Manichism In Economics

The Manichaean character of economics. Charles Kindleberger. Abstract: Economics
is said to have adopted a certain degree of dualism. None of its tenets have
been absolute in terms of social effectiveness. To survive in an economic
system, rules must be enforced to ensure the peace. There are times when
pluralism is good for a society as a way recognizing social differences.

However, there are times, such as war, when the rule of a central authority is
preferred. Laws in economics are hardly permanent since such regulations are
enacted and enforced only when the need arises. Full Text: COPYRIGHT 1999 M.E.

Sharpe, Inc. Are there any absolute answers in economics? This international
trade economist and economic historian has his doubts. The answer to most
questions is "It depends." Manichaeus, as we all know from the Oxford
dictionary; was a Persian philosopher of the third century A.D., whose system
held some sway throughout the Roman empire and Asia until the fifth century
(with some elements lasting to the thirteenth). He believed in dualism, the
coexistence of good and evil, with Satan coequal with God. I suggest that
economics has a heavy dose of dualism, though I hesitate to characterize views
that differ from mine as evil or satanic. In the first edition of Economics: An

Introductory Analysis the only one I read when I was teaching the introductory
course - Paul Samuelson wrote that when one is offered a choice, it is not
legitimate to say "both." I hesitate to differ from my esteemed
colleague, but "both" is often a correct answer, as occasionally is
"neither." Is one supposed to believe in Say\'s law that supply creates
its own demand, or Keynes\'s law that demand creates the needed supply? In the
course of a long academic life, I have developed Kindleberger\'s law of
alternatives, based on historical examples. Often after extended policy debate,
the powers that be end up doing both. In 1931 Keynes recommended tariffs, others
devaluation or depreciation. Outcome: both. During World War II there was a
vigorous Allied debate as to how best to push back German railheads from the

Normandy beaches, whether by bombing marshaling yards, as the British called
them, or bridges. Answer again: both. Nor did questioning a German prisoner of
war, General des Transportwesen West, under Marshall von Runstedt, make clear
which was better. American interrogators got the answer from Oberst (colonel)

Hoffner they wanted - bridges - and the British theirs - marshaling yards.

Robert Heilbroner has been a Classicist (Say\'s law?) and a Keynesian (Keynes\'s
law?) and has been mildly infected with Marxism, but has never to my knowledge
adopted the absolutist position of denying all truth to the polar opposite. In
economic debates we have capitalism versus socialism; perfect markets with
rational and informed suppliers and demanders versus market failure; monetarism
versus Keynesianism; fundamentals (such as geography demography, technology, and
perhaps history) versus institutions, path dependency; externalities, and
occasional breakouts of herd behavior ending in financial crisis; free banking
versus regulation and central banks; public choice versus markets (governments
make mistakes but markets seldom do, and such mistakes as they rarely make are
quickly corrected); centralization versus pluralism; rules versus decisions by
authorities . . . One could go on. In international trade, which I taught before

I learned the delight of historical economics, I was wont to say that the answer
to every question in economics is, "It depends," and that it usually
depended on the magnitude of the elasticities. President Truman sought one-armed
economic advisers because of his unhappiness with the answer to his question
"On the one hand, . . .; on the other hand, . . ." I have admiration
approaching reverence for the thirty-third president of the United States, but I
cannot endorse his pleas for an answer of "Yes," or perhaps
"No," followed by a number. Let me illustrate this deeply
philosophical or perhaps cowardly position with a few examples drawn from
history. I skip capitalism versus socialism because most of us believe in the
mixed economy, perhaps leaning slightly to one or the other, but in any case
nowhere near the limits. Such, as I interpret it, is the Heilbroner take on

Marxism since his infection at (by?) the New School. Centralization versus
pluralism can be disposed of in two sentences, though I have a book of 100 pages
on the issue: In quiet times, pluralism is better because it is more democratic.

In crisis or on deep moral issues such as slavery or racism, some central
authority is preferable. It is, however, difficult to change back and forth as
conditions alter. Events since World War II seem