Licence to Be Bad: How Economics Corrupted Us: Summary & Key Insights

The transformation begins with rational choice theory—the proud cornerstone of modern economics. The idea appears simple enough: people act rationally to maximize their satisfaction, choosing whatever option serves their self-interest best. The seduction lies in its elegance and mathematical clarity. Once human beings are treated as calculating agents—homo economicus—the messy unpredictability of moral motivation can be tidily set aside.

In policy circles and business schools alike, this abstraction took hold as a universal lens on behavior. Rationality was redefined as self-interested calculation, and by a subtle inversion, anything that did not serve narrow self-interest came to be viewed as irrational. Generosity, loyalty, even honesty, were reinterpreted as strategic in disguise—long-term plays in a game of self-advancement.

I saw how this framework smoothly colonized public reasoning. Governments began designing policies premised on the assumption that citizens would cheat or free-ride unless constrained by incentives. The social contract, once grounded in shared moral duty, morphed into a network of self-seeking actors compelled by surveillance, penalties, and rewards. What had once been the language of ethics gave way to the language of mechanism.

The deeper consequence was a moral reprogramming: by constantly telling people that rational behavior means selfish behavior, economists helped make that story real. Rational choice theory did not simply describe human nature—it reconstructed it.

If rational choice provides the grammar, game theory supplies the syntax of modern cynicism. Developed in the mid-twentieth century, game theory brought the drama of competition to life using models of players, payoffs, and strategies. Its influence extended far beyond economics, shaping military strategy, business negotiation, and even romantic relationships.

The logic of game theory assumes that each player acts to maximize personal gain, anticipating that others do the same. Cooperation appears fragile, trust naive. The famous Prisoner’s Dilemma encapsulates this fatalism: even when cooperation would yield the best outcome for both, rational players betray each other out of fear that the other will do the same. It is a bleak parable of mistrust masquerading as realism.

When this logic entered public policy, it normalized a harsh form of strategic thinking. Diplomacy, labor negotiations, and environmental cooperation came to be framed as contests of manipulation and deterrence. Even moral choices were recast as strategy. People were encouraged to ask not what is right, but what advantage they gain by seeming right.

Yet, when societies expect distrust, they produce it. The self-fulfilling prophecy of game theory corrodes the very conditions of cooperation it analyzes. The tragic irony is that by insisting we are competitors by nature, economists have helped make us so.