[Adam Smith author of The Wealth of Nations].
Distilled by Guy Sorman in City Journal.
Sorman’s work begins with the scientistic (and flawed) notion that economics has now become a true “objective” (i.e. mathematicized) science.
His list I find largely correct (esp. the necessity of good institutions and creative destruction), but I would like to register a complaint with #4:The Best Measure of an Economy is Its Growth (particularly GDP).
Sorman compares this objective measurement to pie-in-the-sky subjective notions like Gross National Happiness or unnamed (but hinted at) ideas such as egality, equality, distribution of said growth,etc.
Now I’m not knocking the introduction of complex mathematics, rigorous standards of verification/hypothesis, etc. into economics by all means. But this neo-positivst notion is just more modernist nonsense. Smith is pictured above for a reason. The Classical Notion of Economics which did hold a truth that Sorman doesn’t recognize. One clearly articulated by Smith: that economics is a branch of moral philosophy and politics. As such it involves a choice by a society (at least it ought to be) about the manner in which to decide where the market is and is not appropriate. It is a question of issues like common good. Sorman takes a shot at collectivization as a non-mathematical economic theory that did mass damage–true enough but that doesn’t deal with the Smithian alternative.
Modern economics hitched and determined solely by mathematical models hides its own policy and political preferences under the guise of objectivity, when in fact they are in part subjective and intersubjective. [Just not admitted as such]. What is decided then is decided by experts (and their media outlets/mouthpieces) embedding their own social-moral-political views via a process Habermas calls “decisionism.” i.e. Is becomes ought without their being discussion/ratification of such a policy: decisions are made without being made as it were. They are made without dialog and discussion.
A further point via Habermas. Sorman’s piece is titled: Economics Doesn’t Lie and his proof is that it is objective. But as Habermas has I think effectively established, the validity claim of the objective world is factual truth. The validity claim of the subjective is sincerity. Lies have to do with subjectivity which means Sorman is arguing that a supposedly objective fact-based only endeavor is actual the subjective embodiment of sincerity. Objective economic analysis can more lie than it can tell the truth since it isn’t a person with autonomous consciousness. How said facts are used by individual persons can be sincere or false and that of course then involves (back to Habmeras) intersubjective norms of rightness/justice. Which is exactly what gets left out and what Smith actually understood. .
I’m not saying growth is not a crucial way in which to define the health of an economy but it hides its own (non-scientific) value-laden understanding into the process. It might be a good one, might even be the best one, but that needs to be argued in seems to me on a sounder basis than “growth can be objectively measured.”
As counterintuitive and heretical as this might sound at first, maybe objectively measured isn’t always the best thing. And if that thought is so far beyond the pale for you, you think I should be laughed out of the universe for suggesting it, then that is the degree to which this mindset has been lost (and Smith’s original vision has been lost by those who claim his heritage).