... The rise of neoclassical economics at the beginning of the twentieth century portrayed economic theory as objective. “Pure economics” emerged as the new label for what until then had been known as “political economy.” This astute rebranding reimagined an economy that was somehow beyond power relations. Economists became the gatekeepers of infallible models on par with those used by the hard sciences — like, say, quantum mechanics — and too sophisticated for most citizens to understand. This coincided with the rise of allegedly politically independent economic institutions such as central banks, which began removing key policy decisions from democratic scrutiny.
The tidying of the economic discourse placed any suggestion of a more human, more commonsensical political project out of bounds. Even well-meaning progressives limit themselves to pointing the finger at exceptional corporate greed or the out-of-control rise of the financial sector. These critiques go nowhere because they ignore the problems within the basic structure. Neoclassical economists have peddled the market society as one in which everyone, if rational and virtuous enough, can thrive. They claim that social hierarchies are reflections of individual merit, meaning that those who aren’t at the top don’t deserve to be. It is an argument that supports those in power very well.
According to this perspective, the profits of saver-entrepreneurs are the result of their virtuous behavior, enabling them to sign workers’ paychecks, which sounds good. The message is so persuasive that today almost everyone has internalized it: if we try hard enough, each of us can become a rich investor. Those who cannot make it can blame only themselves...