"the idea that it is possible to separate an economic sphere of life, in which the pursuit of self-interest is guided by objective laws to a socially beneficent outcome, from the rest of social life, in which the pursuit of self-interest is morally problematic and has to be weighed against other ends."In Adam's Fallacy he presents a history of political economy which both avoids this mistake and critiques its manifestations.
Foley focuses on a few key figures. Chapters on Adam Smith, Thomas Malthus and David Ricardo, and Karl Marx take up the first two thirds of Adam's Fallacy. He touches briefly on some of the founders and ideas of marginalist or neoclassical economics, on Jevons, Menger, and Clark, on marginal utility and Pareto allocations. And he concludes with Keynes, Hayek, and the debates between them and their followers, notably over the assertion of Say's Law that a chronic oversupply of labour is impossible. A final chapter recapitulates this history from a broader perspective, in its moral and political context.
This history of political economy is necessarily idiosyncratic in its choice of material and limited in its scope, but it covers the most central ideas. (Mathematics is avoided completely, with a few simple equations and diagrams relegated to an appendix.) The result is a fine alternative or complement to books such as Robert Heilbroner's The Worldly Philosophers.
As a critique of claims by economists to truths that transcend ordinary science and morality, Adam's Fallacy is complicated by its historical approach. On the one hand, there are forms of modern economic theology it doesn't tackle at all. On the other hand, it continually runs the risk of anachronistic criticism, though Foley is careful when testing the ideas of earlier thinkers against subsequent history, and acknowledges the existence of
"later versions of Adam's Fallacy, particularly the formulations of marginalist and neoclassical economics, of which there is no sign that Smith had the slightest inkling."
It is unlikely to convert ardent adherents of Austrian economics, but Adam's Fallacy may help newcomers to economics avoid a neoclassical indoctrination.