Last year I wrote a couple of posts on my hatred of economics. I haven’t written much on the topic since then, as the presidential election has grabbed more of my attention. Just a few days ago, a commenter challenged me to consider whether I truly hate economics, or just certain schools of thought within the field. I’ve considered the question, but rest assured: I still hate economics.
Of course, at some times I’ve expressed some liking for certain types of economics. My previous post is about Biblical economics. I’ve had high praise for E. F. Schumacher’s book Small is Beautiful: Economics as if People Mattered. But the things that I like are so far outside the mainstream that most people wouldn’t even identify them as economics. The type of economic thinking that actually influences our nation and most others is entirely loathsome to me.
The major economic debate right now concerns government spending. Broadly speaking, President Obama and the Democrats offer a federal budget that grows by several trillion dollars over the next decade or so. The Republicans prefer a proposal from Congressman Paul Ryan that also adds trillions of dollars to the budget, but fewer trillions than the Democratic proposal. There were already several major fights about the budget last year. Several more are shaping up for this year and the years ahead. The details vary but the centerpiece is the same. The Democratic plans always involve higher taxes on the wealthy and slightly more spending on education and other Democratic priorities. The Republican plans never involve tax hikes and always involve a bit more for the military and other Republican priorities. But both parties agree on the majority of government spending for the near term. Both agree that we’ll have an enormous military, nearly ten times larger than that of any other country. Both agree on hundreds of billions of dollars for transportation, agriculture, and other departments, money that mostly ends up financing wealthy individuals and corporations.
The debate is not really about spending. The debate is about “growth”. You can pick up almost any newspaper and magazine or turn on any news channel and see the talking heads arguing about growth. Each side insists that their policies will produce growth while the other side’s policies won’t. Each side points to individual incidents that supposedly support them. Greece imposed austerity measures and unemployment got worse. California has high taxes and suffered an economic disaster.
Neither side ever asks the question of whether growth is always good, or what type of growth we should aim for. There are many types of growth. Growth is Gross Domestic Product (GDP) is the most commonly used one, but there’s also growth in jobs, manufacturing, home construction, and countless other things. What both the Democratic and Republican talking heads agree on is that growth in any of these areas is always good. If we manufacture more stuff this month than last month, that’s a “positive reading”. If we build more houses this year than last year, it can only be good.
A sensible economic policy would start with the question of what we want? Do we always want growth? Should we always want growth? Is manufacturing more junk necessarily good for us? Will more houses always be a good thing? Over the past decade we built far too many houses and, as a result, the housing sector entered a tailspin that wrecked first our economy and then much of the world’s. Few people would deny this, yet we see no mainstream economist suggesting that we revise our approach to growth.
If we were, as a society, to shift from loathsome economics to human economics, we’d start by broadening our aims. We would consider all the consequences of growth in a particular sector. We would consider how manufacturing affects the environment, supplies of limited resources, and the social structure as well as how it affects the amount of stuff we have. We would consider the age-old question of whether owning more stuff actually makes people happier. We would consider how any policy actually affects human well-being in its entirety rather than just how it affects narrow economic definitions. Then there would be less reason to hate economics.