Larvatus Prodeo

Gary Sauer-Thompson has trained an observant eye on an editorial in the Fin:

Yes, the road ahead looks difficult. But this is no time to abandon our faith in the capacity for enterprises and markets free of oppressive state intervention to reinvent ourselves and bounce back. Human ingenuity will prevail, confidence will eventually return and the wheels of commerce will spin again. There is too much evidence that the world, despite periodic setbacks, continues to progress.

He parses this intriguing paragraph thus:

Interesting isn’t it. The defence of free market capitalism depends on faith not on reason. Reason cannot do the job any more given the global financial crisis and its aftershocks on the economy. So faith is called in to plug the gaps.

Of course, faith was always a big component of economic liberalism. Enlightenment doctrines (and Marxism is another), having toppled God from his epistemological throne as the prime cause, took on some of the characteristics of the theism they thought they’d banished. So economic science has always been contaminated by ideology. Normative values such as “progress” and “ingenuity” underpin a worldview which partakes in blindness as well as insight. Now that a leap of faith is required to defend one’s choice of belief, we’re beginning to see this aspect of economic liberalism in plain view. We’re being asked to sign up to a metaphysics.

Coincidentally, John Quiggin has posted the inaugural number in a promised series of observations about economic doctrines which have been discredited by the Global Financial Crisis. First cab off the rank – the efficient markets hypothesis. Continue reading ‘Economic faith and doctrines’