Why Economic Progress Depends on Economic Religion

Abstract

The success of an economic system depends on its having a strong basis of legitimacy in society. For much of the twentieth century, the legitimacy of capitalism was based on the public belief that it would most rapidly and successfully advance the economic progress of the American nation. Neo-classical economics underlay the claims of the economics profession that it possessed the requisite technical knowledge to ensure this outcome. Economists thus would ensure economic progress which would save the nation and the world -- the essence of capitalist economic religion. This faith has faced a growing challenge in recent years, however, partly as a result of the Great Recession of 2008 and 2009, but also due to the growing intellectual crisis facing neo-classical economics since the 1970s and to the fading credibility of the idea that the solution of the economic problem through economic progress will provide a solution to the human problem. Resolving this challenge will require a fundamental transformation of economics and, given the interconnected character of economics and religion, a religious transformation as well.