Economics of Good and Evil | Tomáš Sedláček

Summary of: Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street
By: Tomáš Sedláček


Embark on an enlightening journey as we dive into the book summary of ‘Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street’ by Tomáš Sedláček. Expect to unravel the intricate relationship between economics and ethics, exploring how historical myths, religion, philosophy, and ancient economic thought have impacted economic analyses and resulted in several flawed modern assumptions. This summary will shed light on how vital philosophical roots have been obscured by the field’s reliance on mathematics and challenge conventional economic thinking that narrows humans down to purely self-serving, utilitarian beings.

Economics and the Illusion of Numbers

Economists’ reliance on simplified mathematical models has resulted in a disconnection from reality, leading to a consistent failure to predict future events or explain past ones. The overemphasis on mathematical branches of economics has not only resulted in disagreements over the cause of past crises such as the Great Depression but also economists’ inability to prevent future financial meltdowns. Upholding the belief that people only act for self-benefit, and universal utilitarianism has also contributed to this analytical failure. In essence, economics’ ethical content, the good and evil, has been buried under numerical elegance. However, there is a solution to this problem – economics needs to de-emphasize its mathematical foundations and reconnect with its philosophical roots, thereby acknowledging the subjective assumptions it makes. The subject of economics has long been a qualitative one, drawing from myths, religion, science, theology, and philosophy, and it must continue to do so. In this way, economic analyses will become more objective by embracing subjectivity, and economists will be better equipped to predict and solve future economic crises.

The Epic of Gilgamesh

The Epic of Gilgamesh, the oldest known literary work, is set in Mesopotamia 4,000 years ago. The story revolves around Gilgamesh, a part-human, part-god ruler who pushes the builders constructing a great wall in the city of Uruk. Enkidu, who comes to oppose Gilgamesh, becomes his friend, and they both become more human and humane. Gilgamesh realizes the futility of his pursuit of immortality after Enkidu’s death and restarts the wall project, understanding that humanity comes at the expense of efficiency. The story reflects a belief that goodness resides within society and that nature represents evil.

Science and Ethics in Historical Contexts

Scientific discovery and inquiry contribute significantly to social progress and improve standards of living. But it has not always been this way. In the past, unpredictable natural forces inspired mythical or religious explanations rather than scientific ones. For instance, ancient Jewish texts linked favorable weather conditions to divine blessings. Moral behavior and material rewards were also closely linked, as seen in the Jewish tradition of debt forgiveness every seven years and the observance of Sabbath. The Hebrews were also pioneers in the linear view of history, unlike the belief that “history heads nowhere,” as seen in the epic of Gilgamesh. The Hebrews also influenced practical progress by portraying neither rulers nor nature as divine beings. Finally, the 2008 global fiscal crisis underscores the importance of ethical considerations in economics, as the field often avoids terms such as “good” and “evil.” Thus, science and ethics are intertwined and have a rich interplay in shaping our lives and understanding the world today.

Greek Philosophers’ Influence on Economics

Pythagoras, Xenophon, Plato, and Aristotle have shaped economic analysis with their beliefs and practices. Mathematics’ power, market-based preferences, the division of labor, and reason’s role in truth-seeking are all ideas that still hold sway in the modern world. Plato’s emphasis on rationality over empirical observation remains a controversial issue in modern economics. Aristotle, however, believed more in empirical discovery than abstract theories. These Ancient Greek philosophers still influence the way we understand economics and economic policies.

Christianity’s Influence on Economics

Christianity has had a significant impact on economic terminology. Many of Jesus Christ’s parables in the New Testament have economic or social contexts, and key Christian terms such as “redemption” and “sin” have roots in economic concepts. Additionally, the Old Testament makes provisions to protect the most vulnerable members of society. The coexistence of good and evil is also explored in Christianity, with Jesus advising against the destruction of evil at the expense of good. Theologian Thomas Aquinas believed that evil only exists because of the presence of good and emphasized the importance of preserving the common good. These principles have laid the foundation for laissez-faire government and lightly regulated commerce, which prioritize the common good but also recognize the need for more regulation in the face of evil. Overall, Christianity’s influence on economics cannot be overlooked and continues to shape our economic systems today.

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