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Quotation of the Day…

… is from pages 95-96 of the 1948 printing of the second edition (1935) of Lionel Robbins’s classic 1932 tract, An Essay on the Nature & Significance of Economic Science (original emphasis; footnote deleted):

Every first-year student since the days of Adam Smith has learnt to describe equilibrium in the distribution of particular grades of labour in terms of a tendency, not to the maximisation of money gains, but to the maximisation of net advantages in the various alternatives open.

DBx: I offer this quotation from an influential book written nearly a century ago by one of the 20th-century’s most prominent economists as evidence that economists do not assume that each person acting in the market seeks maximum monetary gains to the exclusion of the satisfaction of all possible non-monetary benefits. And yet pundits who wish to discredit economics continue to insist that economics is narrowly focused on the maximization of monetary gains and, thus, cannot be trusted as a guide to public policy in a world in which individuals, in their roles as producers, have multiple goals not all of which involve increased monetary income.

These critics of economics either are ignorant of economics or they choose to distort it. (I suspect that the former is more likely, in most cases.) Slaying an especially pathetic straw man, these critics of economics take pride in their intellectual victory and then proceed to recommend government policies – for example, protective tariffs – that they mistakenly suppose are immune to the criticisms offered by competent economists. These critics never stop to consider that if their straw man were real, then economics would predict that individuals would spend only enough money to keep themselves in peak condition as producers.

Ironically, if this straw man were real, economists would be leaders of the cult that insists that genuine consumption is not and ought not be among anyone’s activities. And Adam Smith would never have said what he said about consumption.

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