09 Sep

How do economists change what they say based on money

HBR has this great article about the impact of money on economists and what they have to say about economics:

“To be an economist, you kind of have to believe that people respond to economic incentives. But when anyone suggests that an economist’s views might be shaped by the economic incentives he or she faces, that economist tends to get bent out of shape. This happened perhaps most famously in the documentary Inside Job, in which filmmaker Charles Ferguson posed his questions to the likes of Glenn Hubbard and Rick Mishkin as tendentiously as possible in order to spark just such reaction. But it’s actually pretty common to hear economists saying things like — this is from the usually no-nonsense John Cochrane of the University of Chicago — ‘the idea that any of us do what we do because we’re paid off by fancy Wall Street salaries or cushy sabbaticals at Hoover is just ridiculous.’

It is perhaps ridiculous to suggest that economists do what they do only because of the prospect of consulting gigs or think-tank stints. Economists are human beings, with diverse motivations. But it is definitely ridiculous to suggest that such rewards have no impact at all. Economists are human beings, and human beings respond to incentives. Right, economists?”

(Via Have Economists Been Captured by Business Interests? – Justin Fox – Harvard Business Review.)

This is fantastic.