2008 REVIEWS

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workers need to redefine their roles and changetheir attitudes or risk following in the footsteps oftheir US counterparts and concede their influenceto other occupational groups.

Although Australia and Hong Kong each haveonly one chapter devoted to them, they make for agood read. The Australian chapter in particulargives a nice albeit brief overview of welfarereform, starting from the Social Security Reviewin the mid-eighties. It also clearly explains therole of Job Network and Centrelink and reports onqualitative research based on interviews with JobNetwork case workers. But apart from the nicehistorical overview and the insight into the psycheof the Job Network case workers this chapter hasnot much more to offer. The final chapter onHong Kong is interesting because social protectionin Asia has, at least historically, been based onstrong cultural and familial obligations to meetsocial needs. Even during the Asian financialcrisis of 1997 the government held the view thatincreasing social spending during bad economictimes would only undermine the prospect ofeconomic recovery. However, with no unemploy-ment insurance available many people were forcedto apply for social assistance. In response to therapidly increasing caseload, not helped much bysubsequent negative shocks such as the SARSepidemic, the government curbed social spending,tightened eligibility and introduced a series ofreforms. These reforms are documented in thischapter, and the overlap with Mutual Obligation,Job Network and Intensive Assistance is obviousto readers familiar with Australia.

Reading the series of papers does make thereader think about the role of the individual andways to engage the welfare client with the systemin order to speed up the client engaging in themarket. There are two examples in the book wheregiving the client more control over the publicmoney that is spent on them reduces welfaredependence: the US lump sum ‘avoidance’ grantas an alternative to fortnightly payments and theUK Personal Advisors asking their lone parentclients what

they

want/need. Although this hardlyconstitutes enough evidence, it does suggest thatreforms of the welfare system should be aimed atincreasing clients’ empowerment.

The book as a whole brings to the fore theusual national differences, with the USA favouringthe stick, the UK favouring the carrot, Australiaconfirming its own brand of exceptionalism andHong Kong being taken by surprise. Because thenet is cast wide on what constitutes ‘welfare to

work’, any international comparison is difficult atbest. As such, economists would be better servedby directly sourcing studies on the individualcountries’ reform efforts, notwithstanding theuseful elements in the book described above.

H

ielke

B

uddelmeyer

The Melbourne Institute of Applied Economic andSocial Research

On Classical Economics

, by Thomas Sowell (YaleUniversity Press, New Haven and London,2006). pp. ix + 304.

Thomas Sowell is often recognised as a blackeconomist with conservative political attitudes. Heis certainly that, but those characteristics shouldnot be allowed to conceal his formidable ability todeploy logic or his wide humanistic knowledge.

On Classical Economics

exhibits these qualities,but it is nevertheless an odd book. It reprintsessays from 30–40 years ago, and adds essays onMill and Marx and some general reflections. Thediscussion of classical economics is interestingand sound, but it is not clear that reprinting earlieressays will have much impact on current scholar-ship. Nevertheless, Sowell’s attempt to resuscitateSismondi, which dates from 1972, deserves moreattention than it has been given.

The essays on Mill and Marx are innovative.Sowell is unimpressed by Mill. He contrastsMill’s observations about the ‘ “almost irresistibletendency of the human mind to become the slaveof its own hypotheses”, to “reason, feel, and con-ceive under certain arbitrary conditions, at lengthto mistake these conditions for laws of nature”. ...“subjection to mere accidental habits of thought” ’(p. 142), with his own ready acceptance of thework of Ricardo and his father while failing toreturn to read the critics. The point is right, as aresome other criticisms that Sowell developseffectively, especially the tendency of Mill to beconcerned with the ‘tyranny of the majority’ lessbecause of a concern with freedom than with hisanxiety to preserve privilege for the intellectual elite.However, Mill did create a magnificent summaryof economic knowledge as it existed up to histime, including the leading edge work of himselfand his contemporaries, and Sowell somewhatunderestimates his achievement. Mill’s explorationof the appropriate limits to collective action was

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more subtle than Sowell allows. Besides, it isimpossible to totally dislike somebody who wroteabout a military leader, ‘every feather in his caphas cost the nation more than he and his wholelineage would fetch if they were sold for lumber’,even if his writing was seldom as lively as that.

Sowell’s essay on Marx is notable for its friendlytone. Marx and Engels knew about competitionand about the importance of prices as signals ofwhat should be produced. Not only would theynot have been surprised by the coexistence ofsurplus and shortage in the Soviet Union, but theydeployed classical theory cogently in developingtheir analysis. Nevertheless, Marx and Engelsthemselves saw as their major intellectual con-tribution the vision of ‘the extraction of “surplusvalue” from the proletariat as the essence ofcapitalism’ (p. 185). That certainly continues todrive a lot of contemporary politics but it did notmotivate a large body of important economicthinking. I suspect that Sowell is sympatheticbecause he knows that Marx did not advocate asimple economic determinism: he scorned it, andthought along lines that lead Sowell to reflect onlong-term cultural influences: ‘When the childrenof Jewish and southern Italian immigrants tonineteenth-century America grew up in very similareconomic circumstances in the same neighbor-hoods and sat side-by-side in the same schoolrooms, did their very different reactions andperformances there reflect their immediate circum-stances or the very different cultures which haddeveloped over the centuries before they wereborn into those cultures?’ (p. 195). Sowell’s con-cern is as much the black experience, and blackpredisposition towards collectivism, as withevaluating Marx’s thought.

Sowell is certainly sensitive to the importanceof the idea of a spontaneously self-equilibratingsystem: the market economy. He argues that eventoday, many have not grasped the full implicationsof a reduced role for political, intellectual or otherleaders as guides or controllers of the masses. Isuspect that demand for direct control whether bythe elite or by the masses is somewhat moreimportant relative to preservation of privilege thanSowell allows.

His final reflections show a commendable effortto explore the relations between events and ideaswithout endorsing any simplistic arguments. Ishould have thought that while no simple explana-tion for the marginal revolution is completelysuccessful, the combination of a much greaterdegree of consumer choice as industrialisation

paid off in the middle of the century, and the notunrelated greater visibility of fixed capital pro-vides a good starting point. More puzzling is whywhen human capital has so obviously grown inimportance, many people continue to give priorityto natural resources and mechanisation. But thenperhaps we were as surprised by the eventual pay-off to computerisation as the nineteenth centurywas by the fruits of industrialisation.

Sowell combines his respect for earlier thinkerswith endorsement for new ideas while acknowledgingthat it can be difficult to sort out the valuableones. ‘Oxidation theories and phlogiston theoriesmight co-exist for a while in chemistry but notindefinitely, while opposing political, social andmoral theories can co-exist for centuries. Thehistory of economics has had enough discardedtheories, from those of the mercantilists to thelabour theory of value to the Phillips Curve, to atleast be placed closer to the scientific end of thespectrum in the history of ideas.’ (p. 201). Perhapsso, but the real value of the history of economicsis its combination of enduring questions withprogress in analytical reasoning. Sowell’s

OnClassical Economics

exemplifies precisely thiscombination.

G

ary

H

awke

Victoria University of Wellington, New Zealand

Economics and Religion (The InternationalLibrary of Critical Writings in Economics)

,Volumes I and II, edited by Paul Oslington(Edward Elgar, Cheltenham, UK), pp. 973 + xxviii.

Religious sceptics have long predicted thedecline and marginalisation of organised religionas the advance of science and education diminishesthe demand for belief in supernatural gods.However, the persistence of religious participa-tion, not least the strength and influence of Islamand pentecostal Christianity, has underminedsecularisation theories and generated renewedinterest in religious research. Likewise, recentdevelopments in understanding the impact ofsocial capital on economic outcomes have drawnattention to religious externalities and the effectsof religiosity on economic growth and welfare.

The significant increase in research on the linksbetween religion and economics over the past twodecades was largely unanticipated but it is not, of