Self-Interest: The Economist’s Straitjacket

44 Pages Posted: 14 Oct 2015 Last revised: 3 Feb 2019

Date Written: January 31, 2017

Abstract

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.

Keywords: self-interest, economists, moral philosophers, agency theory, regulation, capture, organization design, economic theory, organization theory, management theory, business education, competition, customers, commitment, controls, boundaries

Suggested Citation

Simons, Robert, Self-Interest: The Economist’s Straitjacket (January 31, 2017). Harvard Business School Accounting & Management Unit Working Paper No. 16-045. Available at SSRN: https://ssrn.com/abstract=2674171 or http://dx.doi.org/10.2139/ssrn.2674171

Robert Simons (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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