OPINION:
Free market economics. Keynesian economics. Austrian economics. Marxist economics. Conservative economics. There are about as many flavors of economics as there are economists, perhaps more.
What Americans need right now, however, is simple, unmodified economics. Mere economics, if you will.
Economics has a few bedrock principles that, when we recognize them, unleash humanity’s slumbering productive forces. The result? We’re rapidly making poverty history, as the absolute number of human beings living in extreme poverty has fallen over the last several decades even as the world’s population has risen.
It’s the most important fact in economic history and should be front-page news every day in every newspaper. It should trend every day on every social media site. Alas, it isn’t. To paraphrase economist William Baumol: The most astonishing aspect of this astonishing change in our fortunes is that we are not astonished by it.
Economic history’s great fact is made up of countless tiny ones.
When you study economics, you start to notice all the little social miracles surrounding us. No single mind knows how to make a pencil and before you say, “making a pencil sounds easy,” ask if you can describe the chemical composition of the grease on the chainsaw that cuts down the tree that eventually becomes part of the pencil. The complexity of a pencil notwithstanding, the modern world makes so many pencils at such low prices that we don’t even notice when we lose them.
Some people don’t see the miracle and argue that economics lacks a soul, that it reduces rich and complex human relationships to mere transactions. But economics rests on an important ethical assumption: Everyone has the right to say “no, thank you” to any offer. Dignity is baked in: You are an independent mind and an independent will, and a free society makes the most of both.
Adam Smith understood this, writing in Book One, Chapter Two of “The Wealth of Nations” that “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
People often misinterpret this as an apology for the worst kind of greed, but it’s not.
Smith recognizes that the butcher, the brewer and the baker have the right to say “no” to you, and the need to appeal to their own interests stems not from their greed but from the fact that they have their own families and communities to care for.
We would like to think that the guy working in the oilfield and the executive in the oil company office are doing what they do because they really care that we have gas to drive our cars, but that’s sheer fantasy. In reality, they have their own families, communities, preferences and problems.
Economics helps us see how the best way for them to take care of what matters to them is to take care of what matters to us.
Whether they know it or not, they’re behaving positively biblically. Philippians 2:4 reads, “Let each of you look not only to his own interests, but also to the interests of others.” In a free market, the best way to look to your own interests is to look to the interests of others.
Alas, economics education appears to have had little impact on public policy. But there is hope. We don’t need the latest technical wizardry or theoretical advances in cutting-edge academic journals. We simply need to understand that people benefit when they cooperate through trade.
This holds whether the people cooperating are on the same or different sides of a political, cultural or racial line. When we let them trade, they unleash human flourishing for all of us.
Can economics tell us what to do? No more than physics can tell us whether to drop the atomic bomb.
But it can show us the underlying structure of the world we live in and the principles that can bring us from the lowest barbarism to the highest degree of opulence. Join us on the intellectually illuminating and spiritually edifying journey that economics offers.
• Art Carden, PhD, is Margaret Gage Bush Distinguished Professor of Business and Medical Properties Trust Fellow at Samford University’s Brock School of Business. Caleb S. Fuller, PhD, is associate professor of economics at Grove City College, a research fellow at the Independent Institute, and a faculty affiliate of the Program on Economics and Privacy at the George Mason University Scalia Law School.
Please read our comment policy before commenting.