The greatest lie of economics is that markets, left to their own devices, yield justice. But across every advanced economy this axiom is failing. Nowhere is this more apparent than in the textbook claim that individual merit equals marginal products, and if productivity rises, so should real wages.

In US, UK, Australia, and much of the OECD, productivity soared while median pay flatlined; labour share of income falls; capital share and corporate profits soar; and wealth concentrates in a narrowing elite. Across sectors, wage stagnation and precarity prevail, while CEOs and “superstar” firms reap rents far beyond any “productive” contribution. Only "coordinated" economies resisted, by fortifying strong labour institutions—clear proof that markets don't self-correct.

This story offers two critical insights. First, efficient markets are a fiction: real economies are shaped by power, privilege, and institutions—not perfect competition. But much more perversely, even ideal markets are not just. Neoclassical theory twists justice into efficiency and turns desert into the mechanics of marginal productivity. By reducing value to price, erasing unpaid and care work, and ignoring social embeddedness and ecological limits, it legitimises inequality and dismisses claims to dignity, care for the vulnerable, democratic voice, or the common good. By relegating justice to the margins, economics is not simply blind to “market failures,” but to its own moral failures.

Academia is guilty—not by ignorance, but by design. For decades, neoclassical economics has moulded how we think and design institutions, and justified distribution of pay, profits, and power as “deserved” on grounds of market efficiency. By systematically erasing justice from the curriculum, naturalizing market allocation through mathematical abstraction, and socializing generations of decision-makers into a narrow, competitive worldview, universities have enabled real-world injustice. Through professional education, policy advice, and international consultancy they have entrenched institutions and laws that perpetuate the very patterns of inequality their theories refuse to acknowledge.

It’s time to end the pretence. Curricula must be rebuilt on the foundations of political economy, plural theories of justice, and explicit ethical training. Every analytical tool must be tested for its distributional consequences. Faculty must demonstrate moral as well as technical competence, and universities must be held accountable for their impact on social value. The profession needs new standards—mandatory disclosure, professional oaths, critical research, ethical peer review, and revised rankings—to bind the discipline to the pursuit of justice, not merely reproduction of technical skill.

Neutrality is not innocence: so long as our schools refuse to stand for justice, their graduates will wield doctrine to perpetuate injustice.

#PoliticalEconomy #Justice #Leadership #Economics #InstitutionalReform