What happens when economics becomes religion?

Economics is the new American religion. Disagree with the mainstream narrative that surrounds it and you are a heathen in need of a quick conversion. It’s no longer seen as a social science that requires impartial investigation: it’s about giving people what they think, whatever the cost.

And the cost they incur in doing so is a big one: the prosperity of the people.

I recently sat down with Dr. Peter Boettock, a professor of economics and philosophy at George Mason University, to discuss what needs to happen against people’s problems in “politics for a sense of truth.” He explains the problem this way: “When my truth is not heard, my only recourse is to impose the truth on others who are peddling lies.”

He is right. This desperate need for control places government on a pedestal as an all-powerful solution rather than as a tool to protect freedom. And the proposed solution needs to use economics for tradeoffs. When people aren’t allowed to disagree about the economy and more policies are forced upon them as gospel, Americans are left with fewer opportunities to accomplish extraordinary things.

Without getting caught up in the culture of economics, we need to go back to the four pillars defined by Boettke that substantiate this social science and hold the foundation for achieving prosperity.

Pillar One: truth and light

The truth is that we live in a world of scarcity. This reality highlights the fact that due to scarcity, we have to make tradeoffs to achieve our goals. For most, it looks like working in your scarce hours and earning money for scarce goods. Many today argue that not everyone can or should work, leading to petitions on Capitol Hill to pass policies that reduce work requirements.

Lawmakers can pass policy after policy, but it will never change the underlying “status of work,” as Boettke puts it. And respecting people’s agency gives them dignity.

Pillar Two: Beauty and wonder

We live in a world of spontaneous order. Every century, it is beautiful and amazing to see how a spontaneous sequence of voluntary activity results in the formation of global markets through which we thrive today.

To achieve this phenomenon, it is essential that individuals are empowered to work and contribute to society. Government policies that impose economic barriers cannot produce the same orderly results that emerge when people are allowed to achieve their hopes and dreams through a system of free markets and limited government.

Coupled with the cultural ideology that governments, not individuals, must act to solve all economic problems, we move further away from individual responsibility and deeper into a mindset of crippling dependency. A mindset that convinces people they are powerless rather than possessing the tools they need to thrive.

Pillar Three: hope

Economics gives us hope to change the situation. Through capitalism and entrepreneurship, we can hope for a civilized society as the first resort where government encourages long-term self-sufficiency as the last resort to reduce poverty.

This was one of the major downfalls of governments across the country in 2020.

By shutting down the economy and deciding which businesses were essential, small business owners and entrepreneurs were sidelined, with fewer opportunities and less hope to emerge from the government-imposed economic crisis. And there is little hope for those stuck in their servile ways.

Pillar Four: compassion

Economics takes at its core compassion for the poor and disadvantaged, trying to uplift them. β€œIt’s not about making the rich better but how we can uplift the poor [so that] The poor get richer faster than the rich get richer,” explains Boettke.

If people understand economics under these four pillars, not as a list of technicalities that police people see, more progress will prevail.

The government constraints imposed on our lives may be in popular demand, but they are not the preferred solution among the American entrepreneurs who fuel the economy. As Matt Ridley writes, “Innovation is the child of freedom and the father of prosperity.”

When seeking economic solutions for the nation, the way forward should be about how best to give people the opportunity to thrive by removing barriers, respecting individual agency, and building hope and empathy in communities. This is achieved by promoting and preserving freedom through limited government and a thriving civil society. Otherwise, we will fail the lesson of economics.

Vance Ginn, Ph.D., is its founder and president Jean Economic Consulting, LLC. He is chief economist at the Pelican Institute for Public Policy and a senior fellow at Young Americans for Liberty. He previously served as associate director for economic policy in the White House’s Office of Management and Budget, 2019-20.

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