The “Lie” of Economics
I really enjoyed the first two paragraphs of this book review by William Davies:
Every orthodox economics education begins with a lie. This is that, in the vernacular of neo-classical economics, we can and must split questions of ‘equity’ from those of ‘efficiency’. To put this another way, economics begins by ignoring moral philosophy, arguing that it is still possible to analyse, model and criticise social and economic relations without resorting to the language of values or justice.
There are various responses to the Lie. The brighter and cockier members of the classroom gobble it up, internalise its implications and run off to make vast amounts of money in financial services. Let’s, for the sake of argument, call them ‘Them’. The more thoughtful and impassioned ones taste it, spit it out in disgust, and go on to write books like Them and Us. Let’s call them ‘Us’.
I think that he’s oversimplifying by describing the results as a bimodal distribution, but it is true that this is one of those places in life where people do often get sorted into two buckets.
The problem, of course, is that it really isn’t a lie. Splitting questions of equity off as an externality is an important part of what gives modern capitalism such amazing power.
Perhaps instead of thinking of it as a lie, he should think of it as a chainsaw. Chainsaws are dangerous and can do a lot of harm if you’re not careful, but that doesn’t mean that you shouldn’t take advantage of them.
The problem is always how to take advantage of the power of market capitalism without all of the effects he finds disgusting. It seems clear to me that the only way to do this is to get his “them” & “us” to stick their heads up out of their buckets and look for some middle ground. Simply saying that people with the other response to the “lie” are wrong and should be ignored isn’t going to accomplish anything.