Are we really rational - or is economics built on a massive myth?

Capitalism is not driven by rational homo economicus, but by power, greed and vested interests. Neoclassical economists' tidy models still shape policy, but other insights into conspicuous consumption, monopoly and political capture better explain today’s world—and remind us economics must face reality, not fantasy, if it is to serve society.

00:00 – Introduction: Richard & John on capitalism
01:30 – Who is John Christensen? Tax Justice Network
03:00 – Today’s theme: Homo Economicus & Thorstein Veblen
05:00 – Neoclassical economics in the 19th century
07:15 – Francis Edgeworth and mathematical psychics
10:00 – Jeremy Bentham, utility, and the idea of maximisation
12:00 – The problem with the “rational human calculator”
15:00 – Early challenges to Homo Economicus
18:00 – Power, exploitation, and what economics ignored
21:00 – From Adam Smith’s messy markets to neat models
24:00 – Veblen’s world of robber barons and sabotage
27:00 – Conspicuous consumption: power on display
30:00 – The Theory of the Leisure Class and emulation
33:00 – The Theory of the Business Class: rent extraction
36:00 – Monopoly, markets, and manipulation today
38:00 – Political economy vs mainstream economics
40:00 – Conclusion: Why Veblen’s insights still matter
TRANSCRIPT
A transcript for this video is available at: https://www.taxresearch.org.uk

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ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.

This video was edited by Thomas Murphy.

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