Working Paper

Economics and the Powerful: Faulty Analysis, Economic Advice, and the Imperatives of Power

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“Look! Up there in the sky! What is it? Is it a plane? Is it a bird?” No, it’s a distraction from the robbery that is taking place in broad daylight on the ground.

One of the great paradoxes of conventional economics is that, though it starts from the proposition that individuals are motivated solely by self-interest, in my experience the majority of conventional economists are fundamentally altruistic. Based on conventional economic theory, they argue for reforms of the current economic system, not because they would benefit their own self-interests, but because they genuinely believe they would make the world a better place for everyone. Whether or not these theories were deliberately developed in the first instance to favour the powerful (Mirowski 1991), they are largely developed and promulgated by individuals who have a genuine foundation for rejecting any charge of self-interest or social bias in their analysis.