ECONOMISTS AS ADVOCATES

HAZEL HENDERSON

ECONOMISTS AS ADVOCATES

HAZEL HENDERSON

                 At last, the public debate over corporate social responsibility has been fully joined by the mainstream financial press. Let’s be grateful for this. However, to properly context this debate and counter the kind of nonsense propagated byThe Economist in its survey, “The Good Company” (January 22, 2005), an enduring myth must be dispelled: economics was never a science. Economics is a profession-—one with rather poor quality control. Economists are advocates, not scientists. Here’s why—and how the myth of economics as a science—got started.

 Since the 2004 Nobel Prize awards, there has been increasingly public brouhaha around demands by scientists that the Bank of Sweden Prize in Economic Science in Memory of Alfred Nobel be clearly differentiated from the Nobel awards. This seemingly arcane row among scientists is a major embarrassment to economists.

 Political economy studies, as they were originally termed, rose to academic prominence after the publishing in 1776 of Adam Smith’s great work An Inquiry into the Nature and Causes of the Wealth of Nations. Invoking the scientific knowledge of the day, Smith related his famous theory of “an invisible hand” that guided the self-interested decisions of businessmen (sic) to serve the public good and economic growth. Smith drew parallels ascribing this pattern of human behaviour to Sir Isaac Newton’s great discovery of the physical laws of motion.

 These principles of Newtonian physics can still be used to guide spacecraft to land on distant celestial bodies—most recently, on Titan, one of Saturn’s moons.

Economists of the early industrial revolution based their theories not only on Adam Smith’s work, but also on Charles Darwin’s The Descent of Man and The Origin of Species (www.thedarwinproject.com).They seized on Darwin’s research on the survival of the fittest and the role of competition among species as additional foundations for their classical economics of laissez faire—the idea