My favorite part:

Efficiency is the Chicago School's defining value. The free market economists who came before--most notably Austrian Friedrich Hayek--offered a philosophical critique of the political consequences of state regulation and control of the economy. But Milton Friedman, his colleague George Stigler and the entire Chicago School focused on the actual economic problems of state control, namely, inefficiency. They rejected Keynes' contention that markets function best with routine government intervention and instead harkened back to Adam Smith's classical conceptions of equilibrium. Chicago School theories gained popularity when global capitalism hit a major funk in the '70s--a period of slow growth and high inflation. Friedman argued, plausibly, that it was too much government that had caused the problems.

What may seem a subtle rhetorical shift had major consequences. It transformed what had been conservatism's moral argument about capitalism bestowing the most benefits on those who worked the hardest--and the inherent injustice of a coercive state forcibly redistributing capital--into a technical argument about the inefficiencies associated with non-free-market solutions and the perverse incentives that made any social programs destined to fail. Thus, arguments about the way the world should be were converted into assertions about how the world actually was. Or, to put in terms that economists favor, normative arguments became positive ones.

In the textbook Sanderson uses, author Michael Parkin defines the difference this way: positive statements are about "what is" and they "might be right or wrong." Normative statements are about "what ought to be" and because they depend on values, they can't be tested. "Be on the lookout," Parkin warns, "for normative propositions dressed up as positive propositions."

Parkin's warning, however, turns out to be surprisingly difficult to heed. Neoclassical economics smuggles a great many normative wares underneath its positive trenchcoat, both in its assumptions about how humans operate--as individuals rationally maximizing their utility--and its implied preference for "markets in everything." Because neoclassical economics always presents itself as a value-neutral description of the world, its ideological commitments can be adopted by those who learn it without any recognition that they are ideological. This is the source of some very spirited debate within the field itself. A growing global movement of "heterodox" economists has criticized the ideological confines and blindspots of the neoclassical approach. As Nobel Laureate Joseph Stiglitz put it, the dominance of the neoclassical model is a "triumph of ideology over science."

So when are you going to join the ranks of the heterodoxy, and write a book.  Ideas are weapons, Jerome.  And thus far Europe has preserved the Social Democratic model, but with Sarkozy and Merkel, how long can it last?  I'm with Polanyi on this.  And I think that in order to fight Hayek, Von Mises, and Friedman, we have to turn substantivism.

Economies ares embedded in social structures.  They are not interlinked markets, that are subject to "rational" calculation.  The formal, (mathematical), understanding of society and economics must be calibrated upon substantive understandings of human values that there are no sufficient numerical understandings of.  

How much is a 4 year old boys life worth?

Should there be a market for organs?

Should individuals be able to willing sell their own freedom for a price to enter into voluntary servitude?

Economics has deluded itself into the belief that it is the master science.  But as Polanyi tells us, the commodification of human life and the natural environment destroy the social foundations upon which the market rests.  As Stiglitz says in the intro to the 2001 edition of Polanyi's Great Transformation, societies do not willingly committ suicide.  Free market economics pushes social order to the brink, and when society draws back out of a sense of self preservation, economists tell us that the reason for market failure doesn't lie in extremist market fundamentalism, but instead they problem is that society by protecting itself refused to allow the market to complete the task at hand.  The problem isn't that the market was allowed to go to far, it's that it wasn't allowed to go far enough.  So said Stiglitz.

And the give and take between the advance of "economic" thinking replete with the commodification of human life and society's self protection makes the double movement.  In the 1970's the neoliberals pushed economic thinking and the neoliberal paradigm onto society destroying the protective measures instituted by society in the post war period.  Banks were deregulated, utilities privatized, social security nets removed from beneath the fall of the working classes.  This can only happen so long before society recognizes that it is committing suicide and protects its self.  

In the United States, the Bush years have seen unabated advance of market fundamentalism as what remained of the social safety net has been shredded.  Economists of the orthodox variety falsely believe that that can sucessfully kill society (because there is no such thing, society belonging to the same set of antiquated social conventions as religion.)

But societies will not willingly committ suicide, and the farther econonomic thnking insinuates itself into what is rightfully the preserve of social values the more severe the response.  The choice is between social democracy so that social values may be preserved, or dictatorship where the work of the market is completed and the intrinsic value of human life is reduced to a matter of numbers.  In time society will reassert itself (see Spain) but at what cost?

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg