Self-Interest : The Economist’s Straitjacket

This paper examines contemporary economic theories that focus on the design and management of business organizations. In the first part of the paper, a taxonomy is presented that describes the different types of economists interested in this subject — market economists, regulatory economists, macro economists, and enlightened economists — and illustrates the extent to which each tribe has been captured by the concept of self-interest. After arguing that this fixation has caused — and is likely to continue to cause — significant harm to our economy, the paper then presents an alternative approach based on a theory of business and discusses the implications for research and public policy