I’m extremely interested in economics. My interest lies primarily in the application of economics toward solving social and political problems. Problems like poverty, instability, health care, and the environment all intersect with economics to a great degree. Pretty much every problem these days has a component of economics involved.
I took a micro-economics course a couple of years ago, and worked through a macro-economics textbook on my own. The micro-textbook (and indeed the professor teaching the class as well) irritated me greatly with their insistence that capitalism is an end to itself, that the market set price for a commodity was a moral end. He espoused a neat utilitarian philosophy. I’m generally a utilitarian, but there are limits. In particular, utilitarianism runs into a problem of how to evaluate what is the greatest good for the greatest number of people
. The version of moral certitude presented in my micro class, based on market economics, was that the greatest good could be determined simply by adding up the value of the goods (a broad term) available for use by people.
Let me expound on that a bit, because it seems like this professor was merely spouting off that money was everything. He was not. Money is worth less to some people. Those people may be willing to give up money to gain other things, like leisure. But money can still be used to value what you have. In particular, the money a person is willing to give up to gain their non-monetary things can be used as a proxy. Sum up the value of everything, including proxies, under your various choices, and the total value for each choice should indicate which choice is the better choice. For example, should we allow billboards on a highway or not? There are economic benefits/drawbacks to the advertisers, the people being advertised to, the landowners where the billboards would be placed, and to neighbors. Add up how much each class would get from the deal. Compare that to the money those who don’t want the billboards would pay to not have them there. Whichever amount wins is obviously the moral choice. At least according to my econ professor, and suggested by Heyne in the textbook.
According to Duncan Foley, this is a form of Adam’s Fallacy. One form of the term refers to the idea that private selfishness of individuals translates to a public good in the aggregate. At this point, to the best of my knowledge, we barely have an idea on how to determine what the public good really is. An evaluation in market terms certainly is convenient for calculation purposes. It let’s you put the variables in the proper places and gives you an idea on how to fill in those numbers, though figuring out those dollar figures could be problematic. But as we said in the software industry, at that point the problem is reduce to plug and chug
even if the plugging is hard. That formulation eliminates magic happens here
clouds. But there’s only two things going for that methodology, convenience and ideology. In other words, it fits the libertarian screw you, leave me alone
ideology.
Foley’s book examines the work of Adam Smith, his political economy descendants, and their work. He explains the basic contributions of each, with a particular focus on how their work attempts to close the gap of Adam’s Fallacy. It was a great introduction for me, as the economics taught in my econ classes presupposes these questions have already been solved. If indeed they have, I’d like to understand how we came to these conclusions. This is my first introduction to Malthus, Ricardo, Veblen, von Hayek, and Schumpeter. I’ve done some reading of Keynes, though hardly enough to understand his contributions beyond a basic level. And I know Marx mostly through other people’s opinions about him. I think that Foley focuses on Marx in this book well beyond his current influence, and doesn’t cover some of the later economists nearly enough. I got the feeling that Foley’s specialty is Marx. Write what you know, goes the old saw.
At the end of my reading, I don’t have many conclusions really. I’ve got an idea of further reading I want to delve into. I’ve got enough information from this book to start drawing a map of where I want to go. But it’s certainly not enough to draw any conclusions beyond a confirmation from a fairly eminent economist that my distaste with my econ professor was justified. And a bit more ability to make my distaste cogent in argument form.
Title: Adam’s fallacy : a guide to economic theology
Author: Duncan K. Foley
Imprint / publisher: Belknap Press / Harvard University Press
Format: Hardcover
Length: 265 p. (includes index)
Publication date: 2006
ISBN-10: 0-674-02309-9
ISBN-13: 978-0-674-02309-3
Subject: Smith, Adam, 1723-1790. Inquiry into the nature and causes of the wealth of nations
Subject: Economics — Philosophy
LC classification: HB72 .F639 2006
