<< The Body Politic

Economists and Res Publica

Thursday, November 29th, 2012

In the third in a series of policy briefs by AEI’s Program on American Citizenship, Steven E. Rhoads, professor of politics at the University of Virginia and author of The Economist’s View of the World: Government, Markets and Public Policy, explores the virtues and limits of thinking like an economist when it comes to matters of citizenship.

He writes:

With the possible exception of lawyers, economists are now the profession with the most influence on public policy. In the 1960s, when I began working at the US Bureau of the Budget, Charles Schultze, an economist and then-director of the bureau, tried to ensure that most of the public policy and program evaluation offices were headed by economists. Economic thinking still dominates the Office of Management and Budget, the Congressional Budget Office, and the General Accounting Office, and it is influential in policy and program evaluation offices across US agencies and departments. Moreover, economic thinking is at the forefront of most public policy schools at our leading universities. Intentional or not, economists now have a large say in forming the laws and regulations we make as a polity. The question that naturally arises is: what are the civic benefits that accrue from adopting the economist’s view of the world—and, in turn, what are the limitations?

Key points from the policy brief include:

  • Economists have a distinctive way of looking at the world, and their influence on public policy is considerable. What are the civic benefits that accrue from adopting the economist’s view of the world—and, in turn, what are the limitations?
  • The self-interest assumption is a sound maxim for most market activity and can usefully inform public policy debates. But human beings are not simply economic beings and, as such, there are limits to how economic thinking can and should guide policymaking.
  • As influential as economists have become, the profession may have become too insular and have forgotten the fundamental questions with which its greatest theorists struggled.  Economists could better serve both the public and themselves if, within the discipline, the history of economic thought were more widely taught.

Read the whole report: “Economists and Res Publica: The Virtues and Limits of Economic Analysis.”

AEI