ONE of the most sensible things I ever learned as a young economist came from my old boss Grant Baird, former Chief Economist of the Royal Bank of Scotland.

Reviewing one of my articles which lent rather heavily on the quantitative results of an input-output analysis of the Scottish economy, Grant looked at me wearily and said: “Remember Alex, for most folk anything over a million is just a big number.”

And so it was and so it still is. Therefore, politicians who believe that you can win a political argument by quoting the latest billion from the latest economic assessment are doomed to disappointment.

This is particularly the case because many politicians themselves find big numbers tricky. I recall once sending that thoroughly nice man Lord James Douglas-Hamilton, when a Prisons Minister, a friendly corrective note in the House of Commons because he kept innocently mistaking his millions for billions!

Nor should we expect the experts to be infallible. Last week’s Institute for Fiscal Studies (IFS) report got some fairly simple sums badly wrong. They made elementary mistakes in calculating the effects of both Labour and SNP proposals. They transposed Labour’s borrowing targets for 2020 on to the SNP and they committed a gross unfairness of suggesting Tory, Labour and Liberal estimates from revenue on tax clampdowns were “made up” – but then counted them in for the Westminster parties but not for the SNP!

In reality, it doesn’t take an Einstein-type analysis to understand that, given the SNP (with our Green and Plaid allies) are the only major party pledged to increase rather than decrease public spending, then there will be more public spending if SNP plans are followed.

A broader view came from Professor Simon Wren-Lewis of Merton College Oxford. This is not really an individual analysis but part of a broader academic exercise, testing the claims parties made at their manifesto launches. The Conversation website involves more than 30 UK universities, including Aberdeen, Stirling and Glasgow Caledonian.

It is far from a political exercise, and the professor is not an SNP supporter, but his verdict on Nicola Sturgeon’s assault on austerity was unequivocal: “Nicola Sturgeon’s statement on the economic impact of austerity on the UK is correct, with no qualifications.”

This exercise is more about real economics than the tax-and-spend process of the IFS. Even if they had managed to get their sums right, the IFS have little to say about economics in the context of policies. For example, in the morally neutral world of the IFS, a tax cut for millionaires carries the same clout as pay increase for low-paid workers. They look at the balance sheet impact of the policy and nothing more.

But neither real economics nor real people exist in a moral vacuum.

I made a speech at Glasgow University last week where I pointed out that it was time to reclaim the economics of Adam Smith from the Neanderthal right. Smith, of course, was a moral philosopher at that very university, where he wrote his first great work The Theory of Moral Sentiments. However, we don’t need to rely on that book to understand his moral purpose that underpinned his economics.

In The Wealth of Nations itself the great man proclaimed: “What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can be flourishing and happy, of which the far greater part of the members are poor and miserable.”

Inequity and the debilitating effects of poverty on human potential are real challenges facing the economy. So are the relatively low levels of productivity and the miserable rate of private-sector expenditure on research and development. Then there is the disastrous lack of capital investment in public infrastructure, the mitigation of which has been one of the great success stories of SNP governance in Scotland.

These are all things that a move away from public spending cuts would allow to be partially addressed.

The deficit focus that is required is not just on a Budget deficit but on the deficit of ideas, the deficit of empathy and deficit of imagination which afflicts the Westminster parties and the whole decrepit system that they reflect.

That requires understanding the difference between real economics and mere tax and spend.

If, through an alternative economic approach, we can lift both the economy and growth rate by even a small part of a percentage, then the underlying deficit will close. Using rather than abusing human potential really matters.

The higher output of better skilled people in better jobs will lift productivity, which in the long term is what counts. We need to lift the level of productivity in our tradable industry to secure wealth for the future.

Finally, a competitive economy requires not only enhanced productivity of labour but improved productivity of capital.

The move from the disastrous Private Finance Initiative (PFI), so beloved of Scottish Labour, to Not for Profit Trust (NPD) has transformed the productivity of capital in Scotland. We now build better schools for 30 per cent better value than under PFI. Now we need to go much further to build an infrastucture of transport and communications which will do justice to our fundamentally smart country.

Over the weekend Cameron was embarrassed by not being able to remember the name of his supposed football team. It is interesting to see the Prime Minister exposed as a fake. However, the BBC seemed to think that humiliation was of more significance than the thousands of women who turned out to support Nicola Sturgeon’s message of hope and aspiration.

In the same way, those caught up in the tunnel vision of tax and spend are mistaking the point of the proper relationship between politics and economics. They are abusing the dismal science to produce dismal politics and a dismal London election campaign. Real economics is about human beings. Real economics which can offer real hope to real people.