Economics as religion

Louis Proyect lnp3 at panix.com
Fri Apr 19 16:16:51 MDT 2002


H-NET BOOK REVIEW
Published by H-Business and EH.Net at h-net.msu.edu (April, 2002)

Robert H. Nelson. _Economics as Religion: From Samuelson to Chicago
and Beyond_. University Park: Pennsylvania State University Press,
2001. xxvi + 378 pp. Index. $35.00 (cloth), ISBN 0-271-02095-4.

Reviewed for H-Business and EH.NET by Robert D. Tollison
<rtollison at bus.olemiss.edu>, Department of Economics, University of
Mississippi

Nelson's basic thesis is that economics is more like a religion than
a science. In fact, he argues that economics in the twentieth century
has virtually supplanted organized religion with a creed of material
progress.  Within economics Nelson analogizes Samuelson and company
as being more like Roman Catholics who adhere to natural law
doctrine, such as the efficacy of market institutions with a strong
overlay of government regulation. Chicago economists are more like
Calvinists in that they are radical revolutionaries in the pursuit of
a more libertarian approach to economic life in general.

The half of me that wants to like the book reflects an admiration for
Nelson's scholarship. His thesis is new and novel; he has written a
strong brief for it, and to say the least, he has interesting ideas.
Stylistically, he wins me over.

The other half resists the extremity of the argument. There is no
doubt that modern economics is full of value judgments, both implicit
and explicit, and that one must use care in separating positive from
normative arguments. Where the argument is normative, one must be as
explicit as possible about what the value judgments are and whether
individuals are in general agreement with respect to these judgments.
In most cases, the normative aspects of economic analysis are benign
and easily accepted--for example, more wealth or utility is better
than less, material progress is a good thing, market institutions
stimulate economic growth (this is also a positive prediction), and
so on. Of course, there will be dissenters; we do not live in a
Pareto-optimal world. But for the most part, the normative
assumptions of modern economics are not controversial. So while
Nelson is right that there is a "religious" sub-text to economics, I
do not think it is such a big deal. Most of these value judgments are
just common sense writ large.

At times Nelson seems to deny the prospect of a value-free analysis.
Here, I think he goes too far. Positive economics is alive and well
in academia, and the economic paradigm of choice within constraints
is being pushed steadily forward to new frontiers of explanation
(including religion). There are no hidden values here; there is no
sub-text. There is a simple desire to explain the world as it is in a
more understandable way. The relevant question to these scholars is
not how but why? Most of the work that Nelson discusses in the modern
Chicago approach and in the New Institutional Economics is this type
of analysis. And while understanding the world per se may actually
lead to social change, I do not think this correlation is thought
about or stressed very much by these analysts. Their focus is on
understanding, not changing, the world.

Still, on net, I give Nelson high marks for making an interesting and
useful argument. It is always good to take stock of what we are about
as professional economists.

One final note is that Nelson may be right about the demise of
economics in universities. One way to look at the issue is to note
that the great economic debate is over. Capitalism won, so that the
demand for the "religious" services of economists is on the wane.

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--
Louis Proyect, lnp3 at panix.com on 04/19/2002

Marxism list: http://www.marxmail.org



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