Quotation of the Day…
… is from page 230 of the second edition (1985) of Deirdre McCloskey’s brilliant textbook for courses in intermediate microeconomics, The Applied Theory of Price:
In any case it is a mistake, though common, to confuse the moral issue of the goodness or badness of moneymaking with the descriptive issue of how common it is. In view of the confusion, the testimony of the money-makers often misleads on the matter of how common it is. You will hear a truck driver declaring that he does not work for money but for his family; or a lawyer that she does not work for money but for the good opinion of her colleagues; or an owner of a shoe factory that he does not work for money but for his own independence and for the well-being of his workers. The declarations can be honest and even true, yet can all be consistent with the pursuit of money. Money buys these things. Even when it is not the plain motive, then, moneymaking pops up.
DBx: Yes.
Money is a means. No one but a seriously deluded person works – produces – to obtain money as an end in itself. (And, by the way, such a deluded person, before perishing from self-imposed poverty, is a benefactor to his or her fellow human beings. This person dies with lots of literal cash on hand while many of his fellow human beings consume the fruits of his productive efforts – none of which fruits he or his family consumed, self-destructively obsessed as he was with accumulating money as an end in itself. Of course, this person would have been an even greater benefactor of humankind had he or she consumed just enough to live healthily into an old age, all the while producing and accumulating in monetary form all of his or her wealth beyond that which had to be spent to remain alive and healthy.)
Putting aside cartoonish characters such as the one mentioned in the previous paragraph, ultimately all motives for human action – including those actions commonly identified as “economic” – are non-monetary. Some of these motives are material: everyone must eat and be housed and clothed. And, it’s true, some of these material motives are crass and shallow: Joe uses some of his monetary earnings to get drunk on Friday night while Janet feeds some of her monetary earnings into a slot machine. But other of these motives are not material: Jane spends much of her monetary earnings on piano lessons for her children while Jerry donates a portion of his monetary earnings to a community children’s theater and uses another portion to improve his learning by subscribing to The Rest Is History podcast. (Note: I highly recommend this podcast simply because I listen to it on an almost daily basis and enjoy it immensely. No one appealed to the homo economicus within me to offer any tit-for-tat exchange for a mention on my pedestrian blog.)
Those many pundits, professors, and preachers who – fancying themselves morally superior to “market fundamentalists” or “neoliberal economists” – do not know that they’re talking about when they denounce the economic case for free market as being shallow and unrealistic because of its alleged reliance on the assumption that human beings are motivated overwhelmingly by money. These pundits, professors, and preachers either have not read (or read carefully) the works of the market’s greatest champions – scholars from Adam Smith through Philip Wicksteed and Edwin Cannan – to Ludwig von Mises, Lionel Robbins, F.A. Hayek, W.H. Hutt, Milton Friedman, Armen Alchian, James Buchanan, Israel Kirzner, Harold Demsetz, and Deirdre McCloskey – or they intentionally distort the clear meaning of economic action found in these works.
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