The Seduction of Science in the Service of Power: An Essay on the State of Economics




"Tyranny is always better organized than freedom."

Charles Peguy

This essay by John Kay excerpted below is a very nice summary of the problem we have in modern economics. It is a bit dry to the layman, but it touches on the distortions that crept in to economic thought and their intellectual sources and in particular the operational rather than political means.

I do not think it was unintentional. Economics served to distort public policy and blind people to unfolding reality. Investments in think tanks and universities encouraged and paid for misleading reports and studies, draping propaganda in the robes of respectable academia and faux science.

This is certainly not the first time this sort of thing has happened. Medicine has a rather checkered history in service to power. These types of distortions can of course cut both ways, and science has been used to justify abuses from all ends of the political spectrum.

The concept to remember then, is that economics and other sciences are no substitutes for public policy. Policy is not an outcome of economic science, but rather, policy is set and renewed from first principles, a commitment to certain ideals and common objectives. Economics and other sciences do play a role in shaping the details of implementation. But we must revisit and determine the effect which those details have on the achievement of first principles.

Unfortunately we must sift those inputs with care, and especially the assumptions on which they are based, because the professions have shown a willingness to misrepresent, distort, and even lie for money and power.

One must always come back to first principles, to some notion of what they, and by extension their community, wish to be. Is the first principle of the US the maximizing of profit? By what measures, and to whom? Or is it something else again.

This is the question that the protesters of Occupy Wall Street are asking. People of the status quo say, 'What do they want? What is their solution?' No, it is they who are asking the question of those comfortable people in power. If they have any statement to make, it is 'The Emperor has no clothes.'

And since the modern day Emperors do not wish to answer the people plainly and honestly, having only their tired old lies, they become uncomfortable and afraid. Instead they ignore, ridicule, and silence the question, offering new lies and scapegoats, claiming all is well. And it is, at least for them.

If the people are ignored and abused long enough they will stop asking questions and begin to make their demands and push them forward, and then it may be too late as these things obtain their own momentum.

Economics is a discredited science at the moment. A few practitioners sold its soul and honor to a small group of wealthy ideologues while the great majority remained silent. But certainly no more discredited than the doctors who served the policies of euthanasia or the Russian abuse of psychiatric wards. And when the destroyers appear on the horizon, the mechanical sciences and their industrialists are generally seen swimming out to meet the boats.

But a caution is that those who promoted false theories for power and money in the service of crony capitalism are still at work, and the results are more difficult to see than piles of dead bodies, or rooms full of broken individuals.

The answer is not to turn away from knowledge, and embrace a hatred of science promoted by a new crop of passionate know-nothings, although that also is a recurrent historical theme, and a phenomenon already evident as a minority theme in the world of politics and a certain status quo. In this modern age they not only have their own magazine but television channels as well.

Science has its proper place. But it is not at the top, dictating outcomes in the social world like the answers to irrefutable equations. And it is especially good that we remember this when science is abused, and used to justify cruelty, selfishness, and plunder.


"The preposterous claim that deviations from market efficiency were not only irrelevant to the recent crisis but could never be relevant is the product of an environment in which deduction has driven out induction and ideology has taken over from observation.

The belief that models are not just useful tools but also are capable of yielding comprehensive and universal descriptions of the world has blinded its proponents to realities that have been staring them in the face. That blindness was an element in our present crisis, and conditions our still ineffectual responses.

Economists – in government agencies as well as universities – were obsessively playing Grand Theft Auto while the world around them was falling apart."