Acton Institute Powerblog

Is economics an ideology?

‘Ludwig von Mises’ by Ludwig von Mises Institute CC BY-SA 3.0

Richard H. Spady, research professor of Economics at Johns Hopkins, has recently published a piece at First Things entitled ‘Economics as Ideology’ in which he explores some contemporary trends among economists and their use of economics as a Procrustean bed to reshape society in its own image,

A body of thought is “ideological” when it will­fully projects its own first principles on its subject matter and actively seeks, perhaps unconsciously, material changes to bring social realities into conformity with these first principles.

It is a thoughtful essay and chronicles some worrying trends within the both the discipline of economics and in society at large. I’ve defended economists before (See ‘Misreading capitalism’) but they are not above reproach. For economics to be a force for human flourishing it must be grounded in the liberal tradition from which the discipline itself emerged.

Lord Acton famously said that liberty is the delicate fruit of a mature civilization. His life’s ambition was to write a history of the growth and maturation of the idea of freedom (See my introduction to Lord Acton: Historical and Moral Essays for an outline of the triumphs and tribulations of this massive project). Acton sought to trace the development of the idea because,

The history of institutions is often a history of deception and illusions; for their virtue depends on the ideas that produce and on the spirit that preserves them, and the form may remain unaltered when the substance has passed away.

Churches, states, and all the institutions that constitute our social life which have sought to embrace human freedom have done so unevenly and haphazardly so it is not surprising that the economics profession has done so as well. Peter Boettke is engaged in a project similar to Acton’s seeking to trace the idea of economics through history separating what he calls the ‘mainline’ economic tradition which endures and grows from the ‘mainstream’ economic practice which is whatever economists happen to be doing at the moment (See Living Economics). When the science fiction author Theodore Sturgeon grew frustrated of defending his often maligned genre he responded by coining Sturgeon’s Law acknowledging what everyone knows by experience, that ninety percent of everything is terrible. That shouldn’t prevent us from treasuring and learning from the wondrous ten percent.

That wondrous ten percent of economics emerged from a long liberal tradition. Lord Acton traced this tradition through the world of antiquity in ancient Israel, Greece, and Rome (See History of Freedom in Antiquity) and the later medieval Christian synthesis and elaboration of this tradition (See History of Freedom in Christianity). Acton reminds us that it is the savior himself that introduces the idea of rendering to Caesar the things which are Caesar’s and to God the things which are God’s (Matt. 22:21). Theologians began to examine the nature of exchange (See Sources in Early Modern Economics, Ethics, and Law) and attitudes toward exchange began to change in the wake of this sustained reflection. The origin of the discipline of economics itself is often credited to a professor of moral philosophy, Adam Smith.

The advances in political and economic freedom realized with our imperfect embodiment of the liberal tradition are real but they do not alone constitute the good life (See ‘Give socialism a try? Let’s not.’). In his book Liberalism Ludwig von Mises rightly articulates the limits of economics and social policy,

Social policy, with the means that are at its disposal, can make men rich or poor, but it can never succeed in making them happy or in satisfying their inmost yearnings. Here all external expedients fail. All that social policy can do is to remove the outer causes of pain and suffering; it can further a system that feeds the hungry, clothes the naked, and houses the homeless.

All of life is economic, but economics is not all of life. To put our trust in economists is as mistaken as putting our trust in princes, “Man shall not live by bread alone, but by every word that proceedeth out of the mouth of God.” (Matt. 4:4)

Dan Hugger

Dan Hugger is Librarian and Research Associate at the Acton Institute.