Harper Collins, 2009, 338 pages, C$29.95 hc, ISBN 978-1-55468-395-6
Given the importance of money, it almost goes without saying that a good understanding of the world goes hand-in-hand with a good grasp of economics. “Follow the Money” isn’t just good for crime thrillers: it’s a solid way to figure out what’s really happening around us. Unfortunately, economics isn’t called the dismal science for nothing: often politicized into uselessness, the study of money has attracted, well… people with money, intent of using the results to further their political aims. As a result, activists from the right and the left now come with preconceived notions about economics that are actively harming any rational policy discussions.
To truly understand economics, argues Joseph Heath in Filthy Lucre (subtitled, somewhat incompletely, as “Economics for people who hate capitalism”) we have to let go of a few myths, cherished preconceptions and long-held statements of faith about economics. To this end, he presents and demolishes twelve fallacies about economics: six that are favoured from a right-wing perspective, and six that are usually held by the left.
Heath isn’t an economist; he’s a philosophy professor at the University of Toronto and already well-known in Canada as one of the country’s most interesting intellectuals after a few well-received books such as The Efficient Society and The Rebel Sell. He’s a skilled rhetorician, and Filthy Lucre is at its best when it starts poking at beliefs that have been ingrained in us through lazy consumption of political debates. (His metaphors aren’t always convincing, but he can usually offer further sources for readers who would like a deeper understanding of his arguments.)
In the first half of the book, he demolishes a few right-wing fallacies: Libertarianism is the first target in explaining why capitalism isn’t natural. In successive chapters, he argues that incentives aren’t all that matters, that competition isn’t always better, that taxes are usually at their optimal level, that international competitiveness isn’t required and that moral hazard doesn’t necessarily embed morality into economics. Game theory figures heavily in his metaphors and readers are almost guaranteed to come away from this section with a better understanding of economics in general.
What’s more interesting, however, is the second section which takes aim at economic fallacies cherished by the kind of left-leaning readers most likely to pick up a book on “economics for people who hate capitalism”: Here, Heath serves some tough counter-examples to people who still believe that prices must be set by governments, that the pursuit of money is evil, that capitalism is doomed, that equal pay is an ideal, that all wealth accumulates to the top or that equality is more desirable than efficiency. If the book’s first section is fun to read, this second half makes the book even better, because it forces equality-minded left-leaning readers to confront their own prejudices with colder facts and ponder the trade-offs required to get to their shiny progressive utopia.
Anyone who’s familiar with Heath’s previous work will find a continuity of argument in Filthy Lucre: Heath may be writing from a deep and self-acknowledged left-wing perspective, but he’s remarkably successful at explaining the status quo, its advantages over most alternatives and the wonders of steady incremental changes. The book argues for a keener, more nuanced understanding of the current system before setting out to improve it, and it’s hard to argue with such even-handed reason.
After The Efficient Society and The Rebel Sell, Filthy Lucre also marks a third great popular book in a row for Heath. If anyone has missed his work so far, don’t wait for another excuse: Read the books and wait for his next one –he deserves a spot on anyone’s must-read list.