I have been writing a book on Modern European History. It is basically a high-school text book for home schoolers. I just rewrote the chapter on economic history from Adam Smith through Karl Marx. What I found interesting was how economics as a science started out with the best possible explanation of how economies work and from there slowly degraded over time so that by the time Marx got done with economics, he had created a theory that not only did not work, but when it was applied was totally destructive of economies as well as human lives.

I won’t go into the details of it as you can read the chapter from my book by clicking the link above. However, I would like to explore why such a thing might happen. I think there are several reasons. First, people like to tinker with ideas. Their egos are such that they believe that they can add something constructive. I think this is what drove men like Malthus, Ricardo, Bentham, and Mills. They thought they were adding to a scientific theory, when in fact they were simply muddying the waters.

Second, there is the jealousy factor. Certain elements could not believe that capitalism could create the best of all possible worlds. (Frank Knight, who developed the law of talk, often lamented the fact.) They did not like the idea that allowing the most ambitious and meritorious to rise to the top by rewarding them that the best would actually provide a rising standard of living for everyone. They were jealous, because they themselves had not succeeded.

Third, and on the opposite side of the coin of number two, is those who felt guilt that they or their families were successful. They were imbued with a mistaken altruism that clouded their vision of economics and made them believe that they could benefit all of society by allowing the government to play Robin Hood.

Fourth, there are the academicians and the bureaucrats who, setting in their ivory towers, believe they know better than individuals how people should run their lives. They like nothing better than to play god and run people’s lives for them.

Finally, we have the religious fanatics of the Marxist religion who merely want everyone to live by their code and the dictates of their god and to place no other gods before Karl Marx.

The weight of all this opinion sways many, and the crusty layers of theory they have laid upon economic thought has corrupted it. What they fail to see is that pure capitalism and a free-market system, limited by a government held within reasonable bounds, does create the best of all possible worlds. I think what is common among all these groups who have screwed up economic thought is a reliance upon visceral feelings, and a basic lack of ability or desire to use their brains.