CAPITALISM'S ACHILLES HEEL Dirty Money and How to

320 CAPITALISM’S ACHILLES HEEL
benefited from the first, the refinement of economics, and ignored the second,
the fragmentation of their system’s supporting tenets. I comment on the economics
in this section and on the philosophy in the next section.
In 1893 a young woman in her twenties published an article in Britain’s
Economic Journal that threw her dour Victorian male counterparts into a
frothing hissy-fit. Caroline Foley chided professionals for overlooking “Fashion,”
the title of her piece. Much more than that, she pointed out that efforts
to calculate utility to an individual and demand for goods and services are affected
by the utilities and demands of others. Utility and demand are not
simply “intrasubjective” to an individual, based only on his or her own needs.
Rather, they are “intersubjective,” that is, influenced by the utilities and demands
of friends, acquaintances, and the wider population. She identified
various ways that demands reach outside mere needs, such as a desire for imitation
or conformity, a yearning for distinctiveness, and a preference for
change regardless of need. What this meant was that an individual’s demands
and consumptions are swayed by the demands and consumptions of countless
other people and therefore are incalculable. Quite simply, the utility measurement
for a person cannot be accurately performed because it is subject to
too many extraneous variables. The establishment scholars of the time were
left yanking on their beards, trying to determine how to get out of this analytical
box. A recent commentator summed up the jolt to the Cambridge
school as follows: “[T]o express a utility function that reflects intersubjective
determinants, as well as intrasubjective ones, requires a construction of almost
unimaginable complexity. . . . Pigou concludes that . . . the individual’s
utility function for a commodity is undefined.” 27
The “unimaginable complexity” of the utility calculation contributed to
several important developments in economics during the twentieth century.
First, it advanced the mathematization of the subject, drawing on statistical
resources and employing modeling methodologies. As Alan Blinder, an
economist at Princeton, put it: “[T]he statement that economics became a
science during the twentieth century is almost equivalent to saying that economics
became a data-driven, econometrically-oriented discipline . . .” 28
Second, together with its growing mathematical sophistication, the locus
of the profession shifted from England to the United States. In the early
decades of the twentieth century, the field was dominated by Cambridge,
and Cambridge was dominated by utilitarians. John Maynard Keynes was
the last of the truly great figures from the Cambridge school. After World