It is no secret that economic debates often have a religious flavor and similar passion; sometimes this flavor is metaphorical but other times is direct. Indeed, there many people — especially in the United States, who explicitly equate their economics with morals and religion.
Some worship at the altar of gold (the gold standard to be exact), whereas others sacrifice to the god of free markets and cast aspersions at devils like government or regulation. Freedom itself — that greatest of blessings bestowed by a loving God — supposedly exists only where markets are private and unregulated.
Although there are secular versions of this story, and non-religious economists or politicians who proclaim it, even the secularized version(s) feel oddly religious and zealous (e.g., Ron Paul). What accounts for this?
Because these ideas are rooted in the classical economics of Adam Smith (and others such as David Ricardo), the connection is not accidental. In a short paper (Economics as a Moral Science) that Harvard economist Ben Friedman recently delivered at the American Economic Association meeting, he examines the religious influences on Smith’s thinking:
The commonplace view today is that the emergence of “economics” out of the European Enlightenment of the 18th century was an aspect of the more general movement toward secular modernism in the sense of a historic turn in thinking away from a God-centered universe, toward what we broadly call humanism.
To the contrary, I suggest that the all-important transition in thinking that we rightly identify with Adam Smith and his contemporaries and followers, the key transition that gave us economics as we now know it, was powerfully influenced by then controversial changes in religious belief in the English-speaking Protestant world in which they lived. Further, those at-the-outset influences of religious thinking on what became known as economics not only fostered the subsequent spread of Smithian thinking, especially in America, but shaped the course of its reception.
The ultimate result was a variety of fundamental resonances between economic thinking and religious thinking that continue to influence our public discussion of economic issues, and our public debate over economic policy, today.
As Exhibits A through E through for this continuing influence and the confluence of religion-economics in America, we need look no further than Rush Limbaugh, Bill O’Reilly, Glenn Beck, Sarah Palin, or Mike Huckabee — all of whom have a mystical reverence for free markets. Moving from the banal to the brilliant, classical acolytes include Friedrich von Hayek, Ludwig von Mises, and Milton Friedman.
As for Adam Smith, he was a Jeffersonian type deist. He rejected Christianity, believing instead in some kind of creator who initiated things but had no further interaction with the universe. Smith’s famous “invisible hand” metaphor is a logical consequence of this idea.