Am I an economist?

I have an undergraduate degree in economics from the University of Manchester. I was awarded it a long time ago, when the Phillips curve was something relatively new and the first edition of Richard Lipsey's first textbook had just appeared. After that, I became a chartered accountant, which is how I described myself until I became an academic. But perhaps I am also an economist...

My musings have been prompted by the extensive media discussion of what is being described as Corbynomics. I'm not especially interested in the substance of what is being discussed - even if Mr Corbyn were to achieve significant power, I'm sure he would discover as others have before him* that there are significant constraints to policy implementation, consigning his manifesto to oblivion.

But I am interested in how policy making happens: who do policy makers consult and how do they evaluate the advice they receive? In the areas I know best, there is sadly little use made by policy makers of independent and rigorous academic research, although ICAEW is striving to address this by basing its policy recommendations on a thought leadership programme which draws on academic research, and by establishing strong links with academics across the world through funding research studies and involvement in leading academic conferences.

So if his economic policy ideas are so newsworthy, I began to wonder who advises Mr Corbyn. That's not difficult to discover as his adviser Richard Murphy, has quite a high public profile (although he doesn't feature in this list of "top economists". To join this particular list, you can nominate yourself and the ranking is based on social media activity. With a bit of effort, I could probably get myself in there. Maybe I am an economist!)

Mr Murphy is described as an economist and has extensive experience as an advisor to a range of organisations. His campaigning stance on tax justice seems to make him a controversial figure and his frequent blog postings generate some interesting debate on the blog and on Twitter. As with many blogs, I found myself wanting to know more about the supporting arguments for opinions expressed; my personal rating system gives more credence to bloggers who cite peer-reviewed academic research - I have, after all, spent many years telling my students to follow up sources to assess the credibility and legitimacy of arguments.

Mr Murphy's posts don't seem to cite many academic sources, and neither do those of his publications accessible from his web site, which led to me wonder about his background and qualifications. I was very interested to learn that he has exactly the same qualifications that I do: an undergraduate degree in economics and accountancy, and an ICAEW qualification. I'm really beginning to think that I may be an economist!

So what gives authority to Mr Murphy's advice? His advice on accountancy and tax would presumably derive authority from his membership of a professional accountancy body but there is no equivalent for economists, other than, possibly, membership of the profession of academic economists. Interestingly, in his very full disclosure of his personal funding arrangements on his blog, Mr Murphy states that his funders "have agreed that an appropriate income benchmark for my work is that of a UK university professor." Hm. Some professors of economics and finance command pay considerably higher than the grants Mr Murphy receives. But the holder of a professorial post in a UK university is subject to an important constraint: his or her work is subject to peer review, which gives it legitimacy and authority. The system of peer review may have its flaws (this is a good discussion of these in the context of medical science) but it does expose ideas to analysis and critique by those who understand them. Mr Murphy does get called out sometimes by those who comment on his blog: today he posted an interesting article about pensions which included a very confusing statement about the status of bank deposits, implying that these are bank capital rather than liabilities to depositors, and, when challenged by a reader, agreed that this was misleading - although he hasn't apparently amended the original post. But this is not the same as the type of review to which an academic article would be subjected. But, then, Mr Murphy is not an academic. Which leaves me still wondering about how authoritative his economic advice might be.

Anyway, I look forward to reading his forthcoming book "The Joy of Tax". His publishers have cannily decided to capitalise on his current high profile and bring forward the publication date.

However, I'm still not entirely clear about what an economist is. Investigating the jobs advertised on www.econ-jobs.com suggests that for many of them I'd need a stronger quants background than that provided in my degree, although some say that the role involves the sort of information analysis and communication for which any solid accountancy qualification and experience would provide. so maybe I can conclude that I *could* be an economist, if I really wanted to...

*Most recently, for example, the Lib Dems: before the Coalition came into being, I attended a meeting at which Vince Cable set out a compelling and indeed inspiring case for the government to take the opportunity provided by the financial crisis for extensive infrastructure investment, a case which was never heard of again...

Accountancy firms wake up to widening access

I am delighted to see today that EY has followed PwC's lead and scrapped their UCAS points requirement for student applications.

Thirty years ago, when I started teaching accounting at Oxford Poly, students on our accounting degree course were typically admitted with relatively poor A level results. In those days, course managers dealt with admissions and had a great deal of latitude: we had time to interview applicants and make a judgement about how well they might cope with degree level study. And, as the majority of staff teaching accounting had professional accounting qualifications, we could also develop some idea about whether the students were suited to and likely to be successful in subsequent professional examinations. Quite often, poor A level results could be explained by situations beyond the student's control and we could take those into account.

Many of these students flourished during their studies and achieved excellent degrees but those who wanted to become chartered accountants faced great difficulty in securing training contracts

Around that time, someone noticed a correlation between good A level results and success in ICAEW examinations. Accountancy firms were having to deal with increasing numbers of applications for training contracts, so setting a minimum A level score was an attractive, and apparently logical, screening process. The result was that our graduating students didn't even get as far as the interview stage. We tried to help, advising them to draft covering letters which stressed the value added of their university experience and to include a photo. We drew on our personal contacts in firms, encouraging them to visit us and meet our students and persuading them to make a case for interviewing strong applicants. We steered our students to apply to smaller firms where partners were often more interested in assessing how well a student might fit in to the team and have the skills to contribute quickly in a practical way than in their out-of-date A level results. For some, we suggested that they might find it easier to train with a different professional body, although an ICAEW qualification was, usually, in their view, the best: this was especially the case with our international students.

Our students had often felt that they had been written off at 18 because of poor A level scores but they had blossomed in higher education and regained confidence: it was very sad to see them denied entry to their chosen career paths, with three years of significant achievement dismissed as irrelevant.

The advent of online application meant we were no longer able to use any of our support strategies. A further blow: subsequent analyses of ICAEW exam performance revealed a correlation between a degree in a non-accounting subject and success in ICAEW examinations.  Our students could still find training contracts with smaller firms but those who succeeded with the Big Four became rare.

I'm still in touch with quite a few of my former students: they all became qualified accountants and many of them have had very successful careers, both within the profession and outside it. Some have even offered to employ me. But I still lament the loss to the profession which resulted from enforcing that rule for so many years and I greatly welcome the widening of access. I'm also delighted that one of my former colleagues is researching in this area: her work should provide sound data for future policy decisions.