Pitchfork Economics with Nick Hanauer Back to Basics Series: Is Econ 101 a Lie? (with Eric Beinhocker and James Kwak)
Jul 15, 2025
Eric Beinhocker, Executive Director at Oxford's Institute for New Economic Thinking, and James Kwak, a law professor and author, delve into the shortcomings of traditional economic teachings. They argue that Econ 101 oversimplifies complex realities and perpetuates inequality. The discussion highlights the need for policies that encourage cooperation over self-interest and critiques outdated economic models that mislead public discourse. They advocate for a reevaluation of economics to better reflect human behavior and address pressing societal issues.
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Economics as Social Construct
- Economics is not a law of nature but a social construct often used to justify inequality.
- Neoclassical economics assumes selfish, rational behavior, which fails to describe real human cooperation that drives prosperity.
False Assumptions on Human Behavior
- Neoclassical economics assumes people are perfectly selfish and rational, which is false.
- Prosperity arises from cooperation and morality, not selfishness, contradicting traditional economic assumptions.
Economy's Disequilibrium Nature
- Economics has focused on equilibrium models borrowed from physics that assume the economy rests at balance.
- The real economy is dynamic, constantly changing and rarely in equilibrium, missing key phenomena like booms and busts.
