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Are Economists in Love with Tough Love?

Vigorous economic competition certainly has a place in today’s world. But economists may currently be overly reliant on this default approach, attributing to a lack of discipline outcomes that may instead result from insufficient solidarity and concern.

CAMBRIDGE – Mark Twain purportedly said that “History never repeats itself, but it rhymes.” Typically, however, what rhymes is not the underlying historical facts but the narratives we construct around them. The stories we tell about the world repeat some basic ideas that may not necessarily be true. But we like to believe that they are because they make the world more intelligible and morally certain.

The standard education of economists is a case in point. Beyond individual theories, the profession possesses a long list of rhymes. We recognize their meter and can guess when and how they end, because we know the previous stanzas and also know that the next phrase needs to rhyme with them.

Consider Adam Smith’s invisible hand, according to which we get our dinner from the butcher and the brewer because of their self-interest, not their generosity. The market can turn their private vices into public virtue. So, greed may not always be bad.