A cold has turned my brain to cotton wool over the weekend, but I have been paging through a pamphlet that turned up courtesy of Abe Books, [amazon_link id=”B001OVBYXG” target=”_blank” ]National Income and Expenditure[/amazon_link] by J.E.Meade and Richard Stone. (I’ve got the 4th, 1957 edition; it was first published in 1944.) This is research for my next book, which is about GDP – contain your excitement. Modern national accounts manuals run to hundreds of dense pages. This first, crystal clear, description is 44 pages long.

It is startling, too, to be reminded how much the economy has changed. In 1954, personal consumer expenditure on food amounted to 21% of GNP at market prices, spending on communication services 0.45%. The percentages in 2011 were 5.5% and 1.3% respectively. Spending on clothing is down as a share, spending on entertainment up. We are living in difficult times, but these changed patterns are the measure of prosperity since the first systematic work on national accounts. It’s just as well that what might turn out to be a decade of GDP going backward came after a half-century going forward.

Meade and Stone

I’ve been looking through a book that arrived here yesterday, [amazon_link id=”B008AU9LZM” target=”_blank” ]Affluence & Influence: Economic Inequality and Political Power in America[/amazon_link] by Martin Gilens, a Princeton political scientist. Although I haven’t read it at all carefully, paging through makes it clear that there is important evidence here that in the United States public policies have increasingly been shaped in the interests of the top 1% (not even the 10%) of the income distribution. There does not appear to be any ranting at all, not a vampire squid in sight. This is serious, empirical social science and lots of it, careful multivariate regression analysis.

The conclusion: “The patterns of responsiveness found in previous chapters often corresponded more closely to a plutocracy than a democracy.”

The influence of the rich is sometimes tempered a little by a closely divided Congress and legislative gridlock, and by an approaching Presidential election. Otherwise, the very rich have bought policies, literally – campaign donations prove be the main channel of influence. Professor Gilens is not optimistic about the prospects for campaign finance reform. Yet as he warns:

“Further concentration of political influence among the country’s affluent threatens both the perception and the reality of a shared political community so central to the health of even the modestly democratic republic we currently enjoy.”

So this rather dense-looking work of political science has a sobering message for the United States, and for all of us non-Americans who used to greatly admired what was, once, the world’s leading example of democracy and opportunity.

[amazon_image id=”B008AU9LZM” link=”true” target=”_blank” size=”medium” ]Affluence and Influence: Economic Inequality and Political Power in America[/amazon_image]

[amazon_link id=”0230392547″ target=”_blank” ]Going South: Why Britain Will Have A Third World Economy by 2014[/amazon_link], by Larry Elliott and Dan Atkinson, is a rattling good read.

The authors, veteran journalists on the economics and finance beat, are the Statler and Waldorf of the field. This book is a follow-up to 2007’s [amazon_link id=”1845296052″ target=”_blank” ]Fantasy Island[/amazon_link] – the new book has the same gloom about Britain’s economic prospects seasoned with a sense of satisfaction that events seem to have proven these  pessimists right.

[amazon_image id=”0230392547″ link=”true” target=”_blank” size=”medium” ]Going South: Why Britain will have a Third World Economy by 2014[/amazon_image]

The thesis is straightforward: the UK is de-developing. Just as Argentina, which would have been in the G7 in 1945, has dropped down the world economic league table, so is the UK. The roots of the decline date back to at least 1914, although at some points the book seems to trace them to 1815 or even – I thought at one point – 1530. Young workers have inadequate skills, thanks to the failings of the school and training system, there is too little manufacturing industry, the infrastructure is decaying, finance has unbalanced the economy, living standards are declining and will do so for years more.

Interestingly, the authors focus on the malign role of the state in shaping this grim economic future. They describe the proliferation of rules and intrusive petty officialdom (a 600,000 increase in state sector employment between 1997 and 2010) as “enormously wasteful and inefficient” (p97) and speak of the “hostility by practitioners to public choice and involvement” (p112). The result is that “the state’s own enforcers are increasingly treated with the greatest suspicion.” (p117) and most people aim to avoid the attention of officialdom in all its manifestations. This, they argue, is undermining the rule of law in favour of the rule of personal connections. Hmmm, echoes of Good Italy, Bad Italy. Their prescription? Shed our illusions, stop daydreaming of a golden age (Downton Abbey, Call the Midwife), and recognise that the economic policy needed is a development policy.

Now, of course this is overstated – especially the decline of manufacturing –  and the recent books [amazon_link id=”1408703300″ target=”_blank” ]Made in Britain[/amazon_link] by Evan Davis and [amazon_link id=”0300117779″ target=”_blank” ]The New Industrial Revolution[/amazon_link] by Peter Marsh offer useful balance. (Although it should be acknowledged that Elliott and Atkinson are in the distinguished tradition of [amazon_link id=”0333197720″ target=”_blank” ]Britain’s Economic Problem: Too Few Producers[/amazon_link] by Bacon and Eltis, which was big in my student days.)

Still, this is mischievous of me, but reading the book so soon after listening to Niall Ferguson give this year’s BBC Reith Lectures, the areas of agreement seemed striking. Although both contributions to the debate, Ferguson on The Rule of Law and Its Enemies, Elliott and Atkinson in Going South, overstate their case, both make some important points. The economic and political system as a whole is not working. This book exaggerates wildly – and very entertaining it is too – but they’re on to something.

Elliott and Atkinson

As somebody who has never worked as an academic economist but still has all the passion for the subject that drove me to get a PhD, it was with a real sense of recognition that I read this article by Alexandra Lord in the Chronicle of Higher Education. It contains this call:

“If our profession is to thrive in or outside of the academy, we need to encourage and train new scholars to write accessibly. We also need to use new media to connect with the public. Fundamentally, we must provide more opportunities for graduate students to engage with the public, and we must better reward tenure-track and tenured faculty members for seeking to reach a general audience.”

She is writing about historians here, and the disconnect between academic historians and the massively enthusiastic amateurs who read popular history books, trace family trees, track down historical mysteries, re-enact events and so on. But the slight disdain academic historians feel for popularisers described in this article is shared with other academics, including of course economists.

The disconnect is far more troubling in the case of economics, for two reasons. One is that the academic discipline is in general disrepute because of the crisis, and while some economists in the universities are painfully aware of the need for change, I would say many others are either in denial or just can’t be bothered. The other reason is that economics has such a direct role in public policy and that makes public legitimacy essential if policies are to have the consent of the governed.

The gap between academic and popular economics should not be overstated, especially as more of the academics engage via blogs and social networks. Neither should the fact that there is a gap, not only between the ivory tower and people in general but between the university economists and professional economists in government and business.

I applaud Ms Lord’s efforts on the history front. I do my bit for popular economics, along with heroes like Tim Harford and John Kay, and all the excellent economic journalists we have. There is other post-crisis movement too, as Sara Ledwith reported in her recent Reuters special feature. Planning for a pilot UK Festival of Economics in late November is under way, inspired by the Trento Festival of Economics. A book, [amazon_link id=”1907994041″ target=”_blank” ]What’s the Use of Economics[/amazon_link] (following up the February conference on teaching economics at the Bank of England) will be out in mid-September. The need for better communication by scholars, highlighted by Ms Jones in the case of historians, was emphasised by almost every contributor to the conference and book.

So I think the gap is narrowing – but then it needs to.