Peter Radford — Irving Fisher and Inequality

“Our society will always remain an unstable and explosive compound as long as political power is vested in the masses and economic power in the classes. In the end one of these powers will rule. Either the plutocracy will buy up the democracy, or the democracy will vote away the plutocracy.” ~ Irving Fisher, 1919

That markets exist, indeed can only ever exist, inside a broader sociopolitical context disappeared altogether from mainstream economic thought. The consequence being, as I have said far too many times before, is that economists ended up studying only economics and not actual economies. Their models, large or small, formal or ad hoc, mathematical or narrative, all overlooked the sociopolitical impact subsequent policy advice derived from them might have. In this way economics became “performative” in that policy advice and the lessons learned in the classroom all had the effect of trying to bend society to conform to the ideal, rather than bending the ideal to conform with reality.

Economics became a massive social experiment. Economists began tinkering with society even while being oblivious to the fact that they were tinkering. Innocent or not – and I still believe that some economists knew full well they what they were doing – the mainstream drew to itself a massive ethical responsibility that it has never to this day recognized. Namely that if your advice is based upon some theory that assumes away most if not all social reality, and that it then has the effect of altering the reality it presumes to model, you had better be damned sure both theory and advice do no harm. Hiding behind idealized theoretical constructs is not acceptable. When you seek to bend real social relations to mimic those of your theory you had better be prepared to be called to task for any consequences society might not like. The loss of democracy being high on that list.

Or is it that many mainstream economists simply have a contempt for democracy because it muddies their pristine theoretical waters?

The  post contains some excellent quotes about the intersection of culture, law and the economy.

The Radford Free Press
Irving Fisher and Inequality
Peter Radford