The Great Economists

¶ … Economists

Explain the theory of Social Darwinism. What elements of truth are in the theory? How do you refute it?

The theory of Social Darwinism is simply asserts that only the fittest survive in the wild or in society as it exists today. Thus, this theory was based heavily on the ideas of Charles Darwin and his views on plants and animals in nature. Thus, this theory specified that the weak would ultimately not flourish but diminish, whereas those who were naturally possessing fortitude of strength and mind would exert influence and ultimately flourish. The ideas of Charles Darwin are view life as essentially a battle for existence which was ruled by the law of the common phrase, that most have heard which is "the survival of the fittest." Darwinists believed that nature would simply select those who were meant to survive, and those who were not -- hence the term natural selection. However, in society today, where survival does not depend on sheer might alone, one might wonder how social Darwinism manifests itself, and whether or not it still takes the same form.

Today, we still have weak members of society, members which depend so heavily on others and which need so much, but who are not necessarily physically weak. These members of society are those who depend on others for their survival -- for food and for shelter. These are the members who are on the receiving end of charity and the good will of others. These weaker individuals are "…always under the dominion of the superstition of government, and, forgetting that a government produces nothing at all, they leave out of sight the first fact to be remembered in all social discussion - that the State cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man" (Sumner). Essentially Sumner is saying that it's the working class, industrious man who is responsible and is committed to a job and earns money, is essentially paying for the man who cannot take care of himself. This would be akin to a strong man (but not super strong man) carrying a man with two broken legs on his back through the forest. As Sumner asserts, it's completely unnatural: Darwin would naturally select the man with two broken legs to not be able to survive and thus cease to exist, and essentially, as Sumner alludes, we should do that with the people so dependent on charity. In order to survive, they're depending on not just the generosity of other people, but on the hard work of the industrious man, something which simply isn't fair -- or even natural. "The friends of humanity start out with certain benevolent feelings toward 'the poor,' 'the weak,' 'the laborers,' and others of whom they make pets. They generalize these classes, and render them impersonal, and so constitute the classes into social pets. They turn to other classes and appeal to sympathy and generosity, and to all the other noble sentiments of the human heart" (Sumner). What Sumner describes here as it would take place in the wild is essentially a group of people standing around feeling sorry for a person with two broken legs (who can't thus run from predators) or someone with no arms (who thus can't hunt for food).

These people of "generous spirit" are thus feeling guilty about their own health, vitality and success and offer to carry the weak, something which goes against social Darwinism and the overall health of the entire economic system. As Sumner explains, these "benevolent people" propose a transfer of capital, from the better off to the worst off. "Capital, however, as we have seen, is the force by which civilization is maintained and carried on. The same piece of capital cannot be used in two ways. Every bit of capital, therefore, which is given to a shiftless and inefficient member of society, who makes no return for it, is diverted from a reproductive use; but if it was put into reproductive use, it would have to be granted in wages to an efficient and productive laborer. Hence the real sufferer by that kind of benevolence which consists in an expenditure of capital to protect the good-for-nothing is the industrious laborer" (Sumner). Thus, every act of charity is actually hurting the strong, and with it, all members of society and the general health and wellness of society as a whole.

In what ways do the theories of Smith, Marx, Veblen and Hayek differ in their assumptions about the motivations behind economic activity?

While many people attribute Smith's theories as largely connected to the sympathies of people as being a significant motivator in the realm of economic activity, few people are cognizant that Smith was a strong behavioral economist as well. "The meanest wretch puts an inestimable value upon himself, and the highest wish of the ambitious man is to have all the world, as to that particular, of his opinion: so that the most insatiable thirst after fame that ever hero was inspired with was never more than an ungovernable greediness to engross the esteem and admiration of others in future ages as well as his own; and (what mortification soever this truth might be to the second thoughts of an Alexander or a Caesar) the great recompense in view, for which the most exalted minds have with so much alacrity sacrificed their quiet, health, sensual pleasures, and every inch of themselves, has never been anything else but the breath of man, the aerial coin of praise" (Smith). As Adam Smith explains, man desires as such in order so he can purchase other goods, including honor -- the desire for honor being a tremendous motivator for economic activity and a major driving force among men.

Marx on the other hand, would argue that the struggle among the classes is one of the founding aspects of society and that this aspect motivates all economic activity: fundamentally all workers are struggling for power and they are fighting to eventually manifest what some view as inevitable, which is a classless society. As Marx asserted, "The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones. Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has simplified class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other -- bourgeoisie and proletariat" (chapter1). Additionally, Marx would probably argue that all workers are driven to reconnect to the products of their labor from which they are continually estranged, as workers are alienated from other workers, along with the process and products of their labor.

Veblen on the other hand, argued that economic activity, like any other form of human behavior was connected to the social sphere and also influenced by others. As Veblen asserts, "The motive that lies at the root of ownership is emulation; and the same motive of emulation continues active in the further development of the institution to which it has given rise and in the development of all those features of the social structure which this institution of ownership touches. The possession of wealth confers honour; it is an invidious distinction. Nothing equally cogent can be said for the consumption of goods, nor for any other conceivable incentive to acquisition, and especially not for any incentive to accumulation of wealth" In this manner, Veblen was one to concede to a certain degree of Darwinism when it came to social interactions, and that humans would continue to evolve dependent on their environments, ever dependent on technology. Economic activity, according to Veblen is also greatly influenced by human thought and perception.

Hayek argued that economic activity was motivated by economic freedom. Once there was less government intervention it meant to Hayek that people would have the freedom to choose, which to him meant a free market economy, which would be the most engaging motivator of economic activity. As Hayek explained, "It was only through a re-examination of the age-old concept of freedom under the law, the basic conception of traditional liberalism, and of the problems of the philosophy of the law which this raises, that I have reached what now seems to be a tolerably clear picture of the nature of the spontaneous order of which liberal economists have so long been talking."As Hayek believed, a significant issue for nearly any economy was the way in which people's actions were coordinated; in this sense his views were evocative of Adam Smith, who also noticed that free markets were key in helping to coordinate the actions of people, even though this level of coordination was not a major part of anyone's intent.

Comment on Keynes' view of the future economic prospects and their effect on human values?

Keynes appears to exhibit a certain degree of ambivalence regarding future economic progress and the impact they will have on human life and on human values. Keynes makes strong, positive commentary on the results of the consistent economic progress during recent centuries, as a result of new technologies which have caused production to become more effective. In this light, Keynes said that mankind was creating a solution to its most fundamental economic problem. In the past, "the economic problem, the struggle for subsistence, always has been ... The primary, most pressing problem of the human race - not only of the human race but of the whole biological kingdom from the beginnings of life" (Keynes, 4). However, Keynes saw a point in the future where one might be able to satisfy all needs so that all further energies could be spent towards non-economic purposes. Keynes believed that such a time really was imminent and that it would then present people with a more permanent problem: "how to use his freedom from pressing economic cares, how to occupy the leisure which science and compound interest will have won for him, to live wisely and agreeably and well" (4). Thus, with regard to human values, there becomes an even greater obligation to determine how this free time will be spent, and what the greatest expenditure of human energies will be in the future, with technology taking up so much slack. However, in this sense, Keynes saw the future as remote enough that it wouldn't impact current economic policies but that.

On the other hand, unlike other economists, Keynes didn't view efficient production as the key and secret to offering people leisure and freedom: rather Keynes saw it as responsible for unemployment, as it forces society to come up with new uses of the labor force. After World War II, many government policies did put Keynes' wisdom to use, finding new uses for all the tremendous labor available, with more roads and other forms of infrastructure being built. However, Keynes was wrong about his grandchildren having more leisure time: in that regard the human race hasn't actually had to deal with the problem of human values and an excess of leisure time.

What is Galbraith's main thesis?

One of the more pre-eminent themes that dominates the work of Galbraith, is the focus on the inherent imbalance of economic power within massive companies. As Galbraith asserts repeatedly, this creates a social and environmental imbalance as a result. Galbraith also spends a lot of time in examining the resulting implications of this type of imbalanced development of modern affluence, even at times drafting and proposing a means of exerting a certain level of social change. Galbraith appears to be arguing that within America, these large corporations exert a tremendous amount of power over society, and over the individuals who are part and are not a part of their corporation at large. Within these massive structures which wield so much influence over the economy, there are just a small handful of people who are actually making decisions. With corporations, "… there must always be question as to how much the individual is deciding and how much has been decided for him by the group which has provided the relevant information; the danger of confusing ratification with decision must again be emphasized. And in all circumstances it is important to realize that corporate ceremony disguises the reality. This deserves a final word. Corporate liturgy strongly emphasizes the power of the board of directors and ultimately, thus, of the stockholders they are presumed to represent. The rites which attest this point are conducted with much solemnity; no one allows himself to be cynical about their lack of substance. Heavy dockets, replete with data, are submitted to the board. Recommendations are upended. Discussion is brief, stylized and superficial. Most of the participants are old men. Given the extent and character of the group preparation, rejection would be unthinkable" (Galbraith, 105-106). In this passage, Galbraith is adequately demonstrating how there's really a tremendous amount of pomp and circumstance in the way in which tremendously influential financial decisions are made within corporations. There's an appearance delivered that the stockholders have an equal or at least sizeable amount of power, but this is just part of the smoke and mirrors. The pomp and circumstance of these meetings and the superficiality of the data delivered within them are all there to mask the fact that this small group of older men are the ones really pulling the strings, and they are the once making a massive impact on the economy and society at large.

Write an essay, a reflection on the readings for this semester. Address the following points; you can add other points if you wish.

After the thorough perusals of some of the greatest economic minds that we've ever been exposed to thus far this semester, a few of the authors stand out for me as being more in accordance with my own personal views. For example, the writings of Marx and Engels within the Communist Manifesto were largely brilliant. There are many perspectives through which to view history, and the idea of viewing history in terms of a series of class struggles is absolutely brilliant and is easily supported by so many events of history. As Marx asserts, "Freeman and slave, patrician and plebian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes. In the earlier epochs of history, we find almost everywhere a complicated arrangement of society into various orders, a manifold gradation of social rank. In ancient Rome we have patricians, knights, plebians, slaves; in the Middle Ages, feudal lords, vassals, guild-masters, journeymen, apprentices, serfs; in almost all of these classes, again, subordinate gradations." What's so brilliant about these ideas are their timelessness. One can easily see their manifestations today, with the skewed distribution of wealth. As recently as 2011, the "Occupy" movement demonstrated a revolution of sorts, with the war cry of this movement being, "we are the 99%" as a means of protesting the grotesque imbalance of wealth in America and the unfair way in which government supports massive corporations and the wealthy. As one Occupy protestor asserted, "Four years of college. $100,000 in student loans. Where's my bailout?" This movement and others like it, demonstrate the new classes and the new forms of oppression that have replaced the old ones, just as Marx said. This demonstrates the timelessness and relevancy of so much of the Communist Manifesto. As Marx explained, "Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has simplified class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other -- bourgeoisie and proletariat." One could easily argue that this standoff is still in motion and that the working man is still very much in opposition to the bourgeoisie. This demonstrates the timelessness of Marx's writing and how many of these struggles have just taken on a different form today, but are the same at their core. This is one of the reasons why I find the writings of Marx to be so significant and important: as a result of its timelessness.

Furthermore, what Marx proposes as a means of correcting the sheer imbalance of power is incredibly meaningful, and really needs to take shape: "The immediate aim of the Communists is the same as that of all other proletarian parties: Formation of the proletariat into a class, overthrow of the bourgeois supremacy, conquest of political power by the proletariat." The Occupy Movement attempted to do this to a certain extent, but it was largely ineffective; in certain cities it quickly took on the form of an extremist movement with radical peoples and it seemed to lose momentum and respect. However, what Marx appears to be proposing might seem radical at times as well, it's actually a necessary change that needs to be swept over the nation, if there's any hope at rectifying the evils and ills which have been created after too long of an imbalance of power.

The imbalance of power as Marx demonstrates is partly responsible for the alienation and general estrangement of labor: "Political economy conceals the estrangement inherent in the nature of labor by not considering the direct relationship between the worker (labor) and production. It is true that labor produces for the rich wonderful things -- but for the worker it produces privation. It produces palaces -- but for the worker, hovels. It produces beauty -- but for the worker, deformity. It replaces labor by machines, but it throws one section of the workers back into barbarous types of labor and it turns the other section into a machine. It produces intelligence -- but for the worker, stupidity, cretinism." This is an imbalance and alienation which is manifested today through a variety of social ills: urban slums and ghettos, the drug trade, the big business of the prison industry. America is the preeminent nation in the world which imprisons the most of its citizens, and the people who get imprisoned most of the time are lower-class minorities. This is an obvious manifestation of the economic imbalance long inherent in American society and the intensified estrangement of the worker. The working class can't feed their families on minimum wage jobs and thus turn to selling drugs more often than not, which leads to arrests and another person caught in the great machine of the American prison industry.