Friday, October 3, 2008

Faith-Based Economics

Let there be markets:
The evangelical roots of economics

By Gordon Bigelow

The problem is that the story told by economics simply does not conform to reality. This can be seen clearly enough in the recent, high-profile examples of the failure of free-market thinking—how media giants have continued to grow, or how loose accounting regulations have destroyed countless millions in personal wealth. But mainstream economics also fails at a more fundamental level, in the way that it models basic human behavior. The core assumption of standard economics is that humans are fundamentally individual rather than social animals. The theory holds that all economic choices are acts of authentic, unmediated selfhood, rational statements reflecting who we are and what we want in life. But in reality even our purely “economic” choices are not made on the basis of pure autonomous selfhood; all of our choices are born out of layers of experience in contact with other people. What is entirely missing from the economic view of modern life is an understanding of the social world.


The evangelicals believed in a providential God, one who built a logical and orderly universe, and they saw the new industrial economy as a fulfillment of God’s plan. The free market, they believed, was a perfectly designed instrument to reward good Christian behavior and to punish and humiliate the unrepentant.


Looking back two centuries at these early debates, it is clear that a pure free-market ideology can be logically sustained only if it is based in a fiery religious conviction. The contradictions involved are otherwise simply too powerful. The premise of the unpleasant workhouse program was that it would create incentives to work. But the program also acknowledged that there were multitudes of people who were either unable to work or unable to find jobs. The founding assumption of the program was that the market would take care of itself and all of us in the process. But the program also had to embrace the very opposite assumption: that there were many people whom the market could not accommodate, and so some way must be found to warehouse them. The market is a complete solution, the market is a partial solution—both statements were affirmed at the same time. And the only way to hold together these incommensurable views is through a leap of faith.


The comparison with physics is particularly instructive. The laws of Newtonian mechanics, like any basic laws of science, depend on the assumption of ideal conditions—e.g., the frictionless plane. In conceiving their discipline as a search for mathematical laws, economists have abstracted to their own ideal conditions, which for the most part consist of an utterly denuded vision of man himself. What they consider “friction” is the better part of what makes us human: our interactions with one another, our irrational desires. Today we often think of science and religion as standing in opposition, but the “scientific” turn made by Jevons and his fellows only served to enshrine the faith of their evangelical predecessors. The evangelicals believed that the market was a divine system, guided by spiritual laws. The “scientific” economists saw the market as a natural system, a principle of equilibrium produced in the balance of individual souls.


When Tom DeLay or Michael Powell mentions “the market,” he is referring to this imagined place, where equilibrium rules, consumers get what they want, and the fairest outcomes occur spontaneously. U.S. policy debate, both in Congress and in the press, proceeds today as if the neoclassical theory of the free market were incontrovertible, endorsed by science and ordained by God. But markets are not spontaneous features of nature; they are creations of human civilization, like, for example, skating rinks. A right-wing “complexity theorist” will tell you that the regular circulation of skaters around the rink, dodging small children, quietly adjusting speed and direction, is a spontaneous natural order, a glorious fractal image of human totality. But that orderly, pleasurable pattern on the ice comes from a series of human acts and interventions: the sign on the gate that says “stay to the right,” the manager who kicks out the rowdy teenagers. Economies exist because human beings create them. The claim that markets are products of higher-order law, products of nature or of divine will, simply lends legitimacy to one particularly extreme view of politics and society.

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