Many – most? – people, including a great many economists and especially modern economists, get economics horribly wrong. They seem to think it’s just about money. In particular, it has become fashionable (and very convenient, for some) to argue that economics has nothing to do with morality. It is morally “neutral”, they claim. The task of economics, and the task of economists, the argument goes, is purely to show how to multiply wealth – or at least the appearance of wealth – which can be done by increasingly ingenious and esoteric mechanisms which very few people understand. When things go wrong, which they do at fairly regular intervals, it becomes obvious that the economists don’t understand their own mechanisms either since they are unable to put the economy to rights. In Britain at the time of writing Chancellor George Osborne has condemned an entire generation to despair (suicide has overtaken war and motor-bikes as the greatest threat to the lives of young men) with no real end in sight – certainly no promise of a truly better world. Presumably this was not his or the government’s intention. Economists can ride the waves, but they have no real control.
In truth, when economics is properly construed, it means far more than money. Money in the end is just a convenient way of keeping score. Economics in practice is the matrix of society, the medium through which we translate our aspirations into appropriate actions. The mechanisms of economics, including what we pay in taxes and under what circumstances, and the rules – or lack of rules – of trading and banking, determine perhaps more than anything else whether we can translate our aspirations into action, or are stopped in our tracks. Thus, we cannot provide enlightened agriculture (or education or health care for all or anything else that is socially desirable) unless we install the kind of economic mechanisms that will keep them afloat.
An economy that does what an economy must do – provide the context in which society operates – cannot be morally neutral. Every action or policy that affects other people or other creatures, or indeed the fabric of the Earth, has moral connotations. Nothing affects our lives, or the well-being of the biosphere, more than the economic structure and rules – so economics properly construed is an inveterately moral pursuit. All the greatest economists have been moralists first and economists second: Adam Smith, Karl Marx, J S Mill, J M Keynes, Amartya Sen, and so on. All had a clear idea of the kind of society they felt is desirable, and why, and tailored their recommendations accordingly. The modern claim to moral neutrality, especially by the neoliberals, is the grossest nonsense (revealing yet again that specialists in high places often have no broad understanding). Those who claim moral neutrality for the dominant paradigm of neoliberalism are attempting merely to replace human sense and sensibility with an algorithm – a formula: in this case, a formula for making money. That aspiration is itself a huge moral statement with strong metaphysical implications. In practice it is an exercise in dehumanization. It will not do.
But although economics has moral and metaphysical connotations we should not treat it as an ideology. It should always be seen as a pragmatic device – a collection of mechanisms that enables us to create the kind of world we want. Our moral principles should be sacrosanct but the economic details that enable us to realize those principles are not. When we get our moral priorities right then, as Keynes said, “the economic problem will take the back seat where it belongs … and the arena of heart and head will be occupied where it belongs, or reoccupied by our real problems, the problems of life and human relations, of creation, and of behaviour and religion.”
In the following pages we will discuss the ins and outs of economics, starting with the grand theories of capitalism and socialism and all the rest (homing in on the concept of “economic democracy”); but also the details that shape the realities of life: the price of land, houses, and corn; the trade laws – just and unjust; the intricacies of marketing; how to start a small business; and how in general to balance the books. The task for all who want to make a better world is to make a living in the short term within the status quo, but at the same time to lay the foundations of something better; to make the Renaissance happen.