The Political Influence of Neo-Classical Economists: How Governance-Related Ideas Connect the Power of Ideas and the Power of Profession

The political influence of economists, particularly neo-classical economists, has been attracts the attention of both sociologists of professions and political-economists who study the influence of economic ideas. For sociologists of professions, the political influence of neo-classical economists primarily derives from their unique characteristics as a professional group that had managed to acquire a variety of symbolic and material power resources. Political economists have concurrently been studying the political influence of neo-classical economic ideas, and pointed towards the crucial role these ideas played in undermining the institutional order of embedded liberalism and providing the ideational infrastructure for an alternative neoliberal order. This paper connects these two explanatory streams by focusing on a third crucial factor that explains the rising political influence of neo-classical economists, namely their "governance-related" economic ideas.  When political-economists refer to the power of neo-classical economic ideas they normally focus at "market-related" ideas, that is, ideas that define the proper modes of governmental intervention in the economy. What they commonly miss is the political influence of an additional set of neo-classical ideas that focus on questions of governance and define accordingly proper structures of governmental decision-making. This set of ideas has played a crucial role in undermining the democratic arrangements of economic decision-making and provided the ideational infrastructure for the de-politicization of economic decision-making and the rising decision-making authority of "autonomous" and expertise-based governmental bodies. Furthermore, given the central role economists (and to a certain extent legal experts as well) play within these bodies, the rising political influence of governance-related neo-classical economic ideas supports the growing social and political power of neo-classical economists as a professional group.