The price of everything
THE DISMAL SCIENCE:
How Thinking an Economist Undermines Community
By Stephen A. Marglin
376 pp. Harvard University Press $35.00
Reviewed by Mike Marcoe
The “dismal science” used in the title of Harvard economics professor Stephen A. Marglin’s new book is a Victorian-era term allegedly coined in response to the writing of Thomas Malthus, who famously predicted that starvation would be the result of population growth exceeding food supply. The economist’s role has often been forecaster of the dismal, and economists themselves have long been derided for “knowing the price of everything and the value of nothing.”
Economics is a social science that studies the production and consumption of goods and services. Stated this way, it is hard to see “how thinking like an economist undermines community,” as the rest of the book’s title states. Yet this is Marglin’s thesis. To support it, he first differentiates between economics as a descriptive undertaking and as a constructive agenda; his argument depends on this distinction. He states that “... the apparatus of economics has been shaped by an agenda focused on showing that markets are good for people rather than on discovering how markets actually work.... Undermining community is the logical and practical consequence of promoting the market system.” For Marglin, the agenda that drives economics is the maximization of individual well-being. Modern economics does not serve the well-being of an individual’s community, which is what we’ve been told for the past four decades.
This agenda is the focus of much of the rest of this complex, richly analytical book. Professor Marglin is clear, keen, and very detailed in his assertion that modern economics is the result of a myth 500 years in the making. To understand it, we must take a trip through four chapters of western European history, through the fall of feudalism to the beginning of market economics. Along with this he includes the Reformation and the Puritans, the latter of whom saw worldly success as evidence of membership in the Elect.
The Reformation, the Enlightenment, science, the limitless lands of the New World, and technology each conspired in its own way to carve the path of the market in western culture. Western culture is also marked by its elevation of the individual and his interests. Philosophers from 1600 onward celebrated the pursuit of selfish interests as good and noble. Though they did not have folks like Charles Keating and Gordon Gekko in mind, Marglin points out that these latter-day symbols of the market gone awry could be the only inevitable result of it. A the time, though, individualism was shaped by the Protestant work ethic, which set boundaries around the pursuit of wealth to ensure that it was pursued for the good of the individual.
Against all this, we eventually end up with the quintessential capitalist, Adam Smith, whose concept of human nature was that of the calculating, self-interested individual. By the time we enter the 20th century, we get to a place where someone can say “greed is good” and hardly raise an eyebrow. The effects on community have been devastating. Economics has been held hostage by an ideology of selfishness. That selfishness, the author concedes, has done its share of good: it has led to the vast increase in standard of living that the West has experienced and with which the overpopulated East is now catching up.
For all the talk about community in the book’s thesis, it’s in short supply in the book itself. It’s scattered throughout and used largely for illustrative purposes. Whilethe reader might wish to visualize communities broken apart and citizens suffering in disturbing ways, the examples in the book are largely summary and abstract. The village required to raise a typical child doesn’t factor in the book as much as the book’s analysis begs it to. Nevertheless, Marglin does use familiar examples from around the world, such as migrating sweatshop workers who lose their ties to their communities because they are simply not there as much. Among his favorite examples are the Amish, perhaps America’s best-known counter-example to economic individualism. Though most of us would pass on living like them, we admire them from afar for their dedication to their community. The Amish are doing just fine without modern economic theory, thank you.
To those accustomed to operating under a purely descriptive understanding of economics, the author’s thesis requires a stretch of the imagination. They see the real culprit as the economists rather than economics. Just as people, not guns, kill people; so economists, not economics, undermine community. Wherever you place blame, if you’ve ever wondered why our economy seems so callous at times—especially leading up to times of crisis—this book will explain why that is and why so may people accept the theories of the economists.
The Dismal Science is among a crop of books published in the past ten years that sharply critique not only business practices, but economics itself. It is time for an overhaul of the great Western myth, these authors argue, because individualism is destroying its very own requirements. Professor Marglin stops short of arguing for an overhaul. What he does do is lay out the development and symptoms of the Western myth that claims individualism is good for the community. In 2008, as we all curse at the gas pump and the grocery store, we owe it to ourselves to at least understand the system that has robbed one part of us to pay another.
Mike Marcoe is a writer and editor from Middleton, Wisconsin. He specializes in writing personal finance articles and editing scholarly books. He has published over 100 articles, a book on anxiety disorders, and a book of short stories. He has also worked as a chef and a business manager. In his day job, he is the director of content development for the Educated
Investor. When not working, he plays a variety of ethnic flutes, cooks vegetarian cuisine, and writes fiction. His Website is
http://www.mikemarcoe.com.
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