Filthy Lucre: Economics for People Who Hate Capitalism
Encyclopedia
Filthy Lucre: Economics for People Who Hate Capitalism is a 2009 book by Joseph Heath
.
The book is organized around twelve fallacies or myths associated with economics, six of which are common on the left, and six of which are common on the right. It considers ideas like that the government should get out of the way of markets; that competition and Adam Smith
’s invisible hand
improve efficiency; the 'psychopathic' nature of corporations; and the inevitability of capitalism’s collapse.
The recent economic downturn has seen a rise in books on capitalism, finance, and the market.
, Heath argues that the government should operate only in markets where a collective action problem occurs and not in markets where this problem is absent (where it is a race to the bottom not a race to the top). In these good-competition markets Heath defends price gouging
, outsourcing
and free trade
(criticizing price-fixing, trade protectionism and fair trade
). In bad-competition markets Heath argues that by risk-pooling the government provides a natural and optimal solution for everyone. He defends the free market against the lump of labour argument, arguing that increases in efficiency are win-win situations despite job loss and other consequences. Likewise he describes international trade as non-exploitative. Trade specialization increases efficiency thereby increasing the price value of one's labour. This is because the price value of labour is a function of the efficiency of an economy.
In the book Heath criticizes the idea that tax-paying is inherently different from consumption, and that the idea of a tax freedom day
is flawed:
Joseph Heath
Joseph Heath is a philosophy professor at the University of Toronto. He also teaches at the School of Public Policy and Governance. He received his BA from McGill University, where his teachers included Charles Taylor, and his MA and PhD degrees are from Northwestern University, where he studied...
.
The book is organized around twelve fallacies or myths associated with economics, six of which are common on the left, and six of which are common on the right. It considers ideas like that the government should get out of the way of markets; that competition and Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
’s invisible hand
Invisible hand
In economics, invisible hand or invisible hand of the market is the term economists use to describe the self-regulating nature of the marketplace. This is a metaphor first coined by the economist Adam Smith...
improve efficiency; the 'psychopathic' nature of corporations; and the inevitability of capitalism’s collapse.
The recent economic downturn has seen a rise in books on capitalism, finance, and the market.
Overview
The book is intended to clarify core ideas in economics which he feels are systematically misunderstood. As in The efficient societyThe Efficient Society
The Efficient Society: Why Canada is as Close to Utopia as it Gets is a popular book by Canadian philosopher and author Joseph Heath. First released in 2001, the book is Heath's attempt to explain why Canada 'works'. He argues that Canada's successes as a nation are largely attributable to its...
, Heath argues that the government should operate only in markets where a collective action problem occurs and not in markets where this problem is absent (where it is a race to the bottom not a race to the top). In these good-competition markets Heath defends price gouging
Price gouging
Price gouging is a pejorative term referring to a situation in which a seller prices goods or commodities much higher than is considered reasonable or fair. In precise, legal usage, it is the name of a crime that applies in some of the United States during civil emergencies...
, outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
and free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
(criticizing price-fixing, trade protectionism and fair trade
Fair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
). In bad-competition markets Heath argues that by risk-pooling the government provides a natural and optimal solution for everyone. He defends the free market against the lump of labour argument, arguing that increases in efficiency are win-win situations despite job loss and other consequences. Likewise he describes international trade as non-exploitative. Trade specialization increases efficiency thereby increasing the price value of one's labour. This is because the price value of labour is a function of the efficiency of an economy.
In the book Heath criticizes the idea that tax-paying is inherently different from consumption, and that the idea of a tax freedom day
Tax Freedom Day
Tax Freedom Day is the first day of the year in which a nation as a whole has theoretically earned enough income to fund its annual tax burden. It is annually calculated in the United States by the Tax Foundation—a Washington, D.C.-based tax research organization...
is flawed:
It would make just as much sense to declare an annual "mortgage freedom day", in order to let mortgage owners know what day they "stop working for the bank and start working for themselves". ...But who cares? Homeowners are not really "working for the bank"; they're merely financing their own consumption. After all, they're the ones living in the house, not the bank manager.