------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (April 2005)
Jerry Z. Muller, _The Mind and the Market: Capitalism in Western
Thought_. New York: Anchor Books, 2003. xvii + 487 pp. $16.95
(paperback), ISBN: 0-385-72166-8.
Reviewed for EH.NET by Bruce Caldwell, Department of Economics,
University of North Carolina - Greensboro.
It is, sadly, a truism that people who are not economists often have
a hard time making sense of what economists say. We are caricatured,
often not without reason, as a profession mired in numbers and
mathematical models, with an impenetrable jargon and way of reasoning
all our own. Many non-economists are, as a result, often suspicious
of our views. This is frustrating to economists, especially to those
who feel that they have something important to say, which is, of
course, all of us.
Sometimes, though, non-economists do not understand us because they
ask questions or raise concerns that seldom occur to us. My
university Honors Program has a regular coffee at which different
topics are discussed each week. One time I led a discussion on the
topic of "money." I learned from that experience that there are a
large number of ways to talk about money besides its functions as a
unit of account, a facilitator of trade, and a store of value.
As Jerry Muller shows in his brilliant book _The Mind and the
Market_, there are also a large number of ways to talk about the
market system. Muller reviews what a number of modern (modern meaning
from about 1700 through the twentieth century) Western thinkers have
said about markets and capitalism. He includes figures that
economists might expect: Adam Smith, Karl Marx, Joseph Schumpeter,
John Maynard Keynes, Friedrich Hayek. But he also includes many that
most historians of economic thought would not think to include, among
them Voltaire, Hegel, Justus M=F6ser, Edmund Burke, Max Weber, Georg
Simmel, Werner Sombart, Georg Luk=E1s, Hans Freyer, and Herbert
Marcuse. Muller gives a full chapter to some of the thinkers, while
for others he links two or three together. As one moves from chapter
to chapter, the old tried and true dichotomies (left versus right the
first among them; many of the most trenchant critics of markets were
conservatives) pretty quickly fall away. Instead the effects of
markets on moral and cultural values, on such non-market institutions
as the family, the nation, the church, and other associative groups,
on senses of community and individuality, are the focus.
Given the space limitations of a review, I will mention only a few
whose ideas on capitalism and its institutions are likely to be
unfamiliar to economists. The French philosophe Voltaire (1694-1778),
propagandist for the Enlightenment and one of the first "public
intellectuals," praised the pursuit of self-interest, this because he
found it less dangerous than the pursuit of religious uniformity:
commerce, after all, brought together Catholic and Protestant, Muslim
and Jew, and made their peaceful co-existence profitable. A
counterbalance to Voltaire can be found in the writings of the German
conservative Justin M=F6ser (1720-94), who saw the changes being
wrought by both capitalism and cameralism as destroying the variety
of institutions and folkways that gave the many German principalities
of his day their vitality and identity. M=F6ser lamented the passing of
guilded master artisans and their replacement by wage labor and the
culture of the shopkeeper, who by importing goods from abroad wrecked
havoc on local markets. The Victorian poet and inspector of schools
Matthew Arnold (1822-88) didn't so much dislike markets as he did the
importation of market values into areas where they did not belong.
His critique of "philistinism" doubtless underlies the smirk that so
many economists encounter when they talk to humanist members of the
academy about restructuring institutions so that all incentives are
aligned. Max Weber (1864-1920) and Georg Simmel (1858-1918) both
emphasized how the emergence of capitalism affected how people think,
making the rational calculation of means and ends more ubiquitous.
Though the gains in efficiency from such a change of mind set are
evident, the danger for Simmel was that the pursuit of means would
cause us to lose sight as to which ends were most important, that, in
a phrase, the means would become the ends. His idea that too much
choice can be a curse should make sense to almost everyone, with the
possible exception of a choice theorist.
Muller's book has multiple virtues. First, though this is principally
a contribution to intellectual history, Muller seamlessly adds to it
illuminating background information drawn especially from economic,
but also from political, social and cultural history. Next, he has an
excellent eye for the telling detail or anecdote. Have you ever
wondered exactly who Burke was talking about when he said that the
"age of chivalry is over. That of sophisters, oeconomists, and
calculators has succeeded ..."? Muller tells you, on pages 132-33. (I
won't give away the specific references, but Burke's general point
was that though commerce could be a civilizing agent, this depended
on the presence of institutions and behaviors that developed
separately from markets, a theme to which Hayek, among others, would
return.) A third strength is that even when Muller writes about
people familiar to economists, he does so in a fresh and insightful
way. (For me, his interpretation of Schumpeter as an ironic writer
was wholly new, plausible, and helped clear up certain apparent
paradoxes in Schumpeter's writings.) Finally, the book is that rarest
of achievements, a scholarly contribution that is also well-written.
Muller's engaging style extends even to his encyclopedic footnotes,
which occasionally rival those of A.J.P. Taylor for the rapier touch.
(E.g., his sardonic comment on page 435, note 2, that one
three-volume work on Marx "entombs a large body of facts in a
Communist conceptual sarcophagus.") Though the book is enjoyable to
read, it is not always fun: the despicable treatment of the Jews by
European intellectuals of every stripe is, sadly, a frequent theme.
Because it is packed with information it is not a quick read, either,
but taken leisurely it is consistently pleasurable.
_The Mind and the Market_ would serve as a useful supplement to a
course in the history of economic thought, or it could be a text in
an interdisciplinary course on the assessment of capitalism in its
cultural context. But even if you do not use it in a course, it is
well worth reading. Something to note in conclusion: the subtitle for
the hardback, which was published by Alfred A. Knopf in 2002, was
_Capitalism in Modern European Thought_. The Anchor paperback changes
this to _Capitalism in Western Thought_ on its cover, but
incongruously the change was not made on the title page inside the
book.
Bruce Caldwell is an historian of economic thought at the University
of North Carolina - Greensboro. He is the General Editor of _The
Collected Works of F.A. Hayek_ and the author of _Hayek's Challenge_,
published in 2004 by the University of Chicago Press.
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