Redeeming Economics: Rediscovering the Missing Element
by John D. Mueller
ISI Books, 400 pages, $27.95
Harry S Truman famously asked for a “one-handed economist”—an adviser who would offer straightforward advice, without listing endless considerations while saying, “on the other hand . . .”
In Redeeming Economics: Rediscovering the Missing Element, John D. Mueller provides a theory of one-handed economics. A private economist and fellow at the Ethics and Public Policy Center, Mueller believes that it is no accident that today’s economists constantly fail to predict macroeconomic fluctuations and turn the simplest questions into interminable controversies. Instead, the field’s fractiousness is an inevitable result of its unusual historical development.
In Mueller’s story, modern economics comprises three avenues of study: production, exchange, and consumption. Until Adam Smith published The Wealth of Nations in 1776, however, that division was not assumed by those researching political economy. Instead, for centuries there was a fourth element, the titular missing element: final distribution. Aristotle, in his Politics, described the workings of an economy using a household model in which economic agents distribute goods to maximize the flourishing of their loved ones. This idea of distribution, later developed by Augustine, Thomas Aquinas, and the Scholastics, was a bedrock component of economics. After all, the Greek word oikos, meaning household, is the root of our word economics.
Smith’s rejection of the natural law component of economics, in Mueller’s view, was a function of his Scottish Enlightenment sensibilities. Smith knew that he was undoing economics’ ethical framework, but he probably couldn’t have foreseen the economics profession’s response. By removing considerations of the distribution of goods and resources, Smith unwittingly created the conditions for a sudden rise in the status of economists as experts. Economists are now able to portray themselves as morally disinterested arbiters, resolving debates that once involved questions of value and priority with “objective” appeals to efficiency and maximum utility.
But as time has shown, they have set themselves up for failure—hence Truman’s complaint. Mueller provides a number of examples of problems modern economics cannot fully resolve, namely, any situation in which someone acts out of love, as opposed to self-interest. Mueller then analyzes the problems using his updated theory of Scholastic economics—aptly named Neoscholastic economics.
Joseph Lawler is managing editor of the American Spectator.