Economics, Religion, and the Climate Crisis: A Long … Religion, and the Climate Crisis: A Long View. ... there has been a shift from a sense, ... Seventh Point: Neoliberal free

Economics, Religion, and the Climate Crisis: A Long View.

Richard B. NorgaardProfessor Emeritus of Energy and Resources

University of California, Berkeley

February 1, 2017 Portland State University

Don’t Discount Our Future

There are many interrelated reasons why America has had difficulty coming to grips with climate change. Climate denial in all its various forms is surely the most important.

One of the next most important is because economists frame the economics of avoiding climate change as an investment by this generation rather than as the most effective way to meet a moral obligation to future generations.

The separation of economics from morality in economic thinking, teaching, practice and public discourse is a central issue.

Economists and the public usually think of economic reasoning and moral reasoning as separate, and that they should be separate, but that way of thinking has now become a part of our failure to address climate change.

But I will argue that by this supposed separation, the market has become America’s God, though surely a false one.

First Point: For at least the last 250,000 years, people have

succeeded because they have been social and have worked

together and redistributed production so as to sustain

themselves as a group. Hunting as a team is more

productive and the distribution of the spoils is better

rationalized with supporting social rules, i.e. moral

principles. These became interwoven with other beliefs

that we now think of as religion.

As people continued to be successful working together, human populations grew larger, and groups became larger.

With the emergence of agriculture, specialization and scale economies increased further, populations and the size of groups grew, and formal institutions for “social control” arose: religion, the structure of the economy, and succession of power became institutionalized.

Religion, power, and ways of producing and distributing were all interrelated and coevolving with each other in new ways through the Middle Ages … there was a substantial shift in human consciousness.

Second Point: Social and moral philosophy became secular enterprises during the Enlightenment to provide logical, empirically verifiable knowledge concerning how people should behave and socially organize without invoking God or the Bible.

Modern economics derives from the efforts of moral philosophers, most of them personally religious, to explain by secular reasoning, i.e. without reference to religion, how people might engage in life effectively together.

2. give the behavior of the market system the religious metaphor of “as if guided by an invisible hand”, and

3. provide the first good explanation of how the wealth of nations could be increased, a precursor to modern theories of growth.

Third Point: Adam Smith (a moralphilosopher) did not invent markets, but he did:

1. give the practice of exchange new moral standing by arguing that, under appropriate conditions, both parties benefit.

The “New” World became a place to implement both Religious and Enlightenment Ideals, to set up wholly new utopian communities in the “wilderness” and try to make them productive, just, sustaining, and meaningful. There were hundreds of such communal establishments, some of them religiously organized economic communes, and some inspired by the socialist visions of Robert Owen and others. Key ones are the Shakers, New Harmony, Amana, Oneida, Brook Farm, Yellow Springs, Icarian Settlements, and the list goes on and on. And this list should include the many communities established by Latter Day Saints (Mormons).

Fourth Point: The separation of religion and economy took a while. Until the mid 20th century, both economic behavior and economic outcomes were frequently compared with religious morals and religious ideals.

In the 19th century, the connections between economics and religion were partly due to the fact that early economists, if they were trained, were trained in theology.

Others, such as Henry Carey and Henry George, were journalists whose religious convictions far outweighed any economic training.

Episcopal Reverend John

MacVickar (1787-1868) ,Professor

of Moral Philosophy, Intellectual

Theory, and Political Economy at

Columbia College, the first

American Economics Professor.

In 1825, after providing notes to a

political economy essay – Outline

of Political Economy – by J. R.

McCulloch of Edinburgh,

MacVickar wrote Concluding

Remarks in which he notes …

This picture, however, presupposes virtue in the people. Political Economy is a science which guards against involuntary not voluntary error. It enters into harmonious alliance with religion, but cannot supply its place.

It must find public men true to their trust, otherwise it (economics) renders them more ingenious in their abuse of power.

My underlining and parenthetical clarification

Reverend John MacVicar 1825Concluding Remarks in Outline of Political Economy p 187

Heather Bresch, CEO of Mylan

Wells Fargo False Accounts Scandal

Volkswagen Emissions Scandal

Fifth Point: Mathematical philosopher Francis Y. Edgeworthand others in Britain and France in the 1880s documented that an economy has multiple efficient solutions depending on how income is distributed.

Both Sweden and the United States can be efficient.

This means economics needs external moral criteria with respect to equity to determine social policy.

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The secular reasoning of Enlightenment economist had not determined social rules independent of other moral criteria.

Well-beingofIndividualX➔➔

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After the Civil War, America rapidly shifted from Jefferson’s ideal of an agrarian democracy to corporate industrial capitalism.

Inequalities perhaps as great have existed in other ages; but never before such inequalities in a society founded on the doctrine that all men are created equal in rights and privileges; never before in a society in which the poor had the spelling book and the newspaper and the ballot in their hands; never before in a society where the penniless walked every day before show windows wherein all the luxuries of all the climes were publicly displayed (1893 pages 26-27).

Washington Gladden 1836-1919

Minister of the First Congregational Church

Columbus, OhioSocial Gospel Spokesman and

follower of economist Henry George

The salutary conviction that political economy cannot be relied on by itself to adjust all the intricate relations of men under modern conditions of life, that the ethical questions that arise are not going to solve themselves automatically by the law of demand and supply, that the gospel and church and the Spirit of Christ have somewhat to do in the matter, has been settling itself deeply into the minds of Christian believers (1899, page 185).

Washington Gladden1836-1919

Minister of the First Congregational Church of

Columbus, OhioSocial Gospel Spokesman

and follower of the American economist

Henry George


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Richard T. Ely 1854 – 1943Founder and Third President American Economics Association

Twenty of the fifty Founding Fathers of the American Economic Association were practicing ministers.

R. H. Nelson, 2010, page 24

“Christianity moderates desires, sets a higher aim than wealth before people, but dignifies the man who gains his bread by honest toil, and enjoins diligence and an improvement of all talents committed to us.

It teaches us to love our fellows, and this has encouraged enlightenment of the masses, and enlightenment increases prosperity.

Luxury is materialistic and selfish: it retards the mental and spiritual development of a people, and tends to impoverish a nation.

Luxury breeds luxury as sin begets sin.”

Richard T. Ely, 1889

At the founding of the American Economic Association in 1885, there was a great battle between those who felt the new Association should “stand for” something and contribute to social reform, and those who wanted an Association that gave them credibility as objective scientists.

Richard T. Ely asked, “Who would want to join an Association that does not stand for anything.”

Twenty of the fifty Founding Fathers of the American Economic Association were practicing ministers.

R. H. Nelson, 2010, page 24

Sixth Point. Yet, in spite of the efforts of economists to be objective, economics and religion were still intertwined.

Frank H. Knight (1885 – 1972) is an important economist in the very early history of the Chicago School of Economics. He co-authored a book in 1945 on economics with a theologian.

But Frank Knight also made this really insightful

point that few economists read but many practice

or participate in:

The point is that the “principles” by which a society

or a group lives in tolerable harmony are

essentially religious.

The essential nature of a religious principle is that

not merely is it immoral to oppose it, but to ask

what it is, is morally identical with denial and

attack.

Knight, Frank H. 1932. The Newer Economics and the Control of Economic Activity. Journal of Political

Economy 40(4):448-9 and 455.

There must be ultimates, and they must be

religious, in economics as anywhere else, if one

has anything to say touching conduct or social

policy in a practical way.

Man is a believing animal and to few, if any, is it

given to criticize the foundations of belief

“intelligently.”

Knight, Frank H. 1932. The Newer Economics and the Control of Economic Activity.

Journal of Political Economy 40(4):448-9 and 455.

To inquire into the ultimates behind accepted

group values is obscene and sacrilegious:

objective inquiry is an attempt to uncover the

nakedness of man, his soul as well as his body, his

deeds, his culture, and his very gods.



Certainly the large general (economics) courses

should be prevented from raising any question

about objectivity, but should assume the

objectivity of the slogans they inculcate, as a

sacred feature of the system.



First Point: religion and economics have been interconnected since earliest times…and they are interconnected still, though we have (mistakenly) thought of them as being separate in late modernity.

Second Point: over human history, there has been a shift from a sense, albeit mystical, of the universe as a whole system to a sense that the universe is made up of separate parts and separate subsystems each of which can be understood apart from the others. We are only now, after six decades of severe environmental problems, trying to make our knowledge whole.

Third Point: Natural philosophy and social/moral philosophy became secular enterprises to provide logical, empirically verifiable knowledge without invoking God or the Bible.

Fourth Point: Adam Smith did not invent markets, but he did give the practice of exchange moral standing and the functioning of the market system the metaphor of “as if guided by an invisible hand”.

Fifth Point: The concepts of divisible property and individual freedom, both rooted in atomism, are key to “free” markets.

Sixth Point: Until the Cold War in the mid 20th century, economic morals and economic outcomes could be compared with Judeo-Christian morals and ideals.

Seventh Point: Neoliberal free market ideology was deliberately created by a dozen conservative economists who denied care and obligations to others, stressing the “reality” of mere individualist assumptions, and limiting economics to efficient market reasoning.


Second Point: over human history, there has been a shift from a sense, albeit mystical, of the universe as a whole system to a sense that the universe is made up of separate parts and separate subsystems each of which can be understood apart from the others. We are only now, after six decades of severe environmental problems, trying to make our knowledge whole. Third Point: Natural philosophy and social/moral philosophy became secular enterprises to provide logical, empirically verifiable knowledge without invoking God or the Bible.




Seventh Point: Neoliberalism is deliberately created by a dozen conservative economists by ignoring social gospel, stressing the “reality” of mere individualist assumptions and limiting economics to market reasoning.

Eighth Point: With the Flood Control Act of 1936, Bretton Woods, and the Council of Economic Advisors, economists play a stronger role in government, roles that “require” them to give one answer in spite of Edgeworth’s math that shows that moral criteria are needed to speak to issues of public policy.


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Economics student are taught this basic finding from general equilibrium theory, but the are also informed that moving the economy to the many possible efficient solutions besides those that make both X and Y better off would be politics. And economists, being objective scientists, do not do politics.

President Truman asked for a one-armed economists who would not say “on the one hand” and “on the other”. The “progressive” political system demands a single answer from objective economists.

Thus economists only advise on making the economy we have more efficient and, hopefully, everybody better off, not going to more equitable economies that we could have that are also efficient.


Second Point: over human history, there has been a shift from a sense, albeit mystical, of the universe as a whole system to a sense that the universe is made up of separate parts and separate subsystems each of which can be understood apart from the others. We are only now, after six decades of severe environmental problems, trying to make our knowledge whole.

Third Point: Natural philosophy and social/moral philosophy became secular enterprises to provide logical, empirically verifiable knowledge without invoking God or the Bible.


Fifth Point: The concepts of divisible property and independent individuals, both rooted in atomism, are key to “free” markets and freedom.


Seventh Point: Neoliberalism is deliberately created in the 1940s by a dozen conservative economists by ignoring social gospel, stressing the “reality” of mere assumptions about people and property, and limiting economics to market reasoning.

Ninth Point. Libertarian theology is deliberately bolstered after WWII to counter the strengthening role of social gospel in political decisions and popular American culture.

Let us ask ourselves whether we, as an industry, do not have a great contribution to make in this effort to regain for business the leadership of our economy. We have within our hands the greatest aggregate means of mass education and persuasion the world has every seen … We have the power. Why not use it?

James Webb Young 1941of the J. Walter Thompson Company

The advertising companies had been organized into the War Advertising Council and that became simply The Advertising Council after the war. The Council and others aligned with conservative clergy to promote Libertarian Gospel

Prayer breakfasts started among business men and this practice was spread to those in public office during the Eisenhower Administration.

Corporate America, concerned with the success of FDR’s social gospel and New Deal “socialism”, helped create a new Protestant Christianity that emphasized individual responsibility for one’s salvation and material well-being while equating liberty and freedom with markets and God’s will, suggesting that God works through the market.

The Russians were Godless socialists.


Second Point: over human history, there has been a shift from a sense, albeit mystical, of the universe as a whole system to a sense thatthe universe is made up of separate parts and separate subsystems each of which can be understood apart from the others. We are only now, after six decades of severe environmental problems, trying to make our knowledge whole.

Third Point: Natural philosophy and social/moral philosophy became secular enterprises to provide logical, empirically verifiable knowledgewithout invoking God or the Bible.




Seventh Point: Neoliberalism is deliberately created by a dozen conservative economists by ignoring social gospel, stressing the “reality” of mere individualist assumptions and limiting economics to market reasoning.

Eighth Point. Libertarian theology is created after WWII to counter the strengthening role of social gospel in public and popular American culture.

Ninth Point: With the Flood Control Act of 1936, and then the Full Employment Act of 1946, economists play a stronger role in government, roles that require them to give an answer.

Tenth Point: Neoliberalism steadily gains influence in the economics profession and among the public for a variety of reasons including the effectiveness of Milton Friedman as a public spokesman (his wife Rose played a significant role).

As Frank Knight noted, the social order requires shared beliefs for it to work. Imagine what would happen if we did not have a system of shared beliefs.

Could markets even exist if we did not have faith in their existence? Imagine what would happen if a significant number of people do not belief their would be food in our markets in the coming weeks. They would rush to buy all the food currently in markets and then buy farm land, though not all could, they would plant what they could in their yards, though some only have flower pots.

The social order requires our faith, but what if that faith as now established guides us only toward making the existing economy more efficient and ignores our care for, or obligations to, future generations?

What if our existing faith keeps guiding us to market solutions for problems that need strong public input and oversight through government?

What of our existing faith guides us to thinking about the costs of avoiding climate change as an investment?

And that investments in climate mitigation should have returns comparable to investments in new brands of cosmetics for problems created by advertising?


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And so I am arguing that part of the problem has been that we, including economists themselves, have let “incomplete, or even “false” economic reasoning intrude on decisions that are ultimately moral decisions.

A side message has been that economics has invaded Christianity in the form of prosperity gospel, so that Christianity

Religion also has a very imperfect history, but it has been the institution that transmits moral thought from one generation to the next. Inquiring into its historical arguments is more likely to help us realize the importance of responding to climate change than is economics alone.

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Economics, Religion, and the Climate Crisis: A Long … Religion, and the Climate Crisis: A Long View. ... there has been a shift from a sense, ... Seventh Point: Neoliberal free