When Malcolm Turnbull asked Cabinet Secretary Robert Armstrong, during the famous Spycatcher trial, the difference between a misleading impression and a lie, Armstrong replied that a lie was a straight untruth whereas a misleading impression might be regarded as being ‘economical with the truth’. The phrase promptly lodged itself firmly in the language.
If the phrase is pithy and/or apt, it’s because we have some idea that economics is concerned with making choices about distribution, and doing so as efficiently — that is with as little ‘waste’ — as possible, where in this case waste refers to sharing information that did not need to be shared.
The choices that economics is concerned with are those that involve some sort of goal-directed action, which is to say they are practical choices. Economics is, after all, a practical science. It is therefore inseparable in some sense from other practical sciences, if we are to take seriously, as Aristotle did, the idea that the goal such actions are directed at is a good, or flourishing, life. For Aristotle, the practical sciences were economics, politics and ethics, though economics then meant something closer to ‘household management’ than perhaps what we mean by it today.
Incidentally, the ‘economy of truth’ line comes originally from Edmund Burke, where he relates it to the exercise of virtue in the proper amount (an Aristotelian idea), which shows how much things change even as they remain the same.
Policymaking, also a decidedly practical activity, can be regarded as a combination of all three of the practical sciences — what ought we do, who for and how much? This is probably not how many would frame it today, though it comes close to the view of Adam Smith, who also argued that questions of morality, politics and economics were inseparable.
There seems to be a great deal of confusion today as to whether to regard economics as a branch of knowledge — a technical means for providing information to help make choices — or as a framework by which such choices can be made. Some people argue for a conflation of both. It seems trivial and a little churlish to point out that it might be helpful to decide on this in some fashion before we engage in policymaking, but all evidence suggests this is advice that frequently goes unheeded.
A major source of this confusion is that money has for some time now been supposed to act as a stand-in for utility, which is to say, happiness. The rather loopy train of thought leading to this proposition is far too convoluted to relate today, but it’s hard to talk seriously about contemporary economics or policy without making reference to it, as it informs much of what we think we know.
In hugely oversimplified terms, the thinking goes like this. What’s good is what produces happiness. We’re unable to say precisely what happiness is (utility might be a more useful term) but it would be helpful if we could quantify it somehow. If we can somehow measure happiness (or utility), we can do things that will increase the amount of it that we gain over the amount we lose — we can maximise our marginal utility. Despite a number of variously amusing and/or embarrassing attempts to measure happiness (including the hedonometer), economics as a discipline has largely settled on using money as a proxy — close enough!
In this sense, economics is connected with ethics — utilitarian ethics — so much so that the manner of the connection has become very nearly invisible. Economists often proceed as if what they are doing is value-free, but the very methods they employ are profoundly value-laden. This would be perfectly fine were it not for the fact that the ethical system being employed is mostly incoherent, in no small part because of those methods.
All this is simply by way of saying that when we want to analyse how economics informs or shapes a policy we must remember that economics is hardly the neutral, value-free approach it is often assumed to be. Rather it comes fully laden with its own values (many of which derive from utilitarianism) — it just usually doesn’t declare them as such. This is not to devalue or discredit economics as a valid way of thinking about things, it is merely to insist on the inseparability of economics from ethics and politics. Good policymaking begins when we proceed from this observation and think through the implications carefully. Anything less is simply being economical with the truth. ◾