How Economists Took Power
For much of the early twentieth century, economists stood near the edge of public life. Presidents, judges, and business leaders often saw them as narrow specialists who understood equations better than people. They were consulted, but rarely trusted with the final word on how a country should be run.
That began to change during the Great Depression. John Maynard Keynes argued that markets could fail for long stretches and that government had a duty to step in when private demand collapsed. His ideas helped reshape public policy after World War II, especially in the United States, where leaders increasingly believed that government could support steady growth, high employment, and rising living standards.
By the 1960s, economists had moved much closer to power. They advised presidents directly, shaped tax policy, and helped design social programs. Many believed they had finally learned how to manage the economy with precision, adjusting spending, taxes, and interest rates to keep the country on course.
Then the economy changed. Inflation rose, growth slowed, and unemployment stopped behaving the way the old models predicted. This breakdown opened the door for a new generation of economists, especially Milton Friedman and others who argued that markets usually worked better than governments and that many public efforts to steer the economy only made things worse.
From that point on, economists were no longer just advisers. They became central figures in public life, helping justify major changes in labor policy, regulation, taxation, trade, and finance. Their influence rested on a powerful promise: that market competition, if given more room, would make society richer, freer, and more efficient.
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