The Religion of Economists

24 May 2007 at 1:24 pm 4 comments

| Peter Klein |

The relationship between economics and religion has attracted increasing attention in recent years. There is the positivist approach, represented by Larry Iannaccone and ERel, which applies standard economic analysis to religious activity and institutions; there are groups like the Acton Institute that try to improve economic literacy among the clergy; and some have even attempted to analyze economics itself as a kind of secular religion.

A new paper by Dan Hammond takes a more straightforward approach, analyzing the religious views of John Nef, Frank Knight, and Milton Friedman, placing this in context of the twentieth century’s general move toward embracing the secular over the sacred.

In this paper I use Milton Friedman, Frank H. Knight, and John U. Nef, Jr. as case studies of how twentieth-century economists have dealt with the transcendental. Friedman (1912-2006) was a student of both of the two older economists, Knight (1885-1972) and Nef (1899-1988). In my comparison he represents the economic mainstream of positivist science. Both Knight and Nef rebelled against the wave of positivism that swept over the social sciences during their lives, a wave not unconnected with the loss of intellectuals’ religious faith. Knight’s and Nef’s visions of economics, and more generally of intellectual life, were broader than Friedman’s specialized positivist bent allowed. Friedman saw himself as an economic scientist. Knight saw himself as a scientist, but not as a positivist scientist. Nef’s self image was as an historian of civilization. Both Knight and Nef sought to preserve room in social science for the metaphysical, efforts that led them to direct confrontation with religious questions which appear not to have troubled Friedman.

Hammond maintains that even avowedly secular intellectuals retain “transcendental commitments” and that these commitments are inextricably linked to their scientific work. He concludes:

It seems that we find Milton Friedman’s transcendental commitment in his ideology of personal liberty, although this statement is a projection beyond this paper rather than a conclusion from it. Friedman may not have believed in God, but he believed in man.

Entry filed under: - Klein -, Institutions, Methods/Methodology/Theory of Science. Tags: .

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4 Comments Add your own

  • 1. Richard O. Hammer  |  25 May 2007 at 9:00 am

    In order to talk about what Mr. X believes we need to have an image of what he believes. Notice two different ways to get this image.
    1. We can accept what X says he believes.
    2. We can observe the way Mr. X behaves, apart from anything he says. His choices give us a view of what he believes.

    Recently I enjoyed reading Coase’s observation (in Essays on Economics and Economists) that Uncle Milton’s famous essay on positivism was not itself an exercise in the positivism he was espousing. The essay is normative!! Leave it to Uncle Ron!

  • 2. Cliff Grammich  |  25 May 2007 at 7:09 pm

    I had not been aware of the Nelson and Stackhouse work; thanks for pointing it out. I checked the available online amazon excerpt and read, in the very first sentence of Chapter 1, “To the extent that any system of economic ideas offers an alternative vision of the ‘ultimate values,’ or ‘ultimate reality,’ that actually shapes the workings of history, economics is offering yet another grand prophesy in the biblical tradition.” Could this sentence be applied to sociology, political science, or, indeed, any of the social sciences? More than once I’ve thought of the leading practitioners in these fields as akin to priests or, depending on their standing or even belief in their own infallibility, bishops or pontiffs. Can academic fields beyond the social sciences be likened to religion as well?

  • 3. links for 2007-05-26 at Jacob Christensen  |  26 May 2007 at 7:24 am

    [...] The Religion of Economists « Organizations and Markets The relationship between economics and religion has attracted increasing attention in recent years. There is the positivist approach, represented by Larry Iannaccone and ERel, which applies standard economic analysis to religious activity and institutions (tags: economics religion) [...]

  • [...] interesting: “Transcendental Commitments of Economists: Friedman, Knight, and Nef” (HT: Organizations and Markets). Acton president Robert A. Sirico’s reflection on Friedman’s legacy last year noted, [...]

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