- The Washington Times - Tuesday, September 25, 2001

Economists have long argued about whether theirs is a value-free science. Robert Nelson, an economist at the University of Maryland, emphatically says that it is not.

Yes, he admits, economists provide technical knowledge. But, he contends, "another basic role of economists is to serve as the priesthood of a modern secular religion of economic progress that serves many of the same functions in contemporary society as earlier Christian and other religions did in their time."

In certain ways it is an astonishing claim. And, indeed, Mr. Nelson pushes the comparison too far while theology has not hesitated to pronounce judgment on matters of everyday life, it has linked itself to a transcendence far beyond the most extravagant claims of the most ambitious economist. But "Economics as Religion" nicely explores the often unstated philosophical assumptions behind supposedly objective economic analysis. While the economic analysis itself often is value-free, it has almost always been enlisted in the service of political and philosophical values.

As "priests," argues Mr. Nelson, economists defend and propagate a series of market norms the importance of private property, efficiency, honesty, economic self-interest and political selflessness. But the bulk of the book is devoted to the proposition that modern economics has as its core a theological conception of the value of economic progress. In Mr. Nelson's view, "The religious purpose of the market is to ensure maximal efficiency in the use of the material resources of society, and thus rapid movement of American society along a route of economic progress in this world."

Mr. Nelson's framework seems contrived, yet it is analytically useful. For instance, in his view, Karl Marx had a salvation message: The laws of history would act as God to deliver mankind from alienation or sin. Marx is thus "best understood not fundamentally as an economist at all, but as another Jewish messiah like Jesus with another message of salvation for the world."

John Maynard Keynes offered "a modest variation on Marx." Capitalism would bring about the end of history, but the millennium would come not through apocalyptic explosion but government intervention. Paul Samuelson's "Principles of Economics," contends Mr. Nelson, "was meant to instill, and to a considerable extent succeeded in instilling, a religious commitment to the market now depicted as the 'market mechanism' and a commitment to the priestly authority of economists to manage this marvelously productive instrument for the general social benefit."

Mr. Samuelson substituted a vision of scientific economic management for populist political control of the market. An important aspect of this approach was to downplay noneconomic costs so-called "soft considerations," such as the psychic pain of economic transitions. Measuring them would impede the world's economic salvation so, explains Mr. Nelson, "It is instead the religious duty of all good citizens of our time to bear the sacrifices of economic progress without complaint."

In Mr. Nelson's view, succeeding economic schools offered new interpretations of existing dogma. Frank Knight emphasized that self-interest marred the behavior of economic managers, thereby marking "the beginning of a fundamental break of the Chicago school with the Progressives of Samuelson's ilk." Milton Friedman and George Stigler warned of the corrupting influence of interest group liberalism, which constantly seeks to manipulate the market.

More refinements followed, through Gary Becker, Ronald Coase and others. But recent challenges to the value of material progress have created a theological crisis. One of the threats is posed by environmentalism, where, writes Mr. Nelson, economic skeptics "found a new gospel often actively hostile to technology, economic growth, and the long-standing claims for the transforming benefits of material progress."

As Mr. Nelson documents, economists have long endorsed the importance of economic development and growth. People believed that "If the market (or any other economic system) could guarantee continuing rapid economic growth, it would be the route to salvation in this world." But the noneconomic disasters of the 20th century have undercut the promise of economic growth. As a result, argues Mr. Nelson, "society is less inclined to recognize the religious authority of the economic priesthood." He posits a possible environmental/Libertarian synthesis, reached through the writing of Frank Knight.

In the end, a belief in economic progress looks more philosophical than theological, a logical assumption for people who spend their time studying economic systems. Economists have little to say about the truly transcendent, particularly the meaning of the human person. However, economists are not objective technocrats, applying a value-free science, and in developing this argument Mr. Nelson makes an important contribution.

Doug Bandow is a senior fellow at the Cato Institute and the author of "The Politics of Envy: Statism as Theology."

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