Monday, December 12, 2011

History Remains a Discipline, Economics Remains a Bunch of Stuff People Assert

Over to Crooked Timber, Daniel Davis ends a long post with this claim: economics isn’t a morality tale. This is something Krugman likes to say as well. It is, of course, wrong. If we accept that modern economics starts with Smith, which we might not want to but many do, he was explicitly using Jansenist arguments about how God created greed to substitute for "real" charity and how this allowed society to continue despite humanity being depraved. Smith clearly thought that a market based system provided the greatest good for the greatest many. So did Hume. So, in fact, did all the early pro-market capitalism economists. Indeed, it is difficult to find, or to even imagine, an economist arguing that his or her preferred economic policy doesn't provide the greatest good for the greatest many.

In other words, economics is so a morality tale but contemporary economics is a morality tale told by a sociopath.

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