Adam’s Fallacy: A Guide to Economic Theology

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 distribution—that 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.

Table of Contents:
Preface 1. Adam"s Vision The Division of Labor The Theory of Value Capital Accumulation The Invisible Hand and the State Smith's Theory of Money Adam's Fallacy Revisited 2. Gloomy Science Second Thoughts Malthus and Population The Context of Malthus's Essay Malthus's Postulates Malthusian Logic 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 Historical Materialism The Commodity and the Theory of Value Capitalist Exploitation Accumulation and the Falling Rate of Profit Primitive Accumulation The Transition to Socialism Marx and Proletarian Revolution Marxist Theory and Social Change 4. On the Margins Adam's Fallacy Needs New Shoes Marginalism 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 Two-Armed Economists Escaping Adam's Fallacy Face to Face with Adam's Curse Reading Further Appendix Demographic Equilibrium Theories of Money and Prices Ricardo's Theory of Rent and Accumulation Decomposition of the Value of Commodities The Working Day Index