Selfishness, greed and capitalism : debunking myths about the free market

This IEA publication deals head-on with a number of widely quoted myths about the market economy. In the case of the philosophical myths, such as the idea that economists believe that everybody is greedy, the author, Christopher Snowdon, carefully and entertainingly unpicks the misguided ideas that have taken hold. The author then moves on and effectively disposes of a number of economic myths using empirical evidence that is often ignored by commentators.;The author; Foreword; Preface; Summary; Figures and tables; Part 1; The Straw Men; 1Capitalism relies on greed and selfishness; Incentives and the invisible hand; \_GoBack; The parable of the steel company; Is greed good?; Conclusion; 2Economists believe people are perfectly rational; Some models are useful; Rational choice and behavioural economics; Have we found angels to govern us?; Rational consumers and irrational voters; Conclusion; 3Economists think GDP is all that matters; A blind obsession?; Figure 1Public spending in 2013/14 prices (UK); No design for life; Conclusion. The author Foreword Preface Summary Figures and tables Part 1 The Straw Men 1Capitalism relies on greed and selfishness Incentives and the invisible hand _GoBack The parable of the steel company Is greed good? Conclusion 2Economists believe people are perfectly rational Some models are useful Rational choice and behavioural economics Have we found angels to govern us? Rational consumers and irrational voters Conclusion 3Economists think GDP is all that matters A blind obsession? Figure 1Public spending in 2013/14 prices (UK) No design for life Conclusion. 4Economists think we live in a free marketA free market is not anarchy Capitalists don't like free markets Planning, private and public Conclusion PART 2 The Myths 5The rich get richer and the poor get poorer Higher wages for all Figure 2Disposable income (solid line) and GDP (dotted line) Figure 3Real-terms increases in disposable income by quintile Figure 4Disposable income growth for bottom two quintiles The progress of the poor relative to the rich Conclusion 6We are working ever longer hours Figure 5Annual working hours in the developed world, 1992-2012. Figure 6UK average hours worked per weekConclusion 7Rich countries will not benefit from more economic growth Figure 7Global real GDP per capita Growth scepticism In defence of growth Conclusion 8There is a paradox of prosperity Other people's consumerism Ferraris, Porsches and other preferences Conclusion 9Inequality is rising in Britain Figure 8Inequality as measured by the Gini coefficient Figure 9Inequality as measured by the difference between the 90th and 10th percentile Why inequality rose in the 1980s Taxes, benefits and inequality Inequality and recession. Figure 10Incomes of retired and non-retired householdsThe one per cent 10Inequality is the cause of health and social problems Selection bias Figure 11Gross national income and self-reported happiness Figure 12Inequality and life expectancy (Spirit Level countries) Figure 13Inequality and life expectancy (with missing countries included) Ignoring outliers Figure 14Inequality and homicides per 100,000 Dismissal of economic growth as a factor Figure 15Inequality and self-reported trust Figure 16Gross national income and self-reported happiness Ignoring history Mechanisms. Selective criteriaFigure 17Inequality and heart disease mortality (per 100,000) Figure 18Inequality and per capita cinema attendance Figure 19Inequality and faith in God Figure 20Inequality and The Economist's Quality of Life index Consensus? The panacea temptation Why inequality? Conclusion 11If you're born poor, you die poor Absolute and relative mobility Table 1Relative mobility in the UK Towards a meritocracy Conclusion References Blank Page About the IEA. This Iea Publication Deals Head-on With A Number Of Widely Quoted Myths About The Market Economy. In The Case Of The Philosophical Myths, Such As The Idea That Economists Believe That Everybody Is Greedy, The Author, Christopher Snowdon, Carefully And Entertainingly Unpicks The Misguided Ideas That Have Taken Hold. The Author Then Moves On And Effectively Disposes Of A Number Of Economic Myths Using Empirical Evidence That Is Often Ignored By Commentators. Machine Generated Contents Note: 1. Capitalism Relies On Greed And Selfishness -- Incentives And The Invisible Hand -- The Parable Of The Steel Company -- Is Greed Good? -- Conclusion -- 2. Economists Believe People Are Perfectly Rational -- Some Models Are Useful -- Rational Choice And Behavioural Economics -- Have We Found Angels To Govern Us? -- Rational Consumers And Irrational Voters -- Conclusion -- 3. Economists Think Gdp Is All That Matters -- A Blind Obsession? -- No Design For Life -- Conclusion -- 4. Economists Think We Live In A Free Market -- A Free Market Is Not Anarchy -- Capitalists Don't Like Free Markets -- Planning, Private And Public -- Conclusion -- 5. The Rich Get Richer And The Poor Get Poorer -- Higher Wages For All -- The Progress Of The Poor Relative To The Rich -- Conclusion -- 6. We Are Working Ever Longer Hours -- Conclusion -- 7. Rich Countries Will Not Benefit From More Economic Growth -- Growth Scepticism -- In Defence Of Growth -- Conclusion -- 8. There Is A Paradox Of Prosperity -- Other People's Consumerism -- Ferraris, Porsches And Other Preferences -- Conclusion -- 9. Inequality Is Rising In Britain -- Why Inequality Rose In The 1980s -- Taxes, Benefits And Inequality -- Inequality And Recession -- The One Per Cent -- 10. Inequality Is The Cause Of Health And Social Problems -- Selection Bias -- Ignoring Outliers -- Dismissal Of Economic Growth As A Factor -- Ignoring History -- Mechanisms -- Selective Criteria -- Consensus? -- The Panacea Temptation -- Why Inequality? -- Conclusion -- 11. If You're Born Poor, You Die Poor -- Absolute And Relative Mobility -- Towards A Meritocracy -- Conclusion. Christopher Snowdon. Includes Bibliographical References. This book attempts to correct many of the economic myths that prevail in public discourse and which are often promoted in schools and even universities. It begins by examining straw men, such as the assertion that economists believe that people behave selfishly or that economists think that GDP is all that matters. The fact that economists do not believe these things at all is easily established and it is surprising that scholars with good publication records (albeit not in the philosophy of economics) can honestly argue otherwise. The author then moves on to look at myths that can be subjected to empirical analysis and easily shown to be false. These myths, such as the idea that the poor are getting poorer while the rich get richer, or that we are working longer hours, are easily rebutted. This is not a book about economic theory, nor does it attempt to settle major controversies. On the few occasions where the subject matter touches on a genuine academic debate, this is acknowledged in the text. For the most part, however, the questions posed can be answered by consulting evidence that is widely available or - in the case of the straw men - listening to what economists actually say. This book deals with myths about the market economy - such as the idea that economists believe that everybody is greedy. Christopher Snowdon, carefully and entertainingly unpicks the misguided ideas that have taken hold. Essential reading for all who wish to separate fact from fiction when it comes to understanding economic reasoning and evidence.