10 Responses to Is Economics Universal?

  1. American Knight says:

    I think much of the problem stems from what we think ‘economics’ is. As I see it, economics, in simplest terms, is the interaction of free-thinking humans as regards the use and enjoyment material means. The material means can be quantified, the human ends much less so. From a temporal perspective many economic valuations can be determined in advance, many can’t. If, however, humans are acting like stewards of God’s creation, rather than consuming animals, then the ends are God’s, the means are God’s and we are merely His instruments. That means the economic principles are perpetual because He set them forth. From this view economics is just the use of material means in order to sanctify man. Man was made for Love and all things were made to manifest love.

    I think the Austrians view valuations in purely subjective terms, which is correct from a temporal perspective. If humans are free, then they will necessarily value things differently, subjectively. If humans are nothing more than rational animals then the statists have it right, for consuming animals will destroy each other in their pursuits without some authority to temper their passions. That authority is the oligarchs that rule the state and they must control the means, all the means, determine the ends and ‘manage’ the slaves, er, ah, people. This places everything under the dominion of a few men, prone to evil, and leaves no room for God. Essentially this gives the field of economics over to the devil.

    Where the Austrians fail is in the lack of regard to the objective truths about how humans ought to behave as dictated, subjectively, by the Creator. Confusing authentic freedom and temporal license is the failure of the Austrians.

    I think the Austrian theories can be made more perfect simply by acknowledging that all the wealth belongs to God. From that perspective economic principles are always true, everywhere. His subjectivity makes the observance of objectivity possible. I think we can move toward that understanding, but the true universal economics will never be realized this side of heaven. Of course, the economic Law of Scarcity has absolutely no relevance in God’s superabundance and eternity.

  2. WJ says:


    A less sanguine interpretation of Radford would be that modern society resembles a POW camp. 😉

    More seriously, do you know Alexander Rosenberg’s work, especially Microeconomic Laws: A Philosophical Analysis (1976) and Economics: Mathematical Politics or Science of Diminishing Returns? (1992)? These books do a good job of highlighting both what is true about the most general “laws” of economics and where and how these truths are, in the hands of professional economists, distorted so as to make it seem that economic behavior is law-like (in the strong, scientific sense of that term preferred by our friends the practitioners of the dismal science.)

  3. Aaron B. says:

    Maybe I’m wearing the same blinders, but it seems obvious to me that laws like supply and demand are laws of nature rather than cultural artifacts. The POW camp example is good, but the one I always fall back on is the desert island. If ten people are stranded on a desert island and only one of them knows how to catch fish, he can trade his fish to others who pick coconuts, build shelters, or offer other goods and services. A pricing structure will develop. If he builds a net and starts catching a lot more fish, the ‘price’ of fish — what he can trade a fish for — will go down as the supply goes up. If ten new people are stranded and none of them knows how to fish, the price will go up as the demand goes up. If someone else finds a patch of wild asparagus, the price of all food will come down because the supply went up.

    I don’t think any of this requires that the stranded people be from a capitalistic culture. People who grew up with supermarkets and auctions might work it out faster than people who were raised by wolves, but they’d all get there. Wouldn’t they?

    Of course, if one person has the only gun, and he decides to crown himself king and confiscate all the fish and other goods and distribute them as he wishes, that will wipe out the pricing structure. But that doesn’t mean the law of supply and demand no longer exists; it just means it’s been superseded by force. A rocket shooting into space doesn’t prove the law of gravity doesn’t exist; it just proves it can be overcome by force.

    To tie this back to real life, we have no idea where the law of supply and demand would set the price of health care, because we supersede it through the use of force (government). But the law still exists, and would come into play if the force were removed.

  4. Alex says:

    Your logic is correct, but you are missing many pieces to the pie. Lets look at political economics in which both sides are incorrect. I would like to say that economics itself is tries to be value nuetral.

    The Dem: Are what i can see as economic conservatives
    We can’t trust markets yada yada … lets regulate
    ( but only the markets that benifit us )
    The Rep:Are what i can see as economic liberal
    Lets let everyone run wild because the invisable hand economics is were it is at
    ( but lets give subsidies to those who will vote us into office)

    Yes it is Economics Universal take out the politics you find something alien.

    No Subsudies to anyone

    Only Government (not what we have now) intervention in markets that would otherwise be monopolistic (e.g. Public needs all inferstruture needs)

    Government breaking monoplies up so we truly allow perfect competition (Sherman AntiTrust Laws)

    Import/Export laws that protect our economy and not business revenue/profit

    Its something you will never see from either party… if you do pigs are flying

  5. American Knight says:


    Nice post. Simplistic and naive, but nice. Don’t you know that economics is supposed to be math-intensive, complicated and beyond the minds of regular folks to understand.

    Your example fails because there was no one there to tell the islanders of these universal laws that you allege exist. Sure, the guy with the gun can force whatever he wants, but that doesn’t make him an economist. Even the guy with the gun would need an economist.

    I suggest you alter your example to include an economic board of governors and they will tell the guy with the gun what to do, after all, only the economists could introduce the concept of money to get us beyond barter and the guy with the gun, would need their money to buy bullets. I know you’ll tell me he has the only gun so he doesn’t actually have to fire his bullets, just threaten with them. But, the fact is that when a guy has a gun like that, he must shoot some people every now and then for good measure. Sure, if he’s only got twenty subjects, he may not want to kill them, but perhaps there are some poor people with stuff to plunder on the next island. More bullets, more money, more power. Ah, the wonders of the political economy. This is better than monopoly. 😉

  6. WJ says:

    “If ten people are stranded on a desert island and only one of them knows how to catch fish, he can trade his fish to others who pick coconuts, build shelters, or offer other goods and services. A pricing structure will develop.”

    Sure, he *can* do this, I suppose. But to think that he *will* do this is to make all sorts of assumptions about the background beliefs and culture of the ten people on the island. (It is Rawls’s classic mistake–assuming that practical deliberation in such a scenario may be abstracted from particular modes of ethical and intellectual formation.)

  7. Tony says:

    As long as humans have bodies, and as long as bodies have material needs that use (and use up resources), nature implies scarcity for some things we need. As long as humans have fallen human nature, and as long as human societies are given to widespread sin, there will be uncharitable withholding of goods between men. So long, then, the law of supply and demand must needs be applicable.

    When those conditions cease to apply (plenitude of material goods, and/or universal charity), the law of supply and demand may wash away as irrelevant.

  8. Aaron B. says:

    I wasn’t trying to explain all economic effects, or to say that every human society will spontaneously develop market capitalism. I just think Woods is correct that the law of supply and demand is a law of nature like the law of gravity, not a human construct. Humans may construct economic systems based on the law of supply and demand, or to attempt to ignore it. But the basic concept — that the value of something goes up when the demand exceeds the supply — is always true, whether you’re talking about trading beads for land, wine for slaves, or stocks for bonds. People may try to override it with price controls or socialistic regulations, but the law is still there underneath, applying stress.

  9. WJ says:

    “the value of something goes up when the demand exceeds the supply”

    Grace seems to me to be a counterexample to this.

  10. Aaron B. says:

    Natural laws don’t apply to the supernatural.

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