books creates an edifice Mueller calls
How the ‘A-Team’
Redeems Modern
Economics
by Jennifer Roback Morse, Ph.D.
a review of the book, Redeeming
Economics: Rediscovering the Missing
Element by John D. Mueller. This review
was originally published at Family in
America.
John Mueller’s Redeeming Economics is an
impressive achievement, really three books
in one. Mueller rewrites the history of
economics in the first book. In the second
book, Mueller expands the concerns of
economics in the light of his historical
reinterpretation. The third book proposes
and critiques public policies through the lens
of the theory developed in book two.
Readers of The Family in America will
probably be most interested in book three.
But Mueller’s most lasting contribution to
the well-being of the American family may
well be book two. His expansion of the
concerns of economics has the potential to
give economists as well as social
conservatives the analytical tools needed to
defend the family on its own terms, rather
than as a special case of a contract.
The scope of Mueller’s intellectual ambition
in this book is truly astonishing, as is the
scope of the research involved in all three of
his projects. The combination of these three
Dr. Jennifer Roback Morse • 663 S. Rancho Santa Fe Road Suite 222 San Marcos CA 92078
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“neoscholastic economics.” As the real
challenge for this book will
be to get people to read all three “books,” I
trust this review will convey a sense of why
people should invest the time needed to
read, absorb, and promote this important
book.
Book 1: Rewriting the History of
Economics
Modern scholars tend to believe that
discipline of economics began with Adam
Smith. However, this a-historical reading of
the subject is corrected by Mueller, who
insists that we have to bring on the entire
“A-Team” to really grasp the history of
economics: not just Adam Smith, but also
Aristotle, Augustine, and Aquinas. In this
respect, Mueller stands with no less an
authority than Joseph Schumpeter, author of
the twentieth century’s most comprehensive
history of economics. Schumpeter argues
that the real founders of modern economics
were the “scholastic doctors” of the Middle
Ages. These natural law philosophers had
worked out all the elements of economic
analysis; Smith simply coordinated them.
Schumpeter further claims that “The Wealth
of Nations does not contain a single analytic
idea, principle or method that was entirely
new in 1776,” and Mueller fully agrees.
Most modern economists, who instinctively
venerate both Smith and Schumpeter, are
innocent of Schumpeter’s somewhat
heretical views on Smith.
Mueller believes that the questions the
scholastics raised reveal their sophistication.
Aquinas’s theory had four elements:
production, exchange, distribution, and
consumption. Smith dropped consumption
and distribution, leaving only production
and exchange as the proper domain of
economics. According to Mueller, Smith
appealed to his contemporaries because he
over-simplified Aquinas’s synthesis of
Aristotle and Augustine. Aristotle argued
that every community follows some
principle in distributing its common goods,
some principle that defines what the Greek
philosopher considers “distributive justice.”
Augustine expanded this theory by adding to
it a theory of “personal distribution.” Each
person decides “to whom” or “for whom” he
is distributing his goods. Humans always act
with some person in mind, even if it is only
the actor himself. We give to people we
love; we sell to or exchange with people we
don’t.
Smith’s famous declaration about the
butcher and the baker acting solely out of
self-interest eliminates Augustine’s theory
of distribution. Smith’s contention that
everything is done out of some redefined
self-interest collapses a real and valuable
distinction between gifts and exchanges.
Mueller claims that Augustine’s theory of
distribution could have shown why the
butcher and the baker give their wares to
their own children, and sell them to
everyone else.
Book 2: Expanding the Concerns of
Economic Theory
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This historical analysis sets the stage for
Mueller’s own contribution. He redefines
economics as “the science of human
providence—personal, domestic and
political—for oneself and other persons,
using scarce means that have alternative
uses.” He offers an outline of a theory of
how people divide their goods between gifts
and personal consumption. The theory of
distribution is a theory of gifts to people one
cares for, crimes against people one has no
regard for, and exchanges with everyone
else. Mueller calls this “neoscholastic
economics.”
He introduces a simple problem, adapted
from neoclassical economist Philip
Wicksteed. Neoclassical analysis often
begins with Robinson Crusoe, alone on his
island, allocating scarce resources with no
companions or relationships. By contrast,
Wicksteed invites us to consider the problem
of a mother, a person “loaded with social
relationships and complications.” The
“mother’s problem” is to explain the
behavior of the typical mother (circa 1910)
in her home as she tries to maximize the
value of her family’s resources. How might
she allocate a single scarce commodity—
milk—among alternative uses? “In the usual
routine, milk may be wanted for the baby,
for the other children, for a pudding, for tea
or coffee, and for the cat.” According to
Mueller, neoclassical economic theory could
provide the solution in the special case in
which all the milk was for her own use. She
should begin with the most urgent use—that
is, the use with the highest marginal
utility—and as the urgency of this need is
diminished by the application of milk,
continue to the next most urgent, and so on.
But, Mueller continues:
The mother’s actual problem is quite
different, and unanswerable by neoclassical
economics, since she is dealing not only
with her own preference but also with the
preferences of several other users of milk.
Her problem is twofold: not only to estimate
the preferences of each user, but also to
decide how much weight to give to those
preferences. Should she give the same
weight, other things being equal, to her own
preferences, those of her husband, each of
her own children, a neighbor’s child and the
family cat?
Wicksteed concludes that the solution to the
mother’s problem lies outside economic
theory. “No one would regard the principles
upon which I balance the claims of devotion
to God against those of friendship, or of
either against the indulgence of my aesthetic
appetites, as within the range of economic
science.” But Mueller believes this leaves an
unacceptably large hole in economic
analysis. As Wicksteed observes, “Her
doings in the market-place and her doings at
home are . . . part of one continuous process
of administration of resources, guided by the
same fundamental principle; and it is the
home problem that dominates the market
problem and gives it its ultimate meaning”
(emphasis added). Mueller believes that
Wicksteed’s neoclassical followers like
Gary Becker do not have a satisfactory
unified theory any more than Wicksteed did.
Economists, claims Mueller,
Dr. Jennifer Roback Morse • 663 S. Rancho Santa Fe Road Suite 222 San Marcos CA 92078
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©2007 No part of this document may be reproduced or disseminated in any way without the expressed written consent of the
Ruth Institute.
declare the answer a matter of
normative or moral judgments that
economists qua economists cannot
make. But this is an unacceptable
dodge. It leaves economists with a
fundamentally analytical or
‘positive’ failure: Neoclassical
economics does not provide a
coherent, empirically verifiable
description of how people actually
choose rightly or wrongly—to
distribute the use of their resources,
whether as individual persons, as
members of a family household, or
as a society under the same
government.
Mueller solves this problem by resurrecting
Augustine’s theory of gifts to supplement
the theory of exchange. Mueller’s revision
of economics should be of interest to those
who are dissatisfied with the current
treatment of the family by economists.
Economists tend to view the family as a
special case of the market, marriage as a
special case of a contract, and children as a
special kind of consumer durable. Mueller’s
revision allows economists to view the
human family as a social institution in its
own right, not simply a special case of
something else.
This revision of economics should also
interest those who care about human liberty.
Economists currently divide society into the
“private sector” and the “public sector.”
Decisions that do not have significant
spillover effects on other people are the
proper domain of the “private sector,” and
everything left over becomes the concern of
the “public sector,” by default. This
dichotomy has made it difficult to resist the
lure of the state takeover of the wide scope
of human activity that can be plausibly
argued as affecting other people. Mueller’s
synthesis brings a third sector more clearly
into view: the social sector. In the social
sector, people interact with each other
without contracts or explicit exchanges.
Instead, people give gifts, transfers of
resources with no implicit or explicit
expectation of reciprocity. The family quite
obviously operates in this realm of the gift.
This social realm has been squeezed by a
combination of the market and the state
partially because the people who should be
its natural defenders have no vocabulary
with which to defend it.
The enemies of the state who ought to resist
state encroachment of the family’s domain
have been reduced to treating the family as a
special case of the market. This rhetorical
strategy has made it difficult to do justice to
the deep human need for personal
connections, a need that cannot be satisfied
by commercial relationships. At the same
time, the enemies of the market who ought
to defend the family against
commercialization have typically offered the
government as the only alternative. These
critics have been blind to the state’s
encroachment on the proper domain of the
family and the accompanying replacement
of family bonds with impersonal
government transfers and bureaucratic
control. Mueller’s synthesis allows us to see
the genuinely social arena of human life,
Dr. Jennifer Roback Morse • 663 S. Rancho Santa Fe Road Suite 222 San Marcos CA 92078
www.jennifer-roback-morse.com • email: drj@jennifer-roback-morse.com • 760/295-9278
©2007 No part of this document may be reproduced or disseminated in any way without the expressed written consent of the
Ruth Institute.
where people are more than autonomous
individuals, and where actions nevertheless
remain none of the government’s business.
Book 3: Proposing and Critiquing Public
Policies
The third “book” consists of policy analysis
based on the expanded economic theory.
Mueller’s targets include the usual fiscal
topics like taxation, unemployment,
inflation, and social security, as well as
topics usually considered social issues like
abortion, fertility, and marriage. He
contrasts the neoclassical approach with his
own neoscholastic approach. In the
neoclassical approach to public policy,
“politicians preside over society in the same
way that a parent presides over the
household.” Mueller thinks this is
unsatisfactory. Unlike a mother, who makes
personal distinctions amongst the family
members in accordance with her “love” for
them and her perception of their needs, the
policy maker “must treat them (hungry
babies) all exactly the same.”
By contrast, the neoscholastic framework
uses the Thomistic distinction between
benevolence, or good will, which can be
extended to everyone in the world, and
beneficence, or doing good, which cannot.
We can always avoid harming others, which
is why there are no exceptions to the moral
prohibitions against theft and murder. But
scarce goods cannot be shared with
everyone, simply due to the fact of scarcity.
And, as Thomas Aquinas taught, what is
inherently impossible is not morally binding.
This leads to the policy insight that analysis of preferences for persons and
“enforcement of negative rights is inherently rigorously testing the new hypotheses such
practicable, because to refrain from harming analysis would generate. Mueller’s
another person incurs no cost. . . . Positive analytical structure has the potential to
rights, in contrast, can never extend further humanize wide swaths of public policy-
than the ability to pay for them.” Hence, the making. This is contribution enough for one
neoscholastic framework recognizes that book, even a book that is really three in one.
scarcity in the public sector plays out quite
differently from scarcity in the private Jennifer Roback Morse, Ph.D. is an
sector. economist and the Founder and President of
the Ruth Institute, a nonprofit educational
Some of Mueller’s policy conclusions will organization devoted to bringing hope and
seem familiar and unexceptional. Others will encouragement for lifelong married love.
be quite surprising, such as his argument She is also the author of Love and
that the real solution to the Social Security Economics: It Takes a Family to Raise a
crisis is to lower, not raise, the payroll tax. Village and Smart Sex: Finding Life-Long
He also insists that the government should Love in a Hook-Up World.
stop raiding Social Security funds to pay for
other, non-Social Security programs. But do
not judge the book by one policy proposal or
another. A book of this scope is not going to
convince everyone on every analytical or
policy point. For instance, I am not
convinced that his analytical “distribution
function” and the accompanying graph is
doing the work he thinks it is doing. But it
would be a mistake to look in the index for
your favorite public policy and then dismiss
the whole book if you don’t like what
Mueller has to say about that particular
issue. Instead, look at the entire book and be
astonished that one person has something to
say about such a broad range of topics, and
that so much of what he says does makes
sense.

My hope is that Redeeming Economics will

inspire a generation of doctoral theses and
monographs, systematically working out the
Dr. Jennifer Roback Morse • 663 S. Rancho Santa Fe Road Suite 222 San Marcos CA 92078
www.jennifer-roback-morse.com • email: drj@jennifer-roback-morse.com • 760/295-9278
©2007 No part of this document may be reproduced or disseminated in any way without the expressed written consent of the
Ruth Institute.