Aligned interest of Wall Street and the economics profession


“Wall Street seduced the economics profession not through overt corruption, but by aligning the incentives of economists with its own. It was very easy for academic economists to move from universities to central banks to hedge funds—a tightly knit world in which everyone shared the same views about the self-regulating and beneficial effects of open capital markets. The alliance was enormously profitable for everyone: The academics got big consulting fees, and Wall Street got legitimacy. And it has kept the system going despite the enormous policy failures it has generated, not to exclude the recent crisis.”

Francis Fukuyama explaining the dominance of efficient market hypothesis” and market fundamentalism in general. Read the whole article.

Good read if you are new to American political economy, if not the best part is quoted.

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