What if Everything We Know About the Economy Is Dead Wrong?

Entrepreneur and anti-inequality warrior Nick Hanauer has a vision of a fairer, more humanist system. All it takes to get there is to throw out everything that came before it.

How fundamentally wrong or right are the economic theories we use to design much of our social and governmental policy? According to Nick Hanauer, the Seattle-based entrepreneur, venture capitalist, and advocate for fighting inequality, and Eric Beinhocker, an economist at the Blavatnik School of Government and executive director of the Institute for New Economic Thinking at the University of Oxford, they are, in fact, all the way wrong.

According to the pair, the past century or so of scholarship in many different fields has proven just how wrong early economic thinkers were in their basic assumptions about how people think, how they interact with each other, and how societies grow and address human needs—and that should make us question the basics of almost all economic thinking. We should throw it all out, they say, and replace it with a new set of ideas they call market humanism. To do so would upend the neoliberal assumptions that have driven federal policymaking on both the right and the left for the past 50 years, and place human well-being and advancement at the center of our government’s economic policy.

I spoke with Hanauer about his work, the book he and Beinhocker are currently writing, why they think our concepts of economics should be replaced by something new, and how this “comically ambitious” project can be achieved.

[This interview has been edited for length and clarity.]

Who did you all write this for? Who are you hoping reads this, and what do you hope that they do with it? Is it policymakers, is it lawmakers, is it candidates?

Eric Beinhocker and I are writing a book on all this stuff. We have a manuscript, but it’s 500 pages long, and it’s not done, and the world is on fire. We think we have something important and novel to say, so we scrambled to put together—we call it a booklet—aimed at the kinds of people who care deeply and think deeply about these issues, and that is policymakers, political candidates, policy professionals, journalists, people who take this stuff quite seriously.

Part of your thinking is that the failures of neoliberalism have led to this rise of right-wing authoritarianism, but that’s not the only thing they led to. There has been a renewed interest in socialism and democratic socialism. I’m wondering if those are part of what you’re talking about, or if you see those as insufficient........

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