BThe Bank of England is a “forbidden place” in itself. He is responsible for storing gold bars and setting monetary policy, but he is currently best known for making ominous forecasts of the economic outlook. It is located on Threadneedle Street in the City of London and is a neoclassical fortress with walls so high that they seem to be built to deter anyone from looking inside. Can’t We Just Print More Money ?, Bank of England Economists Rupal Patel and Jack Meaning is a well-timed attempt to show the public what’s going on inside – and to introduce them to some basic economic concepts. Each chapter addresses a different question, such as “Where does my breakfast come from? or “Why am I richer than my great-grandmother?” The book is riddled with hilarious anecdotes and neat examples: the price increase is explained by reference to milk sticks; the value of collective bargaining is illustrated by an episode of The Simpsons. Most of the time, this chirping tone works, but sometimes it can creak out, “I hope you come to see it. [money] it’s not just a piece of metal or plastic, “the authors write (one who already reads would certainly not need to tell).
All of this is “completely different from most things the bank has published in the last three centuries,” writes its governor Andrew Bailey in the preface. The bank has been trying to explain the economy to the public at least since 2018, when it first launched a series of civic panels. As living standards in the UK have fallen sharply, there has been a trend to talk about things like ‘financial inclusion’ and ‘money management’. You can think of it as Martin Lewis’s theory of social change: educate people on how to navigate an increasingly ruthless economy, and they will be able to improve their lot.
Economics is styled as a science, but – at least when it comes to communicating – stories are often as important as empirical observations. Parables about prehistoric villages and marketplaces where beans are exchanged for cows are used to explain things like the evolution of money. Then there is Easter Island, whose iconic stone heads (Moai) have been read as a warning of the complex relationship between growth and environmental degradation. “The story is that the islanders cut down trees to make tools to build and transport them moai around, ”writes Patel and Meaning. “Without any trees, soil erosion has increased and crop yields have fallen. The result was a catastrophic decline in population. ” But the stories can be misleading: as the authors note, anthropologists are increasingly questioning this.
Consider another story about the “Commons tragedy,” illustrated by the dispute over unlimited chips in the Bank of England canteen. This is the idea that a shared resource can be depleted to the point of destruction, and was introduced in 1968. an article by economist and environmentalist Garrett Hardin, whose arguments encoded the whole stance on politics (Hardin also worked hard to promote the idea that immigration is a likely environmental threat). Again, on closer inspection, it does not hold completely. Economist Elinor Ostrom found that “when communities have control over their shared resources, they don’t actually run out of them to destroy.” If implemented, its findings “may be able to save markets from themselves,” Patel and Meaning write.
Stories include abstraction and selection. The same is true for models that the authors admit are never entirely correct. “All models create a set of assumptions for simplifying the world around us” (statistician George Box once said: “All models are bad, but some are useful”). These assumptions shape the way the economy is measured and calculated: in France, economists include frog legs in their annual “consumer basket” to determine the rising price of goods, while the German basket contains sausages. The British list includes a somewhat nostalgic “join-ready joint” as a measure of price inflation. This year, meatless sausages, canned legumes and sports bras were added to the UK’s statistical shopping cart. Donuts, men’s suits and charcoal were removed.
The authors seem to be constantly trying to communicate the idea that we exist for you. When the Bank of England became independent in 1997, it was given the task of controlling inflation, for which politicians were previously responsible. How do you establish the democratic legitimacy of an institution whose purpose is to partially relieve the control of elected representatives? This question is even more embarrassing by recent events: inflation seems to be spiraling and many people’s life experiences with the economy are dire. The bank may seem distant or even inaccessible, as Bailey recently said that workers should not ask for a generous wage increase. This book it is an attempt to give the bank a human face – but its repulsive reputation cannot be so easily dispelled.