Volume 2, Number 39
22 March 2002

What is Economics?

Dear Friends,

The first Readers' Comment, below, helps me to understand what has been happening to me over the past quarter century. I have always been part of the family I will call "progressives," because I love them and feel at home with them. Progressives are people who care about the environment, who want to improve conditions of the poor, and who want a more just world. My problem is, that most of the progressives that I know and love have never studied economics.

David Korten makes that clear in his book, When Corporations Rule the World, which is known to virtually all my progressive friends. This book begins with a thesis and "proves" it by selective perception: citing evidence in its favor, and ignoring all else. Had Korten studied economic statistics, he would have known better.

In a review comparing my book, The Moral Economy, with that of Korten, the late Paul Heyne, economist with the University of Washington, asks: "How can intelligent and informed people with almost identical concerns construct such contradictory recommendations for a world they have in common? Let me suggest the answer. Powelson employs the perspective of economic theory. Korten, on the other hand, tells us in the prologue to his book" that he is proud of not having studied economics. Heyne goes on to say that The Moral Economy is "rich in insights, instructive examples, and practical proposals."

Economics describes how the economy functions. It is people who are moral or immoral, compassionate or not compassionate. It would make just as much sense to say that physics is immoral, because it created nuclear weapons. But physics merely describes how the physical world functions. People could make nuclear weapons only within the laws of physics (or, they might not make them: it's their choice). Economics has laws that are as fundamental as those of physics.

When I was in my twenties, I was part of the New York Young Friends (who would be called "Adult Young Friends" today). We were bound together by our pacifism in a hostile world (WW II was on!). We also sat in restaurants to test their racial policies. Bayard Rustin and Jim Farmer (who later became prominent in the civil rights movement) would sit with some Whites at one table, while other Whites (a comparison test) would sit elsewhere.

Many of us were socialist. Evan Thomas, the brother of Norman Thomas, socialist candidate for president, met with us frequently. I had met and admired Norman when he visited my high school.

I was also pro-union. Whenever I saw a picket sign, I would talk to the picketers. Once I marched down Boylston Street in Boston in a union parade, singing "Solidarity Forever." I sought out the communist leader of the union (C.G.T.) in Lille, France, to dine in his home and become his friend. Traveling to Europe with the Experiment in International Living for several summers while in graduate school, I tried to learn about other cultures. When the AFSC formed summer high school institutes in world affairs, I was on their faculty. When the AFSC ran an educational program on student ships to Europe in 1948, I was lecturing and conducting discussions.

Those were the years that I felt most at home with progressives.

Then I went out into the world. I took a PhD in Economics and a CPA, worked for the International Monetary Fund and Price Waterhouse, then taught at Harvard, Johns Hopkins, and finally the University of Colorado. From these universities, I took frequent leaves of absence to help lift the Third World from its poverty. I "advised" presidents, cabinet ministers, and governors of central banks. ("Advised" is in quotes because rarely did they take my advice). I lectured in universities all over the Third World. In every capital city to which I was assigned, I wandered around the slums, talking at length with the poorest of the poor. In 1973, I decided that in "advising" the elites, I was helping corrupt people enhance their power. Though they mouthed platitudes about the poor, they rarely communicated with them. In any given country, I knew more what the poor thought than the president did.

So I quit doing that and returned to my loved ones, the progressives in the United States, bursting to tell them what I had found out. But I discovered that, mainly, they did not care to hear me. They did not respect me as an economist, nor my knowledge of history, nor my experiences in the Third World. At one Gathering of Friends General Conference, Friends listened with rapture to an astronomer who said she believed in the Big Bang, not God. They respected her for her scientific knowledge. But they did not respect economics.

I soon found out that for progressives, economics is different from other fields. They think they know the answers to economic questions, and if an economist tells them differently, often they will not listen. (Fortunately, not all or them. In fact, readers of TQE are a major exception). In fact, I am a fairly mainstream economist, not an extremist. Most economists think pretty much the way I do. Mostly, our differences involve policies to correct ills, such as depressions. In how the economy functions, however, we are remarkably agreed. Do I have to choose between being an economist and being a Quaker?

Writing TQE provided an answer. In doing so, I discovered many Quakers understand the importance of economics in their everyday lives and are willing to consider economic precepts and historical principles in fashioning their decisions. You don't have to be an economist, just a logical thinker who does not miss a single step on the way to a conclusion.

Many understand that sometimes gut reactions that at first seem right and moral turn out to be the exact opposite once the complex economic/historical logic has been fully run. For example, the minimum wage increases unemployment among Black teenagers and women; forgiving Third-World debts keeps corrupt dictators in power; boycotting sweatshops forces women into even worse jobs, etc.).

If you read my article in the April Friends Journal, you will find my explanation of why I am leaving Quakers. I have given up on modern, political Quakerism. I will continue to write TQE because many responses from readers show they value the original Quaker philosophy, the classic liberal one. I still think of myself as Quaker, and I keep my membership in my local Meeting. But I will no longer travel under concern to Yearly Meetings and Friends General Conference. I will continue to hang out with progressives, because their hearts are in the right place.

But it is your responses that keep me going. Please keep it up!

Sincerely your friend,

Jack Powelson

Readers' Comments:

Note: Please send comments on any TQE, at any time. Selected comments will be appended to the appropriate letter as they are received. Please indicate in the subject line the number of the Letter to which you refer! The email address is tqe-comment followed by @quaker.org. All published letters will be edited for spelling, grammar, clarity, and brevity. Please mention your home meeting, church, synagogue (or ...), and where you live.

I think the The Quaker Economist is fantastic, and I am glad you have chosen this method to put forth your ideas. Who knows, maybe from time to time, some people will questions their own assumptions as you once did.

— Mel Dodd, Atlanta (GA) Friends Meeting

I feel very much the same way and have been looking around at other churches also. I have stopped talking about political or economic issues to Quakers as I just get them upset. I have been involved in the Wharton Global Consulting Program over the past three years, but have simply stopped telling Quakers about it.

— Mark Cary, Wallingford (PA)

Thanks for the account of your unique background and journey in TQE #39. I found it rich and illuminating.

— Michael Jack, Friends Meeting of Washington (DC)

I have been reminding Friends here in North Pacific Yearly Meeting and in my home Meeting (South Mountain, in Ashland, Oregon) — and anyone else who will listen — that opposition to globalization is hypocritical from a people who not so long back carried bumper stickers that said "one planet, one people — please." If one really wants to help Central Americans combat economic colonialism, I tell them, buying fair-traded coffee is much more useful than demonstrating against the WTO. Fighting against supply and demand is pretty useless, like fighting gravity and thermodynamics, which are also laws of nature. Like you, I have found this message not particularly welcome, but I do continue to give it. I have taken much heart from your stand, as a Quaker economist, on these issues.

— Bill Ashworth, South Mountain Meeting, Ashland (OR).

I've found your last two issues, on the proclivity of unprogrammed liberal Friends toward anti-capitalist politics and economics, fascinating. What I found especially interesting was your memory of a time, perhaps half a century ago, when there was more political diversity among Friends. I don't question that, but I think that it may have been an unusual interlude. Largely, the history of American Quakerism has been characterized by political uniformity.

— Thomas Hamm, New Castle (IN) Monthly Meeting, Professor of History, Earlham College, Richmond (IN).

I resonate with your core premise, that we as Friends struggle to be inclusive, almost as if we have the truth before discerning it by listening to the voice of God in meeting. We are not alone in that among the faithful, I suppose. But I think Friends, fearful of our internal conflict, have forgotten how to listen to the rich diversity of opinion.

— Paul Alexander, Mountain View (Denver CO) Friends Meeting.

Economists have spent enormous amounts of time looking at the way people collaborate, the way people respond to incentives, etc., and have assembled a major body of data and theory. Since both economists and Quakers spend enormous amounts of time thinking about voluntary arrangements, collaboration and non-violent persuasion, Quakers would be well advised to learn more about the work of economists.

— Geoffrey Williams, Bethesda (MD) Friends Meeting.

I was touched by your frustration with progressives. I too used to be a "progressive" but became most disillusioned decades ago. What I learned was that good intentions do not necessarily lead to good outcomes — as a matter of fact, they often lead to terribly evil outcomes. Example: Progressive admiration for the various Stalinist dictators — Stalin himself, then Mao, then Castro... I still remember attending lectures by progressive delegations just returned first from the USSR, later from various "People's Democracies", still later from Red China, then Cuba, finally Nicaragua, even Albania, and all of them reporting enthusiastically on the Brave New World they had encountered in those countries, and how contrary reports were just lies propagated by US disinformation.

— Arthur Bierman, Jewish, Boulder (CO).

I use the hammer analogy myself, but it's simplistic. In physics, for example, others than physicists provide money for research. The donors' priorities do not include, explicitly, the discovery of the principles of the universe, but they influence the direction of physics research. A hammer-but the sponsors would prefer it to be convertible into a sword.

— Jim Caughran, Toronto (Ontario) Meeting

Your TQE Letter #39 made me think of this passage from Landsburg's Fair Play. "Economics breeds not just tolerance but compassion. The economist's method is to observe behavior closely, the better to understand other people's goals and other people's difficulties. That kind of understanding is the basis of all compassion."

— Asa Janney, Herdon (VA) Friends Meeting.

I appreciated the frustration articulated in TQE #39. I also despair of a high level discussion about many issues and policy situations with my fellow Quakers. And unfortunately it corrupts my attitude toward our entire denomination. However, their thought is similar to my non-Quaker radical friends who rail against corporations, free trade and empathize with every dissident group in conflict with governments anywhere.

— Jim Booth, Red Cedar Meeting, Lansing (MI).

I'm still rooting for you. In your own way you are speaking truth to power. I read every issue you send out and bless you for your logical presentation.

Keep up the good work.

— Rich Ailes, Middletown (PA) Meeting.

I know where you're coming from, and I share your reaction. I remember one time after I had spent several Sundays in after-meeting "seminars" with the Honolulu Friends, somebody pointed an accusing finger at me and said, "You're wrong. Nobody has a right to cut down trees just because they own the forest." I tried to explain that people didn't cut down trees "because they owned the forest," but because people needed houses. I tried to point out that, no matter how we wanted to solve the problems of clear-cutting and environmental preservation, we had to begin with this fact. But I was written off as a worshiper of the uncontrolled market.

— Dan Suits, Quaker Economist, Michigan State University.

"Economics has laws that are as fundamental as those of physics." Exactly. I am sure you have read Von Mises introduction (or is it the 1st chapter?) to Human Action where he provides the reasoning for this truth based on an analysis of human nature and behavior. A part of his opus often overlooked.

— Ken Allison, Episcopalian, Paradise Valley (AZ).

I disagree that the laws of economics can be compared so directly with the laws of physics. Economics is a human construct and depends upon human behavior. I think the law of gravity prevailed before humans walked the earth and will continue to prevail after we are extinct.

— Vici Oshiro, Minneapolis (MN) Friends Meeting.

I think Ms. Dixon in her comment after TQE #39 touches on an important point. The Thai farmers whose product comes to be supplanted in the market by a similar product grown in another country cannot easily adjust themselves to the market because they cannot pick themselves up and come to the US or some other country to farm. There is no free international market in people, and there is not likely to be one for the foreseeable future and beyond. As long as people cannot move internationally to where the work or profits are, won't free international trade in capital result in inequity and unemployment? But which First World country is going to be the first to open its borders entirely, i.e. no restrictions on anyone coming in and taking any job?

— Frank Perch, Philadelphia (PA) Meeting.

Jack, I admire and respect your yearning and more for the company of progressives such as those you describe from the 1940s and those involved in a collective search for Truth at Boulder Friends. These types of folks are indeed exciting and lively, and some good may come out of what they do. My quest for association has been more toward the good but creative quiet life and those who enjoy it by simply trying to do the right thing from day to day, and being quite serious about it. I tend to associate progressives with greed, in the sense of trying to force others to pay for their agenda, using the tools of the State. (NPR is a minor example.) The ones I'm trying to hold in the Light often pronounce ãconservative" and "Republican" in a clearly pejorative manner, denoting something right down there with the slime. I find their sense of rectitude and moral superiority discouragingly cavalier. (This is stereotyping, but no more so than your description of folks with their hearts in the right places, etc.) The good but creative quiet types are more likely to do it on their own and in a different way. Hatred (possibly too strong a term to use here) of existing institutions and practices and of the rich or the poor are not part of their frame of reference or the basis for their activism.

— J.D. von Pischke, a Friend from Reston, VA.

I am amused (or bemused, maybe) by how Friends would react if I for example (or any one MD) were to offer up pet/imagined remedies for arthritis (or any other human physical ills) — and how respectfully (and naively) they do react when MD's and other non- economists, non-historian, non-MSW folk pontificate in Meeting, in social hours, and even in print on their pet/imagined remedies for poverty, social ills (e.g., homelessness), WTO, etc. There ought to be a law ... but then it wouldn't be a democracy, or a Quaker Meeting, would it? I couldn't agree more with your disaffection for "modern political Quakerism" — and its foundation of intellectual immodesty.

— John Janda, Orange County (CA) Meeting

I can understand how you must feel rather "beaten about the head and shoulders" to judge from some of the responses I heard when I was present at some of your workshops. I am very sorry about that. As you know Jim and I always counted ourselves among your supporters. That doesn't mean that I have always agreed with you about everything (for example: I have some cruelty to animals issues with things that have occurred under the aegis of NAFTA) but I think we could discuss things like that and still feel quite happy with one another. I am deeply sorry that this seems not to be the case with many "liberal" Friends. I put liberal in quotes because it seems to me illiberal to infuse rancor into what should have been open, honest, and to the best of one's abilities, informed discussion.

— Pat Corbett, Tucson (AZ) Friends Meeting

I agree with what you say about "progressives" who either cannot or are unwilling to see economics as an essential part of any society. Economics is the science of the natural laws that bind our lives together - the necessary material half needed to maintain the balance between abstract and reality. I don't understand why so many liberally-minded thinkers tend to leave out what seem to me to be obvious economic considerations in their hopes for a better world. Your letter reassures me that there are people out there who are willing to call attention to this. Thank You.— Anonymous.

I take your point about Quakerism. I still believe it's now just a poorly funded liberal PAC, not a religion any more than any other political movement. (Of course, Quakerism probably has more than its share of "true believers".)

— Tom Cooper, Jr., Boston (MA).

The current Quaker outlook is a remnant of an older upper class ethos, based on inherited wealth, in which "We" are folks of privilege, cultivation, and benevolent concern, who "Do Good" to "Them," the oppressed, etc. Indeed, it is specifically the outlook of the children of those who no longer need to "work for a living," and feel themselves beyond the gritty, soiling arenas of vulgar commerce (note the affinities with antecedent British aristocratic attitudes). Our "socialism" is thus strictly of the Fabian variety, I think.

— Chuck Fager, Director, Quaker House, Fayetteville (NC).


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Publisher: Russ Nelson, St. Lawrence Valley (NY) Friends Meeting

Editorial Board

  • Roger Conant, Mount Toby Meeting, Northampton, MA.
  • Caroline Conzelman, Boulder (CO).
  • Ann Dixon, Boulder (CO) Meeting of Friends.
  • Virginia Flagg, San Diego (CA) Friends Meeting.
  • Merlyn Holmes, Boulder, Colorado.
  • Janet Minshall, Anneewakee Creek Friends Worship Group, Douglasvillle (GA).
  • Jack Powelson, Boulder (CO) Meeting of Friends, Principal Editor.
  • J.D. von Pischke, a Friend from Reston, VA.
  • Geoffrey Williams, Attender at New York Fifteenth Street Meeting.

Members of the Editorial Board receive Letters several days in advance for their criticisms, but they do not necessarily endorse the contents of any of them.

This newsletter was formerly known as The Classic Liberal Quaker.

Copyright © 2002 by Jack Powelson. All rights reserved. Permission is hereby granted for non-commercial reproduction.

Revision: Jack's one-paragraph reply to a comment by an anonymous reader has been moved from this letter to TQE #38, where it immediately follows the comment in question. — LC, 20 Feb 2005.

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