This book could be called “The Intelligent Person’s Guide to Economics.” Like Robert Heilbroner’s The Worldly Philosophers, it attempts to explain the core ideas of the great economists, beginning with Adam Smith and ending with Joseph Schumpeter. In between are chapters on Thomas Malthus, David Ricardo, Karl Marx, the marginalists, John Maynard Keynes, Friedrich Hayek, and Thorstein Veblen. The title expresses Duncan Foley’s belief that economics at its most abstract and interesting level is a speculative philosophical discourse, not a deductive or inductive science. Adam’s fallacy is the attempt to separate the economic sphere of life, in which the pursuit of self-interest is led by the invisible hand of the market to a socially beneficial outcome, from the rest of social life, in which the pursuit of self-interest is morally problematic and has to be weighed against other ends.
Smith and his successors argued that the market and the division of labor that is fostered by it result in tremendous gains in productivity, which lead to a higher standard of living. Yet the market does not address the problem of distributionthat is, how is the gain in wealth to be divided among the classes and members of society? Nor does it address such problems as the long-run well-being of the planet.
Adam’s Fallacy is beautifully written and contains interesting observations and insights on almost every page. It will engage the reader’s thoughts and feelings on the deepest level.
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About the Author
Duncan K. Foley is Leo Model Professor of Economics at The New School for Social Research.
Table of Contents
1. Adam''s Vision
The Division of Labor
The Theory of Value
The Invisible Hand and the State
Smith's Theory of Money
Adam's Fallacy Revisited
2. Gloomy Science
Malthus and Population
The Context of Malthus's Essay
Population and Food since Malthus's Time
Ricardo and the Limits to Growth
Ricardo's Labor Theory of Value
Accumulation and the Stationary State
Ricardo's Views on Machinery
The Political Economy of Poverty
3. The Severest Critic
The Commodity and the Theory of Value
Accumulation and the Falling Rate of Profit
The Transition to Socialism
Marx and Proletarian Revolution
Marxist Theory and Social Change
4. On the Margins
Adam's Fallacy Needs New Shoes
Where Do Prices Come From?
Marginalism and Social Welfare
Marginalism and Time
Veblen and Conspicuous Consumption
5. Voices in the Air
John Maynard Keynes
World Capitalism in Keynes's Time
Say's Law and Laissez-Faire
Labor Markets and Unemployment
Expectations and Money
The Fate of Capitalism
Complexity vs. Collectivism
The Prophet of Technology
6. Grand Illusions
Looking in the Mirror
Escaping Adam's Fallacy
Face to Face with Adam's Curse
Theories of Money and Prices
Ricardo's Theory of Rent and Accumulation
Decomposition of the Value of Commodities
The Working Day
What People are Saying About This
Adam's Fallacy is a stimulating tour d'horizon of the ideas of the great economists. In clear, accessible prose, Duncan Foley, a noted theorist himself, describes what they wrote and what their work means today, providing an insightful and thought-provoking critique of economics.
Duncan Foley has written a fair-minded and very well-written history of economic thinking organized by the theme announced in his title. He contends that economic thinking has been dominated by fallacious attempts to separate positive analysis from moral judgment. This leitmotif has enabled him to create a unified presentation, which will be very useful to the general reader. --(Kenneth Arrow, Stanford University)
Adam's Fallacy is a stimulating tour d'horizon of the ideas of the great economists. In clear, accessible prose, Duncan Foley, a noted theorist himself, describes what they wrote and what their work means today, providing an insightful and thought-provoking critique of economics. --(Stanley Engerman, University of Rochester)
This learned and lively book reconnects economics to the complexities and conflicts of politics and society, and powerfully reminds us that there are no fixed, necessary, or inevitable laws that govern markets. By tracing the history of economic thinking as a form of engagement with values and policies, it also thoughtfully beckons us to grasp together the twin challenges of scientific understanding and moral reasoning. --(Ira Katznelson, Columbia University)
Most Helpful Customer Reviews
Dr. Foley demonstrates that our peculiarly intense American fascination with and belief in the "free market" is essentially a matter of faith, a theological mistake based on a fundamentally fallacious understanding of how free market capitalism works. I was struck not just by the clarity and persuasiveness of the argument, but I got a great intro to a number of important "founding fathers" of economic theory. Highly recommended!