Working Paper | HBS Working Paper Series | 2019

Self-Interest: The Economist's Straitjacket

by Robert Simons

Abstract

This paper examines contemporary economic theories that focus on the design and management of business organizations. In the first part of the paper, a taxonomy is presented that describes the different types of economists interested in this subject—market economists, regulatory economists, macro economists, and enlightened economists—and illustrates the extent to which each tribe has been captured by the concept of self-interest. After arguing that this fixation has caused—and is likely to continue to cause—significant harm to our economy, the paper then presents an alternative approach based on a theory of business and discusses the implications for research and public policy.

Keywords: self-interest; economist; moral philosophers; regulation; Capture; organization design; economy theory; organization theory; management theory; commitment; controls; Governance; Customers; Conflict of Interests; Business or Company Management; Competition; Organizational Design; Business Education; Agency Theory; Economics; Theory; Boundaries;

Language: English Format: Print 44 pages SSRN Read Now

Citation:

Simons, Robert. "Self-Interest: The Economist's Straitjacket." Harvard Business School Working Paper, No. 16-045, October 2015. (Revised January 2019.)

About the Author

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Robert Simons
Charles M. Williams Professor of Business Administration
Accounting and Management

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