Menu Close

The religion of economics

Asad Zaman

“Holy Trinity of Capitalism” by scottmontreal is licenced by CC BY-NC 2.0 DEED

Maeshiro, in “The Capitalist Religion and the Production of Idols“ (2016), writes that Capital is the God, and Capitalism is the religion of modern society. Gauthier’s review of Nelson’s Economics As Religion states that “economics became the modern theology that replaced traditional theology as the set of doctrines that give meaning to our social reality and hope to our endeavours to improving our lives … (Nelson analyses) the works of the major twentieth century U.S. economists to show how professional economists are equivalent to the priesthood of this religion of economics which justify, disseminate and legitimize in scientific discourse, the normative foundations required for a rapidly growing modern economy”. These articles provide numerous additional sources which assert that modern Economics is a religion. Nonetheless, Economists vehemently deny this charge, and argue that their discipline consists purely of positive and descriptive statements about how modern economies function, without any value judgments. We can achieve substantial clarity about this dispute by studying the history of the origins of economic theory.

Over a century of enormously destructive religious wars in Europe convinced everyone that social theory could not be built on religious foundations.

The scholastic approach, building on the Bible, was rejected, and the entire structure of the social sciences was rebuilt from scratch. Because of urgent need, political science was the first of these secular social sciences to emerge. In Religion and the Rise of Capitalism, Tawney describes the replacement of religion by reason as follows:

“… the secularization of political theory … (was) … the most momentous of the intellectual changes which ushered in the modern world. … The theological mould which shaped political theory from the Middle Ages to the 17th century is broken; politics becomes a science, ultimately a group of sciences, and theology at best one science among others. Reason takes the place of revelation, and the criterion of political institutions is expediency, not religious authority. Religion, ceasing to be the master-interest of mankind, dwindles into a department of life with boundaries which it is extravagant to overstep.”

Widespread myths about the nature of the Enlightenment have been debunked by historians, but continue to dominate popular discourse. Nonetheless, for deeper understanding of the status of Economics, it is essential to understand the ambiguities of Enlightenment “rationality”. The Enlightenment thinkers sought to reject Christianity in toto, and rebuild the entire structure of human knowledge starting from zero. However, they could not escape their historical and cultural context.

The apparently neutral and secular “rationality” taken to be the sole basis for valid knowledge implicitly incorporated many assumptions from Christianity, while explicitly rejecting many others. We provide one illustrative quote from The Age of Enlightenment: The Eighteenth-Century Philosophers by Isaiah Berlin: “Enlightenment thinkers aimed to build a secular and rational order, but they often drew on concepts and values deeply rooted in Christian thought. Their ideas were shaped by their cultural background, which included both the legacy of Christianity and a desire to move beyond it.“

Enlightenment thinkers enthroned rationality as the sole source of valid knowledge. However, many of them failed to realize that reasoning always goes from premises to conclusions. Valid reasoning can never add information to the premises – the knowledge expressed in the conclusions must be present already in the premises. For example, in the famous deduction that “I think” => “I am”, the premise “I think” already assumes the existence of the subject “I”. Kant, in his Critique of Pure Reason, expresses awareness of this conundrum, and introduces the “synthetic a priori” to resolve it. Some knowledge must be present prior to the use of reasoning, to enable us to build upon it. Russel and Whitehead sought to build all of mathematics based on only two primitive notions: set and inclusion. These two were taken as primitives to be understood intuitively, not subject to further explication. The point is that even mathematics cannot be built from scratch – some primitive a priori knowledge must be assumed.

Enlightenment philosophers could not avoid incorporating concepts and values deeply rooted in Christianity into their definition of rationality. Similarly, while Economists claim that their discipline is value-neutral, with many values built into the conceptual frameworks used as foundations of modern Economic theory. Hausman and MacPherson in Economic Analysis, Moral Philosophy, and Public Policy explain that “in defending their model of rationality, mainstream economists implicitly espouse contestable moral principles”. It is obvious that “rationality” is a normative concept, and the book shows that norms of rationality advocated by economists conflict strongly with nearly universally held intuitive and commonsense notions of morality. For example, economists believe that it is rational to renege on a promise, if material gain would result from this.

It is this switch from morality (good vs evil) to rationality (intelligent vs foolish) that is the key to understanding Economics as a religion. Once we realize that the normative principle of rationality serves a replacement for Christian morality, we can reconstruct the foundational principles of the religion of Economics. Pre-Enlightenment European societies were united in regard to the Christian idea that the goal of life was to seek salvation on Judgement Day. Enlightenment rejection of Christianity eventually led to the new goal of seeking to maximize pleasure in this worldly life. Tawney, in Religion and the Rise of Capitalism, provides the complex historical details of how this transition took place over the course of two centuries. A central aspect of this transition is the replacement of the Biblical “Love of money is the root of

all evil” with the Shavian “Lack of money is the root of all evil”. As Tawney puts it, 16th Century Thought insisted that “Christianity has no more deadly foe than the appetitus divitiarum infinitus, the unbridled indulgence of the acquisitive appetite”. However, by the 19th century, it became an unquestionable truth that religion should be confined to the private sphere, and the pursuit of wealth was the natural goal for individuals and society. Schooled in secular modernity, we think of this as a replacement of religion by reason. The crucial point I want to make here is that this was the replacement of the religion of asceticism by the religion of Mammon.

Widespread use of the word “rationality” for the worship of Mammon automatically makes all counter-arguments appear “foolish”. Amartya Sen’s essay on “Rational Fools” explains how the behaviour that economists call rational would be foolish in ordinary language. The title of the essay displays the linguistic trap created by economists’

appropriation of “rationality”: it is self-contradictory to say that rationality is foolish. The only way to wriggle out of this straitjacket is to reclaim the ordinary language usage for “rationality”. We can do this by using E-rationality for the Economists’ usage of the word, and distinguish it from O-rationality or just plain rationality, for the ordinary language usage. Once we do this, it is easy to see that E-rationality and Orationality are in strong conflict in many different areas. E-rationality is the normative framework for the religion of Economics, and differs strongly from nearly universal notions of morality, common to many different moral frameworks.

E-rational behavior, embodied in the infamous homo economicus, is sociopathic. Is it rational to be a sociopath? While economists think so, no one else does, for good reasons. A “society” exists because we are tied to each other by social networks outside of the market framework. Polanyi’s masterpiece “The Great Transformation” explains that in a traditional society, market transactions are embedded within society. A market society reverses this priority, subordinating social relationships to the market. To understand this better, consider the moral question of whether a drugstore owner should give a life-saving drug to someone who needs it, but does not have the money to pay for it. In a market society, private property, and the right to do whatever one wants with one’s property takes precedence over social responsibility. So, the question does not arise: of course, the owner of the drugstore should withhold the drug unless, as an individual quirk, he is moved by compassion and sympathy.

In a traditional society, the answer is equally definite, but the opposite. How can a human being allow another person to die, when he has the means to save his life? The social relationship takes precedence over the market.

The main point of this essay is that the choice between the two options is a moral choice. It is not a question of “reason” versus “religion” but that of market-religion versus natural human morality, embodied in all traditional religions.

Once we strip away the disguise of “science”, it is easy to see why all traditional societies have warned against the worship of Mammon, aka Economics. E-rationality makes the pursuit of wealth the highest goal for individuals and society, with disastrous consequences. By rationally maximizing their profits, financial institutions stripped millions of their life-saving in the Global Financial Crisis, creating homelessness and hunger in the USA not seen since the Great Depression. The concealed moral framework of Economics rationalizes the extreme and increasing concentration of wealth. E-rationality teaches us that scarcity, and not lack of compassion, leads to a billion people living below poverty line, when planetary resources can easily provide

for basic needs of entire humanity. As Zygmunt Bauman shows in Modernity and the Holocaust, it is perfectly rational to burn millions of living people, if this is considered desirable for the welfare of the majority. Similarly, wars which kill millions to enrich corporations are perfectly rational. In fact, according to Friedman’s views, it is the moral responsibility of corporations to kill millions, if it will bring them profits and is not illegal. Manufacturers of a baby milk formula, who know that their product will kill millions of babies, use this justification as defense in courts (see the movie: Tigers).

As in A Brave New World, Economists distort language in order to prevent critical thought. We can counter by differentiating between E-rationality and the ordinary language rationality. Max Weber said that the spirit of capitalism is the pursuit of wealth for its own sake, to the point of being irrational. Economists have deceived us by turning irrationality into E-rationality, and dropping the Eprefix. We must relearn the difference between rationality and irrationality, in order to prevent painful outcomes.

Source: The religion of economics

Leave a Reply