ECONOMICS



Liberal friendly quotes:

"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who belive themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back."
-- John Maynard Keynes

"After getting the first hundred pounds, it is more easy to get the second."
-- Benjamin Franklin

"A billion here and a billion there and pretty soon you're talking big money."
-- Senator Everett Dirksen, attributed

"When a man tells you that he got rich through hard work, ask him: 'Whose?'"
-- Don Marquis, quoted in Edward Anthony, O Rare Don Marquis

"A full pocketbook often groans more loudly than an empty stomach."
-- Franklin D. Roosevelt, speech, November 1, 1940

"The forces of a capitalist economy, if left unchecked, tend to make the rich richer and the poor poorer."
-- Jawaharlal Nehru, Credo

"Name the greatest of all inventors. Accident."
-- Mark Twain

"God forbid that India should ever take to industrialism after the manner of the west…keeping the world in chains. If [our nation] took to similar economic exploitation, it would strip the world bare like locusts."
-- Mahatma Gandhi

"A hundred times every day I remind myself that my inner and outer life are based on the labors of others."
-- Albert Einstein

"The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of [society's] evil… The owner of the means of production is in a position to purchase the labor power of the worker. By using the means of production, the worker produces new goods which become the property of the capitalist. The essential point about this process is the relation between what the worker produces and what he is paid, both measured in terms of real value. In so far as the labor contract is 'free,' what the worker receives is determined not by the real value of the goods he produces, but by his minimum needs and by the capitalists' requirements for labor power in relation to the number of workers competing for jobs. It is important to understand that even in theory the payment of the worker is not determined by the value of his product."
-- Albert Einstein, Why Socialism?

"The argument for laissez-faire capitalism is built on a contradictory view of liberty. Right-wing libertarians understand that state control of all economic activity is tyrannical: that the power to determine if and how people make a living is the power to enforce conformity. But they don't see that the huge transnational corporations that own and control most of the world's wealth exercise a parallel tyranny: not only do these behemoths unilaterally determine qualifications, wages, hours, and working conditions for millions of workers, who (if they're lucky) may "choose" from a highly restricted menu of jobs or "choose" to stop eating; they make production, investment and lending decisions that profoundly affect the economic, social, and political landscape of communities and indeed entire countries -- decisions in which the great majority of people affected have little or no voice. Murray defines economic freedom as "the right to engage in voluntary and informed exchanges of goods and services without restriction." Fine -- but if an economic transaction is to be truly voluntary and informed, all parties must have equal power to accept, reject, or influence its terms, as well as equal access to information. Can anyone claim that corporate employers and employees have equal power to negotiate their exchange? Or that consumers have full access to information about the products they buy? And if we're really interested in freedom, the right to voluntary and informed engagement in economic transactions has to be extended beyond their principals to others affected -- whether by plants that reduce air quality or rent increases that chase out shoe repair shops in favor of coffee bars. The inconsistency of the belief that economic domination by the state destroys freedom, while economic domination by capital somehow enhances it, is often rationalized by attributing the self-interested decisions of the corporate elite to objective, immutable principles like "the invisible hand" or "supply and demand" -- just as state tyranny has claimed to embody the laws of God or History. But the real animating principle of a free society is democracy -- which should include a democratic economy based on enterprises owned and controlled by their workers."
-- Ellen Willis

"Injustice was as common as streetcars. When men walked into their jobs, they left their dignity, their citizenship and their humanity outside. They were required to report for duty whether there was work or not. While they waited on the convenience of supervisors and foremen they were unpaid. They could be fired without a pretext. The were subjected to arbitrary, senseless rules... Men were tortured by regulations that made difficult even going to the toilet. Despite grandiloquent statements from the presidents of huge corporations that their door was open to any worker with a complaint, there was no one and no agency to which a worker could appeal if he were wronged. The very idea that a worker could be wronged seemed absurd to the employer."
-- Walter Reuther (on working life in America before the Wagner act)

"Once we begin distinguishing the many forms capitalism can take, analytic utility is lost by retaining talismanic terms like 'free market.' There is no national economy in the world today that is not a mixed economy, which also means that there is no market that is free, or even 'mostly' free. Rather, markets are structures that are culturally bounded, always regulated, and genetically dependent on government intervention for their reproduction. Never are they simply 'permitted.'"
-- Jonathan Stein

"The term "free market" is really a euphemism. What the far right actually means by this term is 'lawless market.' In a lawless market, entrepreneurs can get away with privatizing the benefits of the market (profits), while socializing its costs (like pollution). Uncomfortable with the concept of a lawless market? The far right will try to reassure you with claims that the market can produce its own laws, either as a commodity bought and sold on the market, or through natural market mechanisms like the 'invisible hand' or the Coase theorem. But it is interesting to note that even if entrepreneurs don't take the more likely shortcut of creating their own state, this type of law removes the creation of law from democratic legislatures and gives it to authoritarian business owners and landlords. And since you get what you pay for, 'purchased law' will primarily benefit its purchasers. Society might as well return to aristocracy directly."
-- Steve Kangas

"I often quote myself; it adds spice to my conversation."
-- George Bernard Shaw

"Probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rough rules of thumb, above all the principle of laissez-faire."
-- Hayek, The Road to Serfdom, p.18

"I am the last person to deny that increased wealth and the increased density of population have enlarged the number of collective needs which government can and should statisfy."
-- Hayek, New Studies

"Because economics touches so much of life, everyone wants to have an opinion. Yet the kind of economics covered in the textbooks is a technical subject that many people find hard to follow. How reassuring, then, to be told that it is all irrelevant--that all you really need to know are a few simple ideas! Quite a few supply-siders have created for themselves a wonderful alternative intellectual history in which John Maynard Keynes was a fraud, Paul Samuelson and even Milton Friedman are fools, and the true line of deep economic thought runs from Adam Smith through obscure turn-of-the-century Austrians straight to them."
-- Paul Krugman, Slate

"Most people who think about supply-side economics at all probably imagine that it is simply a strong form of conservative economics... But the story of supply-side economics is much stranger than that. There are many conservative economists... but these academic conservatives are not supply-siders, nor have the supply-siders been drawn from their ranks. Instead, supply-side economics remains a movement of outsiders... they came from the fringes of economics: from journalism, from congressional staff positions, from consulting firms; nowadays most of them are employed by conservative think tanks... to put it another way, the supply-siders are cranks."
-- Paul Krugman, Peddling Prosperity

"I don't accept that much of use can be learned about policy in this way [well-structured deduction from metaphysical first principles.] When the world deviates from the principles, as it usually does, the simple lessons go astray. This is not a complaint against math. It is a complaint against indiscriminate application of the deductive method, sometimes called the Ricardian vice, to problems of human action. Mine is an old gripe against much of what professional economists do; not against science but against scientism, against the pretense of science. To combat it, I spend my research time wrestling with real-world data, and I spend much of my writing time warring against the policy ideas of aggressive, ahistorical deductivists."
-- James K. Galbraith, letter in Slate, Nov. 5, 1996

"I'm skeptical of claims based solely on logical deduction, especially in the social sciences. This is especially true in economics where many have pointed out the incredible premises that are required to show that laissez-faire achieves even a minimal sort of optimum."
-- David Shea

"As a scholarly discipline, economics has always suffered from physics envy."
-- Robert Kuttner, Business Week, Nov. 12, 1990.

"Economics is the only field in which two people can share a Nobel Prize for saying opposing things."
-- Old economics joke. (Specifically, the socialist Gunnar Myrdahl and the libertarian Friedrich Hayek shared one.)

"Probably the only people left who think that economics deserves a Nobel Prize are economists. It confirms their conceit that they're doing 'science' rather than the less tidy task of observing the world and trying to make sense of it. This, after all, is done by mere historians, political scientists, anthropologists, sociologists, and (heaven forbid) even journalists. Economists are loath to admit that they belong in such raffish company."
-- Robert J. Samuelson, The New Republic, Dec. 3, 1990.

"I think it must be conceded that it is possible to create a society in which the response to market failure is not a swing to socialism, but an exacerbation of individual efforts to stay ahead by making and spending yet more money. Does the public health service have long waiting lists and inadequate facilities? Buy private insurance. Has public transport broken down? Buy a car for each member of the family above driving age. Has the countryside been built over or the footpaths eradicated? Buy some elaborate exercise machinery and work out at home. Is air pollution intolerable? Buy an air-filtering unit and stay indoors. Is what comes out of the tap foul to the taste and chock-full of carcinogens? Buy bottled water. And so on. We know it can all happen because it has: I have been doing little more than describing Southern California.
"Now it is worth noticing two things about the private substitutes that I have described. The first is that in the aggregate they are probably much more expensive than would be the implementation of the appropriate public policy. The second is that they are extremely poor replacements for the missing outcomes of good public policy. Nevertheless, it is plain that the members of a society can become so alienated from one another, so mistrustful of any form of collective action, that they prefer to go it alone."
-- Brian Barry, The Continuing Relevance of Socialism

"Secular trends of social organization embracing the whole civilized world are not dislodged by the events of a decade. Both in Great Britain and in the United States millions of independent business units derived their existence from the principle of laissez-faire. Its spectacular failure in one field did not destroy its authority in all. Indeed, its partial eclipse may have even strengthened its hold since it enabled its defenders to argue that the incomplete application of its principles was the reason for every and any difficulty laid to its charge. This, indeed, is the last remaining argument of economic liberalism [i.e., laissez-faire] today. Its apologists are repeating in endless variations that but for the policies advocated by its critics, liberalism would have delivered the goods; that not the competitive system and the self-regulating market but interference with that system and interventions with that market are responsible for our ills. ... Although it is true that the 1870s and 1880s saw the end of orthodox liberalism, and that all crucial problems of the present can be traced back to that period, it is incorrect to say that the change to social and national protectionism was due to any other cause than the manifestation of the weakness and perils inherent in a self-regulating market system."
-- Karl Polanyi, The Great Transformation

The real Adam Smith:

[Editor's note: conservatives love to portray 18th century radical humanist Adam Smith as the original capitalist defender. In fact, Smith "despised aristocrats, hated capitalists, and wept for the laboring poor," as commentator John Hess so eloquently put it. Conservatives mistake him for their own on the strength of one quote, which introduces the famous concept of the "invisible hand":]

"Every individual… intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his original intention. By pursuing his own interest he frequently promotes that of society more effectively than when he really intends to promote it."
-- Adam Smith, Wealth Of Nations

[But here is what Adam Smith really thought:]

"All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."
-- Adam Smith, Wealth of Nations

"No society can surely be flourishing and happy when part of the members are poor and miserable."
-- Adam Smith, Wealth Of Nations

"Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people."
-- Adam Smith, Wealth Of Nations

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
-- Adam Smith, Wealth Of Nations

"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce."
-- Adam Smith, Wealth Of Nations

"The liberal reward of labor, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the laboring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition that they going backwards fast."
-- Adam Smith, Wealth Of Nations

"The rate of profit... is naturally low in rich and high in poor countries, and it is always highest in the countries which are going fastest to ruin."
-- Adam Smith, Wealth Of Nations

"The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state ....[As Henry Home (Lord Kames) has written, a goal of taxation should be to] 'remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.'"
-- Adam Smith, Wealth Of Nations

"Whenever the legislature attempts to regulate differences between masters and their workmen, its counsellors are always the masters. When the regulation, therefore, is in favor of the workmen, it is always just and equitable; but it is sometimes otherwise when in favor of the masters."
-- Adam Smith, Wealth Of Nations

"The interest of dealers, however,... is a always in some respects different from, and even opposite to, that of the public... The proposal of any new law or regulation of commerce which comes frm this order ought... never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."
-- Adam Smith, Wealth Of Nations

"In a society of an hundred thousand families, there will perhaps be one hundred who don't labour at all, and who yet, either by violence, or by the more orderly oppression of law, employ a greater part of the labour of society than any other ten thousand in it. The division of what remains, too, after this enormous defalcation, is by no means made in proportion to the labour of each individual. On the contrary those who labour most get least. The opulent merchant, who spends a great part of his time in luxury and entertainments, enjoys a much greater proportion of the profits of his traffic, than all the Clerks and Accountants who do the business. These last, again, enjoying a great deal of leisure, and suffering scarce any other hardship besides the confinement of attendance, enjoy a much greater share of the produce, than three times an equal number of artizans, who, under their direction, labour much more severely and assiduously. The artizan again, tho' he works generally under cover, protected from the injuries of the weather, at his ease and assisted by the convenience of innumerable machines, enjoys a much greater share than the poor labourer who has the soil and the seasons to struggle with, and, who while he affords the materials for supplying the luxury of all the other members of the common wealth, and bears, as it were, upon his shoulders the whole fabric of human society, seems himself to be buried out of sight in the lowest foundations of the building."
-- Adam Smith, first draft of Wealth Of Nations

[And here is what Adam Smith thought about labor unions:]

"We rarely hear, it has been said, of the combinations [that is, unions or colluding organizations] of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual price."
-- Adam Smith, Wealth Of Nations

And from the other side...

"I believe the power to make money is a gift of God."
-- John D. Rockefeller, quoted in Matthew Josephson, The Robber Barons

"For years I thought what was good for our country was good for General Motors and vice versa. The difference did not exist."
-- Charles E. Wilson, testimony before the Senate Armed Services Committee, January 15, 1953. Often misquoted as "What is good for General Motors is good for the country."

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