The Economists’ Hour
Critical examination of economists’ impact on policy and society since the 1960s.
Summary of 6 Key Points
Key Points
- Rise of Economists in Policy Making
- Market-Based Approaches to Public Policy
- Impact on Inequality and Regulation
- Case Studies: Airline Deregulation and Financial Crisis
- Critique of Monetarism and Supply-Side Economics
- The Shift Away from Keynesianism
key point 1 of 6
Rise of Economists in Policy Making
In the decades following World War II, economists started taking a more prominent role in shaping public policy, having a significant influence in decision-making processes. Their theories and models were used to justify and implement policy changes, from deregulation and privatization to the implementation of new monetary and fiscal policies. Economists began to hold key positions in government, and their influence extended beyond national borders, impacting global economic policies and institutions…Read&Listen More
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Market-Based Approaches to Public Policy
Market-based approaches to public policy, as depicted in the book, underscore the notion that markets, through their inherent mechanisms, can efficiently allocate resources and solve socioeconomic issues. Economists held the belief that unfettered market forces, characterized by competition and consumer sovereignty, could self-regulate, thereby reducing the need for extensive government intervention. They upheld the idea that humans, as rational entities, would make optimal choices driven by self-interest, contributing to overall economic welfare…Read&Listen More
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Impact on Inequality and Regulation
The Economists’ Hour delivers a comprehensive account of the rising influence of economists and their ideas in shaping public policy, particularly in the realms of inequality and regulation. It shows how economic theories and models permeate our everyday lives, determining the health of society and the wellbeing of individuals. In terms of inequality, the book illustrates the dramatic effects of the economists’ ascendency on income distribution and social stratification. They argue that their theories and models have contributed significantly to the soaring income inequality in both developing and developed countries. The book states that the economists’ policies have tended to benefit the rich disproportionately, while the middle-class and the poor have seen their incomes stagnate or even decrease…Read&Listen More
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Case Studies: Airline Deregulation and Financial Crisis
The Economists’ Hour describes the airline deregulation as a remarkable demonstration of the effects of economic theory on policy-making. It was largely agreed that the regulation of fares and routes stifled competition and innovation, leading to an inefficient industry. Economists argued in favor of deregulation, believing that competition would drive down prices and improve services. They suggested that the government’s role should be reduced, and the market should be allowed to determine prices and routes. After the Airline Deregulation Act was passed in 1978, ticket prices did drop significantly, and new airlines emerged, offering more options for consumers…Read&Listen More
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Critique of Monetarism and Supply-Side Economics
The critique of Monetarism and Supply-Side economics begins with an examination of how these schools of thought influenced economic policy. Monetarism, in particular, is shown to have shaped policies around controlling inflation and managing money supply. However, the focus on controlling inflation often resulted in high unemployment rates, leading to social and economic instability. The stringent measures of monetarism often stifled economic growth, and failed to account for the human impacts of these policies. ..Read&Listen More
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The Shift Away from Keynesianism
The shift away from Keynesian economics began in the late 1960s and early 1970s. This was a period of economic tumult, characterized by high inflation and stagnant growth, a phenomenon known as stagflation. Keynesianism, which advocated for government intervention in the economy to promote full employment, seemed ill-equipped to handle this challenge. A new generation of economists, led by figures like Milton Friedman, argued that government intervention often did more harm than good and advocated for a free-market approach…Read&Listen More