Bad Advice

Kaushik Basu The economist's traditional model is that of a soundless economy. If individuals suddenly lost their ability to speak, nothing would happen to this economy because their ability to speak was never a part of its assumptions. Yet in reality speech matters, not only in itself but because it influences the world of action, This paper shows that the link between the world of speech and the world of action is as yet ill-understood and its under- standing is important for the social sciences. It argues, for instance, that the advice of economists has had insufficient impact on actual policy not so much because of the inadequacy of the contents of the advice as because of our ignorance of how to give advice. Some of the existing work on speech and action