Theme: Political Economy | Content Type: Blog

Talking to Voters about the ‘Everyday Economy’

Anna Killick

jason-blackeye-136827-unsplash

Jason Blackeye

| 35 mins read

Labour has reclaimed the mantle of being the party of work and ordinary working people; in June 2022, pollster Chris Curtis found that 57 per cent of all voters say Labour is that party, compared with only 18 per cent who say the Conservatives are. But, Labour has made less progress on building a coherent critique of the government’s economic incompetence. Despite the unprecedented levels of inflation and other economic pressures, any occasional Labour poll leads on economic competence have been less secure than its leads in other areas like the NHS.

While both Labour and the Conservatives will make competing claims about which economic policies will be more effective, how they frame the broader debate about the economy, including the terms they use, will also be important. As Labour struggles to work out how to increase voter trust in its economic competence, one key debate within the party is whether Labour should debate the economy in conventional terms as the Conservatives do, or whether the party should be more radical and attempt to educate the voters about the need to see the economy and growth in a different way.

The 2022 Conservative leadership contest shows the Conservatives feel supremely confident about keeping the economy as a dominant issue, to the extent of arguing about how they should tackle the energy crisis with a great deal of openness. Their debates about how to bring inflation down, as well as general economic philosophies, were detailed—from Rishi Sunak tackling ‘tax cut fairy tales’ to convoluted arguments about the legitimacy of taking longer to pay off Covid debt. However, they were also conventional in how both candidates shared references to an over-arching ‘economy’ which was only material. Both took it for granted—and assumed voters would also take it for granted—that raising gross domestic product (GDP) should be a key goal.

Rather than attempting to meet the Conservatives on this conventional ground, everyday economy theorists argue Labour should take a more radical approach. As the other authors in this special collection outline, the everyday economy approach is based on a fundamental re-evaluation of the twenty-first century economy and the policies and priorities we should be pursuing. At first glance, the approach has followers at the top of the Labour economic team. Rachel Reeves is a supporter, writing a pamphlet entitled The Everyday Economy in 2018. In that pamphlet, she argued that, rather than focussing on the conventionally ‘productive’ spheres of manufacturing and finance, Labour needed to adopt an everyday economy approach that reflected the realities of people’s lives: of employment insecurity, low real wages and work in sectors like retail, hospitality and care, whether paid or unpaid. She re-stated her support for the everyday economy approach in a speech as Shadow Chancellor in January 2022, channelling the spirit of the everyday approach that governments should not just focus on GDP, but on broader economic goals that encompass ‘healthy lives’ and ‘strong communities’. She re-iterated a key everyday economy theme of the interrelatedness and interdependence of economic and social sectors, saying about the everyday economy that ‘millions work in it’ and ‘we all rely on it’.

If Labour was to persist in re-framing its message in these everyday terms, we would expect to see less talk of the economy and more of ‘liveability’, incorporating wellbeing—social and environmental. We would also expect to see a downplaying of the desirability of ‘economic growth’ or growth in GDP, which those on the left, such as James Meadway, who do not necessarily embrace the everyday economy approach in its entirety, also call for. For both everyday economy theorists and Meadway, rather than talking about ‘the economy’, Labour could adopt the strategy of talking about its sectoral policies, like housing or cost of living, which voters may be more predisposed to have confidence in.

One extra benefit of shifting to an everyday economy approach may be that voters will find the language used more appealing than the terms conventionally used. Those working in the field of economic knowledge and understanding argue that politicians need to find new ways to talk about the economy, to ensure voters understand their arguments enough to buy into them. Voters of all persuasions have complained that they find the economic language politicians use hard to understand and alienating. Technical language is the first barrier in a line of barriers. Other barriers include voters’ beliefs that the statistics politicians use are not trustworthy and the indicators they refer to do not reflect what is important in voters’ lives. The inaccessibility of current political economic discourse may in itself be one of the reasons many voters fall back on a default position of trusting the Conservatives more. Therefore, one of the advantages of the everyday economy approach may be that it makes economic discourse more accessible.

But, would voters respond positively to Labour politicians explaining that ‘the economy’ should not be seen in the old-fashioned way as limited to the productive spheres, but should encompass everything that makes life ‘liveable’? Should Labour politicians make a virtue of explicitly downgrading the classic goal of economic growth as measured by GDP, explaining to voters that their wellbeing and the environment is more important? Before Labour politicians fully embrace changing how they talk about the economy, first we need to examine more closely the evidence for claims that voters would respond more favourably to the terms used by everyday economy theorists. I argue that the evidence suggests Labour should not change the existing economic language voters are used to. Voters would not pay close enough attention to learn what the new terms meant, or become convinced they should abandon long-held beliefs that growth is positive. Voters may be alienated by technical language used in existing economic discourse, but they recognise what it means more than is sometimes supposed.

‘The economy’ as a pot and zero sum

First, why and how do everyday economy theorists think we should reframe the economy? The earliest everyday economy theorists were keen to show that ‘the economy’ should be interpreted more broadly than was often the case. The productive spheres of manufacturing and finance should not be over-emphasised at the expense of utilities and welfare, which Froud and Williams call the ‘foundational economy’ (see this special collection). People do not just rely on utility and welfare services; these are sectors that employ 40 per cent of the workforce. More recently, everyday economy theorists have started to consider even more broadly the importance to people of wellbeing, environment, place and sociability or ‘social infrastructure’. A term that encompasses all these goals is ‘liveability’. Liveability builds on the household economy approaches from early twentieth century reformers like Rowntree. As the twentieth century progressed, the household economy was eclipsed by the national accounting focus on wages and consumption and the ‘market citizen’ approach that the greater good would be served by expansion of GDP and marketable consumption, which would also pay for better services via tax receipts. Froud and Williams argue that the market citizen approach has drawn successive governments in the twentieth and twenty-first centuries into perceiving their responsibility to be to promote GDP rather than considering the wider aspects of liveability.

At first glance, there is strong evidence that voters agree that the narrowly material conceptualisation of the economy in the twentieth century market citizen incarnation is an alienating one. In qualitative research which probes how people see the economy, many voters feel that when politicians talk about the economy, they are referring to something that is distant and disconnected from their lives. In my qualitative interviews conducted between 2016 and 2019, most participants perceived ‘the economy’ that mainstream politicians talked about to be somewhat alienating, but there was a class stratification in how alienating they found it. Lower income voters felt more distant from the ‘productive’ economy than higher income ones. They thought they intersected with the productive economy at fewer points than richer people; for example, if they did not have mortgages or bank loans they did not need to pay attention to the Bank of England base interest rate. Lower income interviewees articulated this disconnection by not mentioning ‘the economy’ spontaneously in interviews as often as high income interviewees and, if they did, putting the stress on the definite article, ‘the economy’ to indicate they saw it as distinct from their own economies. More recently in NIESR researchers’ Johnny Runge and Nathan Hudson-Sharp’s focus groups on this subject, a participant from Manchester reflected this common attitude when he said the economy did not really affect him: ‘it’s the money men who are really interested in it. They’re the ones that produce the graphs and all that for us workers’.

Dora Meade and her team ran focus groups in 2020–2021 which re-affirmed how much participants dislike the term ‘the economy’ and the negative reaction it provokes. they highlight two additional elements of voter perception that ‘the economy’ conjures up. As well as the sense of a disconnect from a narrowly drawn ‘productive/financial’ ‘economy’, Meade’s team finds it significant that many voters also interpret the economy as operating like a finite pot or container, rather than a circular flow of money where there can be multiplier effects.[5] This perception of ‘the economy as a pot’ triggers voters to think in two ways. The first is to make voters think in terms of scarcity. What comes out of the pot should be based on what went in. For example, in the pandemic when asked about furlough payments, participants were pleased to get them, but believed they would have to pay them back at some point. ‘Scarcity thinking’ also encourages blaming some people (such as welfare recipients or immigrants) for draining the pot without giving back. Reeves points to this when she says the key group of Conservative voters who she wants to win over work mostly in the private sector on full-time contracts, are aged 35–55 and are ‘the workhorses of the economy’. She describes them as supporting the welfare state, but having lost faith in a system they believe gives ‘something for nothing’ to those who have not contributed. Meade, et al. conclude that Labour should avoid the term ‘the economy’ precisely because it will trigger these anti-welfare responses, arousing traditional distrust of Labour as excessive spenders who are profligate with taxpayers’ money.

The second type of thinking the economy as a pot triggers is the related, but nevertheless distinct phenomenon, of ‘zero sum thinking’. As Lucy Barnes argues, evidence for the existence of zero sum thinking is hard to detect in surveys. But in qualitative research, it manifests as comments about how when the rich get richer, the poor get poorer and a general sense that for some to gain, others have to suffer. James Meadway argues that the 2017 Labour economic manifesto was more popular and credible with voters than the 2019 one in part because it was more closely aligned to ‘zero sum thinking’. A larger number of low income voters turned out for Labour in 2017 than in previous elections, including some who voted for the first time. In 2017, Corbyn and McDonnell were offering voters radical redistributive policies to underpin their zero sum slogan ‘for the many not the few’. They promised to scrap tuition fees, raise benefit and minimum wage levels and reverse austerity. At the same time, Labour’s 2017 fiscal credibility rule reassured voters that Labour would not spend excessively. And crucially, they pledged to raise taxes on the rich and big business to pay for it; the party spelled out that some rich people would lose from higher taxes, which enhanced Labour’s credibility. Peter Sloman also concludes about 2017 that ‘the recognition that fiscal policy was a “zero sum game” helped Labour tap into growing frustrations about inequality in Britain, especially among the young, female, and lower income voters who had borne the brunt of deficit-reduction measures’.

Only two years later in 2019, Corbyn and McDonnell’s economic policies were less popular. This is despite the fact that they were offering more, throwing free broadband into the mix and promising not to raise taxes on anyone earning under £80,000 a year. The low income voters who had turned out in 2017 did not bother to do so again and Labour lost the support of some of those in the middle. Meadway’s explanation is that by 2019, Labour’s economic policies had become less credible because they were less zero sum; everybody would gain, and nobody would suffer. The 2019 promise not to raise taxes whilst engaging in what appeared to be massive and ambitious short- and long-term spending suggested Labour was drawing on incredible notions like magic money trees.

‘The economy’ versus ‘liveability’

Having surveyed some of the qualitative evidence on voter responses to the term ‘the economy’, pointing to a sense of disconnect from the perceived narrowness of it and how it may trigger scarcity and zero sum thinking, what options do politicians have for the language they use? One option is not to use ‘the economy’, but to replace it with something quite similar. Meade’s cautious suggestion here is to use ‘the economic system’ in preference to ‘the economy’, because ‘economic system’ carries more of a sense—everyday economy style—of connections between people and different phenomena. The problem is that ‘system’ may also suggest something quite complex, and ‘economic system’ potentially conjures up the negative associations of ‘economy’, while not obviously linking with the non-productive spheres that everyday economy theorists want to turn voters’ attention to.

Two other alternatives to ‘the economy’ are Meade’s ‘people providing for their families’ and Froud and Williams’ ‘liveability’. As the words economy or economic are not included, these terms might provoke less negative reaction. But, they would involve politicians making radical changes to their language. While both terms fit with aspects of ‘everyday economy’, there are differences. Meade, et al.’s ‘people providing for their families’ has the merit that it makes it clear ‘the economy’ is not distant and, therefore, may increase the sense of connection. However, it is vulnerable to a similar charge of narrowness as ‘the economy’ relating only to production. Many people would interpret ‘providing for’ as earning money and would not necessarily think in terms of healthcare, the environment or social infrastructure. In contrast, Froud and Williams’ ‘liveability’ does imply the economy is a broader sphere, conjuring up certainly health and, possibly, things like environmental standards.

The main disadvantages with attempting to substitute ‘liveability’ for ‘the economy’ are two-fold. First, as Froud and Williams themselves admit, voters are ‘superficial and inattentive’ on what drives liveability and how it links with the rest of the economy. They would have to be paying a great deal of attention to make the adjustment that politicians who used to talk about the ‘economy’ and ‘economic’ are now incorporating their policies on those issues into use of this new term. Essentially, it would involve too big an educative leap. Second, one could argue ‘liveability’ is too all-encompassing and dissolves too many boundaries between environment, health and so on. This could confuse voters when other politicians were talking in terms of trade-offs between, for instance, spending on health or preventing climate change and ‘the economy’.

But, there is a more fundamental problem with chucking ‘the economy’ out of discourse. Voters may not like the term ‘the economy’, and may feel that it is distant and incomprehensible, but they may also accept those features as facts of life. To illustrate this point further, qualitative research into how voters see GDP is instructive. Famously, during the referendum campaign in a town hall in Newcastle, fed up with the European Union expert, Anand Menon, explaining the impact of a Leave vote on GDP, an audience member shot back ‘that’s your GDP, not ours’. Not only is GDP a negative term for some voters, encapsulating an economy that does not seem to benefit them, but GDP is also one of the least understood of all economic indicators. Runge and Hudson-Sharp’s survey research found that fewer than half of respondents were able to define GDP correctly, confusing GDP with the value of exports, the exchange rate (owing to the similarity to GBP) and even general data protection regulation (owing to the similarity to GDPR). This lack of understanding of GDP extended to survey respondents’ self-assessment of understanding: 48 per cent thought they had a ‘very good’ or ‘good’ understanding of the term ‘employment’, but only 24 per cent said the same for the term ‘GDP’. Focus group participants also demonstrated little knowledge about GDP and did not typically understand what was meant when economic indicators were reported as a proportion of GDP. GDP was seen as economic jargon, contributing to the feeling that economics was largely inaccessible to them. When told growth in GDP was 1.3 per cent (in 2019/2020), one male participant from Manchester replied, ‘it means absolutely nothing to me.’

However, in subsequent focus group research, where members of the public were in small groups each of which had an ‘economist’ participant, the economists commented that, when probed, most participants did at least indicate that GDP had something to do with the economy. Some economists said they were impressed that many people ‘at least related GDP to “the economy” and knew broadly what it was, even if the concept itself was abstract to them’. Reflecting on the discussions they had in the workshop, one economist said ‘“economy” is probably the obvious term, so I’m glad to see that [the focus group participants] did relate [GDP] to the economy. The economy itself can mean a lot of different things and I think they know that, they appreciated that.’ Runge and Hudson-Sharp report that when asked to define what they think ‘the economy’ is, focus group participants tend to come up with a list that is long, including employment/unemployment, interest rates, borrowing and lending, prices and inflation, wages, housing, production, trade, businesses and GDP. When I asked interviewees to define ‘the economy’ they said it was to do with money and then gave up on being able to elaborate or define further. But, similarly to Runge and Hudson-Sharp, when asked what it might include, and shown prompt cards, they were more forthcoming. They agreed things like ‘trade’ and ‘taxation’ were economic and came up with long lists that were almost identical to those from Runge and Hudson-Sharp’s focus groups. A few of my interviewees did add ‘housing’ to the productive list, but none added ‘environment’ or anything like sociability or social infrastructure.

Therefore, while many voters may have negative reactions to both the term ‘the economy’ and the more technical term ‘GDP’, they do have approximate definitions of them that centre on productive spheres, ranging into only a few of the areas everyday economist theorists see as constituting ‘liveability’. We could say many voters who do not think they have a strong understanding of the economy and economic matters and do not follow it closely, see it as inherently negative because of how little they feel benefited by it. But they do, however grudgingly, nevertheless recognise it as a concept. In addition, the most distinctive point about how they recognise it is as something that is primarily material or productive.

There is some contrasting evidence that shows an increasing number of voters believe, for instance, that environmental goals should be incorporated into considerations of what should be done in economic policy. Such voters may be in the process of re-framing the productive economy to one that encompasses sustainability. Dimitri Gugushvili argues the public should become at the least ‘agnostic’ about the desirability of purely economic growth and he argues there were signs this was taking place as early as 2008, citing a cross-national study which shows that the majority of people in the EU were opposed to ‘environmentally damaging’ growth.[10] In a more recent cross-national survey in 2021, he finds similar results. The survey asks two questions: whether protecting the environment should be given priority, even if it causes slower economic growth and some loss of jobs and whether economic growth and creating jobs should be the top priority, even if the environment suffers to some extent. While, overall, the UK is not one of the most enthusiastically environmentalist countries, in response, roughly half plump for the environmentalist options. Gugushvili concludes ‘the general public will not necessarily react negatively to policies that curb growth as long as those policies entail tangible ecological benefits’.

But the evidence on this subject is not conclusive. For instance, a 2022 survey by King’s College London asks respondents whether they would ‘give part of their income tax to help prevent climate change’—in itself a fairly ambiguous commitment, and only 35 per cent tend to agree or strongly agree. Therefore, we should be careful not to exaggerate how far or how deeply this shift in attitudes towards economic growth has taken place, nor how far voters may still want to be able to use intelligible language to discuss trade-offs between, for instance, the environment and the economy. And crucially for Labour, even Gugushvili finds support for the belief that the economy should only be based on growth that is environmentally sustainable is lower among economically disadvantaged voters.

The economic language Rachel Reeves uses

Has Shadow Chancellor, Rachel Reeves, changed the economic language Labour uses? I analysed the seven public speeches and press releases archived on the Labour Party website, on the basis that these are considered important for public consumption.[12] Her social media releases tend to be summarised versions based on phrases used in the speeches. She uses the term ‘the economy’ frequently, forty-six times in the seven documents. It is noteworthy that she only uses the bald ‘the economy’, without a qualifier, three of those forty-six times, usually prefacing ‘economy’ with words like ‘our’, ‘secure’ or ‘prosperous’. Six times, her use of the word economy is with ‘foundations’. Of those six, in only half is she attempting to explain what the foundations are in everyday economic theory terms. One example is in her one speech explicitly on ‘the everyday economy’ of January 2022: ‘we must attend to the foundations of our economy, without which we could not enjoy healthy lives or strong communities, but which have been neglected by government for too long’. In addition to the ‘health and welfare’ foundations, she adds ‘high street businesses’.

Reeves tries to emphasise the linkages between different aspects of the economy, as everyday economist theorists advocate, saying ‘the state of our everyday economy really matters. Because driving up pay and conditions in the everyday economy is key to increasing spending power in our communities and reviving our high streets’. But, she justifies this by referring to their productivity, how ‘the foundations’ of the economy relate to wages and growth, rather than framing a more radical ‘everyday economy’ conceptualisation.

Reeves does seem to be responding to evidence that GDP is meaningless jargon to many voters. She makes only three references to it. One accuses the Tories of letting the debt/GDP ratio get too high; the other two have the word ‘invest’ related to the ‘GDP’: ‘investment as a proportion of GDP’ and ‘target of three percent of GDP invested in [research and development]’. In all three cases, she may be pursuing a deliberate strategy to promote the message that GDP is a positive, something to be invested in. But this reluctance to use the term ‘GDP’ does not mean she is avoiding notions of growth in the productive economy. She mentions ‘growth’ as a positive frequently (ten times). Reeves makes no reference, apart from the occasional mentions of creativity, green jobs and foundations of welfare and utilities already cited, to a concept like ‘liveability’ being needed to replace measures like GDP, productive growth or the economy itself. In general, apart from that one everyday economy speech, she has not so far made radical changes to conventional economic language.

Conclusion

Some on the left think Labour should stop mentioning ‘the economy’ as much as it does and should resist temptation to challenge the Conservatives on economic competence in the conventional sense. For instance, it would be a mistake for Labour to attack the Conservatives for the high debt/GDP ratio or high tax burden, especially given that many voters may give the Conservatives the benefit of the doubt that the pressures from the pandemic followed by war in Ukraine are so unprecedented. It might be better to let the Conservatives explain why they are spending so much and accruing so much debt—in effect, to watch them deal with the challenge of reconciling ‘economically credible’ and ‘Keynesian’.

At the same time, Labour could talk convincingly about things to do with the economy without using the term, adopting a sectoral approach—what Labour would do about energy, labour shortages, declining high streets. This closely aligns with how, even though voters see ‘the economy’ as alienating, they see it as encompassing a list of productive sectors and activities, such as inflation and housing. Commentators on the left like Meadway have also urged Labour to stop talking about growth as a goal, in part for environmentalist reasons, but also because currently voters’ main concern is the cost of living. In addition, he argues Labour’s reputation on delivering economic policies to help working families is stronger than its reputation for delivering economic growth. Therefore, the argument is that, as well as being sound economic policy, there are strategic reasons for Labour emphasising the cost of living.[13] More broadly, everyday economy theorists and those on the left argue for educating voters to see that the economy is connected with society and the environment.

However, I argue both the ‘sectoral’ and ‘liveability’ approaches cede too much ground to the Conservatives. The Conservative reputation for economic competence took a hit in the 1992 exchange rate mechanism crisis and contributed to Labour’s subsequent election victory. Since then, commentators have marvelled at how resilient it has been, bolstering austerity and apparently allowing the party to reinvent itself economically in recent years, veering wildly from austerity into levelling up and high wage and back again to wage restraint. They point to the role of the right-wing media in bolstering the Conservatives, always pushing Labour politicians harder on how they would cost spending programmes or how they could justify increasing debt, even if for investment. Why do voters give the Conservatives the benefit of the doubt when it comes to economic competence? This article suggests that one reason is that the public, even those sections that feel alienated from the economy, do recognise it as a sphere that is to some extent distinct from everyday life. Their own economic lives are of vital importance, but they want to think some politicians can be competent in managing that broader sphere effectively enough that they will benefit, or at least not be harmed. Given short attention spans to economic issues, the confidence with which Conservatives announce their familiarity and competence with the economy plays a role in some voter perceptions.

Labour staying silent on ‘the economy’ and ‘economic competence’ might be interpreted as further confirmation that it cannot be trusted on this issue. Even if Labour adopts aspects of everyday economy in terms of policy, those in the party should be more cautious about changing how they talk about the economy, and its growth, with voters. They need to fight for a reputation for economic competence in terms voters will understand, rather than confusing them further with new terms likely to arouse suspicion and incomprehension.

  • Anna Killick

    Anna Killick

    Anna Killick is Collections Editor at the Political Quarterly. She is also a Research Fellow working on perceptions of the economy at University College London.

    Articles by Anna Killick
Volume 95, Issue 1

Latest Journal Issue

Volume 95, Issue 1

Includes a collection on the Future of Public Service Broadcasting, edited by Suzanne Franks and Jean Seaton. This features articles such as 'The Governance of the BBC' by Diane Coyle; 'A Public Service Internet - Reclaiming the Public Service Mission' by Helen Jay; and 'BBC Funding: Much Ado about the Cost of a Coffee a Week' by Patrick Barwise. There are a wide range of other articles including 'Back to the Stone Age: Europe's Mainstream Right and Climate Change’ by Mitya Pearson and 'Labour, the Unions and Proportional Representation' by Cameron Rhys Herbert. Finally, there is a selection of book reviews such as Lyndsey Jenkins's review of Fighting For Life: The Twelve Battles that Made Our NHS and the Struggle for Its Future by Isabel Hardman, and Victoria Brittain's review of Three Worlds, Memoirs of an Arab-Jew by Avi Shlaim.

Find out more about the latest issue of the journal