Donald Trump chose to defend his protectionist stance by saying that the “US is the piggy bank that everybody is robbing”. This hit bullseye in convincing his constituency—never mind whether the data and facts corroborate his charges. Photo: AP
Donald Trump chose to defend his protectionist stance by saying that the “US is the piggy bank that everybody is robbing”. This hit bullseye in convincing his constituency—never mind whether the data and facts corroborate his charges. Photo: AP

Why economists must learn to communicate better

Economic logic on global trade or unemployment can never match up to Donald Trump's 'piggy bank' or Barack Obama 'my job just got bangalored' metaphors

Economics jargon can be quite dispiriting, and it’s no wonder that economics is called the “dismal science". Okay, whether it should qualify as a “science" at all is also in dispute. But economists usually attribute that barb to other jealous social sciences. Even then, most economists do agree that they need to spice up their language and communication. And learn to use plain words, instead of high-sounding “elasticity of demand" or “seasonally adjusted three-month moving average". All you get for such words is glazed eyes from the audience.

Economics is as much about communicating well as doing analysis. It is here that politicians score over economists. If politics is the art of the possible, then it is also the art of communication. Successful political leaders get the message across to their flock, exactly the way they want it to be heard. The latest example is the US President Donald Trump, whose mastery of conveying state policy in a barrage of staccato tweets is unparalleled. You can accuse him of many things, but not of being too reticent. He gets his message across using folksy metaphors. For instance, on the eve of the recent G7 summit, in picturesque Quebec, he chose to defend his protectionist stance by saying that the “US is the piggy bank that everybody is robbing". This hit bullseye in convincing his constituency back home; never mind whether the data and facts corroborate his charges. The immediate imagery conjured up is that of all other rich country trading partners just raiding hard-earned American savings for their selfish benefit.

The “piggy bank" is a repository of painstaking, slow and disciplined accumulation of savings, which should not be frittered away. The fact is that the American savings rate is quite low. And, logically, if Americans are spending their savings on foreign goods, it’s their choice. Nobody is forcing them to. There certainly can’t be any stealing, but only voluntary spending.

Trump also tweeted: “Fair trade is now to be called fool trade if it is not reciprocal," implying that trading partners were imposing non-reciprocal high tariffs for American-made goods. The fact is that the average tariff rates among G7 nations are exactly the same as the US as per World Bank data. In fact, Canada’s average is much lower, at 0.8% compared to 1.6%. The European Union (EU) invests more in the US than any other country, and employs more American workers than the other way round. The EU also buys a substantial amount of services from the US, and their bilateral trade deficit is less than one-third as compared to that of the US with China. Surely, no economist would consider low single-digit tariff rates as protectionist? But none of these facts or reasoning can dull the powerful imagery of “piggy bank robbery". Such is the power of metaphors.

If you think President Trump is an extreme case of right-wing irrational protectionist rhetoric, think again. Back in 2006, another presidential aspirant coined a metaphor, “My job got Bangalored." This was the word wizardry of candidate Barack Obama (he never used it after getting elected). The US unemployment rate peaked at nearly 11% after the Lehman crash, which means that more than 15 million people were unemployed. And even going by very liberal estimates, not more than 300,000 jobs must have been offshored to India. That is about 2% of the peak unemployed workforce. But such is the power of the metaphor that each of those millions who lost a job thought their job had gone to Bengaluru.

Yet again, the politician’s artful articulation, which no amount of data could refute. A presidential candidate of 1992, Ross Perot, had used the imagery of “a giant sucking sound" to describe the migration of jobs heading south to Mexico, thanks to the North American Free Trade Agreement (Nafta). Again, the fact is that while manufacturing jobs and factories did cross the border, the agreement led to immense benefits for the US. That same agreement is in mortal danger of being quashed by President Trump as well, for similar reasons.

Metaphors and memes have much greater longevity than cold and boring economic logic. One of the most abiding, and mixed up, metaphors was coined by The New York Times columnist Thomas Friedman as the title of his book, The World Is Flat. The name arose from a conversation with Nandan Nilekani, who told Friedman that forces of globalization were levelling the playing field for countries like India. Friedman interpreted that to mean that the world was flat. Actually, a more globalized and interconnected world would be round, not flat. But never mind. The metaphor stuck and has been with us ever since.

In India, too, we have had more than our fair share of politicians with their metaphors. One popular slogan was, “We want silicon chips, not potato chips," somehow signifying better industrialization. Never mind that silicon chip factories are extremely capital intensive, and provide minimal employment, whereas agro-processing (like potatoes to chips or fruit to juices) creates much more employment and is more appropriate for India.

The bottom line is that economists must learn to match analysis with articulation. Else they will lose the metaphor war. But inappropriate metaphors lead to bigger and lasting damage. It is worth recalling George Orwell’s warning that foolish thoughts arise from the slovenliness of our language and the “present political chaos is connected with the decay of language".

Ajit Ranade is an economist and a senior fellow at the Takshashila Institution, an independent centre for research and education in public policy. Comments are welcome at views@livemint.com

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