"Economics as Religion: From Samuelson to Chicago and Beyond"

["Craven, Jim" <jcraven@xxxxxxxxx>]

"Economics as Religion: From Samuelson to Chicago and Beyond" by Robert H.
Nelson, Penn State Press, N.Y., 2001

When I bought this book it was shrink-wrapped to prevent examining its
contents prior to purchase. I should have remembered my own axiom: "If it is
shrink-wrapped to prevent examination of contents prior to purchase, it is
most probably written by some right-wing (usually libertarian) asshole who
knows that if the potential purchaser is allowed to examine the likely
meager contents prior to purchase, he/she, if in possession of an IQ over 60
and a heart/conscience, will not likely buy it--hence the need for
shrink-wrapping." Indeed all of the shrink-wrapped books that I have
encountered (Hayek, Friedman, Becker et. al) have all been written by
right-wing libertarians who paradoxically scream about "let free markets be
free and do what markets do" and "consumer sovereignty" which of course
require, according to neoclassical theory, "bounded rationality" (used to be
perfect rationality) and [near symmetrical] access to information requisite
for "informed [free] choice".

The dedication of the book was to Paul Heyne, a hard-core
neo-classical/libertarian ideologue who was trained in theology but held a
professorship of economics at University of Washington. His training in
theology was indeed proper for the metaphysics inherent in the neoclassical
paradigm. Indeed that is part of the central thesis of this book: That the
core postulates, "axioms" and hypothetico-deductivism of the
neoclassicals--and other non-neoclassical paradigms--while purporting to be
based on philosophical positivism and dealing only with
observable/operationalizable/measureable constructs, variables and
verifiable/nullifiable hypotheses, are in reality, as metaphysical as any of
the core postulates, axioms etc of various religions; they constitute,
according to Nelson, "tenets of [an] economic faith".

Nelson goes into what he calls "The Market Paradox": methodological
individualism and homo oeconomicus, central to neoclassical economics and
market processes, when celebrated and played out, may easily create and
celebrate forms of criminality, social darwinism, cut-throat/rat-race
individualism, fraud, waste, uncorrected negative/positive externalities,
gross inequalities in wealth and incomes, rent seeking and other deleterious
consequences that erode or call into question the cohesion, social capital,
dominant ideologies, trust in markets and whole system itself. As Nelson
puts it:

              "However it might be achieved, a suitable value-foundation for
the market should approve the
               pursuit of self-interest when it is expressed
'legitimately'--for example in the normal pursuit of
               business profits in the marketplace. However, there should be
a strong social sanction against
               various forms of opportunistic activity that represent
'illegitimate' expressions of self-interest--
               for example bribing government officials to deny operating
licenses to potential business
               competitors..." (p2)

Nelson, like most neoclassicals and libertarians does not inquire where
power comes from and what it is really about.[power, according to the
"philosophical positivists" is a non-measurable/operationalizable construct
and therefore not worth discussing except by sociologists et al]. As the old
saying goes: "The problem with the rich is not so much that they break the
laws; the problem is that they write the laws." And of course that means the
"power" to define what is legitimate versus illegitimate, legal versus
illegal etc. Nelson does not deal with the reality of capitalism that the
most socially-deleterious effects of capitalism occur through the nominally
"usual" and nominally "legal" processes and relationships of capitalism
itself--in the service of the interests of the few oligarchs who write the
laws and/or hire [bribe] officials to do so and hire the theoretical priests
of orthodoxy to celebrate/rationalize those nominally "usual" and "legal'
processes and institutions.

Not only does Nelson show how various economic paradigms are essentially
metaphysical and theological in nature, he traces various schools of thought
to various theological legacies and traditions.  According to Nelson: "The
greatest figures in the 'Roman' tradition of seeing a rational world that is
guided by natural law follow from Aristotle to Acquinas to Adam Smith to the
positive economics of the twentieth century. The greatest figures in an
opposing 'Protestant' tradition--seeing a sinful and alienated world at
present where the powers of human reasoning have been fatally weakened by
the general corruption of human nature--follow from Plato to Augustine to
Martin Luther to Karl Marx (along with Herbert Spencer and other social
Darwinists).

He argues that the economics profession is: "the priesthood of a powerful
secular religion--or more accurately a set of secular religions, as they
have been developed in the theories of leading schools of economics of the
modern age. Beneath the surface of their formal economic theorizing,
economists are engaged in an act of delivering religious messages. Correctly
understood, these messages are seen to be promises of the true path to a
salvation in this world--to a new heaven on earth."

Nelson goes on to "examine" the "theological messages" in Samuelson, Frank
Knight, Friedman, Stigler, Becker, outright caricatures of Marx [the
proverbial strawman], the "neo-Institutionalists, etc always with an appeal
to return to  what Hayek really meant to resolve the "tension"
[contradiction] between ultra-individualism/self-interest versus necessary
social capital to sanction/manage/facilitate the playing out of "legitimate"
self-interest.

Here is an example of the "depth" [or severe lack of depth] of Nelson's
understanding of Marx: "Marxist economics clearly met Tillich's requirement
that a genuine religion must offer a vision of 'ultimate reality'. For Marx
everything that happened in the history of the world was controlled by
economic laws. Altogether blind to the obvious religious character of his
own economic system, Marx said that every form of religious belief is merely
a product of a particular economic stage of the class struggle. Echoing this
tenet of Marxist faith for example, in the bible of Chines communism, the
'red book', Mao Tse-Tung would say that 'in the general development of
history the material determines the mental and social being determines
social consciousness..."

I guess that this is worth reading. I would recommend not buying it but
rather reading a chapter or two on the fly as you go to bookstores to buy
the really worthy stuff worthy of being supported. In any case, rip-off the
shrink-wrapping of this and all other similarly wrapped books before buying
them; Do it for "consumer sovereignty"; Do it for "informed choice"; The
high-priests of neoclassical and libertarian orthodoxy will/should
understand.

Jim Craven


James Craven
(Blackfoot Name: "Omahkohkiaayo-i'poyi-inaa")
Professor/Consultant Economics; Division (Business) Chairman;
Clark College, 1800 E. McLoughlin Blvd.
Vancouver, WA. 98663
(360) 992-2283; Fax: (360) 992-2863
blkfoot5@xxxxxxxxxxxxx
http://www.home.earthlink.net/~blkfoot5
*My Employer Has No Association With My Private/Protected
Opinion*



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