The Religion of Economics

Benedikt Koehler on the Enlightenment, Religion, and Mosaic Economics

The Enlightenment purged economics of religion. This began when John Locke claimed that everyone had the right to pursue ‘life, liberty, and estate,’ which implied true happiness could be found this side of the afterlife; continued when Adam Smith explained markets followed an Invisible Hand, which made divine will irrelevant to economics; and concluded when Jeremy Bentham wrote that happiness was a surplus of pleasure over pain, which made ethics calculable. Modern economics has been built on insights into property rights, incentives, and utility, and economics and religion have had little to say to each other ever since the Enlightenment. One might ask whether that matters. Astronomers, after all, do their job without reading Genesis. But in the case of economics things are different. The advances of economics inspire awe, but not affection, and from an early stage the accolades earned for amassing material goods came with reproofs for depleting spiritual values. Edmund Burke lumped together “sophisters, economists, calculators;” Thomas Carlyle branded economics the “dismal science;” John Ruskin thought political economy a “delusion.” Writing religion out of the economic script had removed a cornerstone of social thought. The sociologist Emile Durkheim spotted that omission. In The Elementary Forms of Religious Life he wrote that at the origin of society “the rules of morality and law were not distinct from ritual prescriptions. In short, then, we can say that nearly all the great social institutions were born in religion.” He added: “Only one form of social activity has not as yet been explicitly linked to religion: economic activity … the idea of economic value and that of religious value cannot be unrelated; but the nature of these relationships has not yet been studied.”

Looking for the inception of economics, we find them in the Books of Moses.

Economics in the Books of Moses

From earliest history, rulers of communities had been considered the rightful arbiters of economic dispositions, and they were entitled to change them as they saw fit. The Pharaoh told Joseph, “The land of Egypt is before thee (Gen 47:6)”, but those concessions were withdrawn when “there arose a new king over Egypt, which knew not Joseph (Ex 1:8).” It fell to Moses, in his capacity as leader of the Israelites, to lay down rules for their economy. Except in one crucial aspect – to which we will return momentarily – Mosaic economics was in keeping with best practices of the time.

The Book of Genesis framed the right to own land; the Lord had decreed: “The land shall not be sold for ever: for the land is mine; for ye are strangers and sojourners with me” (Lev. 25: 23). Israelites would not have baulked at the injunction that they were tenants rather than owners; because all land in Egypt was owned by the Pharaoh,  no notion of private ownership of land existed. Thus on entry into Canaan, land was allocated by lot to tribes and broken down in parcels to families. If the intent of this measure was egalitarian, its unintended outcome was the opposite. As tenants did not own their land, they had no right to sell it. This made it impossible for land to be bundled or redeployed, and the barrier to private land ownership stymied productivity growth. Rules for settlement of estates aggravated distortions: a tenant had to pass two thirds of his farm to an older son and one third to a younger, with the consequence that descendants of older sons doubled their holdings relative to those of younger sons with every successive generation (for example, one grandchild of a tenant might receive two thirds of two thirds whilst another one third of one third). Widening wealth differentials made the contingency of debt default more acute. Mosaic property rights were designed to ensure equality of property ownership, but distortions were inevitable with the passing of time. This necessitated the introduction of mitigating measures.

The Book of Genesis provided Moses with a blueprint for provision of welfare. The Lord had rested on the seventh day of creation, the Sabbath. This precedent established the principle that the seventh unit in a cycle of time marked the transition to a fresh start. Moses endowed the Sabbath with economic ramifications. On the seventh day, humans and animals were entitled to a day of rest; in the seventh year, slaves were to be set free and fields to be left fallow; and in the Jubilee Year at the end of a cycle of seven Sabbath years, land that had changed hands during the preceding period reverted to the original tenant. Sabbath rules protected workers, animals, and fields; the Jubilee Year leveled property ownership. Taken as a whole, Sabbath policies reset the original egalitarian status quo.

The Books of Moses also gave rules for the conduct of trade; of which the most conspicuous was the ban on lending at interest. In contrast with the rules for property and welfare, the ban on interest was not anchored in a precedent set in the Book of Genesis. One senses, though, that these guidelines were likely inserted at later stages of composition: interest was denoted with different terms (ribbit, neshec, tarbit, marbit), and the application of this ban was not consistent. The ban on interest as such in the case of Israel was not unique; ancient Greeks and Romans also found banking a disreputable business. But no Greek or Roman went as far as Moses as to declare lending at interest irreligious and a contravention of divine will. The ban’s rationale is all the more opaque since neighboring cultures, Babylonians and Phoenicians, had no reservations against lending at interest.

Mosaic economics was in most respects generic. Mosaic economics was cast to guide Israelites in their transition from a nomadic to a sedentary economy, and other societies making the transition from shepherding to farming had similar approaches to the right to own land and the duty to dispense welfare. It was the norm in such societies that property in land was vested in a community’s leader, and that the leader allocated rights of tenure to his subjects (such has been shown by Elman Service). For Moses, however, a particular constraint weighed on his mind. Moses was conscious that he would not enter the Promised Land, and there was therefore a risk that his guidelines would be overruled. Moses precluded tampering with his prescriptions by ascribing the source of his dispositions to the Lord, an authority that no ruler, however powerful, could defy. Economic practices until then had been controlled and changed by whomever happened to hold the reins of power, and that lever of power was taken out of the hands of rulers when Moses transferred that right into the hands of God. Rulers henceforth had to reconcile economic policies with a frame of reference that was beyond the reach of worldly power. With one stroke, Moses ring-fenced economics from arbitrary interventions by secular power: in the hands of readers of the Books of Moses, the will of the Lord was a frame of reference to adjudicate whether economic arrangements were defensible. Secular economics was made accountable: economics had become a normative discipline.

To be sure, powers-to-be might try to fudge prescriptions. The Book of Kings and the Book of Nehemiah related two such cases: a violation of property rights and the practice of usury. The Book of Kings related that King Ahab wanted to buy Naboth’s vineyard, who rebuffed him, “The Lord forbid it me, that I should give the inheritance of my fathers unto thee.” (1 Kings 21) Although Ahab and Jezebel, his wife, dispossessed Naboth, in due course they suffered retribution by an ignominious death. The Book of Nehemiah related the resolution of a debt crisis. Nehemiah was a senior advisor at the Persian court, sent to Jerusalem to resolve a crisis that ensued when large sections of society were no longer able to service their debts. Nehemiah resolved the crisis by invoking the Mosaic proscription on usury,  “I pray you, let us leave off this usury.” (Nehemiah 5:10).

There might be a possible objection to the claim that the Books of Moses shaped the evolution of economics. Notwithstanding isolated examples to the contrary, it might be argued, Mosaic prescriptions were expressions of ideals that had no bearing on actual practices. Such objection is moot. The momentous import of Mosaic economics did not consist in the way it was practised, but in the way it was conceived. By grounding economics on the will of the Lord, Moses endowed economics with an autonomous rationality, a legacy that shaped core aspects of normative economics for centuries. Throughout the Middle Ages, Christianity upheld the Mosaic notion that land was beyond the grasp of human hands; Francis of Assisi placed this message at the core of his preaching. And Islam defined usury as riba, the very term a derivation of Mosaic ribbit. Moses was formative for economics until supplanted by Enlightenment rationalism.

Religion and economics post-Enlightenment

Disenchantment with capitalism has become more widespread in religious circles in recent decades, and calls for religions to exert an impact on the economic sphere have become more vocal. There have been two main approaches to mapping religious prescriptions onto real world economics: one literal, one utopian. In Islam, economists have striven to align business practices of the present with those that existed in Islam’s formative era. However, societies that have introduced Islamic economics have not outperformed economies that are avowedly secular. In Christianity, encyclicals such as Fratelli tutti follow a long line of endeavors to soften the harshness of market outcomes by infusing idealism into the mundane world of trade and business. But the literal and the utopian approaches will not gain traction in the real world until they can demonstrate why betterment cannot be achieved without religion and why religion is a conditio sine qua non. Another approach, pace Emile Durkheim, would be to restore the place of religion as a frame of reference for the way economics is conceived.

The Books of Moses regulated the right to own property, the duty to provide welfare, and the conduct of trade. Taken together, these measures constituted a coherent suite of economic measures. However, Mosaic economics – unlike modern economics – undergirded these measures with a foundation in theology.  One might anticipate an objection that economist academicians do not seem to be hampered by this omission. Perhaps. But it might be timely to cast a glance at a neighboring discipline, political science. Rationality as propagated by the Enlightenment has come under scrutiny from many directions, and scrutiny of its presuppositions has given rise to a vigorous debate whether modern social science is not in fact a recasting of theological disputes in a new guise. Notable voices in this debate, to cite but a few, include Carl Schmitt, Leo Strauss, and Michael Allen Gillespie. In economics, this critique has found expression in Giorgio Agamben’s Homo Sacer. Moses had economics ruled by ethics, and the Enlightenment reversed that relationship. The choice between these two approaches is up to us.

Benedikt Koehler is Economics of Religion Fellow at the Institute of Economic Affairs and Visiting Fellow at St. Mary’s University, in London. He is the author of Early Islam and the Birth of Capitalism.