Keynes wrote “the ideas of economists and political philosophers …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”. This is very sound in principle, but too narrow.
Keynes continued ” I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas”(J.M.Keynes, 1936) I do not think that this is true.
People are fascinated by myths and stories – witness the huge number of novels read by billions of people today. Myths and stories are sometimes consolidated and disseminated by priests into holy texts; and by academics into political philosophies. Over many millennia, such stories have been distorted and used by vested interests – led by tribal leaders, emperors, kings, feudal lords, capitalists, or politicians – as powerful weapons to help them to gain and consolidate political power and riches. This process continues unabated in twenty first century Western democracies.
Tawney showed in Religion and the Rise of Capitalism how from the fifteenth century onwards, the church failed to support merchants and capitalists – whose riches were growing – with the power and influence they sought. So classical (followed by neo-classical) economists filled that gap. Notably, Adam Smith’s absurd myth of the “invisible hand” is still fulfilling this role today for neoliberal capitalism. In contrast, the Marx-Engels Communist Manifesto has been a magnificent weapon in the hands of ambitious politicians wishing to overthrow existing regimes.
It is the power of their rhetoric rather than the truth or logic of their arguments, which helps to turn stories and myths into powerful weapons in the hands of greedy and power hungry people to support and sustain their political influence: The Protocols of the Elders of Zion was a forgery, but this did not reduce its value as support for Hitler’s policies.
The rise of electoral democracies has been accompanied by enhancement of the role of myths and stories in economics and politics, in which “truth”, even if it could be found, has rarely ever played much of a role. Since about 1980, very rich capitalists have assembled a monumental collection of myths and stories which support international capitalism; and which have been widely disseminated most effectively by the use of enormous resources to employ very powerful modern means of communication.
The neoliberal capitalist system collapses every few years, continues to concentrate enormous riches on a tiny proportion of the world’s population, and afflicts greatly the vast majority of that population and the welfare of the planet itself. This hardly makes a dent in its great worldwide popularity.
Reference: J.M. Keynes , 1936, The General Theory of Employment Interest and Money, Macmillan, London, page 383.