Organizations and Markets

The Religion of Economists

24 May 2007 at 1:24 pm Peter G. Klein 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.