(W)e … think of economic growth in terms of material considerations versus moral ones. … We weigh material positives against moral negatives.Benjamin Friedman (2005). The Moral Consequences of Economic Growth, p 4
I believe this thinking is seriously, in some circumstances dangerously, incomplete. The value of a rising standard of living lies not just in the concrete improvements it brings to how individuals live but in how it shapes the social, political, and ultimately the moral character of a people.
Economic growth … more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy.
L’esprit de commerce entraîne avec soi celui de frugalité, d’économie, de modération, de travail, de sagesse, de tranquillité, d’ordre et de règle. Ainsi, tandis que cet esprit subsiste, les richesses qu’il produit n’ont aucun mauvais effet. Le mal arrive lorsque l’excès des richesses détruit cet esprit de commerce; on voit tout à coup naître les désordres de l’inégalité, qui ne s’étaient pas encore fait sentir.Montesquieu (1748). De l’Esprit des Lois, Ch VI
The fundamental attitude of true individualism is one of humility toward the processes by which mankind has achieved things which have not been designed or understood by any individual and are indeed greater than individual minds.Friedrich Hayek (1948). Individualism and Economic Order, p 32
The stupendous loss in the depth and richness of human nature is a noticeable part of the price we have paid in transforming economics from a moral science of man creating wealth to a cold logic of choice in resource allocation. No longer a study of man as he is, modern economics has lost its anchor and drifted away from economic reality. As a result, economists are hard pressed to say much that is coherent and insightful, although their counsel is badly needed in this time of crisis and uncertainty.Ronald Coase & Ning Wang (2013). How China Became Capitalist, p. 206
COCHRANE: Economists should never make predictions.John Cochrane (2021). Conversations with Tyler
COWEN: But theories make predictions.
COCHRANE: Theories make conditional predictions. Theories make if x happens and you hold everything else constant, then y ought to happen. Economics is awfully bad at making unconditional predictions. “Here’s what’s going to happen.” Period. …
So yes, it’s about risk. It’s not about the forecast. That’s a good way of putting it.
(H)ow exactly did this improvement come about? Did the world somehow become more fair? The answer is clearly “no”. The major difference between now and then is that our economy is more efficient – we can produce more with less. In the twentieth century, total world economic output exceeded that of all the previous centuries combined. At the same time, the overall level of social inequality increased. Our economic system is just as unfair as it always has been. The amount of wealth that actually gets redistributed from rich to poor in our society has been, and remains, puny. We rely on efficiency – not brotherly love – to do the work of making our economic system even halfway tolerable for those at the bottom of the heap.Joseph Heath (2001). The Efficient Society. Why Canada Is As Close To Utopia As It Gets, p 6-7
In a community regulated by laws of demand and supply, but protected from open violence, the persons who become rich are, generally speaking, industrious, resolute, proud, covetous, prompt, methodical, sensible, unimaginative, insensitive, and ignorant. The persons who remain poor are the entirely foolish, the entirely wise, the idle, the reckless, the humble, the thoughtful, the dull, the imaginative, the sensitive, the well-informed, the improvident, the irregularly and impulsively wicked, the clumsy knave, the open thief, the entirely merciful, just, and godly person.John Ruskin (1915). In Upton Sinclair, ed. The Cry for Justice: An Anthology of the Literature of Social Protest.
Cryptocurrencies: Everything we don’t understand about money combined with everything we don’t understand about computers.John Oliver (2018). Last Week Tonight with John Oliver
There are no solutions; there are only trade-offs.
The language of … ideological politics … is the language of solutions and of the unconstrained vision behind solutions, the vision of the anointed. (T)his language says that the preferences of the anointed are to supersede the preferences of everyone else – that the particular dangers they fear are to be avoided at all costs and the particular benefits they seek are to be obtained at all costs. Their attempts to remove these decisions from both the democratic process and the market process, and to vest them in obscure commissions, unelected judges, and insulated bureaucracies, are in keeping with the logic of what they are attempting. They are not seeking trade-offs based on the varying preferences of millions of other people, but solutions based on their own presumably superior knowledge and virtue.Thomas Sowell (1995). The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy, p 142
The vast material and intellectual progress under the short era of liberalism threatens to be its own undoing, through placing power – physical, intellectual, organisational, and moral or psychological – in the hands of man and especially the common man, more rapidly than he has educated himself to distribute it equitably and use it wisely.Frank H. Knight (1921). Risk, Uncertainty and Profit, Preface to the 1948 Edition, p lii
Since economics is meant to be my profession, no matter what I make of my love affair with philosophy, I might as well begin by acknowledging that my profession has had something of a troubled relation with the perspective of happiness.Amartya Sen (2009). The Idea of Justice, p 269
Many contemporary scholars, and not only popular writers, have … argued that the standard socio-economic science model requires, justifies and promotes selfish behavior. On the contrary, … opportunism in all relational contracting and exchange across time (is a) cost, not a benefit, in achieving long-term value from trade; an ideology of honesty means that people play the game of “trade”,’ rather than “steal” … .Vernon Smith (2003). Constructivist and Ecological Rationality in Economics (Nobel Prize lecture). The American Economic Review, (93 (3), p 466
(T)he opinion of experts, when it is unanimous, must be accepted by non-experts as more likely to be right than the opposite opinion. The scepticism that I advocate amounts only to this: (1) that when the experts are agreed, the opposite opinion cannot be held to be certain; (2) that when they are not agreed, no opinion can be regarded as certain by a non-expert; and (3) that when they all hold that no sufficient grounds for a positive opinion exist, the ordinary man would do well to suspend his judgment.Bertrand Russell (1958). On the Value of Scepticism, in The Will to Doubt, p 39 (via Conversable Economist Timothy Taylor)
These propositions may seem mild, yet, if accepted, they would absolutely revolutionize human life.
There’s no evidence … that greed or miserliness or self-interest was new in the sixteenth or the nineteenth or any other century. Auri sacra fames, “for gold the infamous hunger,” is from The Aeneid, book 3, line 57, not from Benjamin Franklin or Advertising Age. The propensity to truck and barter is human nature. Commerce is not some evil product of recent manufacture. Commercial behavior is one of the world’s oldest professions.Deirdre McCloskey (2006). The Bourgeois Virtues. Ethics for an Age of Commerce, p 2
Losers in a democratic contest have to hold two contradictory views: that the policies of the winners are misguided, and that these policies should be implemented.Jan-Werner Müller (August 2020). Democracy for Losers. Boston Review.