WHEN I start writing anything, there’s always a gnawing fear that I won’t know enough about my subject matter to do it justice. It’s why, for this year’s show, I spent hundreds of hours researching economics – reading books, watching documentaries and doing online courses.
I pitched this show – It’s The Economy, Stupid! – to my co-creators Dylan Howells and Katharina Reinthaller, for two reasons.
Firstly, I was fascinated by the way economics and politics overlap. And secondly, I felt this was relevant to something that my family went through when I was very young: a bankruptcy during the 1990s recession.
The phrase “It’s the economy, stupid” was coined by James Carville, Bill Clinton’s (below) campaign strategist in 1992. It has become a truism of most modern political campaigns, not least this year’s General Election.
The initial surprise of a slightly earlier-than-expected election (and the less surprising result of a Labour win) hasn’t changed our show very much.
I’m relieved to see the Conservatives out of power, and more optimistic than many about the new government. But some early announcements from Labour – including keeping the two-child benefits limit – have underlined why this show matters. And my research has helped me understand my family’s story in the wider economic and political picture.
My parents went bankrupt in the early 1990s through no fault of their own. Recession bit hard. Interest rates made both their mortgage and their business loan spiral out of control.
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They lost their livelihood, the house we lived in, and most material possessions. But they were able to keep our family together because they were given a council flat and because neither the bedroom tax nor the two-child benefit cap existed.
I won’t ever know the full pain they had to endure but, because of their love and perseverance, and because of the social safety net, my siblings and I never went hungry. We had a happy childhood and a good education and all felt able to choose our own paths in life.
So, as well as informing our show, what did I learn from the hundreds of hours of economic research?
The first is that economics should be taught more widely, from a younger age. If more of us had the tools to participate in public discourse about how we run our economies, I think fewer of us would pay the price for bad policies.
Today's housing crisis, for example, is in large part because of the decision to sell council and social housing in the 1980s, via Right to Buy – but not to give councils that money to replace the homes being bought.
Austerity, after the 2008 financial crisis, slowed recovery, lowered living standards and increased division. Failure to invest in renewable energy left us more reliant on rogue states, vulnerable to global energy prices, and delayed dealing with the climate crisis.
Which leads me to the second thing I learned: the rules are broken. When we start working and paying rent, bills and tax, we join a game that started without us. Wealth is rewarded with more wealth (and, eventually, more power).
As economist Thomas Piketty puts it, r is greater than g – return on wealth is greater than economic growth, over time. To put this in context, house prices are increasing faster than wages are growing.
If you rent, each passing year makes it harder for you to save a deposit. A house might cost 10 times your salary (or more), but banks will only lend between four and five times your salary. But if you have multiple homes or the means to buy them, you can rent them out. Your return will be less risky and more immediate than investing in something that might have benefited society and created good jobs.
Economics is, at its core, about people. And one of the most basic principles in economics is that people respond to incentives. Many incentives – which govern who pays tax, how many homes are built, and where our energy comes from – have resulted in insecure work, expensive and poor-quality homes, and also punitive measures such as the two-child benefit limit, which traps families in poverty.
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Conversely, better incentives could put good housing within reach of everyone, decarbonise our energy supply, raise wages and working conditions, and ensure that banks don’t gamble our future away.
I don’t write this with the intention of depressing people, I’m not defeatist – far from it. Mass employment after the Second World War gave us, among other things, homes for all and the National Health Service – proof that economics can help us rise to urgent challenges.We face multiple, overlapping crises today – on housing, on the cost of living, and the climate. We can rise to these crises but, to do so, we must change the incentives.
Tickets for It's The Economy, Stupid are available HERE. It is on at the Pleasance Dome (Jack Dome), Potterow, Edinburgh, EH8 9AL, from Wednesday until Monday, August 26 (not August 7, 14 or 21).
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