Short history of dismal science

Dr. Gary McDonnell

Thomas Carlyle, a 19th century historian and essayist called economics the “dismal science.” Many people are familiar with this description.

It is widely believed that Carlyle was referring to the ideas of Thomas Malthus, a 19th century classical economist.

Malthus believed population growth would tend to exceed the capacity for food production, and that this state of affairs would ultimately lead to starvation and bare subsistence wages for most workers — a dismal prospect, indeed.

At least so far, Malthus was wrong.  And as it turns out, so is the story about the origin of the phrase dismal science.

Research by two economists, David Levy and Sandra Peart, found that what Carlyle considered dismal about the fledgling discipline of economics was economists’ support for the emancipation of slaves.

The economists argued that there are no inherent differences between people of different races.

This  was not merely rhetorical.

John Stuart Mill, another 19th century classical economist, joined with evangelical Christians in active opposition to slavery.

This may seem odd to some, that economists would take a stand on a social/moral issue.

More than one commentator has critiqued economists for “knowing the price of everything and the value of nothing.”

Sadly, such criticism is probably warranted.

In the effort to understand markets, it appears on the surface that economists are concerned primarily with quantifiable variables such as prices, income, profit and loss — all of which are important.

In the modern era, however, the desire to quantify has perhaps crowded out the importance of non-quantifiable factors, such as love, honesty, trust, compassion, charity, duty and self-sacrifice.

But what makes for a good society is not a question alien to the economist’s mind set, at least not at its foundation.

Adam Smith, considered to be the founder of economics as a distinct discipline, was a moral philosopher.

Smith is perhaps best known for his 18th century work, “An Inquiry into the Nature and Causes of the Wealth of Nations.”

This book critiqued the political philosophy of the time that tended to justify the granting of monopoly privilege by the state.

Smith argued that granting such privilege was not only counter-productive to the creation of prosperity but also unjust.

Smith understood that the rules of the game matter, which included not merely the legal apparatus of the state but also the mores, customs and habits of the population at large.

My colleague, Dr. Hsin-Ling Hsieh, wrote in a recent Professor’s Corner that free markets require virtuous behavior.

By making this point as an economist, she is following in the footsteps of her predecessors.

Human beings are moral agents and markets will function better when individuals consider the moral consequences of their choices.

More broadly, the social order will be more harmonious, just and peaceful if individuals are sensitive to how their behavior affects others.

Of course, moral behavior requires the ability to make choices. Choice, communication and cooperation form the core of what it means to be human, according to John Stuart Mill and friends.

Therefore, those in political authority must respect in large measure the right of individuals to choose for themselves.

Editor’s Note: Dr. Gary McDonnell is an assistant professor of economics at NMU.

The Professor’s Corner is a weekly column in The North Wind. Professors interested in appearing in The North Wind should contact the Opinion’s Editor at [email protected]