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What's the point of economics journalism?
What stories should it tell? What topics should it interrogate? Who is its intended audience?
And who are the experts one should quote? Are they always right? What are their biases? Do their ideas always have a positive impact on households, communities, the country, and nature?
Your answer to those questions will be very different depending on how you see the world.
What is economics?
So what should economics journalism do?
A couple of weeks ago, Peter Siminski, a professor of Economics at the University of Technology Sydney, published a very interesting article on The Conversation website.
It had the headline: "6 reasons Australians don't trust economists, and how we could do better."
He said if the economics profession had a poor reputation in Australia, some of the blame could be assigned to economists and the way the subject is taught (he listed various reasons), but some could be apportioned to the media too.
And these were his observations of the media:
Economists span academia, government, private and not-for-profit sectors.
But those appearing in the media appear to come disproportionately from banks, other financial institutions, management consultancies and think tanks.
Particularly worrying is that some think tanks do not disclose the identity of their donors. The media seems uninterested in holding them to account for this. In contrast, all reputable academic journals (and The Conversation) require authors to declare any potential conflicts of interest as a condition of publication.
Also worrying is that some think tanks seem particularly ideologically driven.
In my view, the media should be much more critical and discerning in its engagement with economists and potential conflicts of interest.
And more space should be made for academic and public-sector economists.
Choices as to who is quoted should be guided by informed attempts to identify genuine expertise, as well as by diversity considerations. The opposite approach, sensationalism, is irresponsible and detrimental to the public good. And it contributes to distrust in economists.
Equally, academic economists should strive to contribute more to national economic debates. A realignment of incentives within universities would help.
He packed a lot in there, and I'd like to come back to that passage to offer my thoughts on each point.
But first, consider how he began his article:
"Economics is about organising markets in ways that contribute to social welfare, which means anyone interested in anything from inequality to housing affordability, to health and education systems, or climate change to gender gaps ought to be interested in it."
Is that a sufficient definition of "economics"?
Bear in mind that Professor Siminski had an 800-odd word limit to discuss a number of big ideas. I'm sure he'd be happy to expand on that definition if his editors weren't so ruthless.
But let's work with what we have.
What contributes to social welfare?
Is economics about organising markets in ways that contribute to social welfare?
Of course.
But how are those markets organised?
They require laws to set the ground rules of each market, regulators to monitor them, courts to enforce the property rights of their participants, and law enforcement agencies to punish participants who break the rules.
So, we're already touching on politics, the courts, regulators and police.
But I'd argue economics also involves finding non-market solutions to economic problems. It's about the ways in which a community uses all of the resources at its disposal to contribute to social welfare.
It includes so many facets of life.
Where does money come from? That involves governments, central banks, Treasury departments, and major banks and other financial institutions.
How are our economic interests protected at home and abroad? That puts us in the realm of defence and diplomacy and foreign trade.
How do we care for people in the economy? That involves education, health, welfare and housing policy, and climate and energy policy.
And how do we keep tabs on the economy? We need statistical agencies to constantly measure things with codified definitions of "reality."
Where do those definitions come from? How do we define "unemployed" and "employed"? What is "inflation" and where does it come from? What is "gross domestic product"? Do our definitions have consequences for people and the planet?
The list goes on and on.
What should economics reporting involve?
But once you've agreed on what you think economics journalism should cover, how do you think economics stories should be told?
It depends on your intended audience.
Some stories are simple. When the Bureau of Statistics publishes new data, you report on that data. Wages have risen a bit recently. Inflation's fallen a little.
A lot of the time you're writing articles that explain what's happening. Why are energy prices rising? How high will interest rates go? When will petrol prices fall?
Sometimes you're answering readers' concerns. What is stagflation? Are we already in recession? Did the RBA's money printing cause inflation? Is anyone left out of the unemployment data?
There are many different stories to tell.
And my personal theory about some economics writing is it can be made far more interesting by bringing history, philosophy, and politics into it, when appropriate.
I think it's important to tell Australian stories to Australian audiences, so I like to bring Australia's economic history into some pieces.
Since more than half of everyone living in Australia today was born after 1980, I also think it's safe to assume the majority of us aren't aware of what came before us, in terms of economic frameworks and policies and approaches, so it can be really illuminating to compare-and-contrast today's policies with the past's.
Why do we do things a certain way today? Why did we do things differently in the past?
I also think the post-World War II world of economic policymaking can be very roughly divided into two halves — the Keynesian half, and the Keynesian/Monetarist half — and that clash of approaches and ideologies still animates modern politics and policies, in a way.
I also find fascinating the animating spirit of the economists and policymakers of the post-war era.
They had the chance to rebuild their societies after the war, and they chose full employment, cheap and abundant housing, mass immigration, all of those things that built up Australia's middle class. They could have chosen other policies, but those were the policies they chose.
What's the spirit that animates today's policymakers and economists?
So, you roll all of those things together and that's why I write some of pieces I write. I think it can make economics writing really interesting and accessible (when done well).
The same voices, over and over
But let's get back to Professor Siminski's criticisms of the media.
He wondered why economists frequently quoted in the media come disproportionately from banks, management consultancies, and think tanks.
I can answer that.
It partly happens for reasons to do with the way our economy's structured.
The Reserve Bank, Treasury, governments, and other major economic institutions use similar economic models to explain the world around us, and their models rely on the same data pumped out by the Bureau of Statistics.
So, when the ABS releases new data every week, who do reporters speak to? They speak to the experts on those data and economic models.
All of our major banks have an independent team of economists whose job is to analyse the latest ABS data, and make forecasts of employment, wages, inflation. It's the same with the big consultancies.
And many of them have previously worked for the RBA and Treasury, so they know how the RBA and Treasury think.
When the ABS releases new data, those economists are very quick to analyse it and share their notes with clients and the media.
It's an entire eco-system of regular data and analysis that's hard to break into if you're an "outsider" economist.
And, given the ABS publishes so many datasets on a monthly basis, that's why it looks like the same economists are being quoted again and again.
I have much more to say on this topic.
Why quote people from think tanks?
But let's move to think tanks.
Professor Siminski's criticism of the role of think tanks in economics reporting was really important too.
And it's a thorny issue.
If you draw attention to the extremely political role that some think tanks play in this country, you can expect a lot of heat.
We have a number of think tanks in Australia these days, and they range from the serious to the lunatic.
But some have been around for decades, and their history is entwined with the political economic history of post-war Australia.
I'll mention three of them.
The Institute of Public Affairs (IPA) was established in 1943 by a bunch of Melbourne businessmen, including Keith Murdoch (father of Rupert Murdoch).
It was aggressively anti-socialist, and planned to push back against the rising tide of socialism (as it saw things) and John Curtin's Labor government of the 1940s.
Robert Menzies, who founded the Liberal Party in 1944, drew heavily on the IPA's policy ideas, and the IPA has been linked with Liberal politics ever since.
Next, you have the Centre for Independent Studies (CIS), which was created in 1976. It was Australia's first "neo-liberal" think tank.
That's not a pejorative. It simply refers to the ideas of "New Liberalism" that swept the western world in the 1970s and 1980s, inspired by thinkers like Friedrich Hayek and Milton Friedman.
Its founder, Greg Lindsay, argued that "true liberalism" had been all but dormant in Australia for most of the twentieth century, and he wanted to revive it.
He received seed funding from Neville Kennard (of Kennard's Self Storage), and companies like Santos, Shell, BHP, Western Mining Corporation, and The Advertiser.
In its early days, the CIS received a boost in publicity by the Australian Financial Review's Paddy McGuinness, who reported on a CIS conference with this article, Where Friedman is a pinko, and shared its postal address and phone number.
Today, the CIS is a member of the Atlas Network, an international network of 500 think tanks and organisations with a similar ideology that share lessons about successful policy campaigns around the world.
And thirdly, there's the Australia Institute, a progressive think tank founded in 1994 by Professor Clive Hamilton.
In its first decade, it received funding from philanthropic organisations run by the Kantor family, among others (Anne Kantor was Rupert Murdoch's sister).
The Australia Institute produces copious research on income and wealth inequality, and backs renewable energy, strong action on climate change, and progressive taxation reform.
It draws ire from the right of politics, and a number of economists are very critical of its work, including some inside the RBA.
I agree with Professor Siminski that there needs to be more critical awareness of the role of think tanks in Australia.
How often do think tanks successfully influence the legislative process in Australia? Why do corporate interests back certain ideas over others? If we don't know who's funding a think tank, should we report any of its research?
It's a really important topic, and it requires a mature conversation about power, ideas, ideology, and the mass media.
Let's pause for a moment
But I'm extremely conscious of the length of this piece. I'm already pushing your patience.
And the more I think about it, the more I have to say in response to Professor Siminski's criticisms of the media's economics coverage, especially the question of sensationalism.
So, let's leave that for next week, in Part II.