Blacklisted Economics Professor Found Dead: NC Publishes His Last Letter

Professor Outis Philalithopoulos was found dead in his home three days ago; the coroner’s report cited natural causes that were left unspecified. Unfortunately, all of the professor’s academic work has disappeared; the only trace left appears to be the following letter, which he sent to an admirer shortly before his death. The understandably concerned recipient of the letter has shared its contents with Naked Capitalism, and has insisted that her identity be protected.

Dear * * *,

Reading your generous letter was an unexpectedly encouraging experience. I rarely feel that others truly understand the purport of my theories, but when I see a high school student such as yourself navigate her way through the vilifications that surrounds my work, it makes me want to redouble my efforts to explain my ideas to a larger audience.

How did you become the most courageous economics professor of our time? Really, you are far too kind. I never thought of myself as anyone out of the ordinary while working as a young PhD on technical questions in Public Choice theory. As you probably know, Public Choice is the pathbreaking theory that demystified the decisions of politicians, showing that they act rationally in order to maximize their own economic benefits.

Soon after receiving tenure, it occurred to me that we were being profoundly inconsistent. While we had correctly criticized the previous mainstream view that politics involved benevolent efforts to serve the common good, we had failed to apply the same rigor to the community of academic economists. As a result, we were modeling both economic and political actors as self-interested utility-maximizing agents, while continuing to see economics professors as idealistic pursuers of truth. I decided to correct this oversight by developing my theory of Academic Choice, in which economists are theorized as rational agents who continually seek to maximize their future earnings potential.

The way I would describe Academic Choice theory is that it is “the sociology of economists, without romance.” Is this right? What an insightful comment. As you say, Academic Choice theory is a descriptive project, with no normative orientation. We apply a critical approach in order to counterbalance pervasive earlier notions of economists as scientific heroes struggling against popular ignorance in order to serve the common good.

What would you identify as the central insights of Academic Choice theory? The theory begins by identifying three principal ways in which economists try to maximize their utility. First, they receive salaries from universities, which can be increased if their course enrollment increases. Course enrollment is primarily driven by students with future careers in business and the financial sector, so an economist has an incentive to propound theories that CEOs and financial institutions find attractive. Even if adoption of these theories leads to substantial public costs, these costs will not be shouldered by the economist personally. Second, by developing such theories an economist can open the door to future wealth as a lobbyist or consultant. Third, the support of economists is critical to creating and maintaining special privileges for the financial services industry and for top corporate officers. By threatening to withdraw this support, economists can engage in rent-seeking. I call this last practice academic entrepreneurship.

Is it really plausible that economists threaten top banks that in the absence of some kind of payoff, they will change the theories they teach in a direction that is less favorable to the banks? There are certainly cases in history of the following sequence:

a. Economist E espouses views that are less favorable to certain special interest groups S. Doing so threatens the ability of S to extract rent from the public.
b. Later, E changes his view, thereby withdrawing the prior threat.
c. Still later, E is paid large amounts of money by representatives of S in exchange for services that do not appear particularly onerous.

For example, let E = Larry Summers and let S = the financial services industry. In 1989 E was (a) a supporter of the Tobin tax, which threatened to reduce the rent extracted by S. This threat was apparently later withdrawn (b), and in 2008 E was paid $5.2 million (c) in exchange for working at the hedge fund D. E. Shaw (an element of S) for one day a week.

However, it is naturally more difficult to witness the negotiations in which specific threats were appeased with specific future payouts. This is a problem that also bedevils Public Choice theory, in which it is likewise difficult to show exactly how a particular politician is remunerated in exchange for threatening businesses with anti-business legislation. The theory assures us that such negotiations occur, although they are difficult to observe directly. Perhaps further theoretical advances will help us to close this gap.

Isn’t it offensive to assume that economists, for motives of personal gain, shade their theoretical allegiances in the directions preferred by powerful interest groups? How could it ever be offensive to assume that a person acts rationally in pursuit of maximizing his or her own utility? I’m afraid I don’t understand this question.

Is there a “behavioral” version of Academic Choice theory, in which the basic premises are enriched by the possibility that economists sometimes act irrationally? Great question. One of my students developed just such a theory – he postulated that economists sometimes do act benevolently, but they have access to limited information and are subject to cognitive biases. Under these assumptions, he proved that economists would produce theories that are flawed in similar ways to what is independently predicted by Academic Choice.

However, while his dissertation was unquestionably a valuable contribution to the literature, I am personally convinced that the original Academic Choice theory is more empirically realistic. Studies have shown that many people do act irrationally, but not economists – to the extent possible, their decision-making conforms to the model of Homo economicus.

If the theories of economists are harmful to the general welfare, why doesn’t someone try to persuade the public that these theories are mistaken? Collective action in this sense is infeasible. If we instead consider the efforts of a single individual, the cost in terms of time and effort of discrediting an economic theory is substantial, while the benefits are dispersed over many people and so are comparatively small. In any case, the efforts of one person are unlikely to be decisive in swinging the consensus of economists away from a given erroneous theory. It follows logically that the rational decision for an intellectual consumer is to be inactive on this front, and even to be ignorant of the flaws in economic theory.

It might be thought that when economic theories are marred by particularly glaring problems, the public would notice. However, the consequence may simply be to select for economic theories that are particularly difficult for the public to evaluate, without implying any increase in the aggregate accuracy of such theories.

Do you simply assume based on the theory that people are generally ignorant about mistakes in economic theories, or are there other reasons why you would think this? Public Choice scholar Bryan Caplan was able to prove empirically that democracy subsidizes irrational beliefs. He looked at one political issue after another and found that the views of voters are very different from the mainstream views of economists and are therefore obviously irrational. I would love to be able to prove that intellectual consumers are ignorant of biases in economic theories with an equal degree of rigor, but so far have not thought of a way. See, however, the response to your next question.

The core claim of Academic Choice is that valid economic theories are an underprovided public good, due to a combination of academic entrepreneurship and rational public ignorance. Is this merely a prediction of the mathematical models, or is there real world evidence of this claim? Originally I did arrive at this result as a logical consequence of the theoretical model; however, the prediction has since been corroborated through empirical investigations.

Consider the following seven propositions. All of them have been effectively promoted and publicized by academic economists:

P1. (e.g. Greenspan) It is unnecessary to worry about deception in financial markets since market discipline will make sure that dishonest agents are permanently ostracized.
P2. (Clarke) A person whose income is 100 times as large as that of another person has contributed exactly 100 times as much to the general welfare.
P3. (First Welfare Theorem) Corporations, if left to themselves, will always provide employment to everyone and produce an economy featuring constant recession-free growth.
P4. (Arrow-Debreu) A necessary condition for this ideal economy is the availability of arbitrarily complicated securities that reference cash flows in all times, in all places, and in all ways imaginable.
P5. (Borrowing at the Risk-Free Rate) Economic institutions should be designed under the assumption that whenever a firm or bank tries to obtain a low interest loan, it succeeds.
P6. (1997/2008) If a Third World country has a banking crisis, bedrock principles of economics dictate that its largest banks should be allowed to fail and be acquired by U.S. and European banks. However, if the U.S. has a banking crisis, bedrock principles of economics dictate that its largest banks should be saved through massive subsidies from the public.
P7. (EMH, etc.) It is impossible for investment funds to beat the market. However, the current capital market system centered around funds trying to beat the market is this most perfect system conceivable by human beings.

As a bright high school student like yourself can clearly see, the list consists entirely of statements that are obviously wrong, and several of them are internally inconsistent. If economists were simply confused, we would expect to find no pattern in these statements. Instead, as predicted by Academic Choice, statements P1-P7 all directly enable rent-seeking by certain influential minorities (financial sector employees and corporate executives). Moreover, P1-P7 have also helped to generate market discontinuities with significant public costs, among which the recent global financial crisis.

Some of your critics have insinuated that the true aim of your research is to restore faith in the possibilities of democracy. How do you respond? I confess feeling rather hurt by this accusation. Let me explain to you, though, the reasons for this misunderstanding. A generation of Public Choice economists had proposed guidance by economic theories as an efficient alternative to the mistakes inherent in democratic processes, or in other words, to political market imperfections. Academic Choice suggests, however, that once one introduces “academic” market imperfections, we may need to confront the possibility that far from correcting political failures, the authority of economists may actually prove to be a source of further distortions in the economy, leading to what I call the “academic dissipation of value.”

This much is correct. However, to make the leap to assuming that I intentionally created Academic Choice theory in order to favor democracy is malicious and unfair – it is just like claiming that the main goal of the founders of Public Choice was to discredit politics.

What kinds of proposals could help to minimize value destruction by academic economists? You are quite right that from the point of view of the public this issue looms large. Even in most Western democracies, more than half of the total GDP is allocated according to principles promoted by agents subject to Academic Choice dynamics, i.e. economists. One simple remedy to the large negative externalities generated through their academic entrepreneurship could be to shrink the size of the sector of academic economists.

Another approach is indicated by the game theoretic insight that winning strategies in competitive games usually involve a random element. Following this principle, ever since antiquity trials have been decided by juries who are chosen by lot. We should therefore strongly consider periodically repopulating economics departments with people selected at random.

How are your personal relations with your economist colleagues? When I began to develop Academic Choice theory, I fully expected resistance from historians of science, since I knew they would see me as trespassing on their terrain. But I was heartbroken when I realized that colleagues in my own departments now regarded me with something akin to hatred. I tried to help them to see the elegance of my mathematical models and proofs, but their hostility continued unabated: no one would publish my articles, and even my most promising graduate students were refused jobs everywhere. I could not understand how my attempt to extend the reach of economic theory had led to this rancor, and my only solace was to remind myself that Howard Roark in The Fountainhead had also been misunderstood by colleagues who did not understand his individualistic dream of creating beauty.

But nonetheless, I persevered, and one day it dawned on me that the reactions of my colleagues were actually a startling confirmation of Academic Choice theory. After all, economists are very familiar with the free rider problem, whereby individuals take advantage of group benefits without contributing anything. In order to guard against free riders, economists had instituted the tenure process and the journal review process. And since my theories could conceivably weaken the ability of economists to extract rent in the future, they had classed me as a free rider and were attempting to impose costs on me!

Now that I have realized this, even the most malevolent stares of my colleagues are unable to disturb my sense of inner peace – for I realize that every attempt to disincentivize me from my chosen career path is yet another vindication of the explanatory potential of economic models.

If economists are generally self-interested utility maximizers, how can one explain your own passion to pursue the truth at all costs? I confess that your question has forced me to reconsider many things. Indeed, after thinking about the financial outcomes associated with my career, it seems hard for me to avoid the conclusion that I myself constitute a refutation to Academic Choice!

Trying to address this paradox has led to the humbling realization that I am a flawed example of Homo economicus. In fact, I suffer from a cognitive bias known as harmonization bias – i.e., my personal utility function is distorted by virtue of ascribing positive value to harmony between the real world and my economic theories.

My initial reaction to this disturbing discovery was fear that the validity of Academic Choice could be compromised – what if other economists also suffer from harmonization bias? Thankfully, the disorder appears to be rare in the community, and so Academic Choice theory remains applicable to the real world.

Would you recommend a research career in Academic Choice theory? There are certainly a few obstacles. You would have to resolutely conceal your interest in Academic Choice during your entire educational career, at least until you receive tenure. Once you reveal your true passion, you would have to accept both relative poverty and ceaseless acrimony on the part of your colleagues.

Academic Choice is certainly not for everyone –at the very least, it is necessary to suffer from harmonization bias. In light of these considerations, I had begun to accept that the chances of ever finding another student willing to study Academic Choice were slim. Still, your brilliant and lively letter has led me to question my pessimism.

Wouldn’t it be marvelous to see new faces in Academic Choice! The theory is full of beautiful unsolved problems that doubtless stand only in need of a fresh examination. Maybe harmonization bias is not as rare among people in general as it is among economists. Maybe I should try to offer a scholarship for younger students. What do you think?

Good luck with your senior research report and all the best,

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  1. Steve

    Yves – this is brilliant stuff and my sympathy goes out to the late Professor’s family and friends.

    I hope you will use your website to provide a forum for researchers who wish to carry on this important work in Academic Choice.

    1. Eric

      Have you been taken by a hoax? I googled “Outis Philalithopoulos” and got loads of pages citing this supposed news piece, but nothing else — no university faculty web-page or even reference (such as “Professor Philalithopoulos to speak at Forum” or any other such public mention of someone with that name; no linkedin, facebook, blogger, or other profile, and not even or other phone-book listing for someone with that name — nothing whatsoever.

        1. Yves Smith Post author

          I find it a bit presumptuous that you assume I was hoaxed.

          This is a satirical presentation of a serious theory. That’s why we didn’t run this on April 1.

          Separately, my version of WP seems to have a serious bug. I put a lot of formatting in (paragraph breaks, boldface), previewed and saved it, and scheduled the post to go live. A lot of the formatting got ditched. I had a post last week revert to an older saved version after I made an update (this was a post where I mistakenly put in the embed code for the wrong ScribD document). I double checked on the site from the outside (as in went in via http://www.nakedcapitalism rather than out of WP). The right version was live, yet a few hours later it reverted to the older version and no one had intervened. Really disturbing. So if you see future format glitches, it may not be yours truly’s normal typo problems but WP gone awol.

          1. Avedon

            And now you know why I do all my composition and coding in TextPad rather than in blogging software or even a word-processing program. At least this way, all of the mistakes are my own.

    2. Stelios Theoharidis

      Not to get wonkish with your April Fools post but as a fellow Greek pseudonym-bearer I think I have a bit of a right here.

      I think we can work a bit of evolutionary economics of academic economics programs into this theoretical framework. I think I can design a ecosystem here.

      The instituional positive feedback mechanism would be theoretical self-selection in academic departments supporting and providing tenure to individuals that tow the line or innovate in the field of neo-liberal theory. The second positive feedback mechanism, mana from above, would be excessive institutional grant/research project funding for academic endeavors that support the dominant mode of neo-liberal economic thinking. Thus any academic economist with a minor desire for self interest through publishing, obtaining tenure, or grant funding has a limited pre-determined pathway within which they will receive support. Our negative feedback mechanism would be through peer review boards, publish on the part of individuals that have minor innovations within the neoliberal framework and perish although mostly marginalize academics that fundamentally criticize the dominant mode of thinking.

      The critical academics are relegated to other ‘lesser’ economic departments eg Economic Geography, Intitutional Economics, Behavioural Economics, Game Theory, Development Economics, Environmental Economics, Resource Economics etc wherein they develop their own parallel economic theoretical frameworks funding and peer review process for years.

      This is of course until they are picked up by Ivy League business (see Porter ‘clusters’) or mainstream economics professors (see Krugman ‘new economic geography’ that realize it makes sense 20 years later. These professors promptly take full credit for the work others conducted thus mainstreaming ‘devouring’ other economic theoretical frameworks but never actually changing the erroneous dominant form of economic inquiry that lead to this fragmentation in the first place.

      I think your theory is complete now.

      1. nemi

        I agree. A theory about Academic Choice must explain the distinction between the core theory (i.e. what we simply refer to as “microeconomics”) and the subfields – since many of the subfields allow for imperfections.

        Of course you generally find the same institutionalized tradition of catering to the oligarchy but still, sometimes it isn’t equally bad as the core. I would almost go as far as to say that economic subfields only position themselves about one light year to the right of the position you would expect an objective researcher to take – and in some subfields, e.g. environmental economics, that will still put you short of the revenue maximizing position.

        Thus, instead of proving that every subfield is exactly where they would expect to earn most money – i.e. where the plutocracy would want them to be (a theory which I think might be empirically falsified in a small number of occasions) – I believe in the method (which academic choice seem to evolve from) of highlighting the inconsistencies in how the same method of analysis is used very differently in similar cases dependent on who has to gain from it (and there are A LOT of cases with these characteristics).

  2. williambanzai7

    All of his works have conveniently disappeared. Hmmm

    Luckily, all we need is this letter to understand the gist of his life’s work.

    1. john bougearel


      Now that is truly funny!

      “Nobody, and I mean “nobody”, can write like Outis!”

  3. Anon

    Is there any more information on him? Where was he a professor? What were the circumstances of his blacklisting?

  4. Jim

    What was his age? any pictures of him…?

    Strange all his work disappeared….

    He was obviously messing with a group of powerful people. Scary stuff.

  5. Maju

    While there’s a lot of truth in the content, the (let’s call it) “literary” introduction is a bit of cheating with the naivety of readers, right?

  6. Paul Tioxon

    Yves, thank you for this note from the underground, you really don’t need a weatherman to “know” which way the wind blows, in the wind baby, in the wind! The gulag of the discredited associate professors is an ugly truth, the dark, dirty alley off of the streets paved in gold leading to the ever receding horizon of success. It is only during the dreaded depths of the dark and stormy night of the soul that we see flickering, scattered lights. It is among those soon to be extinguished lights that hope distinguishes itself. We know that the unspeakable has happened, everyone is talking about it and now, you have written words to the screaming conspiracy of silence. I am not alone by myself anymore, I alone with all of you!!

  7. Brick

    Its an argument that I think that has been applied to climate science in that the more you convince people of the dangers the more research money you get.
    Personally I don’t think the perceptions shown here are right exactly. Universities and their environments are unique and over time I can see this influencing those who work there. I can also see that funding for research can channel thoughts in specific directions. I just don’t think that there is a general initial target of rent seeking. More likely there is a battle between university perhaps leftist leanings against funding rightist leanings. Where I think econmics does become stagnated perhaps is by not encouraging mature students with a broader range of knowledge that would bring some fresh incites.
    I think he is right about politicians though and top level regulators. Perhaps even right about non academic economists. Those missing papers worry me and my sympathies are of course with the family at this time.

    1. Joe Rebholz

      April Fools, Yes. But it’s not just April. And the fools are not people who thought this was real economics (if any). But this is real economic thought as taught in universities all over the world. The fools are the economists. And those who believe them.

      1. Yves Smith Post author

        As I said earlier, this is a very serious theory even it the presentation of it is a bit unorthodox. You see further proof of it in Inside Job. And even a decade ago, virtually all professors at Harvard Business School made more on consulting than they did as faculty members. I would assume this is true for all tenured faculty members at major business schools by now.

        1. Anonymous Comment

          Genius. I actually shed a few tears for the poor prof. Loved the bullet point section. You totally got me.


  8. Cedric Regula

    It’s no surprise they killed Professor Outis Philalithopoulos. Of course the details of his “natural causes” death would be suspicious if they did report that he slipped on a banana peel and fell out of an Ivory Tower and accidentally slit his gut on the way down with the paring knife he was using to peel the banana, spilling out all his entrails onto the commons of Harvard’s Economics School.

    It’s a little frightening to know that even using an obvious pen name like Professor Outis Philalithopoulos can’t protect you from your enemies, or, for your own protection, make theories like Academic Choice theory seem less credible.

    Some things economists just accept, but wish to be quiet about it for the good of the profession. That’s an example of Academic Choice theory right there.

    We can also expound on this truism:

    The way I would describe Academic Choice theory is that it is “the sociology of economists, without romance.”

    No more true than at the St. Louis Fed and the folks there diligently working on scrubbing our econ data and providing the data series for FRED I and II that support the positive outcomes of Academic Choice theory. A byproduct of this squeaky clean data product is a data stream which when reformated and played at 28 frames per second is of interest to Vivid Entertainment and others in the porno film industry.

    St. Louis Fed economists do adjust the data, to protect the guilty, by inserting a blue dot over the faces of any economists in the data. They leave any other actresses, actors, or young boys unadjusted as they believe these people to be fame seeking rather than rent seeking individuals. Future rents of the byproduct are projected, then the present value of this rent becomes the selling price offered to ready takers in the porno industry.

    So that’s just one ubiquitous example of Academic Choice theory in action. It may not be safe to explore others.

  9. brian

    An honest interpretation of the goal to make economics scientific. Were that it were possible! If we must compare econ to any science, it might be that of religion. A science only to those that believe. Both have fantastic correlations though, mysticism, malleability at any stage, reason be damned, and the overarching narcissism supported by the little gain.
    alas, much like religion, it means something different to everyone.

  10. Ian M.

    I recommend using this post to track down people stealing your stuff. Just Google the good professor’s name and see that many, many websites are reporting on his tragic death.

    1. ChrisPacific

      I did this for some NC posts after the feed change by quoting a phrase from the article in Google. Very few sites now steal the entire article – maybe 3-4 of them in total. Of those, 1-2 claim to have permission to reprint and are ad-free. That leaves only a couple that are obvious thieves.

      Many, many sites syndicate the feed (truncated) form of the article, but since these are incomplete and come with a link back to NC to read the full text I don’t think they are anything to worry about.

  11. John

    I’m pretty sure this is a satire. I was reminded of an old article by Michael Kinsley, “A Public Choice Analysis of Public Choice Analysis.”

    1. alex

      “I’m pretty sure this is a satire.”

      Yes, but a brilliant one.

      BTW, anyone with more knowledge of Greek (or English for that matter) care to explain the word play in “Outis Philalithopoulos”? “Outis” seems liking outing something, but someone capable of writing something this good has undoubtedly embedded some other word play in some language.

        1. alex

          Thanks for the info. I’m happy to see “Outis” has a classical provenance.

          “with a name like mine you don’t need a pseudonym”

          Do you have a brother named John?

  12. Brick

    Re-reading I am starting to think it is an april fools especially since there is no information anywhere about the professor and the name sort of seems a joke. It is well done with reference to Ayn Rand although the author could have said Homo reciprocans instead of harmonization bias.

    Still bryan Capan is a real person.

    Actually academic choice theory is a real field of study.

    1. alex

      April Fools?

      A touch late (we forgive you Yves). The not-so-funny side of the joke is on us, and it has less to do with the provenance of the letter than the essential veracity of its content.

  13. Justicia

    April 4, 2027

    Nobel in Economics


    The Committee noted the influence of Professor Outis Philalithopoulos, early theorist and author of Who Killed Economic Man and Economics is Dead, …

  14. Bill

    This is lame Yves. A search of this man yields nothing.

    You’re better off sticking to the kitten pictures if you’re going to post such poorly introduced info on a serious matter.

    1. alex

      The history of criticism is filled with such “poorly introduced info on a serious matter”, much of it rightly seen as classic.

  15. Digoweli

    This is a very clever letter. Thanks, but Clifford Geertz got there first and he’s real. Several years ago, at the Institute for Advanced Studies, he proposed coming up with an Anthropology of Western Science and using the institute as the study example. They refused telling him that they were not a culture but were “true objectivity.” Also the Theater Critic Walter Kerr did a brilliant book on this in the 1960s called “The Decline of Pleasure.” Scribners Digoweli

  16. Sungam

    Well, 39 results and plenty of content farms. I’d chalk this one up as a success.

    It’s a great article and I would chalk it up as an April Fool as in this day and age I would expect even a blacklisted Professor to leave more of a trace online.

    Btw the Psychnet article talks about something rather different. And hence cleared for general consumption. :op

  17. SqueekyFromm

    Well, Camelot and the whole King Arthur thing is probably suspect too, yet the Idea Remains. Sooo, if somebody ever asks me, I am going to say:

    Yes, Virginia, there is a Professor Outis Philalithopoulos. . .

    Squeeky Fromm, Girl Reporter

  18. Mia

    “Outis”=”Nobody” As in, what Odysseus called himself after he poked the poor old Cyclops’s eye out.
    “Philalithopoulos”=”Son of love of stone”? “-poulos” is son of, but the “Philalitho-” part is unclear or maybe just random Greek. “Lithos” is rock or stone, and since “Philosophy”=”Love of Wisdom”, “philolitho-” would be “Love of stone.” Or it could be formed by analogy to “Philadelphia”=”Brotherly Love”, in which case it would be “Stony Love”? But the “a” in “Philadelphia” comes from the root “adelphos,” so it’s possible to read it as “Philo-” + “-alitho-” which would be “love of no stone,” but that seems unlikely.
    Learning Classical Greek makes you quite the pedant.

    1. Geryon

      For what it’s worth, “alith-” is probably from the classical word “aletheia,” meaning “truth,” since the eta after the lambda would now be pronounced i. “-poulos” does mean “son,” but it is also a generic ending for surnames in Modern Greek.

      1. Cedric Regula

        Lithography is printing. So I think it goes:

        Sir Nobody With a Love for Chiseling Wisdom in Stone.

        That would explain a lot.

  19. Roger Bigod

    Why did you leave out the link to the endowment fund for his Chair?

    It would certainly be less fraudulent than the so-called Nobel Prize in Economics.

  20. Cro

    This was actually pretty fun. And no one can complain it was too difficult to see through for what it was. I’m personally glad ‘Choice Theory’ and ‘Academic Choice Theory’ are being highlighted to members of ANY forum where mounds of academic theories are used and debated. I spent a summer in Mexico once reading Randall Collins’ ‘The Sociology of Philosophies’. A brilliant piece which revolutionized how I saw academia. I’d suggest it to anyone. The first roughly 80 pages are all you need to understand the theory in depth, but the remaining bulk are actually worth the grind. I at least don’t complain much anymore about academics of any stripe being political with their work, I simply expect it as an extension of their professional academic lives and personal belief systems. They’re just like anyone else, and we can’t expect them not behave that way. We simply have to be aware of the fact and integrate that into our own decision-making when we choose who and what to believe.

    Is there any other good work out there on ‘Academic Choice Theory’?

  21. LAS

    We need an Outis Philalithopoulos endowed chair at every university and college.

    The Outis chairs shall publicly honor corporate entities, politicians and economists of the year who best illustrate predicted outcomes from the general theories of Outis. For example, politicians calling for the privatization of Medicare should be strong contenders for one of the 2011 prizes.

    Now here’s the beauty of it… Because their own theories are so rewarding in and of themselves, honored recipients of an Outis prize need not be extended any actual prize money or banquet to flourish. The Outis scholars get to keep all the endowed cash.

    These Outis chairs could be highly efficient positions to maintain.

    1. alex

      Are you from the “More Truth is Said in Jest” department? Tongue-in-cheek though your post may be (or may not be) such chairs would indeed constitute a public good.

  22. craazyman

    He probably died from boredom if he spent his life studying economics.

    I’m surprised that doesn’t happen more often. :)

  23. Phil Henshaw

    While the tale is full of truth and wonderful story telling the idea that anyone would “do away with” an academic, with that name and leaving only one scrap of paper, for becoming an outcast in his own profession, is purely hilarious. Sounds more like a case of transient multiple personality…:-)

    There’s a further larger mystery exposed none the less, that indeed all academic disciplines are cellular organisms of (to be uncharitable and stay in step with the present discussion) based on self-congratulatory myth making. The further mystery is that, virtually all of nature is built around cellular organization of that same kind, developing according to whatever advances the internal designs of that cell of organization. That includes cultures, communities families, businesses, ecologies, storms etc.. That this is oddly such a visible pattern but not yet recognized by science generally is something I’ve been studying for some time, and has given me a nice set of discoveries.

    I find them a bit hard to share with people, having to do with studying cultures as whole systems, but some are fairly easy to appreciate. The majority of our personal environmental impacts come from the energy the world needs to use to follow our instructions, coming from delivering what we spend money on, and outsourcing untraceable resource uses all over the world to do it, for example. Only a small part comes from our visible technology uses that are what people presently count.

    There are various others described in my recent papers at The great confusion that the natural cellular design of knowledge communities causes is discussed both in the top paper there and in “What Wandering Minds Need to Know”, a group of very short essays on it.

  24. K

    My tip off was that the questions supposedly originated from a high school student. As brilliant as many of them can be, that brilliance is most often not in the form of insight about satisficing human behaviors.

  25. Roger Bigod

    It’s so obvious I hesitate to mention it, but the holder of the Distinguished Philalithopoulos Professorship will have the ceremonial duty of walking the halls of the department with a lamp. Veering off occasionally into the Department of Political so-called Science.

  26. Firean

    “Lithopoulos” is a genuine surname, and there are persons with this name within the economics world; eg. Erik Lithopoulos, Savvas Lithopoulos.
    Work it from there.

  27. melior

    harmonization bias – ascribing positive value to harmony between the real world and my economic theories.

    Other academics have tried less troublesome but equally creative ways to achieve this harmony; e.g. the professor interviewed in Inside Job, who used a simple technical method (he explained as “a typo”) to moderate the reality-dissonant tone of his research listed on his CV by changing his report title from “Financial Stability in Iceland” to “Financial Instability in Iceland”.

  28. ChrisPacific

    The theory assures us that such negotiations occur, although they are difficult to observe directly.

    This is a potential limitation of the theory in the sense that negotiations of this type may lose coherence under focused observation (c.f. Heisenberg Uncertainty Principle in physics). For example, if such a negotiation were discovered and reported widely via Bloomberg it might be unlikely to remain in force.

  29. schoenfields stoneson

    “Outis” = Nobody; loosely translated for this article as “Anybody”

    “Philalithopoulos” = “Stonerly Love” + “Son”; first born or #1 Son, as in primo smoke!

    “Outis Philalithopoulos” = “anyone wanna get primally stoned?”

    funny article, witty, emaculately conceived, thinly veiled, and good fodder for time travel!! DAH HAYUM, i’d like to get those 20 mins BACK!!!

  30. Mark P.

    “For example, let E = Larry Summers and let S = the financial services industry. In 1989 E was (a) a supporter of the Tobin tax, which threatened to reduce the rent extracted by S. This threat was apparently later withdrawn (b), and in 2008 E was paid $5.2 million (c) in exchange for working at the hedge fund D. E. Shaw (an element of S) for one day a week.”


  31. dbk

    Hmm, self-service in the nation’s service … so to speak.

    Outis Philalithopoulos = No (son of a) lover of truth.

  32. Uncle Billy Cunctator

    Yay for me! I broke this story wide open back in what, 2006/7? Economists? they asked. What the devil do economists have to do with finance in the real world? What possible role could they play in flummoxing the public? What do you mean it matters who gives them tenure, pays for their chairs and sends them to conferences around the world. NBER, Oxbridge/LSE, NSF… come on. Who would seriously believe that these institutions produce anything but the unspun truth. Rockefeller money funded the NBER? Now all sorts of interesting foundations and people continue to fund it? So? This is science. Science is pure. Falsify that! How could it possibly matter if they take groups of young grad students on yacht cruises in the Med? Larry Summers? Who the hell is D.E. Shaw? And, btw, are you nuts? What kind of a fool believes that economists don’t write blogs out of the goodness of their hearts?

    Just don’t get no respect.

  33. aletheia33

    λίθος (perseus digital library):
    I. a stone, Hom., etc.: a precious stone, Hdt.: marble, id=Hdt.:—proverb., λίθον ἕψειν to boil a stone, i. e. “to lose one’s labour,” Ar.;— of stupidity, λίθοι blocks, stones, id=Ar.
    2. stone as a substance, opp. to wood, flesh, etc, Il., etc.
    II. also fem., Hom., Theocr.;—but the fem. was mostly used of some special stone, as the magnet, Eur., Plat.; of a touchstone, Plat.; ἡ διαφανὴς λ. a piece of crystal used for a burning glass, Ar.
    III. at Athens, λίθος (masc.) was a name for various blocks of stone used for rostra or tribunes, as,
    1. the Bema of the Pnyx, Ar.
    2. another in the ἀγορά used by the κήρυκες, Plut.
    3. an altar in the ἀγορά, Dem.
    IV. a piece on a draughtboard, Theocr.

  34. aletheia33

    from same source:

    ἄλιθος , ον, (alithos)
    A. without stones, not stony, of lands, X.An.6.4.5.
    II. without a stone set in it, of a ring, Poll.7.179.
    III. free from the stone, as disease, Aret.CD2.3.

  35. Uncle Billy Cunctator


    Outis. Did Nemo write this? Did Pete Peterson write this?

    Philalithopoulos. Pete Peterson’s family name was Petropoulos. Petra is rock, litho is rock.. , black rock. Outing Pete Peterson? He’s the eminence grise or is it someone back in the old country (and if so, which one?)? Does his family go way back in Anatolia like Jamie Papademetriou Dimon’s long line of priests?

    What do I win? An aggressive pancreatic cancer, with the bonus that 5 years of blog rants disappear? (A good many already have) Or tenure? I’d really prefer tenure. I’m a team player with a great love of puns and power. Especially powerful puns.

    Best, UBC

  36. Toby

    Forgive my exuberance, but this is very excellent indeed. My favorite part:

    Isn’t it offensive to assume that economists, for motives of personal gain, shade their theoretical allegiances in the directions preferred by powerful interest groups? How could it ever be offensive to assume that a person acts rationally in pursuit of maximizing his or her own utility? I’m afraid I don’t understand this question.”

    As George Carlin said about ‘Conspiracy Theory’ being a derogatory term (somewhat of a tangent I confess, but sufficiently related I feel): “As if the Powerful don’t get together and plan stuff. Never happens!” Probably a misquote, but it’s close enough.

    And allow me to take this opportunity to implore anyone who find’s Yves’ most wonderful article valid and entertaining to watch “The Century of the Self”. A must for all who have not yet seen it, in my opinion.

  37. D. G. Bokare

    Dr. M. G. Bokare, former vice-chancellor of Nagpur University (India)a teacher of economics for over forty years to graduate and post-grad. students has written in his book (Hindu Economics – Eternal Economic Order,1993, the economic theory of an alternative to capitalism and Marxism):
    The contents of teaching books in Europe an America have been described by Prof. Paul Samuelson in a crisp phrase, ‘kept men’. Economists in communist countries have proved themselves sophists after the collapse. Books in Eastern Europeean countries have been thrown on streets and burnt. Joan Robinson has a piece of advice for scholars in this respect. In her essay on Teaching Economics, she had confessed her share in teaching economics in English universities with harmful thoughts and “a stamp of English teaching”. Demonstration-effect of Marxist and bourgeois economics pervades teaching in Indian universities. As a percolation effect, I taught from the books coming from New York, London, Moscow etc. I now feel guilty for passing falsehood to my students.
    All these trends were caused by the ideological war between capitalism and communism. Sophism is swrit large in books, teachers and lessons. Economics in this shadow of prejudices has become irrelevant. Hindu-economics is a new light on philosophy, history and analysis of economics. ….Hindu economics may be useful now for all after the distrust of Western economics.

  38. achilleas

    philalithopoulos= truth lover/ truth seeker
    philos + alitheia = friend + truth
    e.g. philosophy= philos + sophia = friend + wisdom
    poulos is just a very common greek surname suffix

    yves what if we are interested to see more literature on this idea?

  39. Chris M.

    This has to be one of your best posts ever. Makes me want to get Econned off the shelf and actually read it.

  40. Philip Pilkington

    I took a class with Philalithopoulos at the University of Atlantis once (the principality – not the city in Florida – its not nearly as sunny as Florida…).

    He was a very interesting man – somewhat mysterious, I’ll grant… but very interesting.

    I’m almost sure that his death was not an accident. The man had many enemies – most of them hired by Goldman Sachs. We called them the ‘Goldboys’. We all had a good laugh at the time, but we knew the situation was quite serious.

    The Goldboys were involved in the market reforms in Pinochet’s Chile. They used to torture dissident economists into compliance. They had some particularly awful methods too. One was called ‘Orthodox Reshuffling’. They’d tie the economists to a dentist-style chair and play videos of welfare recipients and people receiving state-run health-care and that sort of thing, all the while waving horrible things under their noses – old fish, armpits and, worst of all, wet, unwashed dogs.

    Few survived the first few days and they all turned up appearing to have died from ‘natural causes’…

  41. Uncle Billy Cunctator


    Outis, “no-one” Phila, “loves,” litho/Petros/Pete (‘s son)?

    “No one loves Pete Peterson.”

    Now, back to decrypting the Cyber Command logo. Has no one ever seen the illustrated characters hidden in that thing? Google it and you’ll see what I mean, if you give it more than a second.

    1. Philip Pilkington

      Oh, that’s what they want you to think – they pretend like it’s an encryption. But it’s not. It’s a code.

      You gotta type all the numbers into your keyboard – going counter-clockwise. Then eight stars. Finally hit: ‘X’ (for the swords); ‘S’ (for the lightning bolt) and ‘NumLock’ (for the key).

      Now, you’ll be able to control president Obama’s brain. His field of vision should appear on your computer screen. Simply type commands and he’ll perform them. If you want him to speak, include quotation marks.

  42. Deus-DJ

    This one was obviously BS from the moment “academic choice” theory was brought up. My opinion about the entire thing is actually rather poor, even if it serves to illustrate a point. Scientifically speaking its quite poor and really the entire thing was rather stupid.

  43. Orin T.

    The natural causes might have been the shame of discovering that he had cribed his work from T.B. Veblen’s “The Higher Learning in America.” It was reputed to have had the working subtitle “a study in total depravity.”

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