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Documentary Of The Week: Power Theory Of Personal Income


not. It’s not about supply-side economics, which is sometimes called ‘top-down’ economics.
Instead, I use the phrase ‘economics from the top down’ to mean two things. First, it’s a philosophical approach to studying human society. It’s an alternative to the ‘bottom-up’ approach that’s most common in economics. In the bottom-up approach, you first postulate simple principles of human behavior. You then use these ‘microfoundations’ to explain the behavior of groups of people.
I think this approach is misguided. It’s the equivalent of trying to explain individual behavior using postulates about how cells behave. It’s not that the bottom-up approach is impossible - clearly individuals interact to create group behavior (just as human cells interact to create individual behavior). The problem is that this bottom-up approach is far beyond our present abilities. We have no universal theory of human behavior (just as we have no universal theory of how ....

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