Economics for the Hurried

The following is an excerpt from the (very) full article on Richard Heinberg’s site.

In theory, the Market was a beneficent quasi-deity tirelessly working for everyone’s good by distributing the bounty of nature and the products of human labor as efficiently and fairly as possible. But in fact everybody wasn’t benefiting equally or (in many people’s minds) fairly from colonialism and industrialization. The Market worked especially to the advantage of those for whom making money was a primary interest in life (bankers, traders, industrialists, and investors), and who happened to be clever and lucky. It also worked nicely for those who were born rich and who managed not to squander their birthright. Others, who were more interested in growing crops, teaching children, or taking care of the elderly, or who were forced by circumstance to give up farming or cottage industries in favor of factory work, seemed to be getting less and less—either proportionally (as a share of the entire economy), or often even in absolute terms. Was this fair? Well, that was a moral and philosophical question. In defense of the Market, many economists said that it was fair: merchants and factory owners were making more because they were increasing the general level of economic activity; as a result, everyone else would also benefit … eventually. See? The Market can do no wrong. To some this sounded a bit like the circularly reasoned response of a medieval priest to doubts about the infallibility of scripture. Nevertheless, despite its blind spots, classical economics proved useful in making sense of the messy details of money and markets.

Read more…