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Why planners need to know about what’s going on in economics

10 November 2017 Author: Richard Blyth

I have heard one academic publicly denounce the planning profession for daring to advise on how cities should be developed. Economics must rule he said (I paraphrase).  I seethed under my breath, wondering what kind of response we would get if planners started invading economists’ territory -  making statements about interest rates. 

But very respected and highly placed people can get away with statements like this again and again.   And not just about planning. Perhaps you might lie in bed wondering how this came to be.  Or perhaps you have a life.

Some guys have got together to tell us why economics has its fingers in so many pies. Appropriately, their book is called The Econocracy* – which I think is meant to mean “rule by economists” but classics scholars would probably rephrase as “rule by housekeepers”.

The word “economy”, which we’re now all so at home with, has only grown into frequent use fairly recently. The authors document its rise in the texts of party manifestos: it first appeared in 1950 in the Conservative manifteso (once) and by 2015 it was mentioned 59 times. Now “the economy” is the disembodied prime concern of every politician. (Rather than, say, “people”.) So “we must do this for the economy”, “that would be bad for the economy”, as if it was some cantankerous old relative who must be satisfied with their particular whims.

This turns many general questions of importance to everyone into purely “economic” questions which require experts (guess which ones) to answer them. There is also a problem in that the public is “never asked what the aims of the economy should be”. If we don’t know what the economy is for, what is the point of paying it so much attention?

It wouldn’t be so bad if there was an “econocracy” if it weren’t for the fact that one particular kind of economics is paramount both on campuses and in politics and public service.   This is the kind known as neoclassical economics. So to revisit a familiar discussion from last year, the question is not really “do we want experts?”, but “what kind of experts do we want?”.

The dominance of economics, and of one kind in particular, has led to there being “a community of think tanks aiming to influence politics with economic logic”. By contrast there are few organisations aiming to influence politics with urban planning logic, but the RTPI works hard to do that as one of them.

I am encouraged that the position taken by the RTPI in our Value of Planning work is increasingly found in many other places. So “Econocracy” talks about widening the understanding of government activity in the economy from simply just “correcting market failure”, as the neoclassicists would have it, to include market making.

Reading “Econocracy” is like someone finally putting their finger on what you always kind of knew was wrong with economics but were unable to put into words. And now you don’t need to.

*The Econocracy, Joe Earle, Cahal Moran & Zach Ward-Perkins, Penguin 2017

Richard Blyth

Richard Blyth

Head of Policy, Practice and Research, RTPI - @RichardBlyth7