The Russian novelist believed that the dismal science was inescapably suffused with morality and politics. Discover Tolstoy’s groundbreaking perspective on Economics, where morality and human behavior merge to redefine prosperity and social justice.

Dive deeper into Tolstoy’s visionary Economic narrative and explore how it challenges today’s financial doctrines.

Genres

Literary criticism, economic theory, historical analysis, social commentary, philosophical discourse, biographical study, cultural examination, political scrutiny, ethical inquiry, educational material

Nick Romeo’s article, “An Economics Lesson from Tolstoy,” delves into Leo Tolstoy’s view of economics as a field deeply intertwined with morality and politics. It discusses Tolstoy’s belief that economics is not a set of rigid laws but a reflection of human behavior, with the potential to drive social change.

The article highlights how mainstream economics, with its focus on growth, often overlooks the human element, leading to wealth imbalances and market monopolies. Romeo references Tolstoy’s 1886 short story “How Much Land Does a Man Need?” to illustrate these points.

Review

Romeo’s article is a compelling read that successfully brings Tolstoy’s economic thought to the forefront of modern discourse. It is well-researched and presents a nuanced understanding of how literature can offer valuable insights into economic behaviors and outcomes.

The article is engaging and offers a fresh perspective on the relevance of Tolstoy’s work in contemporary economic discussions. It serves as a reminder of the importance of considering the moral and political dimensions of economics, making it a valuable resource for readers interested in the intersection of economics and literature.

Recommendation

Leo Tolstoy’s stories show that economics can be a force for social change rather than simply a science of fixed laws and outcomes. Journalist Nick Romeo engagingly assesses Tolstoy’s work in highlighting human behavior in business, and he notes lessons that are as resonant today as they were more than a century ago. Romeo also reports on the shift now occurring within the dismal science, one that augurs a better understanding of commercial activity through the combined study of economics, politics and philosophy.

Take-Aways

• A reliance on mathematics and theory pushed economics toward the hard sciences.
• Economics should incorporate more of the social sciences.
• Some businesses and organizations are making changes.

Summary

A reliance on mathematics and theory pushed economics toward the hard sciences.

Practitioners of economics have traditionally treated their subject as a physical science, void of the potential to account for the possibility of qualitative, human-influenced outcomes. Mainstream economic thought has informed discussions and policies that consider economic growth a necessity. This has led to increasing wealth imbalances among individuals and to oligopolistic and monopolistic levels of concentration among businesses.

“Economics relies on a technocratic, quasi-scientific vocabulary, which obscures the ethical and political questions that lie at the heart of the discipline.”

The renowned Russian author of, among other classics, War and Peace, Leo Tolstoy was not an economist by trade. Yet his work offers a broad and novel perspective that doesn’t rely on mathematical formulas to explain economic outcomes. “How Much Land Does a Man Need?” is a Tolstoy short story, written in 1886, that explains the technical concepts of the “hedonic treadmill” and the “sunk-cost fallacy” better than any textbook can. The story’s protagonist gathers land and wealth, and he leverages his holdings to buy more and more. Eventually he and his fortune collapse, victims of the all-too-human pursuit of greater wealth. The story answers the title question: just a six-foot grave site.

Economics should incorporate more of the social sciences.

Economist John Maynard Keynes also spoke of the human aspects of economic behavior, as he bemoaned the social costs of prosperity in 1933: “We live miserably in a world of the greatest potential wealth.”

“With an optimism that proved premature, Keynes described a future when ‘the love of money as a possession – as distinguished from the love of money as a means to the enjoyments and realities of life – will be recognized for what it is, a somewhat disgusting morbidity’.”

Economics needs to embrace the skills and perspectives of historians, diplomats and philosophers. Economists must consider qualitative in addition to quantitative outcomes. They should account for the true costs of goods and services transacted, those that affects workers, the environment and the welfare of future generations. Economic policies that inform activities such as climate budgeting, employment guarantees, and living wages could fuel human happiness.

Some businesses and organizations are making changes.

Crucial and positive modifications are already afoot in certain quarters. Consider the change to its ownership structure that Patagonia effected in 2022, in which the firm’s owner turned over his business to his employees. Or think of Mondragón, Spain, which hosts the most extensive network of worker cooperatives in the world. Amsterdam began the practice of true pricing – allocating environmental and social costs – and uses climate budgeting. Gig-worker systems such as Uber and similar jobs could be fodder for the Department of Labor to create a public market for occasional employment. Society should consider these model approaches and other original paths to boost economic equality.

About the Author

Nick Romeo is a journalist at the New Yorker, a teacher at UC Berkeley’s Graduate School of Journalism and the author of The Alternative: How to Build a Just Economy.

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