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Brainstorming: Negative Impact of Economics

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By Asad Zaman


Ed. Note: This is a recent post by Asad Zaman on the WEA Pedagogy Blog. The site is well worth following for critical coverage of a range of aspects of economics. Comments are enabled, so you are able to discuss the content of the blog posts.


In my previous post (The Religion of Economics), I explained why economic is a religion, even though it claims to be a science. This religion preaches a toxic morality, where the goal of life is maximization of personal pleasure, with no moral or social constraints. Some months ago, I read an article which suggested that we should do a cost/benefit analysis of economic theory itself – how much harm it has caused, versus any benefits that it has brought to mankind – (I tried to search for this review, which references two books which the article reviews, which strongly support the idea that economic theory itself is the cause of great human misery – but I could not find it because I could not recall the name of the author or the article title or the source).

I would like ask for help from readers in identifying, as precisely as possible, how economic theory has caused harm to humanity. Overall, I am thinking of the framing used by Julie Nelson in her article: Poisoning the Well: How Economic Theory Damages the Moral Imagination.

Abstract: Contemporary mainstream economics has widely ‘poisoned the well’ from which people get their ideas about the relationship between economics and ethics. The image of economic life as inherently characterized by self-interest, utility- and profit-maximization, and mechanical controllability has caused many businesspeople, judges, sociologists, philosophers, policymakers, critics of economics, and the public at large to come to tolerate greed and opportunism, or even to expect or encourage them. This essay raises and discusses a number of counterarguments that might be made to the charge that current dominant professional practice is having negative ethical effects, as well as discussing some examples of the harms inflicted in the areas of law, care work, the environment, and ethics itself.

It is this last sentence which is of great interest to me. General critiques of orthodox economics abound, but I am looking for specific real world cases, where policies were adopted, as recommended by economists, and clearly caused a lot of harm. It would be useful if we could articulate the underlying toxic morals which led to these policies. Of course, examples like this are so plentiful that it would be hard to pick out a few from among thousands. So, I am interested in finding examples where the harms are large, where the cause is clearly identifiable as bad economic policies, and where the link to the toxic morality is very clear. As a leading example, the philosophy that “greed is good” can be very closely linked to the global financial crisis, where fraud was perpetrated on a grand scale, by the collaboration of professionals in many industries. The real estate agents sold mortgages to financially weak parties, with full knowledge that they would be unable to repay and would lose their homes and their life-savings. This is clearly due to the idea that “profits is the only business of business”. Similarly, the Julie Nelson article traces how bad morals advocated by economics have caused a lot of harm in different dimensions. The callousness of economists to suffering, and the consequent adoption of economic policies which lead to human tragedies on a large scale, can be documented in uncountable instances. I am looking for vivid examples, where the causal links between toxic morals underlying economic theory, and disastrous real world outcomes are very clear.

I am about to go on vacation for a month, so wont be able to respond. But I would like to have readers provide suggestions for good examples of this type in the comments. Also, recommendations for the best books which show how economic theory has caused massive human suffering in the real world would be appreciated. One area which seems very under-explored is the connection between economic theories and wars, which inflict the greatest damage. This link is missing in most analyses because we have isolated politics from economics, so the connections are not made. I believe there must be strong connections between economic dominance and the era of continuous wars against this that and the other which has characterized the past century, but I am not clear on how this linkage works. I will try to compile the best suggestions into a blog post or article after I return in mid-July. Best wishes to all readers.

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From: pp.9-10 of WEA Commentaries 13(1), July 2023

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