The World

[as I find it]

Evangelicalism and the History of Economics

I don’t usually write posts simply to refer to other content, but I have just finished reading an article that I found so interesting I will make an exception. It’s titled Let there be Markets: the Evangelical Roots of Economics, and while the title might warn of a debate along the same old “liberal” and “conservative” party lines, I found it to be much more than that.

Some highlights:

1. Adam Smith’s view of personal wealth, and how distant that view was from the status we grant its pursuit today:

In his first book, The Theory of Moral Sentiments (1759), Smith argued that the acquisition of money brings no good in itself; it seems attractive only because of the mistaken belief that fine possessions draw the admiration of others. Smith welcomed acquisitiveness only because he concluded—in a proposition carried through to Wealth of Nations—that this pursuit of “baubles and trinkets” would ultimately enrich society as a whole. … By the 1820s and ’30s, this foundation had become increasingly troubling to free-trade advocates, who sought, in their study of political economy, not just an explanation of rapid change but a moral justification for their own wealth and for the outlandish sufferings endured by the new industrial poor. Smith, who scoffed at personal riches, offered no comfort here. In The Wealth of Nations, the shrewd man of business was not a hero but a hapless bystander.

2. The role of Evangelicalism in a failed free-market solution to the Irish potato famine:

Russell and most of his central staff were fervent evangelicals, and they regarded the cornmeal program as an artificial intervention into the free market. Charles Trevelyan, assistant secretary of the treasury, called the program a “monstrous centralization” and argued that it would simply perpetuate the problems of the Irish poor. Trevelyan viewed the potato-dependent economy as the result of Irish backwardness and self-indulgence. This crisis seemed to offer the opportunity for the Irish to atone. With Russell’s backing, Trevelyan stopped the supply of food. He argued that the fear of starvation would ultimately be useful in modernizing Irish agriculture: it would force the poor off land that could no longer support them. The cheap labor they would provide in towns and cities would stimulate manufacturing, and the now depopulated countryside could be used for more profitable cattle farming. … There was no manufacturing boom. Roughly a million people died; another million emigrated. The population of Ireland dropped by nearly one quarter in the space of a decade. It remains one of the most striking illustrations of the incapacity of markets to run themselves.

3. How social forces affect economic decisions, and how this has been left out of the neoclassical picture:

A helpful, if disquieting, example comes by way of the twentieth-century anthropologist Marshall Sahlins, who, in his book Culture and Practical Reason, points out that the entire structure of U.S. agriculture “would change overnight if we ate dogs.” What Sahlins means is that the powerful social prohibition against using pets as protein will always condition consumer choices. American children and teens do not decide individually that they will for all their lives spare American dogs from the abattoir. This choice is made for them by the historical world into which they are born. They are no more free to eat dog than they are to wear buckskins to basketball practice. As economist Anne Mayhew recently observed, even consumers at the bottom of the wage scale, with absolutely no discretionary income, choose the necessities of life with a common-sense awareness of how their choices will be perceived by neighbors, family, and the wider social world.

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Written by whereofwecannotspeak

February 9, 2008 at 11:50 am

Posted in Ideas

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