Acknowledgement in "The HUMAN ESSENCE of Economics"

Acknowledgement in The HUMAN ESSENCE of Economics
In the interim between 2006 when I published DIVINE MICROECONOMY: A Tapestry of Human Virtues and the present I became aware of a book written by Milton Shapiro. It came to my attention when I was browsing on the Mises Institute website where it was very highly recommended as a book about microeconomics from an Austrian economics perspective.

Dr. Milton Shapiro considers himself a devoted student of Mises, who he says ‘humanized economics.’ Inspired by Human Action and other works of Ludwig von Mises Milton Shapiro wrote Foundations of the Market Price System.

I found myself greatly impressed with this book written by Dr. Shapiro, who taught economics at California State Polytechnic University, Pomona for 25 years. After corresponding and speaking with Dr. Shapiro he agreed to allow me to acknowledge my indebtedness to the clarity and precision of his insights put forth in his book.

Part of my indebtedness to Dr. Shapiro is due to the information conveyed in the diagrams found in Foundations of the Market Price System which I modified and used in Chapter Three to help me to describe the core economic concepts. These include Diagram III B, Diagram III C, Diagram III D, Diagram III E, Diagram III F, Diagram III G, Diagram III H, and Table III A.

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'Foreword' to The HUMAN ESSENCE of Economics.

The HUMAN ESSENCE of Economics

Foreword

This is a book about economics. It includes the expected discussion of topics such as supply and demand, profit and loss, and market-clearing price. It also includes charts and graphs, but disaffected students of economics will be relieved to know that those are easy to understand and relatively sparse.

But this is much more than an economics book. It is fashionable in our contemporary culture to adopt a philosophical approach of pure materialism/empiricism. Whether the field is physics, evidence-based medicine, or economics, one begins with the ideas that 1) everything that happens can be explained by the interaction of matter and energy, and 2) that only results that can be directly observed and measured are meaningful. Bruce Koerber understands that embracing these ideas leads to restricted, incomplete, and sometimes misleading interpretation of results. Instead he approaches economics much as the pioneers of the physical sciences did in the 1600s.

Researchers such as Kepler, Boyle, and Newton discerned that there was a certain order to the universe. They sought to discover and understand the principles by which it operates. They did not view this natural order as accidental, but reflective of the system's Designer. Without this conviction that orderly principles exist, they would have had no reason to undertake the search that led to the discovery of important laws of physics and chemistry.

The author of this book begins with the premise that human beings are more than just material entities. Human nature includes a spark of the divine and therefore reflects—albeit in an incomplete and broken way—the divine nature. This human image of the divine gives mankind goals and wants beyond material needs, pleasure, and pain. We humans are cognizant of the past, have aspirations for the future, and understand that posterity will transcend our own lifetimes. We contemplate concepts of order, justice, cooperation, love, charity, and mercy. And while we share certain experiences, we each have our subjective consciousness which distinguishes us as individuals.

The discussion acknowledges that the economy comprises the decisions of a multitude of individuals, each one motivated by material needs but also by goals and values that transcend the material. The Divine Economy results when these individuals interact according to their own desires and needs, but also in pursuit of goals such as unity, compassion, and justice. Since individuals act subjectively, the economy is never completely predictable and never static. It seeks equilibrium without achieving it. This dynamism, as the root word implies, provides the energy that the economy needs to adapt.

This type of analysis also clarifies why it is folly to attempt to "manage" the economy in a meaningful way through central planning. The decisions of bureaucrats, no matter how selfless or well intentioned, cannot replace nor meet the individual goals of thousands of people. Attempts to change the inherent principles of the economy produce distortions of commerce in the short run, and ultimately fail. When the economy is allowed to operate according to its divinely-inspired principles, it can thrive.

Read this book thoughtfully, not to amass facts, but to appreciate its principles. Perhaps reflection on the Divine Economy Model will lead to new understanding of your own goals. And you will see that the economy is designed to serve both temporal and eternal purposes.

Donald Nelson, MD
Cedar Rapids, Iowa

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