The Economics of Advice

Abstract

Since 1945 economists have been increasingly in demand as advisers and consultants, in government and business. Evidently they are useful; but just what their role is, and how they should be prepared for it, remains undefined. There is one dilemma in particular. Most practical problems have an economic component, but this is only part of what the decision-taker has to bear in mind. If economists base their advice on the economic component alone, it is liable to be impracticable. But if they aim to be practical, and take account, as it is said, of ‘political realities’ or ‘the human factor’, they go beyond their professional competence.