You're BROKE because you can't spell A.U.S.T.E.R.I.T.Y

What is the economy, really?!

The Mystery of the Economy

During the 2024 general elections, concern about the economy seemed to come from everywhere. Newspaper headlines asked, “How will the markets react?” Political analysts wondered aloud, “Will the economy survive this?” Political parties leaned heavily on buzzwords like foreign direct investment and grey-listing.

I accepted those statements almost automatically. I assumed they were correct because they sounded confident and technical. But an honest moment of reflection, and further reading, led me to an uncomfortable realisation: I had no idea what the economy actually was, nor what most of these claims truly meant. The more I read, the more questions I had.

Where is the economy? Is it something I can touch? Are “the markets” a physical place I could visit? Is Pick ’n Pay or Checkers part of the economy? Is it on my Apple Pay? Who exactly is the economy - and who does it benefit?

As I began reading more accessible material, something became clear. The economy is often discussed using words like austerity and foreign direct investment, yet these terms are rarely explained in ways ordinary people can understand. Economic language is locked behind jargon, spoken by experts, for experts. In this piece, I do not aim to explain every theory of the economy, but rather the dominant ways it is currently understood and used.

The Economy Is a Social Science Not Just a Science

The social sciences study people and their relationships within society. Economics, despite often being presented as a neutral or natural science, is deeply social. It is shaped not only by numbers and models, but by emotions, expectations, and beliefs. Confidence, fear, optimism, and uncertainty all influence how economies behave. There is often the saying that politics and the economy are distant from each other, and that politics must stay away from the economy, but, in all honesty, that’s not true. The economy is very political.

Neoliberal economic thinking became dominant in the 1980s. It establishes itself on the principles of free markets, open capital flows, and limiting government intervention in the economy. It became the order of the world and the rules to which everyone should abide by.

Orthodox economics reflects the status quo, the dominant way economic policy is designed and defended today. One idea of the flurry of ideas under the branch of orthodox economics frequently associated with this approach is austerity.

Austerity is based on the belief that if inflation is rising or government debt is too high, the solution is to cut spending. An economy dashed across headlines of newspapers and falling from the lips of politics. On the surface, this seems logical. But let’s bring it closer to everyday life and see how the economy may play out in our everyday lives.

Austerity at Home

Imagine living in a household where money is tight. To avoid running out of money, your family decides to cut spending. They prioritise food, electricity, and water. At first, this seems sensible - survival is secured.

But then, imagine this decision goes further. School fees are no longer paid. Education is seen as an unnecessary expense. Alarm bells should be ringing. While this approach may help the household survive today, it quietly undermines its future.

Education is one of the strongest predictors of long-term economic security. With youth unemployment and graduate unemployment on the rise, cutting investment in education means cutting off future opportunity. The household saves money now, but pays a much higher price later.

Can this simplified example be applied to a country? Yes - very directly.

Power to the Economy or Power to the People?

When governments adopt austerity, they often reduce spending on education, healthcare, infrastructure, and public services. Schools deteriorate, hospitals are understaffed, and energy systems are merely maintained rather than expanded leading to loadshedding! Roads are patched instead of rebuilt. The focus shifts to managing decline rather than building capacity.

For example, in the early years after 1994, economic historians recount how South Africa inherited massive debt from the apartheid government and turned to institutions like the World Bank to stabilise the economy. In return, it was encouraged to be “money smart” - a phrase that often translated into austerity. While this may have reassured markets, it also meant South Africa was never fully allowed to build the capacity needed to care for its growing population in the long term.

This may help contain inflation in the short term, but it does little to prepare a country for the future. A growing population requires more teachers, more doctors, more power stations - not fewer. When governments stop investing, they are not being responsible; they are postponing costs.

This raises a critical question: who is the economy ultimately designed to serve? When economic policy prioritises “market confidence” over human development, the economy begins to feel like something that exists above people rather than for them.

Reclaiming the Economy

The economy is not a mysterious force of nature. It is a set of choices - about what we value, who we protect, and how we imagine the future. Treating economics as purely technical hides the reality that economic decisions are deeply political.

Understanding the economy should not be reserved for experts alone. The reason why we might be broke is because we have been excluded from the language of the economy. We are left out of the conversation on the money matters of the country. When people are excluded from economic language, they are excluded from economic power. Demystifying the economy is not just an academic exercise - it is a democratic one.

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