10 - Economics as Politics by Other Means

Summary

The chapter critically examines the intersection of economics and politics, particularly in the context of behavioral economics challenging traditional economic models. Ezrahi highlights Nobel laureate Daniel Kahneman’s reception by economists, revealing their discomfort with the implications of irrationality and cognitive biases in economic decision-making. The emergence of behavioral economics threatens the perceived objectivity of economists and their claims to enhance rationality in public affairs. The chapter explores how economists striving for professional objectivity, akin to natural sciences, inadvertently align with political and cultural biases. It contends that economics' influence on politics and policy arises from portraying the market as a natural, objective force detached from political interests. The chapter traces the historical evolution of economics, highlighting its separation from explicit moral and political considerations, leading to a focus on abstract models. It contends that economics wields significant influence, acting as both a check on over politicized governance and a veil concealing political choices. The chapter concludes by advocating for a return to political economics, acknowledging and addressing the political dimensions inherent in economic decisions.