Books in brief – Joe Heath

Filthy Lucre: Economics for People Who Hate Capitalism
by Joseph Heath (Harper Collins, 2009)
available at Amazon

Joe Heath, a philosophy professor at the University of Toronto, has written a greatly enjoyable book. In the first half, he examines a few of the economic fallacies commonly advanced by the right (that capitalism is a natural result of society and that government is artificial, that taxes are too high, that the importance of “personal responsibility” and moral hazard requires that we eliminate many forms of public insurance, etc.). He does the same for the left in the second half (that the government should tinker with prices in order to achieve fairness, that capitalism is doomed, etc.). I generally follow a conservative line on economic issues, but I found myself agreeing with Heath on most of the issues raised. His writing is so good that even when I disagreed with a conclusion I understood his analysis completely.

I suspect that most people, forced to justify their positions, would agree with Heath’s general ideas in the end – the point of government is to intervene in the economy in cases of market failure and to provide compulsory insurance where necessary.

That said, there are a few things about the book I disliked. For one, Heath is clearly writing this book for liberal readers. In the introduction, he refers to the “garbage arguments that are routinely trotted out by conservatives in support of their views.” Although he later acknowledges the force of many conservative ideas, the point overall is that conservatives can rarely be taken seriously in contemporary debates and are often acting in bad faith. Second (page 113), after criticizing the common obsession with productivity, he immediately goes on to concede that nations are justified in bidding for foreign direct investment. The obvious problem, which we have seen recently in Ontario and elsewhere, is that governments will use this principle in order to “invest” in anything and to justify any kind of spending in terms of its effect on infrastructure, innovation and the supposed “green” economy. As fears grow about runaway health care spending, I would have appreciated Heath’s showing us the appropriate limits to government spending.

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Final thought, posted several days later: Conservatives' main problem is that they dislike complexity in government. Complexity to them means regulation and a bureaucracy to enforce it. Therefore conservative government tends to be about simple solutions (Bush: tax cuts!) and "values" policies -- simple policies that will impress moderate voters (Harper: revising the citizenship manual). On difficult issues such as health care, education, energy and environment, conservatives argue for the market, but they have no alternatives in clear cases of market failure, or where the governments has to intervene to improve the efficiency of the market.