This is the home page of J.R. Lucas, Fellow of Merton College, Oxford.

Contact details:

Mr J.R. Lucas,
Lambrook House,
East Lambrook,
Somerset, TA13 5HW England

Telephone 01 460 240413
Fax (use voice first, and ask for fax)
Station Crewkerne
OS grid reference ST 433188
E-Mail john.lucas at' merton.ox.ac.uk (I have deleted the simple mailto command, because spamsters are now searching the internet for the at' sign, and thus obtaining further addresses for their objectionable messages.)

My granddaughter, Antonia is my social secretary (electronic), and understands Facebook. and similar systems
If you are trying to get in touch with me via Facebook, please consult her. Her E-mail address is antonia.lucas0@gmail.com but do not bother her needlessly, as she has exams.

### Corrections

September 22nd, 2008. I have just spotted some bad typos (omitted negation symbols) in ch.2 of Reason and Reality p.32. If you have downloaded this chapter, please do so again from the corrected version.

October 2nd, 2008. I was dismayed to find yesterday that although I had entered many corrections to ch.2, my computer had managed to replace the corrected files with uncorrected ones. I think the current text is correct. But if you spot any errors, please E-mail me.

### Old News

September 16th, 2006

I have put chapters of my book, Reason and Reality, on the web, as a series of pdf files. My reasons are partly prudential, partly ideological. Publishing hardback in the traditional manner is slow and tedious, and offers no opportunity of rectifying errors (and I make many typos, as well as more serious mistakes) until the print run is sold out. Plato said that books were a poor substitute for dialogue, and the internet allows for intellectual interchange in a way that was impossible with the old technology. And finally, hardback books are too expensive for most people to buy. I have always warmed to Hillaire Belloc's lines

When I am gone, let only this be said:
His sins were scarlet, but his books were read

# VIII Economics as a Moral Science

I have been trying to understand economics. I have struggled with Keynes General Theory and his Money, and found his criticisms of the then orthodoxy persuasive, but his own arguments full of holes: employment'' sometimes meant employment of resources generally, sometimes of human beings only; demand' seemed to be a quantity that could be simply summed into an overall total. The monetarist criticisms of Keyneseanism seemed telling, but the monetarists' own prescriptions depended on money's being a definite quantity that could be reliably measured, which was evidently not the case. I found myself much closer to Hayek, but took issue with him on two counts. He underestimated the likelihood and danger of market failure. Although markets allow a great deal of self-organization to occur, and can register information from distant and diverse sources, it encourages, as Keynes noted, lemming-like behaviour, which can lead to disastrous outcomes. Markets are an invaluable corrective to state control, but need themselves to be regulated on occasion.
Hayek also has too rigid a concept of law and the rule of law. He recognises the need for some curb on individual activities, to restrain violence and to enforce contracts, but does not give weight to the social and moral context in which law operates. Law is one, but not the only, constraint on individual action. Social and moral norms are also important. Law by itself is not enough---it would not do its job if judges and juries were not honest, and striving to do their duty to seek justice and to reach true verdicts. Social and moral norms operate over a much wider area than the law, and are pervasive influences on economic conduct. Often it is only when these fail, that the law steps in. The successive increases of legal controls on economic activity---laws about weights and measure, take-over codes, cooling-off periods and insider trading----each represented further legal enforcement of what was already recognised as good practice. Moreover, once we recognise the importance and influence of social and moral norms, we can, unlike Hayek, feel comfortable with people having discretion. Hayek fear that officials will use discretion to tyrannize the citizen. This can happen, but need not. If citizens and officials alike are guided by ocial and moral norms as well as legal precepts, officials will use their discretion responsibly, and citizens will not always seek their own interest to the utmost extent the law allows. Keynes was right to insit that economics is a moral science. To understand it properly, we need to see it in its context. This means adopting a radically different viewpoint from that taken up by most economists. It is this difference of perspective, rather than any particular conclusions, that I want to share with my readers. If we see monetary transactions as a particular sort of social cooperation, we can compare and contrast economic activity with other social activities, and see why maximising is an irrational policy. If we see money as encapsulated choice, the logic of choice shows both the difference between choices still open and choices already made, which, together with the fact that if we have choices we can choose to defer them, that is we can choose to chose at a later time, reveals that the key concept in economics is liquidity. Liquidity, not quantity of money, explains the occurrence of booms and slumps, and explains why government intervention usually makes things worse. Further analysis of the present situation suggests that holding down interest rates is a mistake, and that quantitative easing cannot be a cure. Continual inflation is as great an evil as deflation, if not a greater one. It promotes industrial strife, makes long-term planing ineffective, and turns the provision of pensions into a political issue that sets one generation against another. We also see that growth and full employment are separate issues. We can aim to provide, at a cost, meaningful employment for all willing workers, but cannot do so by seeking ever greater growth. Growth should not be the Holy Grail of macro-economic policy. Macro-economic policy can occasionally help, and often damage, micro-economic activity, and economists need to remember that it is micro-economic activity, with all its peculiarities that drives the economy as a whole. In that context growth is sometimes a good thing, but not always. It is good for children to grow, but in later life to have a growth is very bad news.

I am putting my thoughts, as I draft them, on the web. The key sections are in Chapter 3, Section 3.2, The Logic of Choice, in which I go ino Modal Logic in orde to articulate exaclu how money functions as encpsulated choice, and Chapter 4, Section 4.6 (Liquidity). Critics should direct their fire at these two sections. The first three chapters set economics and the concept of money in the right context.
Chapter One: Economics as a Moral Science argues that economics should be seen as a moral science (in the Cambridge sense), not as an autonomous discipline.
Chapter Two: Cooperation applies the theory of games to prove that Rational Expectation Theory is irrational, and that rationality requires us to take into account other persons' points of views.
Chapter Three: Money argues that the function of money is to enable cooperation to take place when the cooperators'' surplus is unevenly distributed; money is encapsulated choice, and has in consequence a complicated modal logic.

The next three chapters are more controversial. Much of traditional economics has been based on premises that are not true.
Chapter Four: The Moneyed Society reflects on the fact that in a modern society money is deposited in a bank rather than kept under a mattress. The quantity of money available is therefore extensible in many different ways, Liquidity becomes the key concept. But the large range of macro-economics notwithstanding, it is micro-economics that wears the trousers.
Chapter Five: Boom and Bust considers the business cycle, which is exacerbated by the positive feedback inherent in the concept of money. Standard Keynesean remedies are not likely to work, and often the watchword for government, as for doctors, is noli nocere, do no harm..do no harm. The current remedies of continual inflation and low interest rates are perverse.
Chapter Six: Employment argues that full employment is not an economic desideratum, but may be a social and political one. The best balance between economic activity and other forms of social and individual activity is a social choice, which is open to wide-ranging social debate.

Chapter Seven: Law, Legislation and Taxation argues that in democracies, as in other regimes, the government does not have an unfetterd right to enact whatever laws it likes, but is limited by some fundamental constitutional principles arising from the nature of civil society. Taxation likewise should be subject to considerations of fiscal, or contributive, justice, which need to be, and so far have not, been discussed publicly.

and then
Themes and Conclusions with two final sections: What Should We Do?'' and What Can I Do?''

There is an appendix:
The Snob Theory of Financial Rectitude which explains the present crisis as an after effect of the Big Bang.

April 4th, 2011 I have put on the web Against'' a three-page synopsis of the arguments against there being any place for moral arguments in economics, and the counters to them.
If you think I am wrong, please tell me.

April 20th, 2013 I have put on the web colour the names of those in Merton with whom I have shared pupils, those I have given lectures and seminars with, and those with whom I have worked on other projects in Oxford, Cambridge, Leeds, Edinburgh, the British Society for the Philosophy of Science, and elsewhere. But there are many others whose names could well appear here, to whom also the book is dedicated with grateful thanks.

Corrigenda to The Conceptual Roots of Mathematics, There were an embarrassing number of typos in the published edition. These are listed in Corrigenda to The Conceptual Roots of Mathematics, together with pdf files of the corrected chapters. But I have been worrying away at some of the loose ends I had not tied up properly, and have now written three chapters that are markedly different from the published version.

• . Chapter 9A, What is Logic'' partly replaces the old Chapter 13, Chastened Logicism?'', but needs to come before the new
• . Chapter 9B, Transitive Relations'', which, on the urging of a correspondent, has been substantially re-written.
• . Chapter 10A , Protopology'', which attempts to replace Whithead's unsuccessful programme of extensive abstraction'', basing topology on mereology together with infinite sequences, by one `Boolean Plus'' that bases it on the most minimal extension of mereology.

I need to give a better account of infinity, and re-do the final chapters, but I have other pressing concerns, so publish these three chapters on their own.

# X Bibliographies

• . Complete Bibliography of the Philosophical Writings of R. M. Hare
• . Complete Bibliography of the Philosophical Writings of B.G. Mitchell
• . Complete Bibliography of the Philosophical Writings of Helen Oppenheimer
• . Bibliography of Michael Oppenheimer

# XI For Browsers

• . a note of links to other web sites
• . My son, Edward's web page
• . Next Sunday's Service at St James' Church, East Lambrook.
• . Wishing for a Well A local charity that raises money in Somerset, and uses it to build wells and dams in an impoverished region of East Africa.