Licence to be Bad: How Economics Corrupted Us

Imagine waking up each day and making choices—what to buy, how to act, whom to trust—without ever realizing that an invisible compass is guiding you. This compass is not a product of ancient wisdom or spiritual tradition, but of economic theories woven into the fabric of our modern lives. Economics has quietly become the new moral language, subtly shaping our sense of right and wrong, often without our conscious awareness.

It wasn’t always this way. Not so long ago, people looked to religion, tradition, or simple common sense to guide their actions. But over the past fifty years, a remarkable transformation has taken place. Through countless subtle shifts, ideas once confined to university lecture halls and think tanks have seeped into the mainstream, reshaping our values. The result? We find ourselves believing that it’s rational to be selfish, that trust is naïve, and that justice is a matter of efficiency.

This story begins on a mountain in Switzerland in 1947, where a small group of academics, journalists, and businesspeople gathered in secret. Their mission was audacious: to change how the world thinks. They saw the growing power of government and the lingering shadow of economic crisis as threats to freedom. Led by the visionary Friedrich Hayek, they founded the Mont Pèlerin Society, planting seeds that would blossom into today’s economic orthodoxy. Their strategy was not to win immediate political battles, but to change the weather of ideas—to make their way of thinking seem like common sense.

Their success is now all around us. Consider how we talk about the global financial crisis: it’s common to blame regulators, not bankers, for reckless behavior. Why? Because we’ve come to believe that greed is not just inevitable, but necessary for markets to function. ‘Bankers will be bankers’ is the refrain—an excuse rooted in the idea that economic actors simply follow incentives, absolving them of moral responsibility.

But the influence of economics goes far beyond banking. It seeps into our daily lives—whether we think it’s pointless to vote, harmless to download music without paying, or inevitable that people will cheat on taxes or insurance. These beliefs are not just the result of changing times; they are the product of powerful economic ideas that have become self-fulfilling. When we expect others to act selfishly, we become more selfish ourselves. When we treat cooperation as irrational, we stop cooperating. The theory becomes the reality.

This transformation has not been accidental. It was carefully nurtured by those who believed that only by changing the underlying ‘common sense’ could they roll back the state and restore the primacy of the market. Their project succeeded beyond their wildest dreams, and today, economics has filled the gap left by the decline of religion—offering a new set of rules, a new way to judge ourselves and others.

Yet, as we will see in the next section, the story of how these ideas took hold is not just about intellectual history. It is about how our basic sense of trust and cooperation has been redefined, and why we now find it so hard to imagine alternatives. Let’s explore how the logic of distrust became the new normal.