Like many things around us, the free-market system is a mechanism we blithely ignore until something goes wrong with it. So it’s no surprise that the recent economic downturn has also seen a rise in books on capitalism, finance, and the market.
Filthy Lucre is another addition to this expanding field. In it, Joseph Heath, co-author (with Andrew Potter) of The Rebel Sell, addresses some of the popular misconceptions that surround economic debates.
Contrary to its subtitle, Heath’s book isn’t just for activists and Naomi Klein acolytes. He spends about half his time debunking myths held by the right: government should get out of the way of markets, competition and Adam Smith’s invisible hand improve efficiency. Misconceptions regarding moral hazard and risk in a free-market system is a particularly timely topic, as experts of all stripes try to pin blame for the sub-prime mortgage crisis on everything from individual homeowners to banks and mortgage lenders to the government itself.
Heath doesn’t spare those on the left, either. By the time he’s done, cherished progressive tenets such as the need to fix prices, the psychopathic nature of corporations, and the inevitability of capitalism’s collapse have all been thoroughly dismantled.
An associate professor of philosophy at the University of Toronto, Heath isn’t a professional economist, but he writes convincingly about a number of basic economic ideas. More importantly, he explains them in a manner that should be emulated by writers of economics textbooks. He employs a logician’s ruthlessness and cold calculation, but underneath all of that are flashes of Heath’s anger that so many fiercely opinionated and seemingly well-educated experts on both ends of the political spectrum can espouse so many flawed ideas.
Here’s hoping that Heath’s book will promote a better understanding of economics and capitalism. If he’s right, we’ll be living with this system for a very long time. It might be nice to know how to fix it the next time it breaks down.