Can the rise of populism be explained as a reaction to the rule of experts?

 

In an essay written over 15 years ago I observed that we were beginning to see a populist reaction to the rule of experts in the United States and (to a lesser extent) in Australia. In more recent essays, however, I have tended to see populism as a manifestation of interest group politics. These explanations are not mutually exclusive, but it may be useful to consider how the rule of experts and populism are both entangled with interest group politics.

My 2010 essay

The essay was entitled: Does Australia also have a ruling class? It was prompted by an article by Angelo Codevilla which suggested that Democrat and Republican office-holders in recent governments in the United States had shown “a similar presumption to dominate and fewer differences in tastes, habits and opinions ... than between both and the rest of the community”. He claimed: “They think, look, and act like a class.”

Codevilla discussed several characteristics of this “ruling class”. For example, he suggested that they believe themselves to be “the best and brightest while the rest of Americans are retrograde, racist, and dysfunctional unless properly constrained”. They view the common people’s words as “like grunts, mere signs of pain, pleasure and frustration”.

I concluded that while Australia also had a self-appointed ruling class which could be identified with the public service and the political left, I didn’t think the conservative side of Australian politics was as closely identified with that ruling class as in the United States. That explains why populist politicians were not particularly popular in Australia at that time.

In retrospect, however, I think I also displayed some “ruling class” attitudes in my essay:

“In my view the words of non-experts on complex economic issues do have little more value than a grunt. Whether we are talking about economic policy, brain surgery or plumbing, I think it should be self-evident that the views of experts count for more than those of non-experts.”

I still think that the views of experts should count for more than those of non-experts, although these days I try to avoid being offensive. Apart from the tone of my comment, I should have made clear that there are reasons to doubt that some of those who claim economic expertise know what they are talking about. The claims that some economists make about the potential to regulate complex market systems to produce better outcomes deserve no more respect than the similar claims of non-experts.

In his book, Expert Failure, published in 2018, Roger Koppl brings an economic perspective to “the problem of experts”. I will briefly consider Koppl’s line of argument in the following section.

Expert Failure

Koppl acknowledges that we must rely on experts even though experts may not be completely reliable and trustworthy sources of the advice we require from them.

 He defines an “expert” as anyone paid to give an opinion. That definition leaves open the question of whether experts are reliable or unreliable.

 Koppl adopts the Hayekian view that knowledge is generally emergent from practice, often tacit, and embodied in our norms, habits, practices, and traditions. His comparative institutional approach leads to the conclusion that expert error and abuse are more likely when experts have monopoly power, and less likely in a “competitive” market for expert opinion.

I expect most economists would view that as commonsense, but it is far removed from standard practice in many fields which rely on expert knowledge. Based on his study of the use of expert witnesses in law, Koppl observes that it is common to encounter the view that it is scandalous for the opinions of men of science to be challenged, even by other scientists. It is often held that the knowledge of expert witnesses is or should be uniform, unambiguous and certain. Experts are often encouraged to come to a common understanding rather than to offer competing views.

Koppl observes that the division of knowledge makes it impossible for anyone to avoid a limited and partial perspective, which implies a parochial bias in our perceptions and judgments. That kind of bias cannot be eliminated by blinding protocols – such as the double-blind requirements used in testing of pharmaceuticals.  It can only be mitigated by multiplying the number of experts and putting them in positions of genuine rivalry.

The book contains an interesting discussion of epistemic systems design in an experimental economics laboratory. In that setting, the experimenter is in the god-like position of defining unambiguously what the truth is and examining how close experimental subjects come to it in different institutional settings. The knowledge gained of which institutional structures promote the discovery and elimination of error is relevant to the real world. Experimental systems design studies offer opportunities to test the role of network structure in producing reliable knowledge in scientific fields.

Koppl comments:

“Rather than attempting to instruct people in how to form true opinions, we might reform our social institutions in ways that tend to induce people to find and speak the truth.”

However, at the end of the next chapter, after considering the problems arising from the monopoly of expert opinion in government -  referred to as the rule of experts or the entangled deep state - the author suggests that the experimental approach of “piecemeal institutional reform (which is mostly borrowed from Vernon Smith) does not have an obvious application to the entangled deep state.”  He concludes:

“If my diagnosis of the deep state is at all correct, reform is urgently required. I freely confess, however, that I have no specific ideas on how we might attempt to roll back the deep state with a reasonable prospect of success.”

Nevertheless, Koppl offers useful insights into the nature of the problem arising from the rule of experts. His conclusion that the problem of experts “mostly boils down to the question of knowledge imposition” is highly relevant to consideration of institutional approaches to determination of public policies.

In the introductory chapter to his book Koppl explains that he values pluralistic democracy and is as much opposed to populism as to the rule of experts.  He argues for pluralism on the grounds that each of us has at best a partial view of the truth:

“In a pluralist democracy, competing partial perspectives on the truth have at least a chance to be heard and to influence political choices. Decisions in a political system – be it populist, elitist, or something else – that override or ignore plural perspectives will be based on knowledge that is at best limited, partial, biased.”

In the process of developing that view Koppl refers to an article by Christopher Bickerton and Carlo Accetti (“Populism and Technocracy: Opposites or Complements?” Critical Review of International Social and Political Philosophy, 20(2), 2015) which describes populism and technocracy as two organizing poles of politics which are both opposed to “party democracy”. I will now discuss that article because it raises the question in my mind of whether party democracy has more in common with interest group politics than with pluralism.

Party democracy, interest group politics and pluralism

 Bickerton and Accetti argue that whilst populism and technocracy are usually assumed to be opposed to each other, there is also an important element of complementarity between them. Both populism and technocracy are predicated on an implicit critique of party democracy. The authors suggest that “if we accept the idea that politics is increasingly structured in terms of this conflict between populism and technocracy, then we find that even the very possibility of articulating a defense of party democracy is excluded from the political spectrum”.

I have no difficulty agreeing with Bickerton and Accetti if they are just using different words to say that both populism and the rule of experts are opposed to pluralistic democracy. Technocracy seems to correspond closely with rule of experts, but “party democracy”, as the authors describe it, seems to me to corresponds more closely to interest group politics than to the role of encompassing political groups in a two-party pluralistic democracy.

The authors define party democracy as a political regime based on two key features: the mediation of political conflicts through the institution of political parties; and the idea that the specific conception of the common good that ought to prevail and therefore be translated into public policy is the one that is constructed through the democratic procedures of parliamentary deliberation and electoral competition. The role of political parties in “mediation of political conflicts” is the focus of my concern.

The authors suggest that an important function performed by political parties is that of “integrating a plurality of particular interests” and moulding them into “an overarching conception of the common good”. When political parties aim to do such things, it seems to me that they end up cobbling together coalitions of interest groups which seek to obtain benefits for themselves at the expense of others. That is essentially what interest group politics is about.

In my view, better outcomes are produced when political parties take on the role of encompassing political groups in two-party pluralistic democracies. In discussing the importance of encompassing political groups in a two-party system of government, Mancur Olson asserted that the leader of a party “whose clients comprise half or more of the society naturally is concerned about the efficiency and welfare of the society as a whole” because this affects the party’s electoral prospects.  (See further discussion and reference here.)

 As I have explained elsewhere (for example in a recent essay on the consequences of path dependence) the growth of interest group politics has tended to contract economic freedom, constrain economic growth and increase public debt levels. As a result, voters have tended to become increasingly disenchanted with conventional politics.

It seems to me that as party politics has increasingly focused on pandering to particular interest groups it has helped to bring about a situation where more people have become more willing to listen to populists who tell them that they are being disadvantaged by the policies of conventional political leaders. Unfortunately, most of those populist leaders advance policies that are likely to produce even worse economic and social outcomes.

The ubiquity of populism, rule of experts, and interest group politics

Looking at recent politics in the United Sates, it might seem appropriate to identify the Democratic Party with rule of experts and the Republican Party with populism. However, that assignment understates the extent of populism in the Democratic Party, which tends to seek popular support by attributing economic woes to the wealthy 1% of the population in much the same way as economic nationalists in the Republican Party attribute economic woes to import competition and immigration. It also understates the extent to which the current Administration relies on commercial expertise – dealmaking – in running the government. It seems that the rule of one group of experts has been replaced by rule of another group with different expertise. The problems arising from the monopoly of expert opinion have changed their character but have not disappeared.

Roger Koppl’s reference to the “entangled deep state” reflects his awareness that the rule of experts is not immune to interest group politics. He notes that participants in the American deep state “have a variety of competing and parochial interests”. More generally, interest group politics is strongly associated with the entanglement of entrepreneurs and interests in private and public sectors.

Interest group politics seems to have attended to the pleas of increasingly narrow groups in recent years. As well as seeking support of broad economic groups such as unions, industry groups, and groups with differing social and environmental attitudes, political parties have increasingly sought the support of narrow interest groups by engaging in identity politics. The progressive side of politics has favoured groups that have previously been disadvantaged by ethnicity, gender and sexual orientation. The conservative side of politics has pushed back against what they label as wokeness, while seeking support from some groups, e.g. young men, who perceive themselves to be disadvantage by it.

Another interesting development in interest group politics in the United States is the emergence of an alliance between conservative populists and the high-tech community. It is not easy to comprehend how populists who claim to be concerned about economic and social impacts of competition from imports and immigration could be complacent about the economic and social impacts of AI. Action by the U.S. government to facilitate rapid development of AI has been accompanied by a change in the economic nationalist narrative away from its populist roots to emphasize the importance of retaining technological leadership in AI in the face of increasing competition from China.

The warning of President Eisenhower, quoted in the epigraph, might now be relevant for reasons that he could not have foreseen. Public policy is not only at risk of becoming the captive of a scientific-technological elite supported by the administrative state, it is also at risk of becoming the captive of a scientific-technological elite controlling the development of powerful AI models.

However, I don’t think we should assume that a future in which AI models will have an increasing influence on social and economic outcomes will necessarily be worse than a future in which the entangled deep state retains its current influence.  It is possible that rivalry between different AI models will ensure that their social and economic impacts are relatively benign and consistent with pluralistic democracy. Even now, greater use of truth-seeking bots has potential to lessen the problem of rational ignorance, and thus to reduce the susceptibility of voters to populists peddling false narratives.

Conclusions

The rise of populism in the Western liberal democracies can be explained to some degree as a reaction to the “ruling class” attitudes of experts within governments.  I have recently tended to see populism as a manifestation of interest group politics, but it is worth considering how the rule of experts and populism are entangled with interest group politics.

The essay has outlined the views presented by Roger Koppl in his book, Expert Failure. Koppl offers the useful insight that the main problem arising from the rule of experts is knowledge imposition. Expert error and abuse are more likely when experts have monopoly power and are less likely when experts are placed in positions of genuine rivalry. Koppl argues that pluralist democracy is superior to both the rule of experts and populism because it enables competing partial perspectives on the truth to have a chance to be heard.

I have also considered the view of Christopher Bickerton and Carlo Accetti that both populism and technocracy are predicated on an implicit critique of party democracy. I suggested that party democracy, as the authors described it, seemed to have more in common with interest group politics than with pluralistic democracy. In my view, interest group politics is largely to blame for the poor economic and social outcomes that have encouraged the growth of populism.

My main conclusion is that the rule of experts, populism, and interest group politics are currently ubiquitous on both the progressive and conservative sides of politics. Populism is certainly not confined to one side of politics and populist governments don’t eliminate problems arising from the monopoly of expert opinion. In the U.S. a populist executive has continued to discourage rival views, while attempting to substitute expertise in commercial deal-making for expertise in statecraft.

The emergence of an alliance between the current U.S. Administration and the high-tech community poses a risk that public policy may become captive to a scientific-technological elite controlling the development of powerful AI models.  We should not assume, however, that a future in which AI models have an increasing influence on social and economic outcomes will necessarily be worse than one in which the entangled deep state retains its current influence. Rivalry between AI models may even have potential to produce better outcomes.

Do people judge my book by its cover design?

 

I don't know the answer to that question. I doubt that cover design has much influence on judgements that people make about books after they have read them. However, cover design might influence decisions to purchase and read books. We may agree with the aphorism that “you can’t judge a book by its cover”, yet not look much beyond the cover in deciding whether to read a book.

A few days ago, Md. Sujon Sarker, a new acquaintance on LinkedIn, began a discussion with me about my book, Freedom, Progress, and Human Flourishing. Before long, he offered the following comment:

“I noticed one thing about your cover, that is, the text in your cover title is not visible, the text is blended with the background, we want to fix this text problem of yours, we will give it a free design correction.”

Md. Sujon Sarker’s opinion carries some weight. He is a “Book Cover & Interior Formatting Specialist”.

It is obviously an exaggeration to say that the text on the cover is not visible, but I acknowledge that it does tend to blend with the background.

Before accepting the offer of a “free design correction”, I make sure that my new acquaintance was aware that I had no intention of creating a new edition of the book which could make use of his design. I told him that I wanted to stick with the sailboat theme, and drew attention to this passage in the Preface:

“Is there an image that captures the ideas associated with freedom, progress, and human flourishing presented in this book? The picture of yachts on the front cover comes close. Yachts are a symbol of freedom because the navigators of each yacht decide where they will go. They are a symbol of economic progress because yachting is an example of a leisure activity that progress has enabled large numbers of people to enjoy. They are a symbol of human flourishing because they capture the idea of life as a journey, a voyage of discovery, in which individuals determine their own direction, but all face many similar challenges.”

Perhaps I should also have added that I had taken the photo used in the current cover design and felt some attachment to it.

Here are the cover designs that Md. Sujon Sarker provided to me:

 

 

Those designs capture the theme I was looking for and the lettering stands out appropriately.

Md. Sujon Sarker lives in Bangladesh but offers support to authors and publishers worldwide. Anyone seeking his services can use the following contact information:

Email: sujongdf@gmail.com

LinkedIn: https://www.linkedin.com/in/md-sujon-sarker-6ba2b8235  

Does Humanomics Need a Moral Anchor?

 

This is a guest essay by Dr Edward W. Younkins, Professor of Accountancy and Business at Wheeling University, and Executive Director of its Institute for the Study of Capitalism and Morality. Ed is author of a trilogy of important books on freedom and flourishing: “Capitalism and Commerce”, “Champions of a Free Society”, and “Flourishing and Happiness in a Free Society”. He also has numerous other publications, including several published on this site. (Please see them listed after the end of this essay.)  

 Modern economics, particularly in its dominant neoclassical form, is often characterized by models that treat human beings as Homo economicus—rational utility maximizers responding predictably to incentives and constraints. This idealized abstraction enables precise mathematical modeling but, as critics argue, collapses the rich complexities of human behavior into a narrow calculus of preferences and payoffs. Homo economicus assumes coherent pref­erences, consistent rationality, and a reduction of social life to instrumental choices. But this framework struggles to account for trust, social norms, feelings of fairness, moral judgment, learning, culture, and meaning—features of economic life that we observe every day. 

 

 Enter Humanomics, a burgeoning intellectual movement that seeks to re-ground economic inquiry in the realities of human experience. At its core, Humanomics aims to integrate moral and social dimensions into the scientific study of economic behavior, recapturing insights from Adam Smith that have been marginalized in mainstream economic theory. Rather than reducing humans to narrow maximizers of utility, Humanomics treats them as sentient, social, purposeful, learning agents whose actions are shaped by sentiments, norms, ethical commitments, and reflective judgment.

 

The longest part of this essay reviews the work on this growing movement conducted by Nobel laureate Vernon L. Smith and experimental economist Bart J. Wilson. That portion of the essay is followed by a discussion of distinguished interdisciplinary economic historian Deidre Nansen McCloskey’s alternative, bur compatible, vision of Humanomics. This is followed by a discussion of neo-Aristotelian philosopher Douglas B. Rasmussen’s proposal that the traditional concept of homo economicus be replaced by dual concepts pf homo agens (acting man) and homo moralis (moral man).  An argument is then made that the neo-Aristotelian framework developed by Rasmussen and Douglas J. Den Uyl called Individualistic Perfectionism may provide a philosophical grounding for Humanomics.

 

 Adam Smith’s Philosophical Vision

 

To understand Humanomics, we must revisit Adam Smith (1723–1790) not merely as the author of The Wealth of Nations (WN)—often oversimplified as the father of free market economics—but also (and arguably even more importantly) as the author of The Theory of Moral Sentiments (TMS). Smith’s intellectual project embraced both economic systems and moral psychology. For Smith, markets emerge not in a vacuum but within networks of interpersonal relations guided by sympathy, propriety, and shared language. The often-quoted “invisible hand” metaphor in WN can only be read in full context when seen alongside his moral philosophy; humans are not egoistic automatons but social beings whose moral sentiments play a foundational role in shaping institutions and behavior.

 

Humanomics begins with this fuller Smithian anthropology: humans act purposefully, learn from experience, and are motivated by both self-interest and social sentiments like gratitude, resentment, trust, and fairness. Experimental evidence in economics, particularly from the works of Vernon L. Smith, shows that in simple game environments humans often behave cooperatively and reciprocally, even when self-interest alone would predict otherwise. These findings are hard to square with narrow neoclassical models but fit comfortably with a Smithian understanding of human nature as complex and multifaceted. 

 

Like Aristotle, Adam Smith focused on the cultivation of virtues and character building. Smith extended Aristotle’s ideas into modern commercial society. In turn, Humanomics builds on the connection between Aristotle’s eudaimonia and Smithian flourishing.

 

Humanomics as a Synthesis of Sentiments and Markets

 

In contemporary economic language, the dominant paradigm is sometimes referred to as Max-U: maximizing utility subject to constraints. Humanomics challenges this by asking a deeper question: What should the subject of economic theory be? If economics is a science of human wellbeing and prosperity, then it cannot abstract away the human condition; it must account for how people actually think, feel, communicate, and form norms.

 

In their 2019 book Humanomics: MoralSentiments and the Wealth of Nations for the Twenty-First Century, Smith and Wilson articulate a framework grounded in Adam Smith’s combined insights from TMS and WN. They argue that conventional economics has “lost sight of the full range of human feeling, thinking, and knowing in everyday life,” and that re-centering economics on sociality and sentiments enriches its explanatory power. Humanomics thus defines economics as a “science of human beings,” not simply a calculus of utility functions.

 

The core thesis of Humanomics is that economics must be re‑founded on a “model of sociality” that captures the full range of human feeling, thinking, and knowing. Smith and Wilson argue that the prevailing “maximize utility” (Max‑U) paradigm is inadequate because it reduces all action to outcome‑based preferences, ignoring the origins of action in moral sentiments and the context‑dependent rules that guide human conduct. In contrast, Smith’s model explains why people often act in ways that cannot be reduced to narrow self‑interest—for example, why subjects in anonymous laboratory games display high levels of trust and cooperation.

 Humanomics thus proposes a paradigm shift: from utility maximization to a “science of human beings” that integrates insights from TMS and WN into contemporary empirical analysis. This shift is not merely theoretical; it is driven by decades of experimental economics. Vernon Smith’s own Nobel‑winning work revealed that in market‑like settings, individuals often behave as narrowly self‑interested agents, while in personal social‑exchange games they exhibit strong other‑regarding tendencies. The Humanomics model reconciles these seemingly contradictory findings by appealing to Smith’s distinction between impersonal exchange (where anonymous rules of justice suffice) and personal social interaction (where fellow‑feeling and moral sentiments are paramount).

 Key to the Humanomics approach is its focus on rule‑following adaptation. Smith and Wilson emphasize that human beings are not merely preference‑satisfiers; they are rule‑followers who learn from social experience. We develop “rules of conduct” through observation, imitation, and the feedback of gratitude and resentment. These rules allow us to navigate both social and economic domains.

 

Extending Adam Smith’s Vision: Vernon  Smith and  Bart Wilson’s Contributions

 

Smith and Wilson extend several core ideas from TMS into contemporary economic analysis:

•  Fellow feeling (the capacity to enter into the emotions of others): Smith’s notion that we naturally project ourselves into the situations of others, sympathizing with their joys and sorrows, becomes a foundation for understanding cooperation and norm compliance in experiments;
•  Beneficence and justice: Smith calls beneficence (voluntarily doing good)  the “ornament” of society and justice its “main pillar”; Humanomics uses this to distinguish nonobligatory kindness from the strict norms whose violation calls for demands for redress; and
•  Impartial spectator (an imagined neutral observer): People internalize a standpoint from which they judge their own conduct. Humanomics treats this internalized judge as an explanatory mechanism for behavior that adheres to norms even when no external enforcement exists.

 

These themes allow Humanomics to construct non‑utilitarian models of choice in which rules, sentiments, and perceived propriety are primary, and utility is not reduced to felt pleasure or material payoff.

 Humanomics does not discard markets or rational choice altogether; it reinterprets them within a broader framework where market interactions are embedded in social relations. Markets are not mechanical devices for exchange but arenas where trust, reputation, norms, and sentiments actively shape outcomes. A simple market price is not just a number; it is a signal embedded in social practices and meanings. Similarly, cooperation in a trust game, or generosity in a dictator game, cannot be fully explained by narrow self-interest but makes sense when one accounts for gratitude, fairness, loyalty, and moral sentiment

 Smith and Wilson develop Adam Smith’s ideas in several crucial directions. First, they operationalize Smith’s moral psychology for experimental economics. They design games that test predictions derived from TMS, such as the role of gratitude and resentment in triggering reward and punishment. This provides empirical grounding for Smith’s often‑overlooked psychological insights.

 They develop a positive alternative to Max‑U. Instead of assuming that actions are driven solely by preferences for outcomes, Humanomics models action as rule‑governed and rooted in human relationships that involve what Smith called fellow‑feeling. This alternative framework not only explains anomalous experimental results but also offers predictive power about how people will behave in various social‑economic contexts.

 

In addition,  they re‑center economics on human flourishing. In their 2024 interview, Smith and Wilson connect Humanomics to the broader goal of human flourishing, which they describe as “discovery as a process that is adaptive and that anticipates new forms of knowing”. By restoring the moral‑social dimension to economic analysis, Humanomics seeks to inform policies and institutions that promote genuine human well‑being, not merely material efficiency.

 

A central insight of Humanomics is its emphasis on learning as a fundamental process. Unlike the static optimization models of neoclassical economics, Humanomics views human behavior as evolving through trial, error, reflection, and adaptation. Individuals do not come equipped with fully formed preference ordering; they learn who they are, what they value, and how their actions affect others. Experimental economics plays a crucial role here, providing empirical evidence about how people behave in controlled settings that approximate various institutional arrangements.

 

The result is a form of economics that is not just about equilibrium states but about processes of discovery. It recovers Smith’s method—humans are curious, puzzled by anomalies, and constantly refining their understanding. When models fail to predict observed behavior, Humanomics asks whether the underlying assumptions about human nature are the problem, not just whether the parameters are mis-estimated. 

 

Because Humanomics insists on incorporating social norms, sentiments, culture, and context, it naturally becomes interdisciplinary. It invites insights from psychology, anthropology, sociology, philosophy, and history into economic inquiry. This stands in contrast with an overly reductionist economics that isolates variables analytically while ignoring how human context shapes meaning and action. In real policy contexts—such as education, public health, public choice, or charity—Humanomic insights can lead to different conclusions than narrow cost-benefit analyses. Analysts must ask not merely whether a policy is efficient but whether it respects real human motivations, social norms, and institutional contexts. 

 Bart Wilson’s contributions to Humanomics focus on the moral ecology within which economic behavior takes place. Drawing on Smith, Wilson argues that human beings inhabit a world structured by rules — not only formal laws but informal norms of propriety, fairness, and respect. These rules are not arbitrary; they emerge from social interaction and are sustained by shared moral sentiments.

 Wilson’s concept of “moral ecology” refers to the environment of norms and expectations that make cooperative behavior possible. Just as biological organisms depend on ecological systems, human beings depend on moral systems that support trust and reciprocity. Markets, in this view, are not self‑sustaining mechanisms but institutions embedded in a moral ecology.

 Wilson also emphasizes the importance of language and grammar in shaping social rules. He argues that moral rules function like grammatical rules: they guide behavior without requiring explicit calculation. This analogy echoes Adam Smith’s observation that moral norms arise spontaneously from social interaction, much like language. Humanomics thus extends Smith’s insights into the contemporary study of rule‑governed behavior.

 

 Experimental Evidence and Field Applications

 

Humanomics has a strong empirical foundation in experimental economics. Laboratory games have repeatedly shown that people often act cooperatively and reciprocally in ways that standard Max-U models do not predict. In market experiments, trading behavior often approximates neoclassical predictions, but in social exchanges and repeated interactions, people reveal trust, fairness, and punishment behaviors inconsistent with narrow rational self-interest. Humanomics treats this not as noise to be explained away but as central phenomena that any reliable theory must account for.

 

Field applications extend this logic: for example, blood donation behavior and charitable giving often occur without direct material incentives but are driven by moral sentiments, social identity, and reciprocal expectations—patterns Humanomics explains in a unified framework rather than as anomalies. 

 

Vernon Smith’s experimental work especially provides empirical grounding for Humanomics. His experiments consistently show that individuals behave in ways that reflect moral sentiments rather than pure self‑interest. For example, in trust games, participants often send money to strangers even when there is no guarantee of return. In ultimatum games, individuals frequently reject unfair offers even at personal cost. These behaviors contradict the predictions of standard economic models but align closely with Adam Smith’s account of moral judgment.

 Vernon Smith interprets these findings through the lens of TMS, arguing that individuals care about fairness, propriety, and the approval of the impartial spectator. Humanomics thus bridges the gap between experimental results and classical moral philosophy. It shows that Adam Smith’s insights remain relevant for understanding real human behavior.

McCloskey’s Vision of Humanomics

 In Bettering Humanomics: A New, and Old, Approach to Economic Science (2021), Deirdre Nansen McCloskey offers a spirited critique of the dominant currents in contemporary economics and proposes an alternative vision she also calls Humanomics.  McCloskey, a distinguished economic historian trained across economics, history, rhetoric, and the humanities, argues that modern economics has become overly narrow in its methods and impoverished in its understanding of human agency. Her work is rooted in the conviction that economics should advance as a science of human betterment that integrates quantitative analysis with a deep appreciation of human motives, language, ethics, history, and culture. 

 McCloskey’s project is both a critique of modern economics and a revival of an older, richer tradition that traces back to Adam Smith. Her Humanomics emphasizes humans as purposeful agents embedded in moral worlds of meaning, speech, and persuasion rather than merely isolated utility maximizers reacting to incentives. This perspective challenges what she sees as the prevailing behaviorist and neo-institutionalist frameworks that dominate economics. 

 In addition to drawing on Adam Smith, McCloskey acknowledges debt to work by experimental economists Smith and Wilson. However, while their approaches overlap in their broad aim to re-humanize economics, they differ in focus and methodological commitments.

 At the core of McCloskey’s Humanomics is the claim that economics should be a discipline that genuinely takes human action seriously. For McCloskey, this means moving beyond the narrow positivism and behaviorism that treat human beings as reactive entities whose behavior is only meaningful insofar as it can be observed and statistically quantified. Rather, she calls for a science that recognizes humans as speaking, thinking, persuading, valuing, and moral beings. Human action, in this view, cannot be fully understood without acknowledging the roles of language, narratives, ethics, and culture. 

 Her critique is directed both at neo-institutional economics (which stresses the role of rules and institutions but tends to treat individuals as passive units responding to institutional constraints) and behavioral economics (which often focuses on systematic deviations from rational choice without adequately theorizing autonomy, meaning, and moral agency). McCloskey contends that these frameworks, in privileging observation over interpretation, fail to capture the why behind human actions and preferences. 

 A central move in McCloskey’s project is to reclaim the tradition of Adam Smith  as a thinker deeply attuned to moral sentiments, rhetoric, and the narrative dimensions of human life. McCloskey argues that classical political economy—and especially Smith’s work—treated human beings as ethical and rhetorical creatures. In her view, this older tradition offers a template for a more holistic economics that respects human complexity. 

 McCloskey also situates her Humanomics within a broader narrative: the Great Enrichment of the last few centuries, during which material living standards rose dramatically across much of the world. For her, understanding this transformation requires a focus on ideas, language, and values—the very realm that conventional models tend to marginalize. Material incentives alone are insufficient explanatory tools; instead, human rhetoric, ethics, and innovation are central drivers of economic progress. 

 McCloskey’s Humanomics calls for an interdisciplinary methodology. She argues that economics should retain the tools of mathematical modeling and empirical analysis, but also incorporate insights from history, philosophy, literature, and rhetoric.

 At a broad level, McCloskey and Smith and Wilson share a commitment to re-humanizing economics by restoring attention to moral, social, and rhetorical dimensions of human life. All three thinkers draw inspiration from Adam Smith’s holistic perspective and reject the narrow positivist view of human action. They agree that humans cannot be understood merely as reactors to incentives or as mathematical objects in maximization problems. 

 Both approaches emphasize interdisciplinarity and contextual richness rather than strict behaviorist reductionism. McCloskey’s Humanomics is particularly expansive in its inclusion of the humanities—language, history, rhetoric, and ethics—alongside economics. Smith and Wilson Humanomics, while acknowledging moral sentiments and context, tends to stay closer to an economic framework that can be operationalized in experimental and theoretical work. 

 

Rasmussen’s neo-Aristotelian Contributions

 

While Vernon Smith and Bart Wilson ground Humanomics primarily in a reinterpretation of Adam Smith and empirical findings, Douglas B. Rasmussen brings a philosophical depth that complements and extends the project.

 

In his recent work (2024), Rasmussen proposes replacing the abstraction of Homo economicus with the paired concepts of Homo agens (acting man), and Homo moralis (moral man). In this view, human beings are purposeful actors (Homo agens) who choose means to achieve ends, and they are also moral agents (Homo moralis) who evaluate not only the effectiveness of their actions but whether the ends themselves and the means to attain them are good for a human life. Unlike Homo economicus, which reduces behavior to utility calculations, this dual conception captures the ethical and purposive dimensions of human action. 

 

Rasmussen’s homo agens comes from Austrian economics and Ludwig von Mises’s “action  axiom” especially as interpreted by Murray Rothbard which holds that human action is purposeful behavior involving the use of scarce means to attain ends. Homo moralis adds the further question of whether the ends chosen and means employed are genuinely good for a particular human being (i.e., tying economic agency to the ethics of individual human flourishing).

 

Rasmussen maintained that neo-classical economists’ grounding of economics in universal self-interest and revealed preference is arbitrary and tautological (i.e., any consistent pattern of behavior can be interpreted as ‘utility maximization”), Rothbard’s homo agens avoids this by characterizing human beings as agents who pursue ends through chosen means, the content of which can be altruistic, egoistic, and so on. This supports a version of Humanomics that does not need homo economicus as a foundational assumption yet preserves economic theorems such as diminishing marginal utility as implications of purposeful action rather than hedonistic psychology.

 

Rasmussen’s framing resonates with Humanomics by emphasizing the agent’s reflective choice, not just behavioral regularities. It anchors Humanomics in a philosophical anthropology that recognizes human beings as rational, moral, and teleological—that is, oriented toward ends that are remembered, evaluated, and integrated within a larger conception of the good life. This aligns with classical and neo-Aristotelian notions of human flourishing, where economics cannot be fully separated from ethics and politics. 

 

Rasmussen’s broader philosophical work on human flourishing situates economics within a normative framework: economics is not just a positive science predicting behavior but a moral inquiry into conditions that enable humans to live well. Drawing on Aristotelian and natural law traditions, Rasmussen argues that flourishing involves exercise of reason, moral judgment, and substantive choice—aspects that narrow economic models often neglect. These philosophical foundations enrich Humanomics by giving it a normative anchor: preferences and choices are not just given but evaluated in terms of their contribution to a fulfilling human life. 

 

Rasmussen’s contribution to Humanomics is best understood through his broader neo-Aristotelian framework of individualistic perfectionism and his sustained work on human flourishing, moral agency, and political philosophy. Rasmussen does not approach Humanomics primarily as an economist, but as a philosopher concerned with the nature of human action, practical reason, and the ethical conditions necessary for individuals to flourish. His work provides Humanomics with a deeper normative and anthropological grounding that complements the empirical and Smithian recovery undertaken by Vernon Smith and Bart Wilson.

 

Rasmussen’s individualistic perfectionism holds that there is an objective standard of human flourishing grounded in human nature, but that flourishing must be achieved through the self-directed activity of individuals rather than imposed collective ends (Den Uyl and Rasmussen [2016]). This view aligns closely with Humanomics’ insistence that economic behavior cannot be reduced to mechanical optimization. Preferences are not merely given; they are formed, revised, and evaluated through practical reasoning over time. Economic choice, on this account, is inseparable from ethical self-authorship.

Under this view, policies or institutions that optimize efficiency but undermine agency, community, or moral sentiments may be judged inadequate. Humanomics, when infused with Rasmussen’s perspective, becomes not just a descriptive science of human behavior but a critically engaged social science that judges economic arrangements in terms of how they contribute to individual flourishing.

 

 Conclusion

 

Humanomics represents a significant intellectual shift toward a human-centered economics rooted in the full breadth of Adam Smith’s thought and enriched by contemporary philosophy. By privileging social relations, moral sentiments, and purposeful action, Humanomics provides a more holistic framework for understanding economic life. The contributions of scholars like Vernon Smith and Bart Wilson reorient economics toward a science of human beings, while philosophical thinkers like Douglas B. Rasmussen deepen its conceptual foundations by restoring moral agency and flourishing to the center of inquiry.

 

In an age where economic science faces criticism for its abstraction and detachment from lived experience, Humanomics offers a compelling alternative: one that holds onto the analytical rigor of economics while honoring the complexity of what it means to be human. In reviving Adam Smith’s unified vision of moral sentiments and economic life, Humanomics challenges the reductionism of modern economics and opens new pathways for interdisciplinary research. It invites economists, philosophers, and social scientists to reconsider the moral foundations of markets and the narrative structures that shape human action. In doing so, it honors Adam Smith’s legacy while extending his insights into the twenty‑first century.

 

Recommended reading

 

Bates, Winton. (2021) “Why Should Economists Practice Humanomics?” Freedom and Flourishing. October 4, 2021.

Den Uyl, Douglas J., and Douglas B. Rasmussen. (2016) The Perfectionist Turn: From Metanorms to Metaethics. Edinburgh University Press.

McCloskey, Deidre Nansen McCloskey. (2023) Bettering Humanomics; A New, and Old, Approach to Economic Science. University of Chicago Press

Rasmussen, Douglas B (2024), Homo Agens and Homo Moralis in Humanomics. The Independent Review.

Smith, Adam. (1759) 1982The Theory of Moral Sentiments.  Indianapolis: Liberty Fund.

Smith, Adam. (1776) 1981. An Inquiry into the Nature and Causes of the Wealth of Nations. Indianapolis: Liberty Fund.

Smith, Vernon L., and Bart J. Wilson. (2019) Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century. Cambridge University Press, 2019.

Smith, Vernon L. and Bart J. Wilson. (2024) “Humanomics: An Interview with Vernon Smith and Bart Wilson.” 2024. Profectus Magazine. October 14, 2024.

 

Some other essays by Ed Younkins

Younkins, Edward W (2025) “What Contribution did David L. Norton Make to our Understanding of Ethical Individualism?” Freedom and Flourishing. January 18, 2025.

Younkins, Edward W. (2025) “How can dialectics help us to defend liberty?” Freedom and Flourishing. July 8, 2025.

Younkins, Edward W. (2025) “How can Austrian Economics be reconciled with the Neo-Aristotelian philosophy of Freedom and Flourishing?” Freedom and Flourishing. October 24, 2025.

Younkins, Edward W. (2025) “Can Polarized Moral Politics be Bridged by a Neo-Aristotelian Philosophy of Freedom and Flourishing?” Freedom and Flourishing. December 13, 2025.

What was wrong with the Washington Consensus?

 

Just as I was reading the final chapters of William Easterly’s book, Violent Saviours: The West, the Rest, and Capitalism Without Consent, the United States government abducted the president of Venezuela to stand trial on drug charges in New York. I was pleased to see Nicolás Maduro facing justice, even if for the wrong reasons, but at the time of writing it remains to be seen whether the U.S. actions will advance the economic and personal freedom of Venezuelans.

 In the light of recent developments, Easterly’s conclusion seem to me to be excessively optimistic. He states:

“Adam Smith’s prophesied movement of “nations into some sort of respect for the rights of one another” had been partially fulfilled. The relation of the West to the Rest, previously based on coercion, was now based mainly on consent.”

Under the presidency of Donald Trump, the U.S. seems to me to be behaving like a colonial power. President Trump makes no secret of the fact that he is more interested in control of additional territory, oil, and other resources than in promoting respect for human rights, free trade, and the liberal international order.

Apologists for President Trump can claim, with some justification, that big powers have always swung their weight around in their own interests despite their rhetoric supporting the liberal international order. Nevertheless, public support for international norms of behaviour has hitherto signaled a willingness to be held to account publicly for breach of those norms.

 Easterly qualifies his statement that the relation of the West and the Rest is now based mainly on consent:

“The trend toward freedom is neither inexorable nor irreversible. As of this writing, new threats to freedom have emerged with proposed increases in US tariffs and possible restrictions on foreign students. It’s a little premature to declare the attainment of a liberal paradise.”

With the benefit of observation of recent events, however, it is difficult to escape the conclusion that the world is currently moving rapidly away from the ideal of relations between nations being based on consent rather than coercion. It is possible, nevertheless, that oppressed people in some countries will manage to achieve more economic and personal freedom over the next few years. The best we can hope for is that before too long Washington will once again embrace the ideal that relations between nations should be based on consent rather than coercion.

Before I discuss Easterly’s view of the Washington Consensus, I will briefly outline what Violent Saviours is about.

The West’s conflicted view of the Rest

Violent Saviours offers a historical account of the conflict between the duelling visions that have influenced the conduct of Western nations toward the rest of the world since the 17^th and 18^th centuries. On the one hand, there are the liberal ideas of consent, self-determination, and equality that make possible positive-sum gains from commerce between groups and individuals. On the other hand, there are the opposing illiberal ideas of coercion, paternalism and racism that yielded a negative sum world of conquest.

Adam Smith was a leading advocate of liberal ideas and a critic of many aspects of colonialism. However, some well-intentioned Enlightenment philosophers (e.g. Condorcet) offered support for the “Development Right of Conquest”. Condorcet sought to justify conquest as offering the hope of eventually “civilizing” the locals.

Over the period from 1776 to 1865, the liberals were mainly on the losing side. They were unable to prevent the West’s adoption of illiberal policies such as colonial conquest and population removal (in countries such as the U.S, and Australia). However, liberals had some victories during that period; most notably, they were able to bring about abolition of the slave trade and of slavery in the United States.

Easterly suggests that over the period from 1865 to 1945 most economists abandoned liberal morality: “Commerce expands but without moral constraints on plunder”. The regression of freedom culminated in World War II, during which liberalism had to fight for its survival.

The period since 1945 has seen the partial victory of liberal ideas with the end of colonialism and a surge in commerce which has partially restored agency to people in the former colonies. Easterly notes that some economists – notably Milton Friedman, P. T. Bauer, and Amartya Sen – revived the idea of individual freedom as “an end in itself”.

It is possible to quibble with some aspects of that account, but I think the important point to focus on is the current state of the conflict between the duelling visions. Easterly writes:

“Yet the legacy of the past is still here. While obviously not equating modern development efforts with slavery, genocide, and colonialism, the question remains of what violations of consent today in the name of progress should be out of bounds.”

That provides the context in which I would like to consider the Washington Consensus.

 The Washington Consensus

The Washington Consensus was the term John Williamson, an economist, invented in 1989 to describe the set of policy reforms that the US Treasury, the World Bank and the IMF believed would be good for Latin American countries. The ten propositions of the Washington Consensus combined fiscal discipline with selective deregulation. They were broadly pro-market but did not entail a vastly diminished role for government. As an advocate of a greater measure of economic freedom than required by the ten points in the Washington Consensus, I recall being bemused to see opponents equate it with “neoliberalism” and “market fundamentalism”. John Williamson had a different reaction. As he discussed in the paper from which I obtained the epigraph, he was concerned that the term was often being used to refer to a more radical pro-market view than he had intended.

The policy ideas in the Washington Consensus were certainly applicable beyond Latin American countries and were not confined to economists in Washington DC. Those ideas were widely accepted by economists with expertise in economic policy in many different countries. I think they are still widely accepted by economists today.

As I was reading Easterly’s discussion of the Washington Consensus, the thought crossed my mind that the era in which it held sway was actually the high point in economic development policy as advocated by the World Bank. The Washington consensus seemed to show more recognition of the importance of economic freedom than subsequent policy approaches emerging from Washington.

One of the problems that Easterly mentions is that many observers thought that pro-market reforms were only desirable if they produced immediate economic gains. The reforms led to anti-globalization protests because they didn’t have an immediate positive impact on economic growth and were often associated with worsening of poverty. As time went on, however, “there was more evidence of growth turnarounds and poverty reduction correlated with movements away from extreme state control”.

As I was reading this, I tried to recollect what I had written in the 1990s about the adjustment process following an expansion of economic freedom. I wrote about some aspects of that question in an article entitled “The New Zealand Model of Economic Reform: A Review” (published in: Agenda: A Journal of Policy Analysis and Reform, Vol. 4, No. 3 (1997), ANU Press). My work suggested that the lack of clear evidence of economic benefits in some countries that had undertaken economic reforms in the 1980s could be attributed partly to the time required for new policy directions to become embedded and for adjustment to occur: 

“Profound changes in behaviour, including changes in the willingness of individuals to learn new skills and business practices, are required as people respond to the incentives that policy reforms provide.  It takes time even for the most innovative firms and individuals to accept that new market incentives are likely to be sustained and to develop and implement new strategies.  Widespread adoption requires sufficient time for these new strategies to become demonstrably successful.”

I am pleased that I wrote that even though I missed an important point that Easterly makes. He suggests that the emphasis “on material results alone – on both sides of the debate – neglected Sen’s and others’ arguments for freedom as an end in itself”.

I don’t see freedom as an “end in itself” – freedom is necessary because human flourishing is an individualized and self-directed process. What I think Easterly means is that institutional freedom would be no less desirable if individuals chose to use it ways that made no contribution to economic growth e.g. by increasing the amount of time they spent on leisure activities.

Easterly also suggests that the manner in which foreign governments were encouraged to adopt Washington Consensus polices was problematic:

“Low and middle-income countries could get badly needed loans from the World Bank and IMF only if they agreed to reforms decreed by Bank and Fund staff. The fatal combination of foreign advisors with some coercion would keep discrediting promarket recommendations made by the World Bank and International Monetary Fund in the 1990s, especially for Africa, Latin America, and Russia.”

A few pages on, however, the author notes that “the association of liberal reforms with a Washington-imposed Consensus did not turn out to be fatal”. He follows that observation with a long list of “homegrown reformers” who have pursued pro-market reforms. (I have reproduced the list here.)

Unfortunately, Easterly’s list of reformers does not include Javier Milei, president of Argentina. It was probably compiled too soon for that to be possible.

Now that I have mentioned Javier Milei it is worth noting that the U.S. government offered a $20 billion bailout for Argentina prior to the country’s recent legislative elections. The offer was apparently made with strings attached — namely, that the funds would be available only if Milei’s party won the election.

It seems to me that if the U.S. president were to promote a general policy of assisting those low-income countries whose political leaders enthusiastically expand economic and personal freedom, he might be worthy of the Nobel Peace Prize.   

Conclusion

William Easterly’s book, Violent Saviours, offers an insightful account of the conflict between liberal and coercive views of economic development since the 17^th and 18^th centuries. He suggests that the legacy of the past is still with us because development economists and policy makers are still confronted by the question of what violations of consent should be out of bounds.

That provided the context in which I considered Easterly’s views of what was wrong with the Washinton Consensus – the moderately pro-market economic policies advocated by the U.S. Treasury, the World Bank, and the IMF during the 1990s. Easterly is clearly sympathetic to espousal of pro-market policies. However, he makes a strong case that such policies should be advocated to promote economic freedom rather than to promote “material results alone”.

The view that Easterly presents is consistent with the idea that liberty is desirable because it provides opportunities for individuals to flourish in the manner they choose.