"One of J.M. Keynes’s most famous quotes, which economists like to repeat, highlights the power of academic economists. He writes, “the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.” (Keynes, 1936: 135) What this quotation misses is the circularity of the idea generating process. The ideas of economists and political philosophers do not appear out of nowhere. Ideas that succeed are those that develop in the then existing institutional structure. The reality is that academic economists, who believe themselves quite exempt from any practical influence, are in fact guided by an incentive structure created by some now defunct politicians and administrators."
-David C. Colander
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