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Hello and welcome to the TCC Weekly – the Friday bulletin for people who know their Magic Formula from their Magic Castle.
Today we look, in our politics section, at the ‘household analogy’ following a blog by economist Richard Murphy. What are the origins of the metaphor, and why is it so widely used?
And of course, there’s Charlie’s Attic, the part of the bulletin that maxes out the TCC credit card each Friday. Today’s instalment features an article about where cringing comes from.
We were interested in this short blog, published recently by left-wing economist Richard Murphy. Entitled ‘The origins of the household analogy’, its start-point is a 1935 book, Housewives and Downing Street, in which Murphy finds early examples of the ‘household’ analogy at work.
For those not familiar, the household analogy is the idea that a national economy operates in the same way as a family home does, with the central priority being to make sure expenditure does not trump income. A good example of the analogy in action was the Tory allegation, in 2010, that Labour had ‘maxed out the national credit card’. Margaret Thatcher, meanwhile, boasted in 1988 that “it’s taken a government headed by a housewife with experience of running a family to balance the books for the first time in 20 years – with a little left over for a rainy day.”
Like the ‘lump of labour fallacy’, the household metaphor is a source of annoyance for economists – especially progressive ones like Richard Murphy – who point out that this is not how national economies work. Murphy ends his blog on a note of frustration: “[the] lie is still being promulgated now by politicians from both Labour and the Tories, who see it as their job when in office to reduce the impact and power of the state... and that is very depressing.”
Whilst we enjoyed Murphy’s exploration of how the metaphor came about, we wonder if this conclusion gets things the wrong way around. The household analogy runs deep in the psyche of voters after all. It’s highly intuitive and reflects how many people who are not economists tend to contemplate the national finances – even those whose values are pretty left-wing. Indeed, we wrote last year about the UK’s ‘economically radical, fiscally conservative’ economic temperament.
If the Tories have been successful in using the metaphor – and if Labour have historically failed to challenge it – then we wonder if this stems from the power of the metaphor itself, rather than from a desire by elites to “reduce the impact and power of the state.” Easy-to-grasp alternative analogies are in short supply after all. Hence, the need to communicate economic decisions in layman’s terms often brings politicians back to the language of individual bank balances and family purse-strings.
The centre right are lucky here, in that the implications of the household analogy are far closer to their own, fiscally conservative ideas than to Labour’s. Hence Labour often ends up discussing the economy on Tory terms. Yet it’s nevertheless a mistake, we tend to think, to see the household analogy as an ideological device – rather than as a comms tool used for expediency.
And finally this week, Charlie’s Attic, where big spenders and bean-counters alike can find what they’re looking for:
