Rethinking economics: Downs with traction

Economics is involved with policy, but economic theory has relatively little to say about the policy making process. Governments’ economic objectives are assumed to be given. One exception to this is the work of Anthony Downs in An Economic Theory of Democracy. He considered possible objectives for participants in the political process, these forming a basis for a set of propositions on the operation of a democratic government. He made two key assumptions, namely no false information, and no irrationality. As he acknowledged, neither of these assumptions is realistic in politics. There is extensive literature to this effect, including writing by Adam Smith recognising the role of rhetoric (deliberative eloquence) in political debate, and the significance of propaganda was recognised in the 1940s. Modern approaches to political processes, agenda setting, and discourse analysis also emphasise persuasion, with framing being an important active or passive factor in this process. These relate to broadly held views and could be called “macro-rhetoric”. In recognition of the literature on rhetoric, this paper builds on Downs' foundation by relaxing his assumptions. First, there is consideration of the nature of rhetoric, including “macro-rhetoric”. This is followed by consideration of the effects of rhetoric on policy debate, and the importance of “traction” on political agendas. As with Downs’ presentation, this discussion provides propositions, but these differ from those that he presented. Building on the earlier material, the derived propositions indicate, in particular: policy issues will only be addressed spasmodically; few options will get attention; and there is likely to be poor monitoring. Consideration is then given to implications for economists and their approaches to policy.