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A less than useful debate

Arguing over which types of economic activity are socially useful is a mug’s game

By Jonathan Wolff   October 2009

In Prospect’s September cover story Adair Turner worried that the City engages in “socially useless activity.” He is by no means the first. In 1845 Friedrich Engels asked the workers of Elberfeld in Germany to consider “how many speculating, swindling superfluous middlemen have now forced themselves in between the producer and the consumer.” Discussing a bale of cotton travelling from America to Germany, he attacked the “exporters, commission agents, forwarding agents, wholesalers and retailers who actually contribute nothing to the commodity itself.”

Yet Engels’s same swindling middlemen are heroes to Milton Friedman and Friedrich Hayek. They find price disparities…

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