Posted by: Jeff | June 14, 2010

Economics Without Illusions: Intro

Economics Without Illusions is the new book by Canadian philosophy professor Joseph Heath, and I’ve been wanting to get it ever since I saw Heath do a Bloggingheads episode with Will Wilkinson, way back when the book was released in Canada under the significantly cooler title of Filthy Lucre: Economics for People Who Hate Capitalism. I just bought it yesterday and I’m already a third of the way through it.

I’d recommend the book to anyone for two reasons, the first being that it’s extremely accessible. Heath’s writing style has personality, clarity, and a welcome lack of opaque jargon. He knows how to use metaphors and how to constructively guide your thinking through what can often be complex and counter-intuitive concepts. Heath freely admits to having taken only one introductory economics course in college, and he writes for an like himself; intelligent laypersons driven by a combination of intellectual curiosity and rigor of thought.

The second reason is that anyone can benefit from the book, regardless of their ideological position vis-a-vis capitalism. Heath breaks his work into two parts, the first dealing with the economic fallacies widely held amongst people on the right, the second dealing with those fallacies held by the left, and with each chapter digging into and debunking a particular myth.

Now, I’m used to hearing about the economic fallacies of leftists like myself who are suspicious of capitalism, and God knows I’ve held to mistaken notions myself. (For instance, did you know that recycling paper does not reduce deforestation? I didn’t, though the reasons why are actually quite straightforward once they’re explained.) And I have to agree with Heath that we on the left have not done a good enough job of learning our economics. Speaking from my own observations, most people who can honestly be described as committed leftists or progressives have an understanding of the field that has indeed not progressed much beyond Marx. And this has three rather debilitating consequences: a lot of our critiques of capitalism wind up sounding incredibly stupid to people in the know, we waste lots of time on well-intentioned schemes that have no hope of working, and, most importantly for this post, we lack the tools to call out conservatives and rightwingers when they spout nonsense in favor of capitalism.

As Heath notes, most attempts at spreading economic literacy to the general populace have been made by economists with an ideological investment in preserving and defending capitalism, so they’ve concentrated their firepower on debunking fallacious arguments against that economic system. Meanwhile, fallacious arguments in favor of capitalism have more or less been passed over in silence. (Idiocy is apparently a lot more tolerable when it’s being spouted by your own team.) The result has been a pretty significant imbalance in which sides of the ideological spectrum get disciplined by regular intellectual smackdowns of bad economic reasoning. More than anything else, this is what caught my attention in Heath’s initial interview with Wilkinson; the realization that a lot of the common arguments you hear from the right about why capitalism is great turn out to be completely screwy once you learn something about economics.

The other important point is that moral suspicion of capitalism in America is hardly limited to radicals or the political fringe. For instance, rising prices in response to a dearth of supply is one of the fundamental features of supply and demand — free markets literally could not work without doing this. Yet Heath notes a study by moral psychologists which revealed that a solid majority of Americans consider it immoral to raise prices in times of scarcity. And those same popularizers of economics and capitalism have done themselves no favors by dismissing perfectly human and understandable moral discomforts with free markets as obtuse, unworthy of respect, or somehow founded on ulterior motives.

The end result of all this is a complete failure of communication. Capitalism’s defender’s have failed to communicate with capitalism’s critics, those who understand economics have failed to communicate with those who don’t, and the left has failed to communicate with the right. It’s not just that everyone doesn’t agree; it’s that no one seems to understand the terms of the disagreements. Everyone is talking past each other.

At any rate, I hope to finish Economics Without Illusion shortly, and I hope to make my thoughts and reactions a major focus of my blog posts this week.



  1. Economics has recently gained my interest and I have been spending the last few months attempting to grasp the true nature of it. t seems that this subject is generally dealt with in a most complex manner, completely excluding the lay person from understanding the science.

    I’ve tried to read books by Ludwig von Mises on the subject and researched some of the best books on by F.A. Hayek, Milton Friedman, etc., yet I still can’t find unbiased views on economics. Almost every author either writes in favor of or opposes capitalism. Where are all the objective economists?

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