Principles of Economic Sanity Redux

John D. Mueller, Lehrman Institute Fellow in Economics at the Ethics and Public Policy Center, delivered these remarks at a panel on "Family -- The First Economy" sponsored by Patriot Voices and the Clapham Group on December 10, 2012, in Washington, D.C.

Let me thank Senator Rick Santorum's Patriot Voices, Mark Rodgers and the Clapham Group for organizing this timely panel on "Family -- The First Economy."

We've all read gloating articles like Maureen Dowd's in yesterday's New York Times, calling the Republican Party "just another vanishing tribe that fought the cultural and demographic tides of history." And: "Yet strangely, Republicans are still gob-smacked by their loss, grasping at straws like [hurricane] Sandy as their excuse."[1]

Actually, this gob was unsmacked. In 25 years of forecasting I've learned to separate what I desire from what I predict. When EPPC's president, Ed Whelan, put a gun to our heads last January, I predicted that Mitt Romney would lose to President Barack Obama, and by an Electoral College total not far from the November result.

Since we have five minutes, or about 500 words, I will make only two points.

First, economic theory is in flux. The subtitle of my book, Redeeming Economics, is Rediscovering the Missing Element.[2] To focus on production and exchange, Adam Smith's Wealth of Nations oversimplified by assuming that "every individual . . . intends only his own gain."[3] Classical and today's neoclassical economic theory reduce all human relations to exchanges. "Neoscholastic" economics is restoring Augustine's theory of gifts (and their opposite, crimes) and Aristotle's theory of distributive justice, which are essential to describing marriage and family.

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