The Religious Underpinnings of Economics

Jeffy Bowyer has an insightful little piece at Forbes entitled, "Classical Economics and Its Religious Underpinnings." He cites Jacob Viner's unfinished work The Work of Providence and the Social Order while documenting that classical economists such as Adam Smith and Frederic Bastiat embraced a belief in "optimistic providentialism." Bowyer notes that Bastiat argued "that peaceful labor and abundance was the Edenic intention, but that there had arisen a 'misunderstanding between God and mankind,' in which the latter chose the path of coercion."

As Bowyer puts it,

The idea of providential abundance was extremely important to the defense of the market order. God made a world which is fit for us, and He made us fit for the world. Resources are abundant and responsive to our touch. To use a modern analogy, commerce and technology work so well because we run on the same software, the mind of God.  Man and nature are, therefore, compatible because we have the same designer.

This is very similar to what I argue in the opening chapter of my Foundations of Economics. I draw upon the epistemology of Gordon H. Clark when noting that we only have the ability to know anything because God fit us with certain mental categories as part of being made in His image. At the same time, these mental categories are compatible and harmonize with the rest of the created order because they were all made by the same Creator.

Similarly, economic laws are not merely ephemeral behavior patters that could change on a whim. They are social regularities that necessarily derive from our nature as rational actors, a nature put in place when God made us. Economic laws, therefore, are part of the created order. Not only should we have confidence in such law, we seek to violate it at our peril. Our economic experience since 2006 testifies to that.