Humanomics of economics
A ground breaking search into the soul of social sciences
By Sarthak Shankar
Economics of Good and Evil, Tomas Sedlacek, Oxford University Press, Pp 352 (HB), $ 27.95
The past decade has been one dedicated to the goal of progress so much so that religion has been berated for bringing up communal problems onto focus and distracting us from the main objective, i.e. economic growth. But Tomas Sedlacek plays the iconoclast and takes the world in a storm with his Economics of Good and Evil.
Written by Tomas Sedlacek, is in itself a plus point for this book. On top of being advisor to Vaclav Havel, Sedlacek has been called one of the “five hottest minds in economics” and lectures at Charles University—among the oldest universities in the world. He is also a member of the National Economic Council in Prague. His thoughts have set ablaze the economic world in a flurry of changes in the way we perceive and understand economics.
Sedlacek reveals that economics as a theory has evolved rather recently but as a principle has been with us since time immemorial. To illustrate his point he finds economics in myths, religion, folklore poetry and philosophy and then one-ups himself as he even shows the change in society’s perception of the arts and sciences.
To the average Joe, the term “economics” usually brings esoteric graphs and large accounting texts to mind. The widely held belief is that Adam Smith is the man responsible for the economics we see today, and that before him it wasn’t considered a mainstream school of thought at all. Sedlacek shows that far from being true economics was not only present since the beginning of civilization it could be seen in their beliefs and traditions as well.
He calls on the ancient Sumerians and proves how there was disciplined economic thought in the epic Gilgamesh. Not stopping here he recollects the Old Testament and guides us to the economic perspective of the ancient Jews. To quote: “The Hebrews never despised material wealth; on the contrary, the Jewish faith puts great responsibility on property management.” He also portrays a contrast between what was said and what was done: “… the commandment on Saturday communicated that people were not primarily created for labour. Paradoxically, it is precisely this commandment out of all ten that is probably the most violated today.”
He moves forward in time to the next big thing, namely, the ancient Greece and how their geniuses, each had different perception of the true meaning of life and happiness. “While the Stoics considered the law to be absolutely valid and utility had infinitesimal meaning in their philosophy, the Epicureans,… placed utility and pleasure in the first place- rules were to be made based on the principle of utility.”
He also mentions that the Bible in itself acts as an economic reading. The first sin, was, after all “consumption.” There is a parallel between the almighty’s redemption and the government’s forgiveness of debt for our ancestors thought debt in itself was a sin. “In fact the key concept of Christianity would not make sense without economic terminology.”
Sedlacek then shows the changes in the social sciences for which he dabbles in the work of Descartes and shows how he tried—without much success—to establish a bedrock for the sciences and thereby remove all doubts rendering it’s studies accurate and precise. “Science has not succeeded in being built as Descartes wished.” Next he makes a quick stop at Bernard Mandeville and how he was the first modern economist.
In part two of his book Sedlacek turns the tables and instead seeks myths, religion, folklore etc. in economics. The presences of ethics in economics, the need and rightness of our progress, the invisible hand of the market, the eternal search of truth all these get due attention.
In all of his citations Sedlacek has made much thought provoking insights about the world around us. To mention one right off the bat, Sedlacek shows that through lending and borrowing i.e. interest money could time travel. Saving give the power (to spend) to the future while loans take it away. “Because money is an abstract construct, it is not bound by matter, space, or even time. All you need is word possibly written, or even a verbal promise, “Start it, I’ll pay it”, and you can start to build a skyscraper in Dubai….Debt can transfer energy from future to the present. On the other hand, saving can accumulate energy from the past and send it to the present. Fiscal and monetary policy is no different than managing this energy.
Yet the most thought provoking thoughts of his, are ones that transcend time and all topics of study and instead face us as questions of humanity. “Does good pay?”, “what are we doing and why?” and “where do our beliefs come from ?”.
Sedlacek points that perhaps we are so focused on our quantitative analysis we are neglecting our qualitative analysis. And he brings up the annoying possibility that perhaps in spite of all our modernization our ancestors had it better.
The book will be a little dry if you don’t have a minimum understanding of economics but otherwise a deeply penetrating read, one that will lead to a trail of thoughts more puzzling than a Rubik’s cube. That said, it is well worth the effort.
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