Reading classical economics for me is to be in the company of economists who understood how economies worked. I have of late been reading Simon Newcomb’s “The Problem of Economic Education” which was published in The Quarterly Journal of Economics in July 1893. And what he does is go through the kinds of economic illiteracy that was all too common in the general population of his time, with a decidedly pessimistic view of whether these ideas can ever be eradicated amongst the population in general. And this was even though there was then universal understanding amongst economists about how fallacious these fallacious ideas were. An example:
From the economic point of view, the value of an industry is measured by the utility and cheapness of its products. From the popular point of view, utility is nearly lost sight of. . . . The benefit is supposed to be measured by the number of laborers and the sum total of wages which can be gained by pursuing the industry. . . . Here legislation only reflects the sentiment of a large majority of the active business community. A man’s economic usefulness to society is supposed to be measured by his expenditure of money and consumption of goods. He who spends freely is pointed out as a benefactor; while the miser, who invests his income, is looked upon as a selfish being, mindful only of his own aggrandizement. (p. 7)
Well, that was in 1893 for goodness sake. Who today would think spending is good and saving bad? From The Australian today:
CLIVE Palmer wants the age at which Australians can access their superannuation lowered, saying it will boost domestic demand for goods and services and increase economic growth. . . .
“I think we should be allowing people to access their super at 50 if they want to.
“It’s up to them, it’s their savings … we want to get that money released from the super funds.”
On this, Newcomb wasn’t even close to being pessimistic enough. Now, and since 1936, even economists think saving is a bad thing and spending is good.