Politics - Blog

The Seven Economic Myths We Tell Ourselves

Last week I questioned whether our current school curriculum provides us with the knowledge we require for handling money during our adult life. This week I’d like to look at seven common economic myths I consequently grew up with that, I believe, should be examined by students in today’s education system.

Economics is often presented as a science of numbers. We hear about growth rates, inflation figures, government debt and stock market performance. Experts produce graphs. Politicians quote statistics. Journalists report percentages.

Yet much of our thinking about economics is not based on facts. We inherit economic beliefs in much the same way that we inherit religious beliefs, political loyalties, or assumptions about human nature. They become part of our mental furniture. We rarely examine them. We simply assume they are true.

Here are seven economic stories many of us have been taught to believe.

Myth No. 1. If GDP Is Growing, Everything Must Be Fine

One of the most common assumptions is that economic growth automatically means social progress. If the Gross Domestic Product is increasing, politicians congratulate themselves, commentators celebrate and newspapers announce that the economy is doing well.

But there is an obvious question that often goes unasked: doing well for whom?

GDP measures economic activity. It measures production. It tells us how much a country produces and sells. What it does not tell us is how that wealth is distributed or whether ordinary people are benefiting from it.

A nation can have impressive growth while housing becomes unaffordable, public services deteriorate and large sections of the population struggle to make ends meet.

As a former teacher, I sometimes compare GDP with examination results. A school may improve its statistics while becoming a worse place to learn. The numbers can look impressive while something essential is being lost.

The same is true of nations. Economic growth matters, but it is not the same thing as human flourishing.

Myth No. 2. Debt Is Always Bad

Most of us are taught to fear debt. For individuals, that is often sensible. Excessive borrowing can destroy lives. It can create stress, dependency and hardship. Yet not all debt is the same.

A mortgage, a student loan or a business investment is different from borrowing money to fund reckless consumption. One creates future value; the other merely brings tomorrow’s spending into today.

The same principle applies to governments. When a state borrows to invest in education, infrastructure, scientific research or healthcare, it may be creating assets that benefit future generations. The question is not whether debt exists, but whether the borrowing is productive and sustainable.

The most successful economies in the world often carry substantial public debt. What matters is not the existence of debt itself, but the wisdom with which it is used.

Myth No. 3. The Rich Create Jobs

This idea appears so frequently in political debate that many people accept it without question. There is, of course, some truth in it. Entrepreneurs create businesses. Businesses employ people. Investment can stimulate growth. But the story is incomplete.

Businesses do not hire employees simply because their owners are wealthy. They hire employees because there is demand for their products and services. A restaurant expands because customers fill its tables. A manufacturer recruits workers because orders are increasing. A shop hires staff because people are buying what it sells.

In other words, jobs are not created by wealth alone. They are created by economic activity. Moreover, much employment comes not from billionaires or multinational corporations, but from small and medium-sized businesses. Across Europe, countless family businesses, local shops, tradespeople and self-employed entrepreneurs collectively employ millions of people.

The real engine of employment is not wealth itself but a healthy and active economy.

Myth No. 4. Markets Always Know Best

For some people, the market has become almost a secular religion. The argument is familiar. Left alone, markets allocate resources efficiently. Government intervention merely creates distortions and stunts economic growth.

There is certainly some truth in this. Competitive markets can be remarkably effective. They often encourage innovation, efficiency and consumer choice. But markets are not infallible.

Consider healthcare. If access to medical treatment depends entirely upon ability to pay, many vulnerable people will be excluded.

Consider environmental protection. Businesses may profit by passing environmental costs onto society as a whole. Pollution becomes someone else’s problem.

Economists even have a term for these situations: market failures.

The reality is that markets and governments each have strengths and weaknesses. Mature societies require both. The challenge is not choosing one over the other, but finding the right balance between them.

Whenever someone insists that the answer is always more market or always more state, I become suspicious. Human societies are rarely that simple.

Myth No. 5. If You Tax the Rich, They Will Leave

This argument appears whenever tax reform is proposed. Raise taxes on wealthy individuals, we are told, and they will immediately pack their bags and move elsewhere.

At first glance, the claim seems plausible. Yet people are not spreadsheets.

Human beings make decisions based on family, friendships, culture, language, quality of life, security and belonging. Financial considerations matter, but they are rarely the only consideration.

Countries such as Norway, Sweden and Denmark have maintained relatively high levels of taxation while remaining prosperous, innovative and attractive places to live.

This does not mean taxes can be increased without limit. Excessive taxation can certainly discourage investment and entrepreneurship.

The point is simply that reality is more nuanced than political slogans suggest.

People stay for many reasons. They leave for many reasons. Tax is only one factor among many.

Myth No. 6. Inflation Is Always Bad

The word inflation usually arrives wrapped in anxiety. We hear that prices are rising and immediately assume disaster.

Certainly, high inflation can be deeply damaging. It erodes savings, creates uncertainty and hits those on lower incomes particularly hard. Yet economists generally do not aim for zero inflation.

A modest level of inflation is usually considered healthy because it reflects a growing economy. It encourages spending, investment and economic activity.

What is often forgotten is that the opposite problem can be equally dangerous.

If prices continually fall, people postpone purchases. Why buy today if everything will be cheaper tomorrow? Businesses then sell less, investment slows and unemployment may rise.

Like many things in life, the issue is not inflation versus no inflation. It is balance. Too much inflation can be destructive. Too little can be equally problematic.

Myth No. 7. Money Is Real

This final myth is my favourite because it takes us beyond economics and into philosophy.

Most of us think of money as something solid and tangible. We earn it, spend it, save it and worry about it. Yet money possesses no intrinsic value.

A fifty-euro note is merely paper. The number displayed in your bank account is simply a digital record stored on a computer somewhere.

Money works because we collectively believe it works. Its value depends upon trust.

This is not as strange as it sounds. Much of human civilisation rests upon shared beliefs. Nations exist because enough people believe they exist. Laws function because people collectively accept their legitimacy. Companies, universities and governments all depend upon systems of shared trust.

Money is one of humanity’s most successful collective stories. That does not make it imaginary. It makes it a social construct, like any other.

And perhaps that is one of the most important lessons economics can teach us.

If only I’d known in my twenties what I know now

If there is a lesson I wish somebody had taught me when I was starting out, it is that wealth is rarely built through cleverness alone. Looking back, the people who seem to achieve financial security are often not the most intelligent, the most educated or even the highest earners.

They are the people who consistently do a few simple things well.

- They spend less than they earn
- They avoid unnecessary debt
- They acquire productive assets
- They diversify their investment portfolio
- They think long term
- And above all, they allow time and compounding to work their quiet magic.

Perhaps that is the greatest economic lesson of all. Not that there are easy answers. But that small, sensible decisions repeated over decades are often more powerful than brilliant ideas pursued for a few months.

Beyond Economics

The purpose of examining these myths is not to replace one certainty with another.

It is to become more cautious whenever someone offers a simple explanation for a complicated problem.

Economic debates are often presented as battles between truth and error, between common sense and foolishness, between left and right. Reality is usually less satisfying.

The older I become, the less interested I am in certainty and the more interested I am in questions.

- Who benefits from economic growth?
- What kind of debt creates value?
- When do markets work well, and when do they fail?
- How much inequality can a society tolerate before trust begins to erode?

And perhaps most intriguingly of all: what other things do we collectively believe in that are no less dependent on faith than money itself?

Economics turns out to be about far more than money.

It is about human beings and the stories we tell ourselves about how society works.

The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.

— F. Scott Fitzgerald

I studied for four years at Oxford and Nobody Taught Me How Money Works

The British government has this week announced plans to ban social media access for under-16s. Ministers describe it as a historic intervention to protect children. Newspapers are full of discussion about algorithms, screen addiction and online harms. Yet as I watched the announcement unfold, I found myself asking a different question entirely. Why are we once again arguing about what children should be prevented from doing rather than what they should be taught?

The discussion is presented as a matter of national importance. Ministers speak gravely about online harms. Newspapers speculate about restrictions and enforcement. Experts are summoned to television studios. Committees are established. Reports are commissioned.

But all of my experience as a student and teacher tells me that we are arguing passionately about the wrong problem. At sixty-five years of age, having attended good schools, won a scholarship to Oxford, taught for decades and worked in several countries, I have reached an uncomfortable conclusion: almost nobody ever taught me how money works.

Nobody explained investing. Nobody explained compound interest. Nobody explained pensions. Nobody explained the long-term consequences of inflation. Nobody explained the relationship between taxation and public services. Nobody explained mortgages beyond the most superficial level. Nobody explained the astonishing difference between acquiring assets and merely consuming income.

Yet these are not specialist concerns. They are among the most important forces shaping the lives of ordinary citizens.

They influence where people live, when they retire, whether they accumulate wealth, how vulnerable they are to economic shocks and, ultimately, the degree of freedom they enjoy throughout their lives.

The strange thing is that this educational failure is almost invisible. Some parents complain if their children leave school unable to read Shakespeare. Politicians worry if socially constructed examination results fall.

Universities debate decolonisation, inclusion, safe spaces and artificial intelligence.

Meanwhile, millions of young adults enter the world with little understanding of debt, investment, taxation, pensions or wealth creation.

Nobody seems particularly alarmed. But as a teacher, I find this extraordinary. And as a citizen, I find it deeply disturbing.

As someone who grew up in a working-class family, I find it difficult to avoid an even more uncomfortable observation.

Those who grow up in affluent families often learn these things anyway.

They hear conversations around the dinner table. They observe parents discussing property, investments, inheritance and taxation. They absorb financial knowledge almost by osmosis.

Those from less privileged backgrounds are often far less fortunate.

The result is that schools, which are supposed to reduce inequality of opportunity, usually end up reinforcing it.

I studied languages, theology, literature and philosophy. I do not regret a moment of it. Education transformed my life and broadened my horizons in ways I shall always be grateful for.

Yet if I am completely honest, my grandfather, a builder with far less formal education, may well have understood practical wealth creation better than I did. He understood property. He understood value. He understood patience. Most importantly, he understood that money is not primarily about income. It is about what income becomes over time. That lesson alone may be worth more than half the curriculum I studied. Unfortunately, he passed away when I was five years old, so he could never pass on his wisdom.

The question therefore is not whether children should be protected from harmful content online. Of course they should.

The question is why governments find it easier to regulate TikTok than to ask whether the curriculum itself is preparing young people for adult life.

Why is there endless discussion about screen time but comparatively little discussion about economic literacy?

Why do we devote thousands of classroom hours to subjects that many pupils will never use again while allocating almost no serious time to understanding mortgages, pensions, inflation, taxation, investing and economic reasoning?

And why, after decades of educational reform, do so many intelligent, capable and highly educated adults still feel financially illiterate?

These are not merely personal questions. They are political questions. They are social questions.

And they are ultimately questions about power.

A population that cannot critically evaluate economic arguments is easier to persuade, easier to frighten and easier to divide. It becomes dependent upon experts, commentators and politicians to interpret reality on its behalf.

A population that understands economics is harder to manipulate.

Perhaps that is why the seven economic myths I recently encountered fascinated me so much. I will share them here next week.

These seven myths didn’t just reveal something about economics, but they revealed something about education.

And perhaps, more importantly, about what education still fails to teach.

“Education is not the filling of a pail, but the lighting of a fire.”

— W. B. Yeats

If Yeats was right, then perhaps we need to ask whether we are lighting the wrong fires.

Gregor Gysi: The Best Chancellor Germany Never Had

Why Friedrich Merz Is Sealing Germany’s Coffin

Recently, Gregor Gysi made an observation that deserves far more attention than it has received. According to Gysi, Friedrich Merz’s political strategy is increasingly based on finding new groups of people to blame for Germany’s socio-economic problems rather than confronting the deeper causes of the country’s decline.

First it was immigrants and refugees.

Then it was the healthcare system.

Now it is Germany’s workforce.

Whether one agrees with Gregor Gysi on everything or not, his criticism exposes a troubling pattern. Whenever Germany faces a serious challenge, Merz appears more interested in identifying a convenient target than offering either a compelling vision for the future or consistent decisions aligned with clear political and ethical values.

The Refugees Who Helped Germany

Germany welcomed around one million refugees during the migration crisis of 2015 and 2016. The decision was controversial then and remains controversial today, stoked up by the nationalism of the AfD.

Yet ten years later, many of these refugees have integrated successfully. They have learned German, entered the labour market, started businesses, paid taxes, contributed to the pension system and become part of German society.

Some arrived as highly qualified professionals: doctors, engineers, academics and lawyers. Others filled essential jobs that Germany struggles to recruit for itself.

Germany’s demographic crisis is not a future problem. It is happening now. Employers across the country face labour shortages. The pension system depends on a shrinking workforce supporting a growing retired population.

Against this background, treating refugees primarily as a burden rather than as contributors makes little economic sense.

I recently thought of a young Syrian woman I know. She now speaks fluent German, as well as English and Arabic. She is completing a doctorate in law and has every prospect of becoming a highly productive member of German society.

Yet she is planning her future elsewhere, most likely in the United States.

Germany invested in her integration. Germany benefited from her talent. Germany may now lose her altogether.

That is not a success story. It is a failure of political imagination.

Scapegoating Healthcare

The same pattern appears in healthcare.

Germany undoubtedly faces major financial pressures in its health and social insurance systems. An ageing population, rising costs and economic stagnation create genuine challenges.

But the answer cannot simply be to reduce protections that millions of people rely upon.

The principle that families should have access to healthcare regardless of income has long been one of the strengths of the German social model. Weakening that principle may save money in the short term, but it risks creating greater social and economic costs in the future.

What is particularly striking is the contrast between the urgency applied to military spending and the hesitation shown towards investments in social infrastructure.

Politicians readily describe defence spending as an investment in the future. Yet healthcare, education and social stability are investments too.

A nation is not defended only by weapons. It is defended by healthy, educated and confident citizens.

The Myth of Working Longer

The latest target appears to be Germany’s workforce.

Merz has argued that Germans need to work more hours and remain economically active for longer. On the surface, this sounds practical and responsible.

In reality, it reflects a remarkably outdated understanding of productivity.

Human beings are not machines.

Productivity depends upon motivation, trust, leadership, skills, technology and working conditions. A well-managed and valued employee working thirty-five hours per week can often contribute more than an exhausted and disengaged employee working fifty-five.

The most successful economies do not necessarily have the longest working weeks. They have the most productive working hours.

Germany’s challenge is not primarily that its people are lazy. It is that investment in digitalisation, reducing bureaucracy, promoting infrastructure and innovation has lagged behind many competitors for years.

Blaming workers is easier than fixing structural problems. But it is also less effective.

Germany Needs Leadership, Not Scapegoats

Friedrich Merz undoubtedly possesses ambition. He looks like a statesman. He speaks confidently. He projects authority.

Yet genuine leadership requires more than authority.

It requires empathy.

It requires vision.

It requires values.

The CDU once prided itself on balancing economic responsibility with social responsibility. Today, that balance often seems absent. The willingness to embrace large-scale borrowing while simultaneously questioning social protections creates the impression not of strategic thinking but of political inconsistency.

Germany faces enormous challenges: demographic decline, economic stagnation, digital backwardness, labour shortages and growing political polarisation.

None of these problems will be solved by blaming refugees, healthcare recipients or workers.

They require something much rarer.

They require a government willing to unite rather than divide.

For all his political flaws, Gregor Gysi has long understood one simple truth: a society becomes stronger when it expands the circle of belonging rather than narrowing it. He truly is the best chancellor Germany never had.

Germany’s future will depend on whether more of its leaders understand that truth as well.

“When five people own more wealth than the poorer half of an entire nation, the problem is not refugees, nurses or workers. The problem is where the wealth has gone.”
— Gregor Gysi (paraphrased from his speeches on wealth inequality)

Sovereignty Begins at the Desktop

Linux desktop workspace representing digital sovereignty, privacy and independence from big tech ecosystems

For years, choosing an operating system was treated as a consumer preference: Mac or Windows. Apple or Microsoft. Design or compatibility.

Those days are ending. Indeed, for me, they have already ended.

My move to Linux was not born of practicality. It began as an explicitly political decision: a small personal protest against what I see as the increasingly troubling direction of the United States and my growing discomfort about privacy and with Europe’s dependence on American technology.

What began as principle, however, quickly became something more exciting. An education, even.

In moving away from mainstream platforms, I discovered not merely a political statement but a better way of computing: faster, calmer, less intrusive, more user-controlled—and one that forced me to confront how casually many of us have entrusted vast quantities of personal data to a handful of foreign corporations.

Increasingly, our technology choices are no longer merely about convenience or aesthetics. They are about jurisdiction, sovereignty, dependence and trust.

The Illusion of Neutral Technology

We have spent two decades pretending that software is apolitical. It is not.

Private data is the so-called new oil.
Cloud platforms are geopolitical assets.
Operating systems are instruments of jurisdiction.
App ecosystems are channels of dependency.

To build one’s digital life entirely on American platforms is not simply to use foreign products. It is to place one’s communications, workflows, data and habits inside systems governed elsewhere.

For years, this dependency seemed harmless because America appeared stable, predictable and aligned with European interests. That assumption now looks far less secure.

Why Linux Appeals Beyond the Technically Curious

My own switch to Linux was motivated initially by principle, but sustained by practical reality.

Linux is, quite simply, excellent.

It offers:

- greater speed and efficiency
- far less software bloat
- more user control
- minimal intrusive advertising or telemetry
- freedom from forced ecosystem lock-in
- a calmer, more focused computing experience

It also avoids a growing trend I find exhausting in mainstream software: the transformation of operating systems into hyperactive consumer platforms.

Notifications.
Recommendations.
Prompts.
Pop-ups.
Embedded AI assistants.
Animated interfaces designed less for work than for perpetual engagement.

Linux, by contrast, still feels like a tool. Not a theme park.

My Preferred Distributions: Mint and Arch

For those exploring Linux, I find two distributions particularly compelling.

Linux Mint: Mature Practicality

Mint is Linux at its most civilised.

Stable, polished, intuitive and highly accessible, it offers a reassuringly traditional desktop experience without sacrificing elegance.

It is the Linux distribution I would recommend to most ordinary users and beginners.

Arch Linux: Radical User Ownership

Arch is a different philosophy entirely.

Minimal, modular and deeply configurable, it demands more of the user—but rewards that effort with extraordinary control.

Arch is not merely software.

It is a statement of intent:

I will shape my tools. My tools will not shape me.

Europe Is Beginning to Think This Way Too

What may once have looked like niche hobbyism is increasingly becoming state policy.

The French government has announced plans to migrate large parts of its public administration away from Windows and toward Linux as part of a broader digital sovereignty strategy.

Other European administrations are exploring or implementing similar moves, including regional and national migrations toward open-source alternatives in Germany and Denmark.

Why?

Because governments are recognising what individuals increasingly recognise:

Dependency creates vulnerability.

Reliance on foreign proprietary platforms means reliance on:

- foreign licensing decisions
- foreign corporate roadmaps
- foreign legal jurisdictions
- foreign political stability

The Great Irony: Linux Already Runs the World

Here is the part casual users often miss: Linux may still be niche on consumer desktops, but it already powers much of the digital world.

Linux runs:

- most of the web’s server infrastructure
- the overwhelming majority of supercomputers globally
- vast portions of cloud computing infrastructure
- countless embedded and industrial systems
- even Android is based on a modified version of the Linux kernel

In other words:

Linux is not an outsider technology.

It is the backbone of modern computing.

The desktop is merely catching up.

A Warning to America — And An Opportunity for Europe

The United States should not assume technological dominance is permanent.

Consumers, institutions and governments are increasingly asking difficult questions:

- Who controls our infrastructure?
- Who governs our data?
- What happens if political alignment breaks?
- Why are we so dependent on foreign platforms for essential digital life?

If American tech firms continue to treat lock-in as strategy and complacency as entitlement, they may discover that dominance breeds resistance.

Meanwhile Europe has an opportunity.

Not necessarily to replace Silicon Valley overnight.

But to build credible alternatives.

To invest in open standards.
To support interoperable software.
To back European cloud and software infrastructure.
To treat digital autonomy as seriously as energy autonomy.

The next decade may not produce a mass exodus from American technology.

But the direction of travel is becoming harder to ignore.

Slowly, unevenly, but unmistakably.

Final Thought

My move to Linux will not alter geopolitics.

But it is, in its own small way, an expression of a wider conviction:

That technology should serve its user.
That infrastructure should remain contestable.
That dependency should never become invisible.

Linux is not merely for hobbyists anymore.

It is increasingly for those asking a larger question:

Who should control the tools on which modern life depends?

“In times of change, the learners inherit the earth, while the learned find themselves beautifully equipped for a world that no longer exists.”
— Eric Hoffer