Capitalism’s Roots May Lie in Religion. And That’s Not a Bad Thing

May 3, 2021 | Tal Fortgang
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In his book Religion and the Rise of Capitalism, Benjamin M. Friedman demonstrates the influence of theology on the origins and development of modern economic thought, and most importantly on the ideas of Adam Smith. Tal Fortgang finds much to learn “from this richly detailed work of intellectual history,” but also notes some strange gaps, and, more importantly, faulty presuppositions:

Friedman’s premise, the unstated assumption that gives his findings their supposed punch, is that it is somehow surprising that theology and economics should have ever been so intertwined. . . . Having found traces of anti-predestinarian theology in Smith’s work, Friedman proceeds as if Smith’s defense of capitalism should now appear more provincial, something like a byproduct of an unlikely religious milieu that stuck around by historical accident. . . . If this is so, then American free-market mythology has been exposed as an article of faith masquerading as a reasonable political view.

But economic arguments are always bound up in religious arguments, . . . because how we conduct our human affairs always depends on how we view humanity and human nature—a question that theology and religion have always sought to illuminate. By no means is such reflection limited to the free-market right. When activists today demand “economic justice” or redistribution, they are making a claim about what economic arrangements provide a standard of living due to individuals by their nature.

In his haste to explain the endurance of capitalist superstition, Friedman thus overlooks the problem posed by Smith’s continued resonance: maybe free-market ideology endures because the system it encourages—one of “capitalist acts between consenting adults,” as Robert Nozick put it, where free people may pursue happiness as they see fit—is precisely what centuries of immigrants came to America for. Or maybe market economies endure because they achieve the most progress we can hope to gain in a fallen world, by producing historically unimaginable living standards for the average worker.

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