- The Poets’ Guide to Economics by John Ramsden recalls a time when economics wasn't just the preserve of economists
- The poets were sometimes self-important, sometimes idealistic – but sometimes incredibly insightful
John Ramsden’s new book recalls a time when economics wasn't just the preserve of economists. In The Poets’ Guide to Economics, Ramsden walks through the unexpected economic insights of 11 famous poets – and some of them aren’t half bad.
Central to the book is the idea of who ‘should’ think about economics, who ‘should’ write about it, and who we ‘should’ listen to. The answers are sometimes surprising. The Poets’ Guide to Economics reminds us of a time when economics was ‘political economy’ and a discipline that grounded itself in common experience. It highlights that poets felt they had the right to expound on economics – and to be taken seriously too.
At times, the poets’ ideas seem far-sighted and revolutionary. George Bernard Shaw, for example, foresaw the advent of negative interest rates. In 1928 (86 years before the EU introduced its negative interest rate policy), he explained: ‘What it means is that you pay people to keep your spare money until you want it instead of making them pay you for allowing them to keep it, which the economists call paying positive interest’. The tract itself, ‘The Intelligent Woman’s Guide to Socialism’, has aged rather less well – and is described by Ramsden as a ‘monument to mansplaining’.
The poets also tackled financial crises. Ramsden argues that economists tend to think that financial markets are rational and that the system tends inherently towards a stable equilibrium. The poets, on the other hand, thought that financial markets were mad and that instability was baked into the economy as a result. Were they right?
After the 2008 financial crisis, Queen Elizabeth II famously asked a group of economists why no one saw it coming. Less well known was the reply from a group of economists, who stated that it was "principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole". And for the past 15 years, we have been acutely aware of the need to feed a broader range of insights into our economic understanding.
But sometimes the poets had too much imagination. As a group, they generally had little interest in the material world. William Morris (of patterned fabric fame), foresaw a utopia with no wages at all, arguing that in a healthy society, work would become a pleasure and a vital creative outlet. Percy Bysshe Shelley also mused on the ability of "natural kindness" from the "fountain full of its boundless love" to provide the means to satisfy all wants.
But before we scoff too much at what poets got ‘wrong’, we should remind ourselves that there isn't really one ‘right’ approach to economics. And the book is a healthy reminder that our answers to tough economic questions are evolving all the time. With inflation at 9 per cent, and a summer of industrial action ahead, we are wrestling with the question of how wages should be set and what ‘fair pay’ looks like today.
Three of the poets, Morris, Ruskin and Belloc, advocated a ‘guild’ system, where associations enforce rules on wages, ensuring a reasonable living for all members. Belloc in particular worried about the power imbalance between workers and employers, arguing that most people lived in wage slavery, terrified of getting the sack.
Some of these thoughts aren’t far from the arguments on union pay negotiations playing out today. The Poets’ Guide to Economics is a timely reminder that in economics, the questions seem to stay the same – it is our answers that change.
John Ramsden - The Poets’ Guide to Economics - Pallas Athene - ISBN 9781843682219
