In the sequel to his acclaimed 1991 book Reaching for Heaven on Earth: The Theological Meaning of Economics, University of Maryland School of Public Affairs Professor Robert Nelson has written what may be the most important recent book on the future of the economics profession. Mixing intellectual history, theology, and a sophisticated yet readable account of the primary doctrines of 20th-century economics, Nelson's book both illuminates economics' immediate past and draws attention to the problems of its future.

Economics as Religion takes on two tasks. First, Nelson recasts the intellectual history of 20th-century economics in theological terms. Economists, he suggests, constitute nothing less than "the priesthood of a modern secular religion of economic progress that serves many of the same functions in contemporary society as earlier Christian and other religions did in their time." This priesthood offers, in Nelson's account, "another grand prophecy in the biblical tradition. The Jewish and Christian bibles foretell one outcome of history. If economics foresees another, it is in effect offering a competing religious vision. The prophecies of economics would then be a substitute for the traditional messages of the Bible." Second, Nelson uses his master-metaphor to pinpoint the challenges facing economics as a discipline, and economists as individuals, in the 21st century.

Thinking about economics (or other social sciences, political movements, and the like) as a religion can be helpful even where the analogy is only an approximate fit, but Nelson makes a persuasive case that the analogy is a good one. It can also be quite a bit of fun—Nelson's playful aside comparing the technical language and mathematics of current mainstream economic writing to medieval church Latin is both entertaining and enlightening, and there are quite a few more like it sprinkled throughout the book.

To make his case, Nelson relies heavily on two extended analyses of particular sets of economic works. In the first part of the book, he undertakes to decipher the religious subtext of Paul Samuelson's textbook, Economics. More than merely a text for undergraduates, Nelson argues, Samuelson's Economics was designed "to provide an inspirational vision of human progress guided by science in order to motivate Americans and other people to the necessary religious dedication to the cause of progress." This secular gospel glorified efficiency as the ultimate value, not to allow increased consumption but because efficiency offers "the best measure of the rate of movement along the path of economic progress."

Nelson carefully documents how Samuelson glossed over complications and problems with his grand narrative, relegating some to appendices and leaving others out entirely. Samuelson told and retold an economic story that, although presented as scientific fact modeled on physics, was in fact driven almost entirely by quasi-religious assumptions. (Indeed, one of my few criticisms of Nelson is that he does not devote nearly enough space to describing Samuelson's repeated failures to get critical facts right—for example, in continuing to report Soviet economic "success" as superior to free markets long after serious questions were being raised about Soviet economic statistics. Having been taught Econ 101 with Samuelson's book, I must admit I have a longstanding grudge against it.)

Despite the flaws of Samuelson's text, Nelson concludes, Economics was a "major artistic and inspirational success." His point is that the book merits attention as a work which—for better or worse—had a powerful effect. That it did so depended, of course, on the fact that it was an assigned text for millions of readers, not that it was freely chosen reading matter.

Playing Martin Luther and his fellow Reformers to the "Catholicism" of Samuelson and the neoclassical economists are the leading lights of the Chicago School: Frank Knight, Milton Friedman, and George Stigler. These economists, Friedman and Stigler in particular, rejected not so much the idea of secular salvation offered by efficiency and progress but rather the orthodox ideas about how it was to come about. In place of Samuelson's story of "a powerful federal government [that] is fully capable of doing many wonderful things for the American people, not only eliminating unemployment but also bringing about many other great benefits," the Chicago "Protestants" offered a vision of flawed humanity whose fallen nature required institutions like markets and property rights to protect individuals from one another as they pursue their self-interest. (Knight is a more complex figure in this tradition, and space precludes a full account of Nelson's treatment of his writings.) The third generation of Chicago economists, typified by Gary Becker and Richard Posner, extended the principles developed by the first two generations to new areas (families, crime, law), making the conflict with Samuelson's orthodoxy more pronounced.

Turning to work by Ronald Coase, George Akerlof, Joseph Stiglitz, Oliver Williamson, Douglas North, and others—the "new institutional economics"—and surveying their contributions, Nelson concludes that they succeed at "showing in both theoretical and empirical terms that norms of honesty, a sense of community, respect for rules, and other elements of culture can have a major impact on economic growth and development." So impressive are their results, he observes, that historical analyses may be more effective than "the quantitative and other formal analytical methods commonly employed by economists for the last half century."

Nelson's survey of 20th-century economic thought is thorough and surprisingly readable; he has always been a good writer, and he has outdone himself here. Anyone interested in economics but not inclined to wade through the jargon and mathematical formulas of the original articles and books can get a sense of the basic insights and failings of the literature by reading the first 260 pages of this book.

But perhaps the book's most important contribution lies in the final part, in which Nelson examines the larger role of "economics as a religion" in Western society. Two points are critical to the argument. First, what has given economics the "power to move the world" is its vital role "as part of a secular religion of progress of American civil society, helping to provide a normative basis for the necessary implicit contracts of a modern economy." Indeed, economics can be seen as a religion peculiarly suited to liberal democratic capitalist societies—a religion that has "the particular characteristic that it advances the pursuit of self-interest in appropriate domains but tightly restrains it in others."

The economic religion of progress is now under attack, and Nelson concludes the book by considering the challenges facing it. One of the most important comes from the environmental movement, large portions of which reject the faith in efficiency and progress that drove Samuelson's influential text. This skepticism is not limited to the most extreme "deep ecology" advocates, who find humans a "cancer" on the planet. Even more moderate environmentalists reject the economic vision of a heaven on earth built from material progress.

Consider, for example, the Endangered Species Act (ESA). An economic analysis of this legislation would focus on the incentive effects of the law and the irrationally large differences in expenditures on different species. The general consensus of economic research is that the esa harms endangered species by making their presence costly to landowners and that spending on species preservation is driven more by the "cuteness" of the endangered species in question than by its ecological value. Former Interior Secretary Bruce Babbitt, not a moderate on the environment but no deep ecologist either, rejected such analysis, terming the esa a modern Noah's Ark which Congress had commanded be filled with all species regardless of cost. Clearly this is a direct challenge to the gospel of efficiency. (The other key challenge comes from libertarian thought—and I won't describe Nelson's discussion of it to motivate this journal's readers to seek out the book for themselves.)

Economics as Religion is a major work—one that everyone concerned with economics (and everyone ought to be concerned with economics, in my opinion) should read. It prompts the reader to reconsider the intellectual legacy of the discipline, to rethink the role of economists in public debate, and to ponder the rising challenges to the religion of progress. If Nelson is right, our choice of civic religion today will have a major impact in shaping the society we will leave for our children. The old order is crumbling; what will replace it remains an open question.

Andrew P. Morriss is Galen J. Roush Professor of Business Law and Regulation at Case Western Reserve University School of Law and Senior Associate, PERC—The Center for Free Market Environmentalism.

Copyright © 2003 by the author or Christianity Today/Books & Culture magazine.
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