| Human Goods, Economic Evils: a Moral Approach to the Dismal Science |
| Edward Hadas, ISI Books, 2007, 400 pages, $35/$22. |
| “Ecce homo economicus!” Like Pontius Pilate presenting Jesus to the Jerusalem mob, in his new book, Human Goods, Economic Evils, Edward Hadas holds up to ridicule the narrowly self-interested and materialistic model of humanity standard in much of economic analysis. Instead, he sets out to give a picture more truthful “both to human nature and to my experience of actual companies, jobs and families”, to be based on his Catholic beliefs and solidly grounded in philosophy and theology. |
| One explicitly religious approach, the Catholic Social Teaching promoted by the Church, a foundation of Christian Democratic thinking, does this explicitly. Hadas mentions this body of work, but instead of adding to it, he says that he is instead looking to lay the foundations for a school of economics that should be accessible to anybody, Catholic or not. Unfortunately, in this book, Hadas is not at all persuasive, as he pays neither God nor Caesar their intellectual dues. |
| Does it matter that much of the way in which we do economic analysis makes over-simple assumptions about human nature? Many economists, I would expect, would think of Milton Friedman’s argument in ‘The Methodology of Positive Economics’, that the assumptions behind any economic theory, no matter how ridiculous, are irrelevant.1 All that matters is how well the resulting model explains or predicts. What might be the Catholic model of option pricing to substitute for the Black-Scholes option-pricing model, or of cost-benefit analysis, or how should one regulate UK electricity prices, set policy on taxing non-domiciled financiers or solve the current banking crisis? I found myself unable to agree or disagree with his case because Hadas never gets around to presenting one. Never in the book does he show even the most minimal engagement with economics as theory or practise or policy that might showcase his supposedly new and original perspective. |
| 1 Milton Friedman, ‘The Methodology of Positive Economics’, in Essays in Positive Economics, University of Chicago Press (1953). |
| Hadas writes, in one of the sweeping and unsupported assertion that litter the book, that “Economists are in a particularly weak position to study transcendental labour,” works of caring and seeking ultimate truths. To begin with, I must confess to being at a complete loss to understand why Gary Becker’s work, particularly on the family and fertility, goes unmentioned. For Catholics in Britain or Ireland, Polish priests have for a decade been as common as their compatriots working as plumbers or plasterers. The visible evidence suggests that economic globalisation has had a similar influence on the supply and demand for these diverse categories of labour. |
| For an aspiring revolutionary, Hadas’ treatment of the philosophical and theological issues is barely more satisfactory. Few people could call on a detailed knowledge of all these areas, and with a thorough understanding of economics, so we might need more of an introduction than he provides. It would be oversimplifying the book, but not to any great degree, to summarise it as saying that motherhood and family are good things, that there is more to life than money and possessions and that satisfaction in work derives largely from its contribution to others. |
| All in all, like Pilate, his condemnation is hurried and unjust. |
| Peter Nolan |
| Principal, Radios Capital |
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