Welcome to the Realm of Economics
Lincoln-Douglas debaters are exploring the new NCFCA topic: Resolved: In the realm of economics, freedom ought to be valued above equity. That exploration leads into the realm of economics. It’s sort of like exploring Narnia where young people enter by falling off a cliff, entering through a magic wardrobe, or being flooded by a magical painting of a ship at sea. Entering the realm of economics often comes as a surprise, and sometimes when bored by an economic lecture or textbook (or perhaps by a blog post). The sense of wonder on being swept into the economic realm can’t quite match those first few moments in Narnia, but though a series of economic adventures young people can prepare themselves to take on the evil witches and kings of the real world.
I’ve lived in the land of economics for over thirty years and first wandered in as a refugee from the history department. My last memory of that college history class was of a professor telling two hundred students that early American colonists, fearful of the dark and brooding forests, had turned their back on nature. To dramatize his point, he spun around, turning his back to the class, which gave me a welcome opportunity to exit.
Next stop, economic history, in the University of Washington’s wonderful economics department. Economics advisor Judith Cox recommended I sign up for Douglass North’s Economic History of the Western World course and also for Paul Heyne’s History of Economic Thought (I’d earlier taken micro, macro and two other economics courses at Central Washington State College).
Douglass North co-authored The Rise of the Western World and was Chairman of the UW economics department. He later shared the Nobel Prize in Economics. Paul Heyne’s introductory textbook, The Economic Way of Thinking, and his University of Washington survey course, welcomed tens of thousands to the economics realm. It would have been hard to find two more compelling courses, and I spent the next months immersed in economic and intellectual history. These courses were so inspiring that I’ve spent the thirty-plus years since continuing to research, write, and speak on pretty much the same topics.
And here is Part 2 of Paul Heyne’s Economic Justice talk:
We all recognize the importance of distinguishing between motives and consequences in judging people’s behavior. If I knock you over accidentally, I may be a clumsy lout, but I’m not an evil person. If I try to knock you over, however, with no provocation, I’m a malicious person even if I miss you completely. The law agrees. Attempted murder is a more serious crime, with more severe penalties, than involuntary homicide. Should this distinction also be applied to social systems?
The temptation to personify non-persons is sometimes irresistible. We curse chairs over which we stumble and we blame the weather when it upsets our plans. Of course, we also realize that these are irrational responses, signs of our own frustration rather than of any genuine intentions on the part of chairs or the weather. But what about social systems and institutions? They aren’t impersonal objects, and we know that motives do matter within social systems. Since they seem to have intentions as well as consequences, we are disposed to judge them, as we judge individual persons, by what they are aiming at as well as by what they finally achieve.
And so Adam Smith’s famous statement about the invisible hand leaves many of us feeling ambivalent at best. Even if he was correct, and there really is some kind of invisible-hand process that extracts the public interest from everyone’s pursuit of purely private gain, wouldn’t it be better if people aimed at the public good directly? Doesn’t it count against a social system, at least from an ethical standpoint, that the motives which make it work are selfish, even if it should be the case that the ultimate consequences are completely satisfactory from a moral perspective?
But this whole line of argument is fundamentally mistaken. Social systems, including the market economy, have no intentions at all, and to suppose that the motives or intentions of those who participate in the system are the motives and intentions of the system itself is a confusion of thought that can lead us seriously astray. It is an especially dangerous confusion when we start to ask about the justice of social systems. Moreover, self-interest is not the same as selfishness, and the narrow pursuit of private purposes has no necessary connection with greed, materialism, or a lack of concern for others. [Source]