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Jerry Z. Muller, The Mind and the Market: Capitalism in Western Thought. New York: Anchor Books, 2003. xvii + 487 pp. $16.95 (paperback), ISBN: 0-385-72166-8.

Reviewed for EH.NET by Bruce Caldwell, Department of Economics, University of North Carolina – Greensboro.

It is, sadly, a truism that people who are not economists often have a hard time making sense of what economists say. We are caricatured, often not without reason, as a profession mired in numbers and mathematical models, with an impenetrable jargon and way of reasoning all our own. Many non-economists are, as a result, often suspicious of our views. This is frustrating to economists, especially to those who feel that they have something important to say, which is, of course, all of us.

Sometimes, though, non-economists do not understand us because they ask questions or raise concerns that seldom occur to us. My university Honors Program has a regular coffee at which different topics are discussed each week. One time I led a discussion on the topic of “money.” I learned from that experience that there are a large number of ways to talk about money besides its functions as a unit of account, a facilitator of trade, and a store of value.

As Jerry Muller shows in his brilliant book The Mind and the Market, there are also a large number of ways to talk about the market system. Muller reviews what a number of modern (modern meaning from about 1700 through the twentieth century) Western thinkers have said about markets and capitalism. He includes figures that economists might expect: Adam Smith, Karl Marx, Joseph Schumpeter, John Maynard Keynes, Friedrich Hayek. But he also includes many that most historians of economic thought would not think to include, among them Voltaire, Hegel, Justus M?ser, Edmund Burke, Max Weber, Georg Simmel, Werner Sombart, Georg Luk?s, Hans Freyer, and Herbert Marcuse. Muller gives a full chapter to some of the thinkers, while for others he links two or three together. As one moves from chapter to chapter, the old tried and true dichotomies (left versus right the first among them; many of the most trenchant critics of markets were conservatives) pretty quickly fall away. Instead the effects of markets on moral and cultural values, on such non-market institutions as the family, the nation, the church, and other associative groups, on senses of community and individuality, are the focus.

Given the space limitations of a review, I will mention only a few whose ideas on capitalism and its institutions are likely to be unfamiliar to economists. The French philosophe Voltaire (1694-1778), propagandist for the Enlightenment and one of the first “public intellectuals,” praised the pursuit of self-interest, this because he found it less dangerous than the pursuit of religious uniformity: commerce, after all, brought together Catholic and Protestant, Muslim and Jew, and made their peaceful co-existence profitable. A counterbalance to Voltaire can be found in the writings of the German conservative Justin M?ser (1720-94), who saw the changes being wrought by both capitalism and cameralism as destroying the variety of institutions and folkways that gave the many German principalities of his day their vitality and identity. M?ser lamented the passing of guilded master artisans and their replacement by wage labor and the culture of the shopkeeper, who by importing goods from abroad wrecked havoc on local markets. The Victorian poet and inspector of schools Matthew Arnold (1822-88) didn’t so much dislike markets as he did the importation of market values into areas where they did not belong. His critique of “philistinism” doubtless underlies the smirk that so many economists encounter when they talk to humanist members of the academy about restructuring institutions so that all incentives are aligned. Max Weber (1864-1920) and Georg Simmel (1858-1918) both emphasized how the emergence of capitalism affected how people think, making the rational calculation of means and ends more ubiquitous. Though the gains in efficiency from such a change of mind set are evident, the danger for Simmel was that the pursuit of means would cause us to lose sight as to which ends were most important, that, in a phrase, the means would become the ends. His idea that too much choice can be a curse should make sense to almost everyone, with the possible exception of a choice theorist.

Muller’s book has multiple virtues. First, though this is principally a contribution to intellectual history, Muller seamlessly adds to it illuminating background information drawn especially from economic, but also from political, social and cultural history. Next, he has an excellent eye for the telling detail or anecdote. Have you ever wondered exactly who Burke was talking about when he said that the “age of chivalry is over. That of sophisters, oeconomists, and calculators has succeeded …”? Muller tells you, on pages 132-33. (I won’t give away the specific references, but Burke’s general point was that though commerce could be a civilizing agent, this depended on the presence of institutions and behaviors that developed separately from markets, a theme to which Hayek, among others, would return.) A third strength is that even when Muller writes about people familiar to economists, he does so in a fresh and insightful way. (For me, his interpretation of Schumpeter as an ironic writer was wholly new, plausible, and helped clear up certain apparent paradoxes in Schumpeter’s writings.) Finally, the book is that rarest of achievements, a scholarly contribution that is also well-written. Muller’s engaging style extends even to his encyclopedic footnotes, which occasionally rival those of A.J.P. Taylor for the rapier touch. (E.g., his sardonic comment on page 435, note 2, that one three-volume work on Marx “entombs a large body of facts in a Communist conceptual sarcophagus.”) Though the book is enjoyable to read, it is not always fun: the despicable treatment of the Jews by European intellectuals of every stripe is, sadly, a frequent theme. Because it is packed with information it is not a quick read, either, but taken leisurely it is consistently pleasurable.

The Mind and the Market would serve as a useful supplement to a course in the history of economic thought, or it could be a text in an interdisciplinary course on the assessment of capitalism in its cultural context. But even if you do not use it in a course, it is well worth reading. Something to note in conclusion: the subtitle for the hardback, which was published by Alfred A. Knopf in 2002, was Capitalism in Modern European Thought. The Anchor paperback changes this to Capitalism in Western Thought on its cover, but incongruously the change was not made on the title page inside the book.

Bruce Caldwell is an historian of economic thought at the University of North Carolina – Greensboro. He is the General Editor of The Collected Works of F.A. Hayek and the author of Hayek’s Challenge, published in 2004 by the University of Chicago Press.