Economic Gaslighting? Does the nation’s financial illiteracy make us more gullible?


The Shadow Chancellor, Rachel Reeve recently commented that the Government is guilty of gaslighting the British People over the state of the economy.

But how much does the impact of the UK’s poor track record in education in economic affairs contribute to our collective gullibility?

In any democratic society, the level of education among citizens plays a crucial role in shaping their understanding of complex issues, including finance and economic affairs. The United Kingdom, like many other Western nations, has faced criticism regarding its education system’s efficacy in imparting financial literacy and economic understanding to its populace. This article delves into the relationship between the UK’s poor record of education in finance and economic affairs and the susceptibility of its citizens to political misinformation and manipulation regarding the state of the UK economy.

Education and Financial Literacy 

Financial literacy encompasses the knowledge and skills necessary to make informed and effective decisions regarding money management, investments, and economic matters. A solid foundation in finance and economics empowers individuals to critically analyse economic policies, understand the implications of governmental decisions on their financial well-being, and discern credible information from misinformation.

However, studies have consistently shown deficiencies in financial literacy among UK citizens. According to the Organisation for Economic Co-operation and Development (OECD), the UK ranks below average in financial literacy among developed nations. This inadequacy in financial education leaves many citizens ill-equipped to navigate the complexities of modern economies, making them vulnerable to manipulation and misinformation.

Political Discourse and Misinformation

In the realm of politics, economic issues often take centre stage, with politicians frequently espousing their visions, policies, and assessments of the economy. However, in the absence of a well-informed populace, political discourse can devolve into a battleground of competing narratives, where misinformation and half-truths easily take root.

Politicians, seeking to sway public opinion in their favour, may resort to oversimplifications, cherry-picked statistics, and even outright falsehoods to bolster their positions. Without a critical mass of financially literate citizens capable of scrutinizing these claims, misinformation can spread unchecked, shaping public perceptions and influencing electoral outcomes.

The Role of Gullibility

Gullibility, or the tendency to believe information without sufficient evidence or critical analysis, thrives in environments characterized by a lack of education and information asymmetry. In the context of finance and economic affairs, gullible citizens may readily accept politicians’ lies and misinterpretations about the state of the UK economy, further perpetuating a cycle of misinformation and manipulation.

Moreover, gullible individuals may be more susceptible to fear mongering and scapegoating, particularly during times of economic uncertainty. Politicians adept at exploiting these vulnerabilities can exploit public anxieties to advance their agendas, whether through divisive rhetoric, populist promises, or deflection of responsibility.

The UK’s poor track record of education in finance and economic affairs undoubtedly contributes to the susceptibility of its citizens to political manipulation and misinformation regarding the state of the economy. Addressing this issue requires concerted efforts to enhance financial literacy through comprehensive educational initiatives, public awareness campaigns, and accessible resources.

By equipping citizens with the knowledge and skills necessary to critically evaluate economic claims and policies, the UK can foster a more informed electorate capable of resisting manipulation and holding politicians accountable. Ultimately, a well-educated populace is not only essential for the health of democracy but also crucial for ensuring the long-term prosperity and stability of the UK economy.