Faith-based Social Science

Jeff Jacoby, who holds the endowed starboard ideologue chair at the Boston Globe op-ed page, recently wrote that the NYC ban on transfats in restaurant foods "makes men and women less free." Now, since the concept of freedom a fortiori means personal choice, it was easy for me to evaluate this assertion by just asking myself how I felt about it.

Am I "free" because the local pizzeria puts trans fats in the dough? Will I be "less free" if they are made to stop? I really don't think so. I'll probably be healthier and live longer, which will leave me freer to spend my golden years calling Jeff Jacoby a putz, which will make me happy. (Granted, the pizza guy will have to use a different shortening, which might cost him 1/10th of a cent more per pie, or it might not. But he should consider that a price worth paying for keeping his customers out of the Intensive Care Unit, from whence nobody buys pizzas.)

The really interesting question is why people like Jacoby come to such strange conclusions. One reason is that they took an economics course in college. The way economics is taught, the textbook and the professor present a series of so-called "assumptions," and then build from those assumptions an elaborate universe using impressive mathematical tools complete with boffo graphics. This universe is called a "free market," and here, every person strives without any moral consideration to maximize his or her personal satisfaction, which is defined tautologically for consumers -- whatever they do must be it -- and defined, for producers, as monetary gain. The result is the best of all possible worlds, in which everyone is as rich and as happy as they can possibly be. The worst possible thing that can happen is that an evil witch called government mars the perfection of this fairy tale.

The flaws in this Economics 101 course, which is taught to freshmen in just about every college, and nowadays more and more high schools, are not hard to find. The most compelling is that, ahh, actually, none of the assumptions are, well, true. At some point the professor and the textbook will briefly acknowledge this mild embarassment, but then they will forget all about it and press ahead to their conclusions. Another embarassment is that this mystical, mythical, magical free market has never existed, never will exist, and cannot possibly exist, for the simple reason that in order to get people to behave even sorta kinda like they have to behave to make the market work, you need massive, sustained, government intervention. The final embarassment is that in fact, the conclusion that the result of the non-existent free market is the best possible result for everyone does not follow from the assumptions after all. The result may be the greatest possible quantity of stuff and activity that is measured in money, but it is probably grossly unjust and leaves lots of people just plain miserable -- that's even if you believe the rest of the nonsense, which you shouldn't, because it's all false.

I've dealt with some of these absurdities before, for example here, and here, and here. The myth of the free market depends on such nonsensical propositions as: all the costs and benefits to society of any transaction are captured in the negotiations between buyer and seller (e.g., there is no such thing as pollution, or depletion of resources); buyers have perfect information about products for sale and all the alternatives; there are no costs of transactions; everybody has equal access to capabilities and resources; all transactions are voluntary; and so on and so forth.

The mythology also ignores the inconvenient fact that markets do not spring up as forces of nature. They are human social constructions, and in complex modern societies, they depend on continuous, assertive, self-conscious government intervention to function at all. Government creates money and controls its supply; defines contractual obligations and enforces them -- somewhat selectively, depending on the parties' political influence; protects against theft and vandalism -- again, selectively, which becomes a political issue; and provides essential infrastructure which, guess what, the impossible free market does not supply, even according to the theory.

As it turns out, the myth of the "free market" is invoked by politically powerful actors, such as large business corporations and wealthy people, whenever they don't like something government does or proposes to do; and they immediately and shamelessly forget about it entirely whenever they want government to do something for them. It's nothing but an ideological scam used by the rich to defend their privileges. They endow professorial chairs in universities from which the mostly highly paid class of professors churn out mountains of obfuscation proving that rich people deserve to be rich and poor people deserve to be poor, and even if they don't, the worst possible course is to try to do something about it. They give each other phony Nobel Prizes to try to convince everybody that they practice a "science." (There is no Nobel Prize in economics, it's a separate prize of the same name.)

What they practice in fact is a version of theology. Start with your conclusions, and reason backwards. The conclusions in this case happen to be very convenient for the rich and powerful, which is why the whole enterprise continues to be so well-funded and well-respected. How to extract this destructive parasite from our public discourse, from our politics, from our academies, from our minds, is one of our greatest challenges as a society.