ONE of the many things that annoys me about political debate in the UK is that far too many people are obsessed with economics and far too few people are even interested in political economy. As a former professor of political economy, let me explain.

Economics likes to think of itself as a technical discipline that creates theories on how economies work and which then produces piles of data that supposedly explain the outcomes that those theories predict.

Most economists would like to think of themselves as scientists and most of them spend much of their time obsessing with mathematics. In reality, most of what they do is quite absurd. That is because their theories are based on ridiculous assumptions about how human beings behave.

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For example, they presume that we are all rational human beings who seek to maximise our wellbeing. But nobody can really measure wellbeing. In that case, most economists presume that people, and most especially businesses, maximise their incomes or profits instead. All that reveals is the complete ignorance that the average economist has on how people and businesses actually think because, as a person who has directed quite a lot of companies and advised many hundreds more, I can say with certainty that not a single one of them has ever known how to maximise its profit, let alone do it.

One reason for that is it would be quite absurd to do so when income is measured in pounds and almost everything that is of real value in life, from our families to our friendships, to our communities, to our environment, to the arts, and so much more, cannot have a price tag attached to it. Economists assume, as a result, that these things must be worthless and, therefore, not worth bothering about. We know otherwise. Wisely, we largely ignore economists (and even accountants) as a result.

It’s just a shame politicians do not, because the result of economists’ myopia is that vast quantities of data is produced on everything from inflation to national income, growth, trade, and almost anything else you can imagine, and it is not just likely to be wrong, but may well seriously misrepresent our true wellbeing.

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In contrast to economists, political economists are very much less interested in data or mathematics. What they are interested in is something of much greater concern to most people. This is how it is that some people are very much more influential than others within society, meaning that they are able to influence policy so that their best interests are served by governments and others, with the concerns of the rest of the population being very largely ignored.

For example, political economists did not spend a lot of time obsessing about the cost of tax havens when it was always obvious that the cost in question must be considerable given the scale of activity undertaken in those places.

Instead, they asked why it was that the world’s largest banks, law firms and accountants all seemed so desperate to partake in tax haven activity that was so obviously designed to attack the incomes of the democracies that we live in and so the wellbeing of most ordinary people in the world. When political economists realised as a result that the ability of these financial services firms to deliver secrecy protected those using tax havens from scrutiny, the political economists concerned with this issue (me included) set out to shatter that secrecy and so change the balance of power. To some extent, we have succeeded.

To use another example, a political economist might ask why some newspaper proprietors (but not the owners of The National) use their power to undermine the interests of almost everyone in society but the wealthy. We have not succeeded in changing regulations on newspaper ownership as a result as a consequence, but that is what is obviously required if this particular power clique is to be broken up.

The National: British newspapers

To provide a third example, particularly relevant to Scotland, an appropriate question to ask about the devolution settlement might be why it was that the Unionists were so able to stitch up the nationalist cause with regard to the tax and finance, leaving Holyrood as an emaciated Parliament unable to deliver on the promises of devolution for the people of Scotland? In this case, the answer is, very obviously, that the forces of financial economic power aligned with Unionism to achieve this outcome. The nationalists were outgunned, and unfortunately very few politicians realise just how dependent they are on both technical and political economic advice on issues as mundane as taxation.

I am delighted that so much work has been put into thinking about the economics of a new, independent Scotland. Issues such as the currency, the management of a central bank, governance, national statistics and much else have been addressed in detail. However, I cannot stress enough that unless the obstacles to achieving power are understood and mechanisms to counter them are created, Scotland will not achieve the independence it deserves

Economics is very often a largely unnecessary smokescreen to distract attention from what is really happening. Political economy cuts through that. Scotland needs really good political economists if it is to be the country that it wants to be. Adam Smith was the first political economist. We need many more to make Scotland into the country it might be.