The new faith. (Book Talk).(Economics as Religion: From Samuelson to Chicago and Beyond)

Economics as Religion: From Samuelson to Chicago and Beyond By Robert H. Nelson Penn State University Press, 378 pages, $35

The House of Bishops of the Episcopal Church offered the following opinion on the cause of the September 11 attacks: "The affluence of nations such as ours stands in stark contrast to the other parts of the world wracked by crushing poverty which causes the deaths of 6,000 children in a morning." The bishops' opinion is a variation on a theological theme: Poverty is the source of evil. Salvation is contained in the wealth of nations. This view is not Christian. It is based on a competing religion whose creed replaces Original Sin with scarcity and Paradise with prosperity. That religion is economics.

Robert Nelson, professor of public policy at the University of Maryland, examines this idea in Economics as Religion: From Samuelson to Chicago and Beyond. Today's economists, says Nelson, serve as "the priesthood of a modern secular religion," forming the basis of America's core social value: economic efficiency. Behind the technical jargon and mathematical models, economists are "engaged in an act of delivering religious messages ... promises of the true path to salvation in this world, to a new heaven on earth."

Nelson perceives two schools of thought in the development of economics: Roman and Protestant. The Roman tradition with its emphasis on natural law, an elite priesthood, and belief in a rational world, is likened to the rise of American Progressivism and its faith in the scientific management of society by a class of experts. The apex of this ideal is found in Paul Samuelson's 1948 textbook, Economics, which fused post-WWII America's new enthusiasm for science with the Keynesian fine-tuning approach to the market. Economics, writes Nelson, with its heroic "poetry of large government" and commandments against monopoly and inefficiency, served as a Progressive's bible.

Samuelson's romantic view of progress was seen as utopian by a new generation of economists led by Frank Knight at the University of Chicago. Nelson classifies this response to Progressivism as "Protestant" in character. Knight scorned the notion that a class of experts could determine the path to prosperity. Like Martin Luther, he advocated "a priesthood of all believers," acting in their own self-interest. "Human reason," he believed, "was a frail instrument, often corrupted by the baser elements in human nature." Private property was a necessary evil. Such individualism and belief in a world corrupted by sin, fundamentally Calvinist in nature, regards each individual as responsible for his own salvation. Breaking with Keynesian conventional wisdom began the genesis of libertarian thought at Chicago. A new economic gospel extolled freedom as a means ...