingly drawn to alternative sources for answers, and the Scotonomics Festival of Economics is structured to enable participants to find answers to questions they rarely see addressed in the mainstream.

Tackling the three myths

Across the three days, we will return to the three main myths outlined above, adding meat to the bones as we paint a different picture of our economy.

The wide-ranging collection of speakers will detail that real resources are scarce, not financial resources.

They will explain why the very concept of a government credit card is deeply misleading.

They will outline why growth is now uneconomic.

Markets will be explained as an option for allocating resources, highlighting that they are far from the only choice for our society.

The festival is structured around the idea of community wealth building, a concept far removed from the mainstream economic narrative. Unfortunately, our policymakers, advised by mainstream economists, focus too much on the flows, not stocks.

For example, attracting foreign companies to set up shop and pay wages is a common target for our governments. Little attention is paid to the stock of wealth. Exactly who owns the factory and who makes the decisions that shape our society should be of significant interest. Our current economic models are blind to power and agnostic to where wealth is taken and where it ends up.

At the festival's heart is the idea that “people, place, and planet”, not profit, should be at the centre of our economy. The core belief is that we must create an economy that works for us and not vice versa. If this resonates with you, we hope to see you in person or online at the Festival of Economics.

Or why not attend our kick-off event in Leith on March 21 with a panel of international economists?

You can find more about Scotonomics' events on their website.