on March 8, 2003
Prof. Robert Nelson argues that economics has become the modern religion, complete with a priesthood (economists), a sacred text (Samuelson's "Economics") and a plan of salvation, (material progress will solve the problem of mankind, including the problem of sin.) Over the top, you say? He makes a great case. Read this book and find out for yourself.
I am a professional economist myself. Nelson's arguments ring true in my experience in the profession. He argues that many of the controversies over economic policy are really controversies over views of the world. These world views are so fundamental, and deeply held, that they are unlikely to be dislodged by technique and data, no matter how rigorous. Nelson thinks we would have more fruitful policy discussions if we would quit pretending to be scientists, and face up to these fundamental questions. I have to agree with him.
I wish he had pointed out that economics is not doing a very good job being a religion. Material progress can not solve all the problems of the human race. We would all be better off, if we would admit that.
on November 15, 2001
Ever wonder how the field of economics could produce such disparate voices, from interventionists such as John Maynard Keynes to the classical liberalism of Milton Friedman? Those looking for insights will do well to read Economics as Religion: From Samuelson to Chicago and Beyond by Robert H. Nelson, an economist at the University of Maryland.
As the book's subtitle suggests, Nelson takes the reader on tour of modern economic thought. Here he's done commendable job, providing a highly readable account of the major personalities. This book will appeal to historians as well as the informed non-specialist. Nelson ranges far and wide in his effort to explore the often unstated philosophical assumptions behind supposedly objective economic analysis. Of particular interest is Nelson's treatment of the rift between economists and environmentalists. He places the debate squarely (and rightly in my opinion) in religious terms. While this is not particularly original, he does a service by reinforcing the deep religious roots of modern American environmentalism.
Finally, in an increasingly small world, Nelson again hammers home a vital point regarding economic opportunity provided by free markets: Economic progress requires the creation of a "civil society" and the rule of law. Social and human capital must be both nurtured and sustained. Laws must reflect these norms and governments must enforce them fairly. Without these, human rights and the environment suffer.
In environments of rampant corruption and political instability, value creating institutions aren't sustained. Success comes when people are rewarded for creating value, not for transferring wealth via force or fraud. Political plunderers, not the market process, keeps countries poor.
This is a desperately important message at a time when many equivocate and ring their hands about the spread of Western democracy as, "a hegemonic discourse of Western cultural imperialism".
Pete Geddes is Program Director of the Foundation for Research on Economics and the Environment (FREE) and Gallatin Writers. Both are based in Bozeman, Montana.
on November 1, 2003
This is a brilliant intellectual history of late 20th century American economics which puts it in both American and European economics in historic context. It is both erudite and immensely practical in helping one to see the limitations in recommendations of economists more clearly.
As a former international banker (and a mathematician by training) who has lived both in Europe and the Far East, the practical limits and occasional parochialism of American mainstream economics have long been clear, but except for Joseph Stiglitz' "Globalization and Its Discontents", I can't think of any book that does a better job of explaining just what is wrong and why. Read them together and be prepared to think hard about the difference beween what we really "know" about (international) economic behavior and what we merely believe.
on April 24, 2003
This is a remarkable book... erudite, opinionated, original, and addressing a crucially important subject matter. Prof. Nelson covers a wide swath of recent economic thinking (that survey alone makes the book worthwhile), and contends that while economics wears the cloak of authority of science, it can more accurately be viewed as a secular religion. I had read one of his 1980s articles, and picked up the book on that basis - and became thoroughly engaged. If one measures success in terms of underlined sections, exclamation points and scribbled notes in the margins, then this one more than passes. I'm not an economist (or a theologian), but nonetheless found this to be a tremendously interesting read. I wanted more, and hope that his next book follows up on his closing point, about the cutting edge role of libertarians and environmentalists.
on January 8, 2013
IN the last few years I was puzzled when seeing economists cannot agree on basic issues like what caused the crisis and what are the adequate remedies. Keynesian, Monetarist and Austrian schools of thought for example interpret the same facts in different ways to come out with conclusions that are frequently opposite. And nobody admits others may be right.
Robert Nelson's book made me understand that the great economists positions are driven by deep values, convictions, models of reasoning and mythical stories which have a religious essence and are embraced with a quasi-religious fervor.
This is a great book for whoever wants to take a peak through the veil of mathematical models, statistics and charts of economists' writings.
on May 7, 2011
This note relates to the kindle edition.
The content by the author is excellent. Amazon's conversion is not.
The text contains numbered endnotes. These notes are not active. The footnotes, marked with an * are active, and the numbered endnotes in the Introduction are active so its technically easy.
The only explanation is pure laziness by the Amazon staff who converted the text.
Since one can't flip easily to the end of the book as to check the contents of an endnote as one can with a deadwood copy, nor can one access the endnotes via the menu, this makes reading the content of an endnote very difficult. One must write down a note on paper that when one reaches the end of the book that one should check an endnote. That makes using the Kindle edition less convenient than using the deadwood version.
on February 21, 2009
This is an excellent book by a professional economist who makes the case that modern neo-classical economics is highly ideological or religious in content as opposed to being composed of truly scientific endeavors. He views modern economics as being a form of religious artistry (with lovely mathematical expressionism) as opposed to being a truly scientific endeavor in a Newtonian sense. He quotes one wag, approvingly, that modern neo-classical economics suffers from "physics envy."
It would seem that Professor Nelson stretches the meaning of "religious" to cover the underlying values of modern day economic thought and social theory. While I agree, that very, very much of our modern day value system is derived from the Western Christian tradition that provided much of the historical moral and ethical foundations of this country, I would be hesitant to extend the "religious" term quite as liberally as Mr. Nelson. My personal preference would be to focus on the ideological foundations of modern Neo-Classical economics as opposed to its claimed "scientific values" foundation. I know that ideology and religion are often closely related, however, I am reluctant to admit that Neo-Classical, Keynesian, Institutional, even Marxian economics can be adequately defined in religious terms. All of them employ religious elements. However, the derivatively religious values are brought in thru the backdoor--not glaringly thru the front entryway. Catholic, Calvinist, Pentacostal, etc., etc. economic ideas are not the primary focus of these religions--God is....
I would rather have a debate and discussion centered around the nature of the differing values underlying the different schools of economic thought than about why Calvinist economic ideas should trump Catholic ideas. That's an argument that I would personally prefer to avoid. I definitely do not want to be ruled by any official Christian sectarian economic school of thought. I am a firm believer of the Enlightenment values upon which our wonderful democratic institutions are based. I know, as the author points out clearly, that many of those values were translated from Christian values and put in a more secular form (backdoor religion, once more). However, I do believe that sticking to such secular forms in terms of economic schools of thought provides a more hopeful venue for decent political and civil debate and disagreement concerning economic ideas. The one thing for certain is that no one is going to agree upon what is properly "God's Will" in terms of His (or Her) desire for our economic destiny.
Mr. Nelson finishes his book with a very approving endorsement of Frank Knight as being the most significant 20th century economist. I plan to read more of Knight to see if I am so impressed. The author also concludes that perhaps libertarianism and environmentalism will be the triumphant "religions" (or my preference, "ideologies") of the future. Personally, I find the vast majority of climate scientists much more convincing than the opinions coming from the "Rush Limbaugh Insitutute of Science." Science may be imperfect. It may stumble and fall. It may advance in fits and starts, but it is the most powerful instrumentality the human race possesses. We should not abandon the real thing--we should only abandon pseudo-scientific pretensions masquerading as science. Environmental science, while imperfect and stumbling at times, is real science. It is something we must pay extremely close attention to if we are to have a future. Our future economic activity and development must be bounded by resource depletion limitations, pollution limits, and ecological concerns.
By contrast, libertarianism seems to be a combination of interesting and novel ideas--and a lot of crank theory. The idea that the individual is the only legitimate concern of economics. The family, community, society, nation, and the world mean nothing. It's all about "ME", "THE SELF MADE MAN!!!" It seems so childishly narcissistic.... We are all selfish creatures, conservatives are right on that. We are also creatures capable of great love and sacrifice. Perhaps the mothers of libertarians should have abandoned their squalling, wet, smelly brats at the nearest city dump out of self interest. Clearly, the little brats had to cramp the mothers' individual styles. Of course they didn't, almost all mothers are strongly maternal and love their children and would never do such a barbarous thing. Also, I wonder how many people, with no idea for any future reward or payback, helped your typical libertarian child growing up. We are basically social creatures. Yes, we are also selfish, but we are also gregarious and cooperative. We would never have survived as a species without our very strong group social skills.
Lastly, I would take issue with the author's negative assessment of the 60's and 70's. I don't regard the Civil Rights Movement, the Vietnam Anti-War Movement, the Feminist Movement, the beginning of the Gay Movement, the Environmental Movement, etc. as being bad moments in history. Far from it. I suspect that the author in his heart of hearts doesn't either. The Sexual Revolution in America actually started in the 20's--not the 60's as commonly believed. The drug use--leaving out recreational pot--of the era was truly lamentable. There is no denying there were excesses during that period and that was one of them. However, questioning institutional idiocy should not be viewed as a negative. There are many times when standing up and being counted is highly laudable when the powers that be are grossly in the wrong. However, it is to be agreed that you don't want to throw out the precious democratic institutions with the polluted political bathwater.
A very good book. A very worthwhile read that should reveal to you different ways of thinking about economics as well as the underlying religious and ideological values of formal economic systems.
on June 27, 2005
This book is certainly worth buying .It is well written.It is probably true that,to some extent,Samuelson saw Keynesian ecomomics as a religious type gospel of reform.Undoubtedly,the Chicago school's libertarian atheism (of Milton Friedman and others)can be regarded as a type of religion.It is certainly true that Adam Smith's work has been so badly misinterpreted by practically all economists,including Nelson,that one could be convinced that Smith's Invisible Hand is based on some type of mysterious ,near religious belief.Nothing could be further from the truth.
Nelson totally misstates Adam Smith's position again and again and again throughout this book.There is not a single page in this book that, even remotely,provides the reader with a firm foundation about what Smith's system of classical liberty really entailed.Nelson's assessments of Smith's system are about as accurate as the entirely false claim that John Maynard Keynes was an advocate of deficit finance(Keynes was a stauch opponent of deficit finance throughout his life.It is simply false to state that Keynes favored deficit finannce).Nelson claims the following:" As Adam Smith now interpreted the natural laws of economics,governments that sought to interfere with the individual pursuit of self interest in the market were acting contrary to the devine plan.The results were only likely to cause wide social disruption and distress-just as would any government action that in the physical order might be foolishly taken in attempted defiance of the law of gravity".(Nelson,p.287 :see also,for example,pp.44,84,89,191,etc.).Nelson,Samuelson, Friedman,and the rest of the economics profession have it all wrong and upside down.Smith certainly recognized that the Invisible Hand process of the division of labor and labor specialization created great wealth and economic growth.However,he also clearly recognized that it simultaneously generated massive undepletable ,detrimental externalities impacting the entire work force that only government actions could reduce,mitigate,or minimize.This is all clearly stated on pp.734-741 of the Modern Library (Cannan)edition of the Wealth of Nations.Nelson's book is intellectually unsatisfactory in its present state.The Invisible Hand has absolutely nothing to do with God,Divine Providence,or religion at all.It is a purely human economic-social process that leads to positive changes over time in a society because both the individual and society(all other individuals) benefit from the additional expertise and training as new specializations are created over time . Unfortunately,this process also has a dark side that Smith recognizes can only be effectively dealt with by government action.Period.Nelson needs to read what Smith actually said and initiate substantial CHANGES IN HIS NEXT EDITION.
on June 2, 2014
We cannot forget that Marx was also an economist and his theory was (and is) as (or more, probably) religious than any other. His Labour Theory of Value is nothing but myth. Nelson should have written a chapter about Marx, that Archbishop of Economic Religion, one that has more followers and worshipers than any other economic religion in the world.
on July 25, 2010
The title is not so provocative today. You only have to turn on your TV set anytime of the day and there are programs galore on covering the markets and investing. Clearly, economics and the scientific disciplines have filled in the void left by religion, at least in the western democracies. Let's hope we don't turn the economic model into a god that time immemorial has already shown is not worthy of human adoration. This isn't to say we shouldn't pay attention to economics, clearly it has an important place in our lives.