14 January 2016

Do It Yourself Economics


Throughout history records exist of situations in which economic policies have been influenced or decided by firmly held beliefs which have little or nothing to do with proper economic treatises or textbooks. Dubbed ‘pre-economics’ by David Henderson, in his blog for the IEA, these ideas have had a pervasive influence on events and policies which economists and others are inclined to play down or overlook.

How much have the leading ideas and beliefs of these popular economic fallacies permeated society? Henderson writes that they are “sincerely held and voiced with conviction by political leaders, top civil servants, chief executives of corporations, general secretaries of trade unions, well-known journalists or commentators, eminent religious persons, senior judges and established professors the whole range of academic disciples, not excluding economics itself”.

Groups promoting such ideas form links with like-minded pressure groups, which through skilful lobbying and persuasion directed to those in power and also through winning assent or support from wider public opinion, have great influence. Without harnessing the power and weight of pressure groups, these smaller interest groups have little or no chance of achieving their aims.

Termed ‘global salvationism’, central aspects of their posturing include an unreflecting, unrelenting love of centralism and the “conviction that good results can reliably only flow from conduct that is not based on self-interest.” Revised notions of established thinking have come to the forefront of current political discussions, most notably the idea that a great majority of the world’s population, not limited to just the poor or those employed by private businesses are actual or potential victims for whom remedies can only be achieved through the far-reaching actions on the part of ‘society’ or the ‘international community’.

David Henderson’s article can be found here.

Wei Tien Sng is a CapX contributor