Thanks to reader Clyde for forwarding the above-linked article to me, the text of a speech by William McGurn, writer for the Wall Street Journal, delivered at Hillsdale College last month. McGurn’s speech was a defense of The Dismal Science, otherwise erroneously known as the field of “economics.” It seems that McGurn felt the need to come to its defense. That alone tells you that the attack on the subject of economics is significant and credible.
As with all such defenses of The Dismal Science, McGurn’s is mired in 19th century writings and events and a complete failure of logic. He begins his defense with an explanation of the origin of the term “dismal science.” Thomas Carlyle used the term in the mid-1800s to deride economists who opposed slavery. But earlier, and more famously, he used the term to mock the theories of Malthus, who predicted that the human population would be held in check by food shortages.
McGurn then goes on to link concerns about overpopulation with the Nazi extermination of Jews and with draconian population management practices, including infanticide, employed in China and India, as though such practices are somehow the only logical outcome of concern about overpopulation. So, once McGurn has made the implication that those who deride the field of economics and worry about overpopulation are racists and murderers, his task of defending the field of economics on purely economical grounds has been made much easier.
Good thing, because his defense of economics from that point on is completely illogical and is summarized in the following excerpt:
In the two centuries since Malthus first predicted the apocalypse, the world population has risen sixfold—from one billion to more than six billion. Over the same time, average life expectancy has more than doubled—and average real income has risen ninefold.
In the four decades since Paul Ehrlich declared the battle to feed humanity over, a Chinese people who saw millions of their fellow citizens perish from famine as recently as the early 1960s are now better fed than ever in memory.
And in the years since Mr. McNamara predicted we could not sustain existing population levels, we have seen the greatest economic takeoff in East Asia—among nations with almost no natural resources and some of the largest and most crowded populations in the world.
McGurn makes a classic blunder of logic, drawing a cause and effect relationship between two unrelated events. Yes, the world’s population has grown a lot in the last two centuries and life expectancy and real income are up. But the same could be said about the preceding centuries as well, when mankind rose from the dark ages through the period of the renaissance. The growth in life expectancy and income were no less impressive, yet the growth in the population was a tiny fraction of that in the last two centuries and the field of economics didn’t yet even exist! That such progress continued for another two centuries can in no way be attributed to population growth or the field of economics. Rather, a more likely explanation is human nature’s drive to prolong and enhance the quality of our own lives. That drive is so strong that it’s likely the progress McGurn speaks of came in spite of the field of economics and population growth, not because of it.
And, yes, Asia has experienced explosive growth in the past four decades. But virtually any thinking person would conclude that that growth came in spite of the challenges of population growth, not because of it. And did the field of economics play a role? In a perverse way, it did. It was our faith in the flawed economic theories about free trade that produced such growth in the undeveloped and developing world, primarily in Asia, but at the expense of the developed world, primarily the United States. America’s wealth has been completely depleted by that development in Asia and Americans now find their incomes and net worth in serious decline. An illusion of prosperity has been sustained only by a succession of bubbles and economic gimmicks for the past two decades.
The real question is not where we’ve been – what’s happened in the last two centuries or in the last four decades. The real question is why global unemployment has escalated into a global epidemic. The real question is why a process of globalization inspired by economic theories resulted in huge imbalances that led to a catastrophic collapse of the global economy. And, most of all, the real question is where do we go from here.
Increasingly, the field of economics seems out-of-step. Its reassurances about bright prospects and our ability to overcome obstacles to further growth seem more like unfounded, wild-eyed optimism than an achievable outcome. Virtually no one denies that the end of the supply of oil that has fueled the growth of the last two centuries is in sight. And Malthus’ prediction of food shortages now seems more plausible than at any time since he formulated his theory, given the demand-driven and supply-constrained rise in food prices and the fact that much of the increase in food productivity made possible by oil-based fertilizers and pesticides is now threatened by escalating oil prices. And economists’ recent abandonment of growth models in favor of “happiness” models, in which we all consume less in order to make room for more people, smacks of rationalization and desperation, further eroding their credibility.
But what makes the field of economics “dismal” today is not an early 19th century theory about the potential for food shortages, but its cowardly, bull-headed, steadfast refusal to behave like a real science and question the full ramifications of population growth – by far the parameter that most dominates our economy today. Economics isn’t “dismal” today because Malthus may have been a couple of centuries early with his prediction, but because some of its other theories – most notably on free trade – are so horribly flawed by economists’ failure to take the effects of population density into account. A science that lacks the courage to consider the full ramifications of the most basic, powerful parameter at work in our economy today isn’t just “dismal,” it isn’t even a “science” at all.