Economics — The Glorious Science
I suspect that many of you have heard economics referred to by the pejorative phrase "the dismal science" and thus either think I'm a fool or wonder what I can possibly mean.
I hope it's the latter.
Have you ever wondered WHY some people call economics the dismal science?
Perhaps you figured that it was because the subject matter of economics — that is, buying and selling, supply and demand, prices and costs, etc. — was boring. I certainly agree that if you find something boring you would be justified in calling it dismal. But surely those who study economics don't find it boring.
Perhaps you learned a little bit about economics and have heard of the early 19th century economist Robert Malthus and his claim that while population tended to grow geometrically the food supply could only grow arithmetically. In other words, that soon there would be more people than the food to feed them. That would certainly merit calling economics dismal.
But Malthus was merely an early example of a long line of prophets of doom that continues today with people like Paul Erlich with his 'Limits To Growth' and the environmentalists with their alarums of global disaster. They all were and are wrong.
Both of these explanations are plausible, both have been and continue to be given, but both of them are mistaken as to the actual origin of the slur.
A few years ago two economists (David M. Levy and Sandra J. Peart) decided to do some detective work to try to find the first time that economics was called 'dismal'.
What they discovered was both depressing and enlightening.
What would you say is the biggest cultural and political difference between the early 1800s and today? If you answered 'slavery' go to the head of the class.
Now maybe you're thinking that the economists of the early 1800s defended slavery and therefore it was the enlightened abolishionists who first called economics dismal. If that was what you thought, you would be wrong.
In fact the exact opposite was the case.
You see, beginning with Adam Smith, who is generally regarded as the first economist, the man who defined and shaped and made popular the science of economics, economists have been showing that cooperation by individuals, each acting in his own self-interest, resulted in the most marvelous abundance possible.
And then David Ricardo came along with his Law of Comparative Advantage (sometimes known as the Law of Association) which demonstrated conclusively that it was always the case that any two countries would both be better off if trade between them was unencumbered by legal restrictions.
Well, guess what — the Law of Comparative Advantage applies not only to countries but also to any two individuals. Even if one person is more capable in every respect than another person, they both would be better off by specializing in those areas where their comparative advantage was greater.
That's right. The Classical economists taught that it was the individual who was important — not his race, not his class, not his national origin.
But this was not what some people of the time wanted to hear. And so, rather than give up their cherished class consciousness, their repugnant racism, they started to vilify economics, to shoot the messenger, by referring to this new science with the derrogatory term 'dismal'. It was Thomas Carlyle, a name you might have heard before, who first used the term in his Occasional Discourse on the Negro Question, in which he argued that slavery was actually morally superior to the market forces of supply and demand promoted by economists.
Fortunately, those early economists were right and their detractors were terribly, terribly wrong.
The science of economics conclusively demonstrates that private property in a free market — in other words, Capitalism — is the only way to achieve the peaceful society that will enable every individual, regardless of his class, regardless of his race, regardless of his national origin, to achieve his maximum properity.
Peace and prosperity.
What could be more glorious than that?
Presented by Rick Pasotto on 2007-08-13
