The Price of Folly - Review

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The Price of Folly: A Lay-Person’s Guide to American Plutocracy

by William Durland, JD., PhD.

Reviewed by Henriette Groot, PhD

The title of this book is an allusion to Erasmus’s 16th century essay, “The Praise of Folly,” which satirizes “the accumulation of wealth as a sign of God’s favor.” In The Price of Folly, William Durland takes us through a rich and often-bewildering historic survey of economic theory; he examines the moral foundations of modern capitalism; and he finds those foundations wanting. This book considers the economic theories of Aquinas, Smith, Malthus, Ricardo, Sismonde, Mill, Fourier, St. Simon, Marx, Marshall, Veblen, Hayek, Keynes, Rand, Friedman, and more. It also surveys economic systems over time, including feudalism, mercantilism, free-market capitalism, corporate capitalism, socialism, and cooperativism.

The main theme of the book considers the work of Adam Smith, the philosopher who conceived of “economics” (which had not existed before) and who eventually became “the father of capitalism.” An 18th century moral philosopher, Smith believed that the laissez faire market was the most effective economic system available, in contrast to the controlling power of kings and aristocracy. Smith believed that laissez faire economics would work to the greatest benefit of the greatest number, not by altruism or by Christian love, but with the help of the “Invisible Hand of Mammon” (i.e. money). Self-interest was the moving force; a combination of all the self-interests of all people would result in the greatest benefit to all.

Smith, who wanted to improve the lot of the poor and who did not approve of corporations, would not have recognized the results that followed from his ideas. Guidance from the “invisible hand” does not work with corporations the way it does with human beings, who get hungry and might take that job even if wages are low, thus balancing the economy according to Smith’s prediction. Corporations, on the other hand, can out-wait changes in the marketplace, to avoid the give-and-take that works to balance the economy and to maximize profits.

According to Durland, this foolish pursuit of wealth carries a steep price: “We have overlooked, in our acceptance of capitalism, the absence of such American values as ethics and democracy. . . America’s greatest gift to the world was not capitalism. . . It was justice and freedom.”

To the “great ethical question” of our day, “the disparity between rich and poor,” Durland says the answer is to create “a social system of public enterprise” that is “balanced in a democratically participatory way.” One promising model of such an approach is found in cooperativism. The challenge here, Durland points out, is that cooperativism flies in the face of our current economic system, which is based on “egoist self-interest.” Changes within our current system would need to be extreme to be effective, says Durland, involving revisions to the Constitutions of the U.S. and of individual states, to clarify the fundamental right of human persons and the legal responsibilities of corporate persons.

Structured like a collection of separate essays, this book explores a broad range of topics, and it surveys centuries of economic history. A few teasers should convey the range that it covers: Durland explores the controversy surrounding Executive Order 11110, by which JFK put the US back on a silver standard, five months before his assassination. Durland recounts the history of “the 1%” versus “the 99%,” which reaches back for centuries. He recounts the biblical roots of Friedrich Engels’s famous slogan, “From each according to his capacity and to each according to his need,” which Engels apparently cribbed from Paul, “It was distributed to each as any had need.” (Acts 4:35)

Despite difficulties in the organization of this book and its occasionally inadequate editing, The Price of Folly offers a wealth out-of-the-box thinking and information, and it would be a valuable resource for anyone concerned about economic disparity in today’s world. The Price of Folly was published independently in 2013 through createspace.com.  ~~~

Henriette Groot holds a doctorate in psychology and worked for the U.S. Veterans Administration. She “dropped out” to sail (almost) all the way around the world with husband, Albert C. Mayes. She became a Quaker in Queensland, Australia, and is now a member of Central Coast Meeting (PYM). Henriette is also an activist with a particular concern about nuclear waste.