The End of Economic Man: Principles of Any Future Economics [Paperback]

George P. Brockway (Author)

Book Description

Publication Date: January 1, 1996

Providing a critique of conventional economics, this work seeks to return economics to its humanist roots. In a concluding essay new to this edition, the author urges readers to question polarization and its consequences.

Editorial Reviews

From Library Journal

In this wide-ranging work, Brockway revisits themes from his earlier work, Eco nomics: What Went Wrong, and Why, and Some Things To Do About It ( LJ 2/1/85). Here his idea that economics is a humanistic discipline is more forcefully expressed and its philosophical underpinnings more deeply explored. In spite of uneven chapters, his message of putting people at the heart of economics comes shining through. This work would be most accessible to readers with a broad background in economics and thus is most appropriate for large university libraries.
- Richard C. Schiming, Mankato State Univ., Minn.
Copyright 1991 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

About the Author

George P. Brockway writes a monthly column, "The Dismal Science," for the New Leader. --This text refers to the Hardcover edition.

Product Details

• Paperback: 336 pages
• Publisher: W. W. Norton & Company; 3rd edition (January 1, 1996)
• Language: English
• ISBN-10: 0393313522
• ISBN-13: 978-0393313529
• Product Dimensions: 8.2 x 5 x 0.9 inches
• Shipping Weight: 10.7 ounces (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #3,471,928 in Books (See Top 100 in Books)

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2 of 2 people found the following review helpful:

5.0 out of 5 stars An excellent economic tour de force, January 7, 2009

By 

PHILIP A. STAHL (COLORADO SPRINGS, COLORADO United States) - See all my reviews
(REAL NAME)   

This review is from: The End of Economic Man: An Introduction to Humanistic Economics (Hardcover)

I first purchased Brockway's excellent book about ten years ago, just before the dot-com meltdown. What he wrote made eminent sense, and is as relevant now - with 401k plans having melted down to the tune of more than $6 trillion, as it was then.

Some, who view Wall Street and its promised wealth as the keys to a happy retirement, may be shocked especially by Brockway's Chapter 10: 'Speculation: Why A Bull Market is a Disaster'. But he makes the eminent point that at root, investing in any market instrument except maybe money funds, is no different from gambling in Vegas, and a "zero-sum" game.

In the end, all "Bull markets" do is set the ordinary person, who can least afford it, up for the next fleecing. Why are Americans so ready and willing to be fleeced, as those who have been picked clean in the Madoff mess? Mainly because our economy no longer words true productivity, as Browkway notes (Chapter 12) but rather speculation. Indeed, what we now have is a highly leveraged speculative economy.

This has also been documented in a number of books, among which the best is perhaps William Wolman's and Anne Colamosca's `The Judas Economy: The Triumph of Capital and the Betrayal of Work', 1997).

Brockway himself has noted that before about thirty years ago one had a 'productive' economy and a 'speculative' economy (based in Wall Street). There was more or less a balance between them, and the nation as whole benefited as a result.

Real productivity kept growing because real investment was made in hands-on materials, plant, research and labor. Most everyone benefited, including workers - via real (defined benefits) pensions (not '401ks') as well as higher wages, and companies that produced REAL goods.

Sometime after Reagan was canonized, in the 1980s, the speculative economy - which up until then had been kept in the background- began to take control. A number of steps instituted by Reagan led to the Michael Milkens, Ivan Boeskys and that lot. This also probably laid the fertile soil for our own WorldComs, Enrons, and Arthur Andersen type funny accounting.

One step was the Bank Holding (De-regulation) Act of 1984, which sped the way to speculative excesses resulting in travesties such as the S&L scandal in the late '80s.

One would have seriously thought the legislative infrastructure would have learned from that - but oh no, they didn't. In 1995, congress repealed the right of investors, shareholders to sue companies. That essentially removed the last private solution that would've kept the criminal speculators (we see today) at bay.

Too much big money from the corporate campaign contributors iced it.

Just as their money has been desperately trying to cook up a perfidy of a bankruptcy law- and has left a corporate "reform" law that isn't worth much more than the paper it's printed on. (Since it excludes independent audit provisions, and still refuses to count stock options for CEO maggots as expenses).

But I digress.

By 1987 and the October Market crash, the speculative economy had sucked nearly $1 trillion from people who had invested, and could least afford to lose money. However, they were constantly besieged with the 'buy and hold' mantra to ready them for the next plucking.

Meanwhile, a host of factors contributed to the speculative frenzy and fed it such as:- the passage of the 401k as a substitute 'pension' plan which would replace defined benefits (in real money) that had been received until then.

Thus, workers were now expected to place their savings - whatever they could muster - at the mercy of a market that was anything but merciful. Basing future retirements on 'phantom money' and the shenanigans of shysters on Wall Street (see e.g. 'License to Steal: The Secret World of Wall Street Brokers and the Systematic Plundering of the American Investor', 1999).

Then add to this morass the constant shrinkage of bank (pass book) interest rates, as well as CDs - forcing vulnerable people to chase yield in risky vehicles for which they were never prepared. These items drove millions of average Janes and Joes into the 'market' who otherwise may never have ventured there. Just as, before 1929, millions of ordinary folk were driven into the infamous 'investment trusts' that caused them to lose everything.

These 'investment trusts' were the forerunners of today's mutual funds) and then - as now - touted as "the little guy's way to enter the stock market".

The more recent piling into the market with 401ks, IRAs, etc, resulted in a never-before -seen phenomenon. What mass speculation did was to drive P/E ratios (the price to earnings of stocks, and averaged out, for mutual funds) to incredible overpriced magnitudes. Some stocks and funds were trading at over 30 times earnings just before the '87 crash, and all during the 90s the average was at 45 times earnings. This was nuts, disclosing grossly overvalued stocks- and (as we now know) a speculative bubble..

At the same time, one beheld the essential disappearance of dividends. Their amounts diminishing in inverse proportion to the soaring P/E ratios. Some 1998-99 stats cited dividends of barely one cent on the dollar for each dollar of return. You can't make any money like that - and all you have left is bogus money, or phantom money. Which is nothing to base a future on.

As prices rose ever higher, with ever more people hoping to strike it rich. Many even taking out second mortgages. They actually thought they could grab the proverbial 'free lunch'. (Since their share prices were so much in excess of what their holdings were actually worth).

This chasing of phantom gains by speculation in the stock market - in fact - caused the underfunding, under-investment in the REAL economy. Not the speculative one. Thus, as money was removed from the spending stream and injected into speculation, real corporate infrastructure - including for better (improved) plant, research, labor was removed.

Instead it was put into the hands of Wall Street's denizens who used it to generate their own profits and enrich themselves. (Since each exchange added to their commissions). At the same time, companies - trying to adhere to the Wall Street line and tempo- sought to jack up yields. Not by any REAL increase in production, but by using financing tricks, smoke & mirrors- such as we beheld at Enron. (Which set up over 400 dummy companies offshore so they could transpose debt and hide losses).

In effect, the speculative economy had intruded into and contaminated what ought to have been Main Street business. Now, added to this, the specter of Social Security privatization - pushed avariciously by Wall Street, cynical politicos, media drumbeaters, and all those determined to finally kill FDR's program of social insurance.

That's not all. They know any privatization will convert remaining public funds into total speculation and a total speculative economy. For years- hell, decades- the Street's parasites will feed off commissions. After all, it regards the folk of Main Street as "chickens to be plucked". (`The Street's Dark Side', Wall Street Journal, Dec. 23, 2002, p. C1)

Lest people forget how we arrived at this sorry pass- where privatization could even be remotely considered- recall it was Reagan that voraciously began raiding the Social security trust funds to cover the deficits he was creating by his inflated military spending. (Even so, in its wake, the U.S. mutated from world's foremost creditor to number one deadbeat....er debtor).

Nothing will improve, as Brockway notes, until we regain the equilibrium that once existed between speculation and actual production. Until the REAL productive economy is restored - including re-ascendancy of labor in relation to capital. (See e.g. 'The Judas Economy- The Triumph of Capital and the Betrayal of Work' by Anne Colamosca and William Wolman).

Brockway's genius in addressing all the effects of the above history, is to tackle in turn crucial financial concepts in each chapter and render them understandable to the serious layperson. ALL of his chapters are essential to read, from the Introduction: 'Why We Have Economics?' to Chapter 2: 'The Three Antimonies of Greed', to Ch. 3 'Why Physics is Value-Free and Economics Isn't', to perhaps his two best: Ch. 5: 'Money - The Distinguishing Idea of Economics, and 6: Reformulating the Law of Supply and Demand'.

For those with ambitions to invest and get rich, I heartily recommend reading Brockway's Ch. 9 'CapitalL Saving and Investing' and Ch. 10: Speculation, as well as Ch. 12: Productivity - Why Micro and Macro Don't Always mix.

For those who have lost jobs in the current downturn, please read Chapters 14 ('Inflation: The Myth of the Full -Employment Tradeoff) and 15 ('Inflation II: The Bankers' Classic COLA). You will never look again at bankers or the financial class the same way, after you have been deprived of your means of sustenance.

Brockway also doesn't stint on supportive or ancillary material, furnishing nearly 40 pages of Appendices - which include sections on the money supply and economies of scale.

Right now, with corporate campaign financing of elections still engrained, I see no one in the political arena with the inclination to do what's needed as Brockway advocates. As he takes those in the sights to task (p. 228):

"It is an open question whether our morale is so corrupt, our power of empathy so feeble, and our interest in economics so meager that it would take another depression to make resumed reform possible"

This quote is given in the context of his referencing... Read more ›

0 of 1 people found the following review helpful:

5.0 out of 5 stars MUST READ!, July 21, 2009

By 

Cuddy (Rockford, Illinois) - See all my reviews

This review is from: The End of Economic Man: Principles of Any Future Economics (Paperback)

Wow. This book has 1 review only. I took home 5 books from the library on economics and financial history to try to beef up on a subject that I didn't have a decent cultural literacy of and this was the only enjoyable book. This book is a masterpiece. For those of you who may of had the regular macro and micro intro classes, but feel like you don't really understand economics, this book is for you. It's very comprehensive, but completely readable at all times (on occasion a word might need to be looked up), and destroys classical economics as having the fallacy of being determined (so many subjects tend to leave out the problem of freedom...people hate talking about freedom..they don't like to spend time on an abtuse philosophical concept..but it's necessary! He uses common sense to destroy commonly held so-called common-sense beliefs in the economy. This book does everything it set out to do and more. Get it!