Is Economics a Religion?

Is Economics a Religion?

Is Economics a science or a religion? Economists have fought hard to have their discipline recognized as a hard science, sometimes even looking down on softer disciplines such as sociology, due to the empirical and data-driven nature of their research. However, in a recent article in the Economic Times, Mark Buchanan (the physicist and economic commentator; not to be confused with the pastor and spiritual author of the same name) makes the case that economics is not as objective as it seems to appear. He notes that economics is very goal driven; once an economic goal is selected, economists general do a good job of finding the mechanics and principles to maximize efficiency and increase output. However, Buchanan asks, how are the initial goals selected? His argument: faith. Advancing a similar thesis put forward by economist Robert Nelson, he maintains that most Western economists have a set of values that they believe are unquestionably good, and that these guide the entire economic discipline. Economic policy is thus not devoid of subjectively selected values, but rather is instead “dressed up to look like objective science.”

He discusses, as two brief examples, the ideas of labor unions (which most economists think are bad) and the encouragement of privatization in Russia at the end of the cold war (which most economists thought was good) and points to the unintended societal and political costs of those decisions. Economists could claim success based on the goals they were pursuing, but should they really define these developments as successful? Should we?

While I don’t know that I agree with him on every issue (and gladly admit that I am no specialist in the field), I think Buchanan has an interesting and important point to make: that the goals and values of economics are subjective and thus ultimately suspect and open to debate, despite the objective principles used to pursue efficiency and maximize output after a goal has been identified. What do you think? Are economic values ultimately a matter of faith? Are economic objectives ultimately subjective? Why do you think so?

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Steven Cottam

Steven Cottam hangs out in the Church Hill neighborhood of Richmond, Va, alongside a lot of cool folks who are up to a lot of good. He works as an outdoor educator, working to get urban youth out and enjoying God's creation. He lives with his wife Megan, his (soon to be born) daughter Jackie, his dog Wanda, and their roommate Kelly. Past adventures have included getting his Master's in Theology from Catholic Theological Union, serving as a elementary school religion teacher, and living in a Catholic Worker house in Phoenix, AZ.
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  • http://www.oerther.org Daniel Oerther

    Some might argue that ‘all values’ are based on faith (ie presuppositional apologists). Personally, I believe that the values we should follow are based on faith. In regard to the statement about a ‘goal oriented outcomes coupled with quantitative tools’ isn’t a ‘hard science’… hmmm, I think I have to disagree with that. While natural observation is a type of science, most folks nowadays consider ‘hypothesis testing’ to be science. In hypothesis testing, you start with what you believe to be a statement of fact, and then you attempt to disprove the statement. When you fail to disprove it, you have increased belief that the statement is a fact. In this way, I would suggest that ‘having a goal’ is similar to ‘having a hypothesis’. If so, that refutes the argument I think…

  • Steven Cottam

    Thanks for the thoughts Daniel. I agree with you that hypothesis testing is certainly acceptable as science – in fact, I think it’s probably one of the most crucial components of science. However, I don’t think that “having a goal” is at all the same as “having a hypothesis” for the very reason that one can be tested (hypothesis) and one cannot; unless we mean goal in a very different way then I think Mr. Buchanan intends it. For example, the statement “decreasing the presence of labor unions in the market will increase GDP” is a hypothesis – you can test it; data can be used to back it up. But that doesn’t necessarily correlate to “we should decrease labor unions,” because the “should” is a moral statement. Maybe labor unions have intangible benefits? Maybe they don’t too (I’m not attempting to defend labor here), but my point is that statements like “Increased GDP is good/bad” or “Labor unions are good/bad” fall outside of the realm of science and into a different category, because “good” and “bad” are not things that can be quantified; they are not statements that can be falsified, which is what our whole notion of science is based on.