Adam's Fallacy: A Guide to Economic Theology [Hardcover]

Duncan K. Foley (Author)

Book Description

ISBN-10: 0674023099 | ISBN-13: 978-0674023093 | Publication Date: September 30, 2006

This book could be called “The Intelligent Person’s Guide to Economics.” Like Robert Heilbroner’s The Worldly Philosophers, it attempts to explain the core ideas of the great economists, beginning with Adam Smith and ending with Joseph Schumpeter. In between are chapters on Thomas Malthus, David Ricardo, Karl Marx, the marginalists, John Maynard Keynes, Friedrich Hayek, and Thorstein Veblen. The title expresses Duncan Foley’s belief that economics at its most abstract and interesting level is a speculative philosophical discourse, not a deductive or inductive science. Adam’s fallacy is the attempt to separate the economic sphere of life, in which the pursuit of self-interest is led by the invisible hand of the market to a socially beneficial outcome, from the rest of social life, in which the pursuit of self-interest is morally problematic and has to be weighed against other ends.

Smith and his successors argued that the market and the division of labor that is fostered by it result in tremendous gains in productivity, which lead to a higher standard of living. Yet the market does not address the problem of distribution—that is, how is the gain in wealth to be divided among the classes and members of society? Nor does it address such problems as the long-run well-being of the planet.

Adam’s Fallacy is beautifully written and contains interesting observations and insights on almost every page. It will engage the reader’s thoughts and feelings on the deepest level.

(20061125)

Editorial Reviews

From Publishers Weekly

Consciously written as an alternative to Robert Heilbroner's classic The Worldly Philosophers, this book sets out to explore and critique the lives and ideas of the great economists. Both books begin with Adam Smith, though Foley discusses only eight of Heilbroner's 16 economists and gives less detail on each. Where Heilbroner celebrates the overlap between economics and other human activities, Foley criticizes "Adam's Fallacy," the artificial division between the economic sphere, in which pursuit of self-interest leads to social good, and the social sphere, in which good results from unselfish actions. Uncritical acceptance of the fallacy, which the author labels "economic theology," leads to the belief that short-term economic gain necessarily favors vague, long-term social gains. Unemployment and cultural destruction caused by free trade, for example, are ignored from a naïve faith that unrestrained trade leads to a greater good for a greater number. Foley finds some brilliance and rigor in the works of all his subjects, while also accusing them of sloppy thinking unsupported by data, which has led to heartless, misguided policies. However, his specific criticisms are mild and technical. Readers who want an abridged version of Heilbroner will like this better than readers who want to understand the fundamental errors of economics. (Sept.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review

Foley gets deep into the analytical content of major schools of thought, ranking Adam's Fallacy up there with Heilbroner's classic. (Robert Solow New York Review of Books )

So what is 'Adam's Fallacy?'...It is the idea that the economic sphere of life constitutes a separate realm 'in which the pursuit of self-interest is guided by objective laws to a socially beneficent outcome'...Professor Foley's book is simultaneously an introduction to economic theory and a critique of it. It is his version of the classic introduction for the economically challenged by Robert L. Heilbroner, The Worldly Philosophers, now in its seventh edition. Adam's Fallacy concentrates more on the worldly philosophies rather than on the philosophers, on economic theory rather than on the characters and events that along with Mr. Heilbroner's masterly storytelling gave The Worldly Philosophers so much color and verve...By questioning economic theory's cordoning off of an economic spheres of life ruled by its own laws and expertise, Professor Foley is implicitly proposing limits to the secularization that is an underlying characteristic of modernity. Secularization has meant that in a cultural transformation, major areas of human activity set themselves up as quasi-autonomous, with their own standards, authorities, and guiding principles. (Peter Steinfels New York Times )

[A] passionate book, to be welcomed in a discipline notably devoid of passion. [Adam's Fallacy] can be read for pleasure and enlightenment by economists and non-economists alike. (David Throsby Times Literary Supplement )

See all Editorial Reviews

Product Details

• Hardcover: 288 pages
• Publisher: Belknap Press (September 30, 2006)
• Language: English
• ISBN-10: 0674023099
• ISBN-13: 978-0674023093
• Product Dimensions: 8.2 x 5.8 x 1.2 inches
• Shipping Weight: 12.8 ounces
• Average Customer Review: 4.1 out of 5 stars  See all reviews (9 customer reviews)
• Amazon Best Sellers Rank: #953,835 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

24 of 25 people found the following review helpful:

5.0 out of 5 stars a very solid book, May 27, 2008

By 

balyzu (Princeton, NJ) - See all my reviews

This review is from: Adam's Fallacy: A Guide to Economic Theology (Hardcover)

People who wrote negative reviews of this book could at least appreciate Foley's honesty: he unequivocally states it is his point of view and throughout the book he identifies himself as a political economist. He does not pretend he is some "positive scientist" like Milton Friedman did (the latter also used some of the most arbitrary and ridiculous assumptions in his work). This book presents an honest and well-argued opinion. Throwing the Soviet Union into the comments is a complete straw man and has no relevance whatsoever.

This book presents the ideas of classical political economists, Marx, marginalists, as well as 20th century economists like Keynes, Hayek and Schumpeter. Insights are abundant: Smith believed in limited laissez-faire (for example, he believed in the infant industry argument), Marx's vision looked quite similar to capitalism (as it included a surplus product), Keynes differentiated between risk and uncertainty, etc. It is not an easy read as some passages get somewhat dry and technical (e.g. when theories of value are being discussed). Utlimately, this book has a wealth of ideas. Foley includes a nice list for further reading for those interested and an appendix with certain concepts explained (I thought the graph with Ricardo's analysis of land and rents was very helpful).

My only complaint is that it could have been longer. For example, Foley discusses Smith's division of labor quite a bit, but forgets to include Smith's claim that without government intervention to provide education, division of labor could also render human beings "as stupid and ignorant as it possible for a human creature to become". The discussion of Schumpeter and Veblen are painfully short and leave one wanting more. Foley mentions neoclassical synthesis in passing and claims it proved "unstable ideologically". It would be great to see this shift discussed in detail, but Foley moves on. Of course, I might be too demanding. Nevertheless, "Adam's Fallacy" provides food for thought for anyone interested in the history of economic ideas.

11 of 12 people found the following review helpful:

4.0 out of 5 stars 4.5 Stars-Excellent book-Horrible Title, July 1, 2007

By 

Michael Emmett Brady "mandmbrady" (Bellflower, California ,United States) - See all my reviews
(VINE VOICE)    (REAL NAME)   

This review is from: Adam's Fallacy: A Guide to Economic Theology (Hardcover)

Foley is correct that "Modern" economic theory(Monetarism,Rational Expectations,Real Business Cycle theory,New Classical Economics, Efficient Market Hypothesis,etc.),which is based on the false claim that all markets can be modeled either as being normally distributed, or " as if " they were normally distributed,assumes stability and a natural self adjusting,self correcting invisible hand mechanism that,operating through the process of labor specialization,division of labor,extension of the market,and economic growth, transforms private greed into a social optimum.These theories model the economy as if it were inherently stable and subject only to exogenous shocks.They assume away the inherent ,internal,endogenous shocks created internally by both technical(capital goods) and financial innovation ,as well as the speculative shocks caused by speculators leveraging their bets with huge infusions of bank loans leading to the inevitable bubble and collapse.
Adam Smith did not make this error or commit "Adam's Fallacy".On pp.734-735 of the WN,1776,Modern Library (Cannan)edition,he makes it clear that the economic growth process of the Invisible Hand ,self interest,and the division of labor creates major undepletable,negative externalities(social,intellectual,martial,political,and moral) that impact practically the entire work force.The only way to counteract this is through government action.Foley needs to completely change the title to David's(Ricardo),Jeremy's(Bentham),and James'(Mills)Fallacy.

12 of 14 people found the following review helpful:

5.0 out of 5 stars Economic Theory as Theology, September 7, 2007

By 

Arthur L. Sensenig "aging reader" (Silver Spring, Maryland) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: Adam's Fallacy: A Guide to Economic Theology (Hardcover)

This is a truly excellent book. As a long time student of the history of economic thought, this book, subtitled "A Guide to Economic Theology" offers a truly insightful perspective on Smith and other classical economists. It has always been my belief that there are a lot of people (some are pompous neo-cons) who quote Adam Smith and have never read him. The author quite effectively dismantles the argument inherent in "Adam's fallacy"; that is by acting in our own (avaricous)self interest, we are acting for the public good; that we must accept injustice in the present to allow for distributive justice over time. Markets for goods, services, and labor do not always produce efficient, let alone just outcomes.

The book should be required reading - not just in Economics Departments, but for elected officials as well. Three cheers for Duncan Foley!!