Financial History 141 Spring 2022 - Page 18

Economist John Maynard Keynes famously suggested that the thinking of even the most practically minded people is the product of what other thinkers said some time before .
Max Weber claimed that Calvinist religion was historically a spur to forms of personal behavior that gave rise to modern capitalism .
Historian R . H . Tawney wrote the 1926 book Religion and the Rise of Capitalism in response to Weber ’ s classic work , The Protestant Ethic and the Spirit of Capitalism .
much less religious enthusiasm . My argument is most certainly not that these were religiously dedicated men who self-consciously brought their theological commitments to bear on their economic thinking .
Rather , the creators of modern economics lived at a time when religion was both more pervasive and more central than anything we know in today ’ s Western world . And , crucially , intellectual life was more integrated then . Not only were the sciences and humanities ( to use today ’ s vocabulary ) normally discussed in the same circles , and mostly by the same individuals , but theology too was part of the ongoing discussion . Part of what Smith taught , as a professor of moral philosophy at the University of Glasgow , was natural theology . He and his colleagues and friends were continually exposed to what were then fresh debates about new lines of theological thinking . I argue that what they heard and read and discussed influenced the economics they produced , just as the ideas of today ’ s economists are visibly shaped by what we learn from physics , or biology or demography .
This idea importantly changes our view of the historical process by which the Western world arrived at today ’ s economics . The conventional account is that the
line of thinking we know today as economics was a product of the Enlightenment : more specifically , that the Smithian revolution and the subsequent development of economics as an intellectual discipline were part of the process of secular modernization in the sense of a historic turn from thinking in terms of a Godcentered universe toward what we now broadly call humanism . Nicholas Phillipson , in his prize-winning biography of Adam Smith , referred to one statement of Smith ’ s as a reminder that not just The Wealth of Nations but Smith ’ s entire project for a modern science of man was “ built on the foundations of the Enlightenment ’ s quintessential assault on religion .” Phillipson was merely stating the commonly accepted view .
As a matter of what Smith and his contemporaries consciously intended , it is accurate enough . But explanations of important developments that rely simply on the conscious intentions of the actors involved are necessarily limited . As the American historian Gordon Wood put it , people are often not so much the manipulators but the victims of their ideas . Even cultural influences that seem obvious from the perspective of decades or , better yet , centuries later were often invisible to
those whose ideas they crucially shaped .
Realizing that the Smithian revolution partly grew out of new ideas in theology , and that the religious debates of that day shaped it — not because that is what Smith and the other creators of modern economics intended , but because the theological debates of their time fundamentally altered how they thought about human nature and the underpinnings of everyday human interaction — puts a different gloss on the matter . So does understanding the ways in which the evolution of economic thinking during the two-plus centuries since has continued to reflect this initial religious influence . So too does recognizing the consequences of this deep intellectual connection for our current-day policy debate .
Taking account of this from-the-bottom-up connection between economic thinking and key strands of religious thinking — the theological questions under so much dispute during Smith ’ s time — helps explain a wide variety of puzzling phenomena , now and in the past : Why do so many Americans who have only the remotest prospect of ever making their way into the top income tax bracket nonetheless favor keeping the tax rate on top-bracket incomes low ? More startling
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