Tomas Sedlacek, Economics of Good and Evil. Oxford: Oxford University Press, 2011.
If, for a moment, we accept the economic consensus
view that growth is the solution to the current economic crisis, one “growth area” wemight observe is the crop of books and articles about that same crisis. As the greateconomist John Kenneth Galbraith once quipped: “Economics provides gainfulemployment for economists.”
The books inevitably differ in their approach. Some like Gil ian Tett’s Fools Gold(2010) take an anthropological and historical approach tel ing the story of bankerswho felt they were “Masters of the Universe.” Others like The Times’ EconomicEditor, Anatole Kaletsky (2009 and 2011) look for solutions and question theeconomic consensus of the past 30 years by suggesting the subject has become
too mathematical and divorced from reality. Indeed, Kaletsky goes as far as tosuggest economists are in part to blame for the current crisis because they havespent too much time looking at their models rather than reality.
This would seem fertile ground for those of us with an integral persuasion. KenWilber (94) has spoken about integral business. Yet, so far, I have seen little aboutan integral economics with the exception of Christian Arnsperger’s Ful SpectrumEconomics, which has an introduction by Wilber. There is also Lessem andSchieffer’s Integral Economics. Unfortunately, I have only been able to read extractsfrom these, their being prohibitively expensive for someone, like me, on a limitedbudget. A look on Amazon suggests this wil be remedied soon. In the meantime,Tomas Sedlacek’s Economics of Good and Evil has appeared at a lower price.Isuspect it wil havemuch of interest for those of us who are integral y minded, andperhaps to those less sympathetic to traditional economic thinking.
This book is unlike any economics text I have ever read—and I have read quite afew, having an incurable addiction to them. Sedlacek’s name was unknown to meuntil I came upon this book. Yet his “conventional” economic credentials areimpeccable: a lecturer at Charles University, Prague, who has also been named bythe Yale Economic Review as one of the “five hot minds in economics.” He has alsobeen economic advisor to a leading Czech bank, his country’s government and notleast to its former President, Václav Havel, who contributes a foreword to the book.
It was the former President’s name that especial y attracted me initial y. Having asmuch a partiality towards Jung as Keynes, the phrase “economic meaning” in thesubtitle struck a chord in me. Meaning is not a word I associate with economists. Few make existential statements or refer to emotional issues in their work. Althoughno lesser economist than John Maynard Keynes regarded the subject as a “moralscience” (Skidelsky, 89), morality and ethics seem to have been taboo subjectsamongst economists in recent years.
By way of contrast, I do associate Havel with thinking outside the usual boxes,linking ideas that would not seem associated with one another, and a range ofinterests beyond the usual academic consensus. An example of this is his interestin transpersonal psychology. In 1993, while stil President of the thenCzechoslovakia, he was patron and guest of honour to a conference of StanislavGrof’s International Transpersonal Association (ITA) in Prague, though in the end hewas unable to attend because of a political crisis. Grof also records that in privateconversations, Havel expressed an interest in “the implications of transpersonalthinking for politics and economy” (Grof, 69).
I therefore came to the book expecting something different from the run-of-mileconomic text. In this Sedlacek does not disappoint. A look at the index andbibliography immediately suggests a very different kind of economist. He is as likelyto quote Mircia Eliade as Milton Friedman. There are names like Clarissa PincolaEstes, Erich Fromm and Joseph Campbel , references to Tolkien, the Hitchhiker’sGuide to the Galaxy, English poetry (how many Czech poets do most Englishreaders know?) as wel as films such as The Matrix. Yet this intel ectual breadth iscombined with a lightness of touch that shows through in flashes of wry humour—in
my experience, a typical Czech characteristic.
The book itself is an exercise in meta-economics rather than an attempt to solve thecurrent economic crisis. The essential thesis is that economics is about how wedecide what is good and evil, and hence a moral subject. Early in the book it issuggested that Adam Smith, general y regarded as the father of economics, was infact reframing and summing up various forms of wisdom that were previouslyavailable in other ways. These he explores in depth.
The book consists of two parts. The first looks for “economics in myth, religion,theology, philosophy and science” (Sedlacek, 7). The second looks for “myth,religion, theology, philosophy and science in economics.” The journey begins with alook at one of the earliest recorded examples of literature, the ancient Mesopotamianpoem, Epic of Gilgamesh.
Sedlacek wryly cal s his “the first feeble attempt to understand the epic from aneconomic standpoint” (20). Yet behind this self-deprecation there is a serious point. The Gilgamesh epic deals with matters like friendship, civilization, and the conflictbetween wilder and cultivated aspects of human nature. He defends his applicationof economic thinking to the epic with the fol owing reasoning: “ancient stories,images and archetypes . . . are with us today and have co-created our approach tothe world, as wel as how we perceive ourselves” (5).
The use of the word “archetype” is also significant. Sedlacek has clearly read agreat deal of Jungian thinking. Readers of this book may be fascinated (or maybeoutraged?) at the application of methods of Jungian writers such as Marie-Louisevon Franz and Robert A. Johnson to economics. Yet it is fascinating to see how thisterm might apply in economics, not least because it establishes straight away adeeper basis to what is commonly perceived, not least by economists, as themotivation of economic behaviour.
Economists of recent years have tried to make economics a “hard” science. Though there have been notable exceptions, this has been the approach which haspredominated. Sedlacek has no problem with the application of so-cal ed “hard-scientific” methods and mathematical modeling as far as it goes. But as hefrequently points out, economics is about more than mathematics and science. Inemphasising such approaches the subject has developed some serious blindspots,not least a failure to connect economic behaviour to some of the most importantmotivations that drive human behaviour.
As wel as greed and self-interest, he sees archetypal patterns as being the roots ofwhat Keynes (104) termed “animal spirits” for the non-rational driving forces ofhuman behaviour. The term has recently attracted renewed interest, being the title ofa best-sel ing book by two economists George A. Akerlof and Robert Schil er. Theirbook revives interesting questions for economists about the influence of psychologyon the economy and is worth a look. But it also left me unsatisfied because theauthors did not go much further than naming some of the spirits. Sedlacek does godeeper, arguing also that, “Our modern economic theories based on rigorousmodeling are nothing more than meta-narratives retold in different (mathematical?)
Having linked mythological precedents to economic models, Sedlacek’s focusmoves to the influence of the Bible on economic values. There are separatechapters on both Old and New Testaments (the latter interestingly subtitled“Spirituality in the Material World”). There then fol ows an additional chapter on theAncient Greeks. Sedlacek sees a link between spirituality and economics, becausespiritual attitudes are acted out in the world. He also points out that a great numberof Old Testament passages reference the concept of commerce and applyeconomic metaphors connected with payment and market trading, raising questionsabout the cause of misfortune and whether such things are caused by lack of moralvirtue. These are Biblical equivalents to financial misfortune looked at from moraland metaphysical viewpoints rather than budgets and statistics.
In these discussions, Sedlacek also looks at attitudes toward work and the traditionof having a Sabbath. He points out that the economies of the West have,paradoxical y, moved in the direction of working longer hours despite becomingricher, perhaps over-emphasising the work ethic. This he contrasts with the AncientGreeks who tried to define what made for “the good life” and who held the view thatwork is not necessarily virtuous. He argues that these have an importantcontemporary resonance because much of the current economic consensusremains concerned with scarcity in modern economies where people don’t need toworry about survival.
The book moves to modern philosophy. There is a discussion on how the Cartesiansplit between mind and body made it possible for philosophers to define humanity byits reasoning capacity, but to the neglect of feeling. The author actual y goes as faras to describe rationality as the “religion of our time.” This is perhaps a familiarthesis, but again it is rare to hear economists discussing how a philosophical biascan affect an economic viewpoint. To demonstrate how this has happened ineconomics, Sedlacek cites a famous economics text book that has diagrams in itresembling those from a physics textbook, making the point that economists havetried to portray themselves as hard rational scientists.
When Sedlacek turns his attention to the role of vice and greed in the economy, theprincipal text he examines is a long poem cal ed the Fable of the Bees by BernardMandevil e. Mandevil e argued that there is a lot of hypocrisy in human nature. Werail against vice and try to wipe it out, yet we yield to it and even owe a great deal toit. Wiping out evil, according to Mandevil e wil destroy society’s prosperity becausevices create a demand for goods such as food, buildings and clothing that providepeople with employment and create wealth. Thus there is an economic rationale forbusinesses to satisfy the needs that vice creates.
Mandevil e is seen by Sedlacek as the first advocate of the “greed is good”philosophy famously espoused in the film Wal Street. The Fable itself provokedcontroversy in its own time. Some see a similarity between its arguments and AdamSmith’s term the “invisible hand,” which he used to name the process by whichindividual self-interest benefits the whole of society. This is a touchstone of freemarket ideology. But here, we learn that, though Smith coined the phrase, he was
far from trying to justify the worst in human nature. Indeed, much of his writing isaimed at contradicting Mandevil e. The term “invisible hand” was used, as isdemonstrated in the book with admirable thoroughness, by Smith in several differentcontexts suggesting that more recent uses of the term are far from what he actual ymeant.
There may be other surprises here for ardent free marketers who regard Smith astheir patron saint. Smith was not against al forms of governmental intervention inbusiness. He even favoured protectionism to help new industries. He was in favourof competitiveness and self-interest, but this was only a part of the equation. Smithwas also interested in what he termed “moral sentiments,” which include empathy,altruism and sympathy, the feelings that bring people together for a common good. These are equal y, if not more, important than self-interest as the building-blocks ofa society and are as much a part of the “invisible hand.”
In the light of this, Smith’s view of human nature becomes considerably lessreductive than has been presented by economists. Smith sees human nature asbeing motivated in several directions. The one surprise to me here is that Sedlacek,who frequently draws on Jung in his discussions, does not use the term Shadow. Even so what he argues here is that al human nature is relevant in economics, thegood and the bad, and that both of these sides have roles in the creation of aneconomy as has been discussed in literature for thousands of years.
This is where the first half of the book ends. The second part is entitled“Blasphemous Thoughts” and looks at the relevance of al these poetic,mythological, and philosophical roots to contemporary economics and the currentdebt crisis. In doing this Sedlacek does not suggest measures to solve the currenteconomic crisis. Instead he looks at how economics and attitudes need to changein facing current problems, which he sees as a process of transformations of thearchetypes that lie deep in our psyche. Thus, he looks not to an economist(Schumpeter who talked about “creative destruction” might be one) for ideas in howto facilitate this change, but toJung: “What we have stored somewhere in ourunconscious can be recognised best in times of crisis. It is in the most unexpected,the most terrifying chaotic things that reveal a deeper meaning, Jung writes. Forhim, the breaking point was what he built on.” (Sedlacek, 213)
It is interesting for me to see talk about the “unconscious” here because the idea ofrational expectations has taken a heavy grip in economics. Yet it was not always so. Keynes, for example, often cites Freud in his writings. By contrast, nowadayseconomists are happier with ideas from cognitive psychology, which perhapsreflects their bias towards the rational. Sedlacek goes further stil than thebehavioural economists in embracing the irrational, even talking about theimportance of dreams in the fol owing passage:
Our dreams are stil with us—and influence us more than we think. Notjust in dreams, but during the day as wel . If we are to indulge a dreamof progress, and if we are to believe in the imperative of constantincreases in the standard of living, then it is precisely this dream thatforces us to get out of bed every Monday morning and work on things
we do not enjoy, which we do not find fulfil ment and meaning in, orwhich we literal y find repugnant (208).
What fol ows are chapters on how to rebuild economics. Sedlacek questions someof the most basic assumptions that have become the conventional wisdom ofeconomic thinking such as the constant need for economic growth in wealthiersocieties such as in Europe and America. He points out that many economic ideasare principal y about scarcity, and hence that the economics’ ideas of competitionand growth might not be as essential in wealthier societies as is assumed. Indeed,he points out in recent years many of the wealthiest societies have been working forlonger and longer hours beyond the justification of producing what meets humanneeds. His suggestion is that the alternative to growth is not poverty and austerity,but what he cal s Sabbath Economics, which al ows both for work and play. Theeconomy is not society even if the two need each other.
Sedlacek is not partisan in the way of some other economists. He sees the subjectin a pluralist way, as a study of human behaviours. But he wants economics to domore. Mathematical models say little without the context of the stories behind them,which may bring in moral and existential judgments. Applying a “middle way”approach, he wants these models as part of an incorporative economics that takesin the ful complexity of human nature including aspects outside the economicsphere. He states, “Studying economics without studying beyond economics cannever lead to the ful er understanding of human behaviour. And as such, neglectingthese metaphysical issues can lead to a dismal economic behaviour. I am afraidthat mainstream economics is close to it” (Sedlacek, 283)
Based on this, I would suggest Sedlacek is seeking to heal and transcend themainstream, not to slay and bury it. Another way to put it is that Sedlacek’sapproach is integral at least in spirit. Interestingly, this approach is also closer to thework of great economists like Smith and Keynes than that of many contemporaryeconomists. Like psychology, economics has benefited from the use of scientificand statistical methods, yet is also one of the humanities, dealing with peoples’individual and col ective stories that don’t always fit into statistics. EF Schumacher(199) once suggested that economics ought to be a branch of human wisdomrather than a science. Economics of Good and Evil can be seen as a passionatecase for restoring the wisdom into economics, and a reminder that the wel springsof that wisdom remain deep inside ourselves. Sources and References
Akerlof, George A and Schil er, Robert. (2009). Animal Spirits: How HumanPsychology Drives the Economy and Why It Matters for Global Capitalism. Princeton NJ: Princeton University Press.
Arnsperger, Christian (2009). Ful -Spectrum Economics: Toward an Inclusive andEmancipatory Social Science. London: Routledge.
Grof, Stanislav (2006). When The Impossible Happens. Boulder, Colorado: Sounds-True.
Kaletsky, Anatole (2009). “Goodbye, Homo Economicus.” Prospect Magazine, April2009.
Kaletsky, Anatole (2011). Capitalism 4.0: The Birth of a New Economy. London:Bloomsbury.
Keynes, John Maynard (2008). The General Theory of Employment, Interest andMoney. London: BN Publishing.
Lessem, Ronnie and Schieffer, Alexander (2010). Integral Economics:Transformation and Innovation. Farnham: Gower Publishing.
Schumacher, E.F. (1974). Smal Is Beautiful: A Study of Economics as if PeopleMattered. London: Abacus.
Sedlacek, Tomas (2011). Economics of Good and Evil: The Quest for EconomicMeaning from Gilgamesh to Wal Street. New York, Oxford University Press.
Skidelsky, Robert (2009). Keynes: The Return of the Master. London: Al en Lane.
Tett, Gil ian (2010). Fool’s Gold: How Unrestrained Greed Corrupted a Dream,Shattered Global Markets and Unleashed a Catastrophe. London: Abacus.
Wilber, Ken (2000). A Theory of Everything. Boston MA, Shambala. About the Author Graham Mummery worked in International and Investment Banking at the back office of the Foreign Exchange and Money Market Centre for a leading bank in London until 2009. He is now retraining to become a transpersonal psychotherapist at CCPE London.
He is also a poet and translator. His poems and translations (from French andGerman) have appeared in literary magazines. Some of these have also beentranslated into German and Romanian and broadcast on Romanian Radio. His firstpamphlet col ection, The Gods have Become Diseases, was published in 2006. Heis currently working on his first ful col ection. He also col aborated in the translationinto English of the poetry book Deepening the Mystery by Romanian poet ChristianaMaria Purdescu.
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