Economic Realism Beyond Gread and Fear

Yesterday's Financial Times ran an insightful and provacative editorial by Paul Collier:

"Greed and fear have shaped the design of the modern Anglo-American company. Belief in the potency of greed drove the trend to tighter links between wages and performance. Belief in the potency of fear drove the subjection of managers to the takeover threat, policed by the capital market. The economics profession took pride in this bleak realism, gleefully extending the model to the family and smugly contrasting itself with the gentler communitarian values of the softer social sciences. Uncomfortably, perhaps reflecting the internalisation of these values, psychology tests revealed that economics graduate students were unusually selfish.

While undoubtedly bleak, this paradigm no longer looks realistic . . . .    READ THE REST