Religion in Economics Courses? (RJS)

Religion in Economics Courses? (RJS) January 7, 2014

Back in November I put up two posts on a book by Warren Nord, Does God Make a Difference? Taking Religion Seriously in Our Schools and Universities (you can find the earlier posts: The Scandal of Secular Indoctrination and Religion in Science Courses? if interested).  Nord’s hypothesis is that a liberal education – as in liberal arts not liberal politics – needs to take religion seriously because religion forms an important element of human existence. When we consider the role of religion in education evolutionary biology generally pops to mind, but Nord’s proposal is far more encompassing. He suggests that the role of religion needs to be taken seriously across the curriculum, in history, literature, science, and … he also singles out economics.

Economics touches on a number of morally loaded issues – yet economics is taught as a value-free science.   According to Nord:

As one text puts it, “Learning about economics will help you predict what may happen if certain events occur or certain policies are followed. But economics will not tell you whether the results will be good or bad. Judgements about results depend on a person’s values.” Nowhere do the standards or the texts suggest that people can have right or wrong values. Values are subjective preferences. (p. 49)

The neoclassical theory of economics assumes that people will generally act out of self-interest and that the “rational” person will generally make the decision from which they acquire the greatest economic benefit. As a description of the average behavior of a population this may be the most accurate assumption – and as such it should be taught in a class on economics. Yet there are consequences to teaching economics uncritically as a discipline.  Nord cites an article, “Does Studying Economics Inhibit Cooperation?” by Frank, Gilovich and Regan in Journal of Economic Perspectives, 7, 159-171 (1993). (The authors were in Economics and Psychology at Cornell.)

From the perspective of many economists, motives other than self-interest are peripheral to the main thrust of human endeavor, and we indulge them at our peril. In Gordon Tullock’s (1976) words (as quoted by Mansbridge, 1990, p. 12), “the average human being is about 95 percent selfish in the narrow sense of the term.”

In this paper we investigate whether exposure to the self-interest model commonly used in economics alters the extent to which people behave in self-interested ways. (Frank p. 159)

The paper concludes:

In an ever more interdependent world, social cooperation has become increasingly important – and yet increasingly fragile. With an eye toward both the social good and the well-being of their own students, economists may wish to stress a broader view of human motivation in their teaching. (Frank p. 170-171)

Nord suggests that incorporating the importance of religious views (not just Christian views) in decision making or even simply acknowledging that decisions do have value would be useful.  The premise isn’t that neoclassical economics is wrong as a description of behavior, but that how and what we think shapes us as humans. (I’ve posted on this concerning the plasticity of the brain.) Economics can teach strategies for optimizing personal benefit while divorcing those strategies from moral reasoning.

For example (not an example given by Nord, but one I’ve heard), there is a standard variation of the prisoners dilemma where a person has an amount of money, say $1. They can split it any way they wish with the other player, but the other player can refuse (leaving both with nothing) or take the split. In our culture the player with the money “knows” that the split had better be close to 50:50 or the other, from a sense of injustice, is almost certain to refuse.  A 60:40 split is usually OK, but 70:30 or 80:20 is not. If, however, the player with the money is constrained by the rules to be unfair – then the inequity isn’t perceived as injustice and the second player both expects and accepts a smaller amount. In value-free economics this suggests that the rational player will (even, paradoxically, “should”) construct the rules to create the impression that inequity is not unjust, but “just the way it is.”

If we take a liberal education seriously, according to Nord, we will not divorce economics from moral considerations such as justice and human rights.  We also will not divorce economics from the intrinsic value and human importance of creative work. Economics is not simply a cold hard science. Students should be given some indication of how controversial (or not) neoclassical theory is. In addition economics should raise questions about personal ethics.

Granted, this is something of a challenge when the texts are committed to ignoring morality, but as an unending series of scandals (some of immense proportions) makes evident, too many executives fail to understand and act on their moral responsibilities. (p. 230)

I find it rather ironic that as teachers and academics, we stress the fact that academic dishonesty is intrinsically wrong (plagarism, copying, bringing unsanctioned “cheat sheets” etc.), but find it unpalatable to make moral judgments about other areas of life including, for some, economics. Continuing the quote above:

No doubt such behavior is made much easier by the conventional wisdom of neoclassical theory that business is one thing, morality another (or the dubious proposition that ethical behavior is always in one’s long-term self interest, which suggests that morality requires an economic justification.) (p. 230)

and Nord concludes:

So long as most economists accept neoclassical theory, the texts can employ it as the primary framework for interpreting the economic domain of life. But clearly, there is a major problem with teaching economics entirely as a hard social science. It is profoundly illiberal insofar as it screens out immensely important moral and spiritual Big Questions and contending philosophical and religious ways of answering them. Indeed, the idea that we can separate economics from morality and religion contributes powerfully to the secularization of our culture. (p. 230-231)

This leads to some interesting questions.

Is economics simply a value-free hard social science?

In science we generally agree that ethic may not change the facts, but should play a role in the practice. We have institutional review boards for both human and animal experiments. There is a general agreement that investigation and development of weapons of mass destruction and biological agents cannot be divorced from moral considerations.

Should moral considerations play a role in economics?

Does religion have a place?

If you wish to contact me directly, you may do so at rjs4mail[at]

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