The free market and values

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Feb 202007
 
Authors: James Easton

It is amusing to read the writings of supposed conservatives on the issue of the recent Colorado minimum wage increase. These writers always point out the supposedly elementary nature of the supply and demand schedule to prove the divine status of the free market that “dictates” value. But this simplified economic relationship is a model created by an economist, Alfred Marshall, not a law of nature.

If economics could treat social behavior like science can treat the natural world, then one would expect to see a system of partial differential equations that relates these variables through time.

Such a system would have to have explanatory and predictive power to be considered a theory. It would need to fully explain the past relationships between at least the mentioned variables (although more are involved in an international economy), and predict how these variables will relate to one another at some future point, say ten years from now. Astrophysics can easily make such predictions about future eclipses and other celestial events. Instead, economics reduces complicated behavior to a triviality, invoking the term ceteris paribus to remove the important variables from the equation.

A fully developed mathematical model of the economy has yet to be completed by any economist. In fact, there is hardly consensus on even the simple hypotheses. This explains the divergence of views within economics, from classical and neoclassical economists to Monetarists and Keynesians. This is because economics is primarily ideological – not scientific. It cannot be scientific because it deals with human actions and beliefs that cannot be parameterized.

As Dostoevsky wrote in “Notes From the Underground” in reaction to 19th century rationalism, “One’s own free unfettered choice, one’s own caprice, however wild it may be, one’s own fancy worked up at times to frenzy – is that very ‘most advantageous advantage’ which we have overlooked, which comes under no classification and against which all systems and theories are continually being shattered to atoms.”

Economics is rightfully part of politics, and quite frankly should always be taught as political economy, not as something separated from the sphere of politics, given to a plutocracy to control. This is for good reason, since it may very well be profitable to be in the business of slavery, drug dealing, child pornography, environmental pollution and all manner of moral degeneracy and barbarity. Such markets could exist, and yet none of us who are Christians or who hold dear traditional values would accept their existence as a legitimate fact in accord with a law of nature. The economy is not something abstracted from our beliefs and values about what constitutes the good life, nor should it be.

Obviously, a free country requires some measure of economic independence and self-sufficiency to prevent subjugation to others, and there must be space within which citizens can make their own choices about what to produce and buy. When the market conflicts with the family, which to a conservative must be the most important social unit upon which civilization depends, then the public that values the family must properly assert its role in establishing terms of employment to ensure the family does not deteriorate.

In our global economy, this may not be well received by many companies that compete internationally. However, I am opposed to modern globalization, which debases cultures, devours land, and undermines sovereignty. I would rather the economy return to being national, with international trade barriers to protect domestic values, and a limited trade partnership only with culturally similar states like the United Kingdom, Ireland, Australia, Canada and New Zealand.

It is interesting that the views of 18th and 19th century British Liberals on economics are no longer questioned by conservatives.

James Easton is a engineering second bachelor’s candidate. His column appears occasionally in the Collegian. Replies and feedback can be sent to letters@collegian.com.

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