Redeeming Economics: Rediscovering the Missing Element
Economics is a strange brew of guesswork, massive formulas, and social philosophy —all reasons the average person doesn’t want to lift the lid and see what’s inside. Here, however, is a book that puts the worldview of economics first, and the math last, so that the average reader can understand the problems economics grapples with, and relate it to their everyday lives in some surprising ways.
Meuller’s argument is, at essence, that economists have looked into the same box of formulas and social philosophy and decided it’s too difficult to manage all in one piece —so they’ve simply removed all the humans from their economic systems. This leaves them with very tidy systems with which to predict the future, but those systems turn out to be completely wrong because they’ve left out the only piece of economics that really matters, the people. Leaving people out economics almost seems like an absurd idea, but as the author explains the history of economic thought, you can see the reasoning behind the removal.
If you see people as mere “meat machines,” who are not really capable of rising above their environment, this removal almost makes sense. But the reality is that humans are not, in fact, “meat machines,” capable of being predicted and controlled through various market forces. Economics, then, comes down to a question of worldviews, like most other questions do — the crucial question becomes why, not in the sense of “how,” but in the sense of “purpose.” What is the intent behind the individual’s economic activity.
Returning to this question is ever more important in our current age, where we seem to think “big data” is somehow going to find the “ghost in the machine,” or prove there is no ghost after all. That we are going to be able to use Moore’s Law to overcome the barriers to explaining just what sort of “meat machine,” humans are, thus validating all our fondest dreams of engineering a perfect society through technology. Meuller throws cold water on the face of the dreamer by showing that unless you account for love and relationship, two things “meat machines” don’t have, you can’t explain human economic activity.
The author’s argument is that Adam Smith began with four economic principles garnered Aristotle, Augustine, and Aquinas —final distribution, production, exchange, and utility— and reduced them to two by removing final distribution and utility. Economists discovered that utility was a necessary component in explaining pricing, so they have added it back into their formulas, but they have resisted adding final distribution back in because of it’s human element. He then shows how this removal of the human has led to every failed economic system in the last 200 years, from Communism to the modern welfare state.
To test his theory, Meuller pits it against a recent paper that attempts to link abortion to the crime rate, and fails. The author finds the abortion rate is economically tied to the crime rate when the human as an independent moral agent is put back into the formula. The work in this section of the book is phenomenal in its scope and explanatory power. To show this, however, Meuller does dive into math of a sort that’s probably going to glaze over the eyes of a large number of readers. The math he moved from the beginning shows up here, and carries on throughout the rest of the book.
It’s well worth wading through, for this explanation of economic history is compelling and interesting, especially in tying economics to worldview in a solid and understandable way.