Highlighting the dangers of thinking like an economist

BOOK REVIEW The Dismal Science: How Thinking Like an Economist Undermines Community by Stephen A Marglin; Harvard University…

BOOK REVIEW The Dismal Science: How Thinking Like an Economist Undermines Communityby Stephen A Marglin; Harvard University Press; $35 (€22)

Is economics a "dismal science"? It had been characterised as such by the nineteenth century British historian and author T Carlyle. This characterisation has persisted since, and has become popular in both academic and non-academic circles. In this book, Stephen A Marglin argues that the reason why economics is "dismal" is its devastating effects on community.

At first sight, Marglin's statement might seem surprising: why would a particular area of knowledge like economics contribute to the destruction of community? The answer provided is that what he calls the "ideology of economics" fosters both the self-interested individual and the market system.

In a world where markets, defined as self-regulating systems, allocate resources, set prices, and determine the distribution of income, there is no space for community anymore. When services like insurances, nursing or health, are sold instead of being provided through community links and mutual aid, impersonal market relationships are substituted for personal relationships of reciprocity.

The relevant questions are, then: what is community, and why is loss of community a negative? After all, one could argue that communities are not always a good thing, as they impose binding constraints on their members; constraints that many people would probably be very happy to throw off.

As community weakens, individual freedom would then increase. Marglin does not examine this counter-argument explicitly, but he provides all the elements for rejecting it. First, community is not like altruism in some economic models. It is defined as "a kind of social glue, binding people together in relationships that give form and flavour to life". It is an essential element of our identity, central to who we are. Community is not just only about economics and politics, it is also about sociality. It provides continuity among the generations by providing a shared memory and a common vision of the future. Marglin shows convincingly that losing community means dissolving our identities.

To analyse the disastrous consequences of the dominant economic theory on community, Marglin leads the reader into refined and fascinating analysis based on different fields of knowledge like psychology, anthropology, philosophy, sociology and history.

The scope of the analysis is very broad and deals with all the key issues related to the author's topic. Marglin, being an unorthodox economist, it is hardly surprising to find him making a clear case against mainstream economic theory.

It is more surprising to find that he does not really analyse the serious efforts made by some unorthodox economists to take community seriously: while his account of the external critique of economics is brilliant and convincing, Marglin has downplayed the internal critique. Probably aware of this limitation, he dedicates an appendix to the limitations of "economic dissents", but this appendix is focused once again on dissent inside of the mainstream.

The main drawback with Marglin's discussion is that an analysis of communitarianism is missing. Communitarianism can be defined as a vision of society where people are not defined mainly as rational individuals, or as citizens of a nation state, but primarily as members of communities - be it religious, social etc.

The key issue is then why, with the acceleration of globalisation promoted by mainstream economists, has communitarianism grown?

Marglin is right to underline that the expansion of markets has undermined traditional communities, but at the same time new communities have made their appearance along with the ideology of communitarianism. If communitarianism is exacerbated by the expansion of markets, doesn't this mean that this expansion encourages new forms of communities even as it destroys old ones?

Despite shortcomings, on the whole, Marglin's demonstration of the relationship between mainstream economics and the destruction of communities is seductive, convincing, and well documented.

Dany Lang is a lecturer in economics at National University of Ireland, Galway