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Economics and the Culture War

Some economists may prefer to concentrate on the current economic situation while standing apart from cultural questions, or to say that the current kerfuffle over "cancel culture" will recede when the economy improves. But this is to abdicate responsibility, and to choose the easy road under cover of their discipline's neutrality.

LONDON – I have long criticized economics for its lack of realism, and for producing “models” of human behavior that are at best caricatures, and at worst parodies of the real thing. In my recent book What’s Wrong with Economics?, I argue that, in their attempt to establish universal laws, economists willfully ignored the particularities of histories and culture.

The economist and sociologist Thorstein Veblen brilliantly captured this blindness. In a 1908 article, Veblen imagined economists explaining the behavior of “a gang of Aleutian Islanders slushing about in the wrack and surf with rakes and magical incantations for the capture of shellfish” in terms of utility maximization.

In the eighteenth century, practitioners of economics – the study of how people went about the ordinary business of making a living – decided to align their inquiries with the so-called “hard” sciences, especially physics, as opposed to “human” sciences like history. Their ambition was to construct a “physics” of society in which social structures were just as subject to invariant laws as natural structures. Thus the law of gravity, which explains the orbit of the planets round the sun, found its economic counterpart in the law of self-interest, which ensures the equilibrium of markets.

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