Andrej Školkay

By Andrej Školkay, published in the Journal of Economics / Slovak Academy of Science in 14-09-2011

Tomáš Sedlá?ek’s book draws attention at first glance for several reasons: first, he is a comparatively young author (born 1977) with an intriguing professional background; second, his book comes recommended by several Czech public figures (former president Václav Havel, economist Ji?í Švejnar, priest and scholar Tomáš Halík, talk show host Jan Kraus); and third, it covers a broad swath of history (from the beginnings of Western culture to the current, postmodern era), and has a nontraditional topic, title, and approach.

What, then, is The Economics of Good and Evil about? The author is, fortunately, very clear in his intentions. On page 17 he states: “The aim of this book is to portray the development of our view of the economic dimension of man, and to reflect back on it.” The book’s underlying purpose is a call to return to the original moral dimension of economics, to a less mechanistic and materialistic model of economic research, and to lower levels consumption. The fundamental analytical or philosophical and economic questions posed by Sedlá?ek are the following (pp. 18, 106, and 201): Is there such a thing as good and evil in economics? Does it pay to do good, or is doing good outside the economic calculus? Is humanity selfish by nature? And can selfishness be justified if it contributes to the general welfare? Can we rely on the goodwill of thousands of individuals, or does society need to be coordinated from above? In which areas of human activity can the spontaneous market process achieve optimal results? If economics is guided by maximizing utility, why do we never mention relaxation and the art of reflection? For the most part, these are not new questions. In fact the opposite is true. What is novel is the author’s methodological approach—a mixture of anthropology, mythology, religion, philosophy, sociology, and psychology—culmi-nating in an “economics of good and evil.” In the first part of the book, Sedlá?ek focuses mainly on the little-known connections between mythological and religious ideas and past and present understandings of research, the importance of commerce, the value of material and nonmaterial incentives, the chang-ing meaning of such concepts as solidarity, time, and progress, as well as perceptions of the foundations of civilization itself. The author gradually (see for example pages 54 and 101) questions the fundamental principles of Adam Smith, in particular his “invisible hand of the market,” i.e., the supposed transformation of private vice and self-interest into the common good. Sedlá?ek writes (p. 54): “Only recently has economics again come to realize the importance of morals and trust—by assessing the quality of institutions, judicial standards, business ethics, corruption, etc.” Later (pp. 78 and 163) the author even goes so far as to claim that the principle of the invisible hand is wrongly interpreted or mistakenly connected with the moral principles of self-interest and egoism supposedly asserted by Smith. Sedlá?ek cites another one of Smith’s works (The Theory of Moral Sentiments) in which the Scottish philosopher rejected the teachings of hedonism and the explanation of all human actions by laws of rationality. However, later Sedlá?ek states that Smith had one opinion as a moral philosopher and another as an economist, or that he did not give a clear answer to the question, or that he gave two different answers to the same question (pp. 164–172), and as a result, “to this day, there is no satisfactory answer to the question of what Smith really meant by self-interest” (p. 169). The difference, then, is that while Smith spoke of self-interest, the earliest interpretations of his work often spoke of egoism, which is significantly different. Sedlá?ek reminds us that the brutally reductive interpretation of the invisible hand, in the shape of the theory that private ethics are irrelevant as long as an action contributes to the common good in the end (p. 153), was the invention of the philosopher Bernard Mandeville, in The Fable of The Bees: or, Private Vices, Publick Benefits. Sedlá?ek also critiques the foundations of European scientific thinking, laid down by Descartes, as too mechanistic and mathematical (p. 143–44). In Sedlá?ek’s view (p. 147), “prescientific man” was actually better off, since he was aware of the limits of his understanding. As for the question of whether it pays to do good, we find the response in the Jewish faith to be not very optimistic: “the relationship arises by chance” (p. 57); or “Good and its rewards have no correlation” (p. 58); although some take comfort in the elegant ancient Hebrew solution to this moral dilemma: “Doing good should be its own reward” (p. 58). Sedlá?ek goes on to point out that Christianity solved this serious theoretical and practical problem by creating the concept of “heaven,” that is, a place where moral and immoral acts are sorted out and either rewarded or punished. One negative of this solution was that our world and life on earth became (potentially) evil and unimportant. The result of this ideological transformation in Christianity—at least in the teachings of some apostles—became morally problematic and laid the theoretical groundwork for, or at least justified, the advanced market economy. The author demonstrates this and other dilemmas of early Christian thinkers in his comparison of the often fundamentally opposing views of Saint Thomas Aquinas and Saint Augustine. Sedlá?ek points out the deep paradox in Christian teaching (although it’s not clear why he claims this is a paradox in all religious moral instruction; p. 99) that the Fall of Man began with his tasting of the fruit from the Tree of the Knowledge of Good and Evil. Although he places more emphasis on the issue of “good and evil” in this act, the question remains whether or not “knowledge” itself is, or was, more important. In other words, was Christianity interested in knowing anything at all, or “just” good and evil, given that, logically, only God could decree the clear and absolute truth. At the beginning of chapter 4, Sedlá?ek lays out the individual “economic systems of good and evil.” Addressing the question of whether or not society needs coordination, he writes: “Society does not require a tyrant, or central planners, but guides. So economics too must come to be the art of steering rather than being an instrument with which we seek to redirect, if not wholly reshape, the river.” The author could be criticized for his frequent use of the technique of putting forth a thesis and then using the opinions of other authorities to support it. In most cases, it seems to me that they are actually the author’s ideas, which he has first shaped with his own thinking and words and only afterwards backed them up with original sources. In conclusion Sedlá?ek calls for more applied theory and behavioral research (though he doesn’t actually use the term) on man as an economic creature (homo economicus). He is skeptical of the prognostic value of economics, stating, “Economics will remain forever dependent on ontology after the fact” (p. 209). Nevertheless, paradoxically, he also remains skeptical of the explanatory power of economics: “To this day it is unclear to economists what ends or what causes an economic crisis” (p. 210). It is certainly an intriguing book, in spots controversial, and no doubt it will find its place among the textbooks of economics and philosophy in not only the best programs for studying economics, but at all of the best universities.