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Economics as Religion: From Samuelson to Chicago and Beyond

Author(s):Nelson, Robert H.
Reviewer(s):Tollison, Robert D.

Published by H-Business and EH.Net (April, 2002)

Robert H. Nelson, Economics as Religion: From Samuelson to Chicago and

Beyond. University Park, PA: Pennsylvania State University Press, 2001.

xxvi+ 378 pp. ISNB 0-271-02095-4.

Reviewed for H-BUSINESS and EH.NET by Robert D. Tollison, 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.

Robert D. Tollison is a co-author of a book on the medieval church and on

mercantilism. He is a past President of the Southern Economic Association and

the Public Choice Society.

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII