Mere Economics

Economists often despair at the general public’s lack of understanding of the social coordination mechanisms that are essential for a healthy society. Mere Economics, written by two economists, is a thoughtful and well-reasoned treatise designed to reduce economic ignorance. Art Carden and Caleb Fuller argue that successful social coordination depends on well-defined and enforced property rights and market signals, not an unusual position among economists. There are several things, however, that distinguish Mere Economics from most other books that are similar in nature.

First, Carden and Fuller put their arguments in an ethical context, arguing that the principles of economics fit well with Christian theology. Second, the authors present a coherent theoretical structure for discussing the application of economics to a range of issues. Third, a thorough bibliography is presented for almost every argument that they make. I take up each of these in turn.

The book is primarily an argument for a free society with economics as the major tool for understanding the importance of freedom and the use of markets. In addition to the economic arguments Carden and Fuller are careful to point out the biblical grounding of economic principles, citing relevant scriptural passages that support their general arguments.

For instance, the authors see scarcity as a result of the fall, with human action deeply marred by sin. The biblical Creation Mandate, however, provides justification for the goodness of work and entrepreneurial action to transform God’s world. In a world of well-defined and enforced property rights, profits are an appropriate reward for reducing the impact of the scarcity constraint. Cooperation through markets is a way of fulfilling Paul’s mandate (Philippians 2:3–4) to look “to the interests of others.” 

The authors, although strong supporters of economic growth through the market process, do not see increased income as the ultimate source of meaning and purpose. They argue that economic well-being is a major contributor to human flourishing but use biblical concepts and language to argue for goals quite apart from material wealth. Economics is useful in that it helps us to “participate actively, humbly, and effectively in restoration work” (245). And restoration work includes ordinary economic activity, buying and selling, the organization of production, and entrepreneurial activity. Economics is also useful because it aids our understanding of the many ways that good intentions can go wrong. 

The authors’ reasoning about the relationship between economics and theology starts with economic principles and then provides a link to biblical passages. That ordering means that the reader who is not interested in the theological justification for economic reasoning can still find value in the book. One can process the clearly articulated economic reasoning without drawing upon the theological arguments. 

Second, Mere Economics begins its arguments with a clear theoretical chapter. This gives a useful framework for their discussion of numerous policy issues. Their theory is presented as nine essentials and nine errors. What follows is a list of the essentials—the basic theoretical statements, and the errors that match each essential: 

Essential 1: Economics Is About Choosing 

Error 1: Economics Is Only About Money

Essential 2: People Have Purposes

Error 2: People Are Irrational

Essential 3: Every Choice Has a Cost

Error 3: People Have Rights to Things That Should Be Free

Essential 4: Incentives Affect People’s Choices

Error 4: Changing People’s Incentives Won’t Change Their Choices

Essential 5: People Make Incremental Choices

Error 5: Choices Are All or Nothing

Essential 6: Trade is Cooperation

Error 6: Every Trade Has a Loser

Essential 7: Cooperating in Markets Is Costly: Governments Regularly Make It Costlier

Error 7: Government Will Fix Society’s Problems If We Get the Right People in Power

Essential 8: Profits Tell Businesses They Are Helping People: Losses Tell Businesses Are Wasting Resources

Error 8: Businesses Profit By Exploiting People

Essential 9: Choices Have Unintended Consequences

Error 9: If It’s Bad For Someone It’s Bad For All

The theory is followed by twelve chapters that apply the economic principles to the modern world. Each chapter has several case studies that illustrate the importance of their theoretical framework for understanding a host of issues. 

Finally, this book is different from many others of a similar type in its careful citation of the wealth of research that supports their arguments. I count 551 footnotes, many containing multiple references to books and articles relevant to the authors’ arguments. The curious reader has ample opportunity to follow up on the arguments made in the text.

Mere Economics is good reading for anyone who struggles with understanding the modern liberal order and the benefits that markets provide. It can also be useful for those who are already convinced of the efficacy of a market order for dealing with human wants. Its clear presentation and numerous supporting references make for easy and convincing reading.

Two omissions exist, however. First, the economic and political system they defend depends on a particular concept of human rights, namely universal human dignity. The authors provide little direct connection between their concept of a God-created and a God-governed universe and their implicit endorsement of human equality. Human equality is a basic building block for the modern liberal order, an order the authors defend. For instance, their chapter 13, “Dominion and Domination,” is a clear argument for the importance of universal moral agency. 

There are strong arguments for the influence of the Jewish and Christian world view on the modern concept of universal moral agency. The authors could have drawn upon these arguments to explain their use of universal human dignity as important to their rights structure. For instance, Luc Ferry (2011, A Brief History of Thought: A Philosophical Guide to Living, HarperCollins) and Larry Siedentop (2014, Inventing the Individual: The Origins of Western Individualism, Penguin) provide strong evidence that the concept of all individuals as created in the image of God was crucial to the modern concept of rights.

Second, their analysis of the role of coercion is incomplete. Their Essential 7 argues that government regularly makes cooperation more costly. Their discussion of government programs provides strong evidence for this proposition. On the other hand, they argue “the rule of law and an ethical consensus are essential if property is to be transferred voluntarily and securely” (218). How does one develop and maintain the rule of law if, as they claim, coercion (government) makes cooperation more costly? The omission is puzzling because they cite important work by institutional theorists that argue for a limited role for government. For instance, there are seven references to the work of Douglass North and his coauthors—work that explicates the appropriate role for coercion. Is government (coercion) important for a functioning market order? Are there appropriate limits? 

Despite these omissions, Mere Economics is a useful and timely book. It makes a strong case for the use of appropriate property rights and markets as crucial elements of social coordination. It also provides a useful discussion of the costs of ignoring the economic principles that they advocate.