The Online Library of Liberty

A project of Liberty Fund, Inc.

• Introduction
• Part 1: Economics and Ethics
• Chapter 1: Are Economists Basically Immoral? *
• Chapter 2: Economics and Ethics: the Problem of Dialogue *
• Chapter 3: Income and Ethics In the Market System *
• Part 2: Economics and Theology
• Chapter 4: Can Homo Economicus Be Christian? *
• Chapter 5: Economic Scientists and Skeptical Theologians *
• Chapter 6: Christian Theological Perspectives On the Economy *
• Chapter 7: Controlling Stories: On the Mutual Influence of Religious Narratives and Economic Explanations *
• Part 3: Economics, Theology, and Justice
• Chapter 8: Justice, Natural Law, and Reformation Theology *
• Chapter 9: The Concept of Economic Justice In Religious Discussion *
• Chapter 10: The U.s. Catholic Bishops and the Pursuit of Justice *
• Part 4: Economics and History
• Chapter 12: Christian Social Thought and the Origination of the Economic Order *
• Chapter 13: Clerical Laissez-faire: a Case Study In Theological Ethics *
• Part 5: On Teaching and Learning
• Chapter 14: “the Nature of Man”: What Are We After? *
• Chapter 15: Researchers and Degree Purchasers *
• Part 6: Teaching Economics
• Chapter 16: Economics Is a Way of Thinking *
• Chapter 17: Teaching Introductory Economics *
• Chapter 18: Teaching Economics By Telling Stories *
• Chapter 19: Between Sterility and Dogmatism *
• Part 7: Economic Method
• Chapter 20: Ethics On the Road to Serfdom and Beyond *
• Chapter 21: Measures of Wealth and Assumptions of Right: an Inquiry *
• Chapter 22: The Foundations of Law and Economics: Can the Blind Lead the Blind? *
• Part 8: Policy Commentary
• Chapter 23: What Is the Responsibility of Business Under Democratic Capitalism? *
• Chapter 25: An Economic Perspective On Illegal Drugs *
• Chapter 26: Economics, Ethics, and Ecology *

CHAPTER 13

Clerical Laissez-Faire: A Case Study in Theological Ethics*

In a recent essay on the evolution of Roman Catholic social thought in the United States, James V. Schall laments his church’s failure to take seriously the productive achievements of the American economy. He writes:

A similar statement could not be made about Protestant Christianity in America, at least not by anyone familiar with its nineteenth century history. Protestant clergymen played a prominent part in the early teaching of economics in the United States, especially prior to the Civil War, and their doctrines generally lauded the productive as well as the moral virtues of the American economy. The Rev. John McVickar of Columbia University, a contender for the title of first academic economist in the United States,2 was expressing the general conviction of nineteenth century clerical economists when he attributed the rapid advance of the United States in wealth and civilization largely to her respect for the divinely ordained laws of morality and political economy. These laws called for individual responsibility, private property, and minimal government intervention in the economy.3 This position acquired almost axiomatic status in the second quarter of the nineteenth century among clerical economists, prompting the historian Henry F. May to speak of “a school of political economy which might well be labeled clerical laissez-faire.”4

What exactly did these theological economists teach? On what were their doctrines based? And what was the fate of these doctrines? Those are the questions to which this paper is addressed.

Francis Wayland, 1796-1865

The most influential member of the school of clerical laissez-faire was Francis Wayland, author of The Elements of Political Economy, first published in 1837. Michael J. L. O’Connor, in an exhaustive examination of the origins of economic instruction in the United States, says that Wayland’s Elements “achieved more fully than any other textbook what appear to have been the ideals of the clerical school.”5 It also achieved, in its original version and in the abridged version published for secondary school use, immediate and widespread adoption; it was by far the most popular political economy textbook prior to the Civil War. Even after its sales declined in the 1860s, its influence continued to be exerted through adaptations and imitations. Because of the authority and prestige that Wayland commanded as clergyman, educator, and moral philosopher as well as author and teacher in the field of political economy, I will use him as a paradigm case in exploring the origins, nature, and eventual fate of “clerical laissez-faire.”6

The basic facts of Wayland’s life may be quickly sketched. He was born in New York City in 1796 of devout Baptist parents, who had migrated from England in 1793. His father set himself up in business as a currier, became a deacon in his church, received a license as a lay preacher in 1805, and by 1807 had given up his business to become a full-time minister. Francis entered Union College in 1811 as a sophomore, graduated in 1813, and began the study of medicine. About the time he completed his medical studies, Wayland experienced a deep religious renewal and decided to study for the ministry. He entered Andover Seminary in 1816, but left after one year, because of severely straitened circumstances, to accept an appointment as tutor at Union College. In 1821 he was called to the First Baptist Church in Boston and ordained as a minister. In 1826 Wayland accepted an offer to return to Union College as a professor of moral philosophy. Before he had moved his family from Boston, however, he received news of his election as President of Brown University, a Baptist institution. Wayland took up his duties in Providence in 1827. He exerted enormous influence on Brown and on American higher education generally until his resignation in 1855. After a vigorous “retirement” devoted to preaching, teaching, writing, and active work on behalf of a variety of social causes, Wayland died in 1865.7

Wayland introduced the study of political economy and took on the duty of teaching it soon after assuming the presidency of Brown University in 1827, at the age of 31. In church-related colleges in the first half of the nineteenth century, it was generally the president’s prerogative to teach moral philosophy to the senior class, and political economy was considered a branch of moral philosophy. The only training in the subject required of a teacher or author was the sort of philosophical background that a well-educated clergyman would be assumed to possess.8

In the preface to his Elements of Political Economy, Wayland wrote:

Moreover:

Tariffs

Wayland nonetheless promised not to intermingle the principles of these two disciplines in his textbook, but rather to argue “economical questions on merely economical grounds.” He offered the issue of protective tariffs by way of illustration.

As we shall see, Wayland did not consistently fulfill this promise. It may be impossible for anyone to maintain a clear distinction between what is moral and what is wise when discussing the organization of economic life. The separation will be especially difficult to maintain if one believes, as Wayland did, that the science of political economy presents the laws to which God has subjected humanity in its pursuit of wealth.

It may be objected, of course, that Wayland was only making a conventional bow to current piety when he referred to the laws which the sciences discover as the laws of God. The Memoir published by his sons two years after his death, however, offers persuasive evidence to the contrary. Wayland’s religious faith was deeply and sincerely held, and he continually tested his academic labors for conformity to what he perceived as the will of God. The Memoir contains extensive excerpts from Wayland’s personal journal, and the following extract is quite representative:

Wayland always thought of himself as a theologian first and only secondarily as a moral philosopher or political economist.

The interesting view which Wayland held on the invariability of divine laws almost certainly affected his conclusions in the area of economics. He presents his position near the beginning of his textbook on moral philosophy:

We should therefore not expect to find in Wayland much sympathy for the idea that different eras, different nations, or different cultures will have their own distinct laws of political economy. Wayland’s position is at the opposite pole from the historical relativism imported into American economics from Germany in the last quarter of the nineteenth century.

Wayland’s Political Economy

Wayland apparently learned political economy largely by teaching it. He wrote the following, shortly before his death, in a reminiscence reviewing his experience as a teacher:

The textbook he used from 1828, when he began teaching the subject to Brown seniors, until 1837, when he published his own text, was J. B. Say’s Treatise on Political Economy, translated from the fourth French edition and published in the United States in 1821. Since Wayland rarely cites authorities or indicates a source and since the Memoir contains only a few paragraphs on the subject of political economy, we have no way of knowing how many other European economists influenced his thinking. We can be fairly certain, however, that he had read extensively in the work that had influenced Say: Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations. Smith is sometimes cited specifically. What is more conclusive, however, is Wayland’s use of Smithian classifications, premises, and analyses as well as what might be called a Smithian “tone” on particular topics.

Wayland’s discussion of what governments may do to promote the increase of knowledge, for example, brings immediately to mind the language used by Smith in his section “Of the Expense of the Institutions for the Education of Youth.”15 The causes Wayland lists for differences in wage rates are Smith’s famous five circumstances that explain differences in pecuniary returns.16 Wayland’s extended discussion of money and banks frequently teaches notions that could only have been derived from Adam Smith’s fatefully erroneous explanation of the ways in which metallic and paper money function in an economy.17 Wayland’s refutation of arguments for restrictions on imports reveals the clear influence of Smith’s treatment.18 Though Wayland, unlike Smith, preferred direct to indirect taxes, his analysis shows that he had considered Smith’s arguments.19

The authority of Adam Smith’s ideas must have been increased for Wayland by their embodiment in the “Scottish school” which exercised such powerful influence on American colleges in the late eighteenth and early nineteenth centuries.20 In his student days at Union College, Wayland studied The Elements of Criticism by Lord Kames (Henry Home) and Dugald Stewart’s Elements of the Philosophy of the Human Mind.21 When he began teaching at Brown, fifteen years later, he used as texts both these books and also The Philosophy of Rhetoric by George Campbell, a member of the famous Aberdeen Philosophical Society.22 It may also be noted that Wayland greatly admired the Scotch theologian-economist Thomas Chalmers.23 Chalmers was one of the “heretics” who rejected the “orthodox” position of British classical political economy by asserting the possibility of “general gluts.” Wayland’s treatment of this topic, under the heading “Stagnation of Business,” seems unclear and unsure of itself, a reflection, perhaps, of Chalmers’ influence.

Ambivalence was not generally characteristic of Wayland’s teachings on the subject of political economy. God had ordained laws governing morality and laws governing the accumulation of wealth, and Wayland did not expect to find contradictions between them. “In political economy as in morals.” Wayland insists,

Wayland often pauses to call his reader’s attention to the divinely intended harmony in the relations he is describing.

Trade, especially international trade, is a fulfillment of God’s plan for amity:

Toward the end of the book, after discussing some common causes of inefficiency, Wayland comments:

Wayland is so impressed with the mutually beneficial aspects of self-interested behavior that he has trouble recognizing or acknowledging that interests can also conflict. Don’t poor harvests in one region cause higher prices and greater prosperity for farmers in other regions? Don’t sellers sometimes benefit from the greater scarcity that is caused by the misfortunes of others? Wayland is reluctant to admit this. He appeals to the true but irrelevant argument that sellers benefit from the prosperity of their customers, and applies the label “short sighted, as well as morally thoughtless” to merchants who expect “to grow rich by short crops, civil dissensions, calamity, or war.”30

Monopoly, from this perspective, is self-defeating. If the agricultural interests of Great Britain had not tried to maintain high prices through the Corn Laws, but had allowed imported grain to lower the price of food, population growth and industrial growth over the most recent fifty years would have more than compensated for the landed proprietors’ loss. Wayland concludes a somewhat vague analysis with the observation:

Wayland on the Relation Between Economics and Morality

The essential unity that Wayland saw between the laws of political economy and the laws of morality emerges most clearly in his chapter “Of the Laws Which Govern the Application of Labour to Capital.”

Section 1 of the chapter explains how the laws on this subject are founded on “the conditions of our being,” conditions that Wayland summarizes in seven paragraphs.32

• 1. God has created man with faculties adapted to physical and intellectual labour.
• 2. God has made labour necessary to the attainment of the means of happiness.
• 3. We are so constituted that physical and intellectual labour are essential to health. Idiocy or madness is the consequence of intellectual sloth; feebleness, enervation, pain, and disease appear in the absence of physical labour.
• 4. Labour is pleasant, or at least less painful than idleness. People crave challenges on which to exercise their faculties.
• 5. God has attached special penalties to idleness, such as ignorance, poverty, cold, hunger, and nakedness.
• 6. God has assigned rich and abundant rewards to industry.

Wayland’s seventh paragraph draws the conclusion: We are required “so to construct the arrangements of society, as to give free scope to the laws of Divine Providence.” We must “give to these rewards and penalties their free and their intended operation.” We are bound, at the very least, to try these means first if we want to stimulate economic growth, and to avoid other policies “until these have been tried and found ineffectual.” Everyone should be “permitted to enjoy, in the most unlimited manner, the advantages of labour,” and all should suffer the consequences of their own idleness.

In Section II Wayland explains what is required if each is to enjoy, in the greatest degree, the advantages of his labor.

The first condition can be achieved by abolishing common property and assigning all property to specific individuals. These individually-held property rights must then be enforced against potential violation either by individuals or by society. Individual violations are held in check through the inculcation of moral and religious principles—the most certain and necessary method of preventing violations—and through equitable laws firmly and faithfully applied. Violations by society, through arbitrary confiscation, unjust legislation, or oppressive taxation, are more destructive than individual violations, because they inflict wrong through an agency that was created for the sole purpose of preventing wrong and thereby they dissolve the society itself. The best preventative is an elevated intellectual and moral character among the people and a constitution which guarantees immunity from public as well as from private oppression.34

The second condition is achieved when individuals are allowed to use their labor and their capital as they please, without legislative interference, so long as they respect the rights of others.35

In Section III Wayland shows what must be done to make sure that everyone “suffers the inconveniences of idleness.” If the dishonest acquisition of property is prevented “by the strict and impartial administration of just and equitable laws,” then, in a regime of private property, “the indolent” will be left “to the consequences which God has attached to their conduct. . . . they must obey the law of their nature, and labour, or else suffer the penalty and starve.”36

What about charity? Where people are poor because “God has seen fit to take away the power to labour,” God has also commanded generosity on the part of those who have wealth to bestow. But no one is entitled to support merely by virtue of being poor, and institutions that provide relief to the indigent without any labor requirement are “injurious.”

Dependency

Poor laws violate “the fundamental law of government, that he who is able to labour, shall enjoy only that for which he has laboured.” By removing the fear of want, they reduce the stimulus to labor and the amount of product created. By teaching people to depend on others, they create a perpetual pauper class. This process, once initiated, grows progressively. Eventually it destroys the right of property itself by teaching the indolent that they have a right to be supported and the rich that they have an obligation to provide that support. Poor laws thereby foster class conflict.37

In cases where a person has been reduced, by indolence or prodigality, to such poverty that he is in danger of starving, he should be “furnished with work, and be remunerated with the proceeds.”38

Section IV explains how the accumulation of capital increases the demand for labor and the rate of wages. Section V argues for “universal dissemination of the means of education and the principles of religion” on the grounds that intellectual cultivation and high moral character among a people promote prosperity.39

In Section VI Wayland reluctantly takes up “bounties and protecting duties, as a means of increasing production.” His reluctance is due to his inability to discover how they can produce this effect; but he knows that popular opinion holds otherwise and so he cannot pass the subject by in silence. After presenting a careful and quite classical criticism of such measures on economic grounds,40 Wayland raises the moral question: By what right does society interfere in this way with the property of the individual, and without offering compensation? He declines to answer, however, on the grounds that this question belongs not to political economy but to moral philosophy; but he clearly thinks that no satisfactory answer can be given to his essentially rhetorical question.41

After stating and criticizing, again in an orthodox classical manner, the arguments in favor of legislative stimulus to industry, Wayland raises the Smithian question of whether it is not unjust for a government to abolish a restrictive system upon which people have come to depend. “To this objection,” he says,

The section and chapter conclude with a brief account of what governments can do to promote industry and increase production. They can enact and enforce equitable laws; promote education and learning; manage strictly experimental farms and manufactures; and above all:

Wayland was not, strictly speaking, an advocate of laissez-faire. As we have just seen, he supported government-sponsored industrial research, and he believed that what economists today call “externalities” justified government efforts to increase and disseminate knowledge.44 He argues that religious institutions also confer benefits upon the state and upon people who have not contributed to their support; but he refuses to draw the conclusion that this entitles religious institutions to a share of the funds from public taxation.45 He doubts that public funds ought to be used to finance most internal improvements, such as roads, canals, or railroads; these are better left to individual enterprise, which will undertake them when they are profitable and leave them alone when they are not. There will be exceptions, however, such as works of exceptional magnitude or where the public importance of the work is too great for it to be entrusted to private corporations. Works for the improvement of external commerce, such as the improvement of coasts and harbors, are assigned entirely to government.46

The relief of the sick, destitute, and helpless is a religious duty, in Wayland’s view, and for that reason ought to be left to voluntary efforts. He recognized, however, that purely voluntary relief would occasionally be inadequate and might in addition strain the resources of the most charitable. So he was willing to allow some provision out of tax revenues “for the relief of those whom old age, or infancy, or sickness, has deprived of the power of providing the means necessary for sustenance.” For the sake of these people themselves, as well as for the sake of the economy, relief should be provided in return for labor in the case of all those capable of work.47

Wayland’s Theological Economics

American economists of this period, unlike their European counterparts, were not much concerned with the Malthusian problem.48 Wayland was no exception. Near the beginning of his chapter on wages, he takes up the possibility that human beings will reproduce too rapidly for the real wage-rate to be maintained above the subsistence level. This does occur, he asserts, and the consequences are “painful to contemplate.” But after quoting Adam Smith on the high infant mortality rates in the Scottish Highlands and in military barracks, Wayland abruptly changes direction.

God could scarcely have intended so many to die in infancy from hardship and want. It therefore follows that the normal wage level for industrious, virtuous, and frugal workers will be one “which allows of the rearing of such a number of children as naturally falls to the lot of the human race.” Improvidence, indolence, intemperance, and profligacy can interfere with this happy outcome; but in such cases “the correction must come, not from a change in wages, but from a change in habits.”49

It is at first difficult to reconcile this position with Wayland’s explanation of how the supply of labor adjusts itself to the demand, or his account of the relationship between the growth of capital and the growth of population. His conclusion to the latter discussion is especially puzzling:

The clear implication is that, unless God intended many to perish in infancy, capital can always and everywhere be accumulated at least as fast as the population chooses to expand.

Wayland has an escape from this strong implication, however. God is not responsible for evil that is the consequence of immoral behavior, and the rate of capital accumulation is crucially dependent upon moral considerations. Frugality increases it, prodigality diminishes it, laws of entail diminish it, as do all restrictive laws that “fetter and dispirit industry.” Above all, however, war diminishes the rate of capital accumulation:

In a properly ordered society of moral persons, capital accumulation will be adequate for the number of people and “we shall hear no more of the evils of excess of population.”52

This analysis still leaves room for paupers to blame their plight upon others, albeit immoral others. Wayland closes that door with the claim that almost all crime and pauperism in the community is caused by intemperance, and the further claim that America, which has few beggars, would have none at all if intemperance and vice were eliminated.

Wage Determination

The laws that regulate wage-rates are finally beyond the power of individual capitalists or laborers to affect. The competition that will naturally exist where there are no restrictions on the mobility of capital or labor will “bring wages to their proper level; that is, to all that can be reasonably paid for them.” Combinations among capitalists or workers designed to raise or lower wage-rates are “useless,” Wayland asserts, because combinations cannot change the laws by which remuneration is governed. Without pausing to defend this non sequitur, he hastens to add that combinations are also expensive, because they expose capital and labor to long periods of idleness. And combinations are unjust, because they deprive the capitalist of the right to employ labor and workers of the right to be employed on terms to which the parties have freely agreed. Is this another case where moral philosophy has crowded out economic analysis? The injustice of a particular combination does not guarantee that the combination will be unable to increase the wealth of those who participate in it.

Wayland has the same sort of difficulty when he tries to explain why political economy finds laws regulating interest rates “injurious to the prosperity of a country.” His first reason is that such laws violate the right of property. One could make this an “economical” rather than an ethical argument by incorporating into it Wayland’s case for the dependence of prosperity on respect for property rights. If this is done, however, the distinction between questions of right and questions of expediency collapses.

The point here is not that Wayland ought to have maintained a clear distinction between economic and ethical arguments, but rather that he claimed to be doing so when in fact he was not. The nature of his argument is consequently obscured at important points, and the critical reader is left uncertain about the kind of evidence and arguments that would be required to buttress or to refute his conclusions.

What evidence and arguments are we supposed to consider in evaluating Wayland’s claim that labor expended in the creation of a value gives one an exclusive right to the possession of that value? Or his claim that different laborers are “entitled” to dissimilar wages? Or that the liability of all property to depreciate in value must be taken into account when estimating the job-destroying effects of machinery? That “the act of creating a value appropriates it to a possessor” and “this right of property is exclusive”? That a college graduate is “fairly entitled” to a wage that will compensate him not only for the cost of his education but also for the forgone interest on the amount invested? That the capitalist comes into the market “on equal terms” with the laborer because “each needs the product of the other”? Or that the capitalist “may justly demand” a greater interest the greater his risk?53

Incorrect Generalization

At one point in The Elements of Political Economy Wayland finds it “worthy of remark” that human ingenuity has done more to increase “the productiveness of labour” in manufacturing and in transportation than in agriculture. A generalization of that kind presupposes the solution of some rather formidable problems of definition as well as measurement. What is the common denominator in terms of which one can meaningfully compare rates of productivity growth when it is the usefulness of diverse products that matters? But Wayland is sure that his generalization is correct, sure enough to add these comments:

Francis Wayland apparently misread “the will of the Creator”: in the United States today fewer than 3 percent of the workforce are employed in agriculture. The error in this case may be unimportant, but the problem to which it points is not. Those who look for the will of God behind concrete social arrangements thereby incur an added risk of failing to perceive the social arrangements correctly. Those who concern themselves too quickly with the moral implications of social interactions may become less able to see how those interactions are evolving. And an empirical proposition that supports an important theological or moral conviction can become extraordinarily resistant to anything as inconsequential as empirical evidence and argument.

The Reaction Against “Clerical Laissez-Faire”

Twenty years after Wayland’s death and half a century after publication of his textbook on political economy, many influential thinkers and writers still maintained that economics and religion were and ought to be intimately linked. When the American Economic Association was formed in 1885, Protestant clergymen were prominent among its founders. The dominant figure in the organization of the Association was Richard T. Ely, a young economist who insisted upon the necessity of basing economics upon ethics and who wanted to make applied Christianity the foundation of economic reform. Religious impulses played such an open and major role in the Association’s early history that even sympathetic participants believed it might be interfering with the scholarly impartiality essential to a scientific body.55

The banner under which they organized, however, was decidedly not one behind which Wayland could have marched. The prospectus which Ely sent out in his call for the organization of the American Economic Association included a four-part platform. The first paragraph read as follows:

The laws of God, which ordained a minimal role for government in economic life according to Wayland, required a vast extension of state activity according to Ely. How did Ely and his associates justify this remarkable about-face? How did they criticize the theological-ethical arguments that had been advanced by Wayland and his school and which were still being taught in the 1880s by prominent academics? The answer is that they did not attempt to do so.

Conflict

The most prominent exponent of “clerical laissez-faire” in the 1880s was probably the Reverend Arthur Latham Perry, professor of history and political economy at Williams College, author of several widely used textbooks in economics, and trusted adviser of government officials.57 Moreover, Perry attacked Ely by name in his Principles of Political Economy for urging that government take a hand in the determination of wages. “The fine old Bentham principle of laissez-faire,” Perry wrote,

Ely was not one to steer clear of conflict. He often responded to his critics, and he took the lead in the 1880s in attacking the “old school” of political economy. Moreover, ethical and religious premises consistently played a large part in the arguments he advanced on behalf of a reconstruction of economics. Nonetheless, he never attempted a systematic critique of the theological-ethical claims of his opponents or tried to show in what specific ways his own theological-ethical premises were more adequate. His fundamental contentions were that the “old school” relied upon an obsolete deductive method, that it employed much too narrow a conception of economic science, and that it refused to take account of the results of historical research.59

Charles Howard Hopkins, in his history of the Social Gospel in American Protestantism, writes:

But condemnations of unrestricted competition or inhuman treatment of laborers do not constitute a criticism of classical economic theory. Hopkins refers to an 1866 article by George N. Boardman as “one of the most searching utterances of its kind in this period.”61 It may be unfair to take this compliment too seriously, especially since Henry F. May finds Boardman’s essay “generally in support of contemporary economic theories.” But the fact remains that Boardman’s critique is far from searching; that it does not show a wide acquaintance with the literature it purports to discuss; and that the religious critics of “unrestricted capitalism” in the last part of the nineteenth century did not really address the arguments that had been advanced by Wayland or his successors. Neither the economists like Ely nor the clergymen—Washington Gladden, W. D. P. Bliss, and George Herron are more representative figures than Boardman—take the claims of the “clerical laissez-faire” school seriously and respond to them.62

Refutation?

These views, of course, have been widely repudiated, both in the 1880s and in our own time. But repudiation is not the same as refutation. Contemporary critics have generally assumed that to refute such views as Wayland’s it was enough to describe them. Thus Henry F. May, after quoting Wayland on the divine imperative to labor, says: “From this simple proposition Wayland deduced the whole platform of the New England mercantile interest.” A page later he refers to Wayland as one of the “simple dogmatists of the thirties and forties [who] set the tone of American political economy for many years to come.” May also speaks of “the pat theories of Francis Wayland,” his “all-sufficient optimistic formulae,” and his “simple, dogmatic method.”63 Simple dogmatisms, pat theories, and all-sufficient optimistic formulae don’t have to be taken seriously, especially if they are in reality a defense of special interests rather than an honest effort toward understanding.

One problem with this approach is that it works equally well when applied to the simple dogmatisms, pat theories, and all-sufficient optimistic formulae of Richard Ely and the clergymen who responded so enthusiastically to his call for organization of the American Economic Association. Consider the conclusions of John Rutherford Everett, at the end of his sympathetic study of the relation between religion and economics in the work of Ely and two of his prominent collaborators in the founding of the American Economic Association, John Bates Clark and Simon Patten:

Moreover, many of the “empirical” conclusions wielded with such assurance by Ely and his colleagues in the 1880s now seem quite as a priori as the deductive theories they condemned. And their confident assumption that they were the “new” and “scientific” school of political economy destined to control the future looks almost pathetic in hindsight; most of them seem to have been completely unaware in the 1880s of the “marginal revolution” taking place at that very time, through which “abstract-deductive” economics would acquire a renewed and more powerful hold on the discipline.

“Clerical School”

It would be unfair to fault May too severely, since his understanding of “clerical laissez-faire” and Francis Wayland was derived from the scholarly work of Joseph Dorfman and Michael J. L. O’Connor. Dorfman’s The Economic Mind in American Civilization is the indispensable source for anyone interested in American economics in the nineteenth century. O’Connor’s investigation of The Origins of Academic Economics, May’s principal source, is actually an examination of the origins and rise to prominence in the northeastern United States of what O’Connor called the “clerical school.” As such it was especially useful to someone like May who was interested in Protestant analyses of economic issues but was not himself an historian of economics. The biases of both authors ought to be kept in mind, however, by anyone using their work.

Dorfman tends to present economic theory as a reflection of the theorists’ social circumstances, with the result that arguments are sometimes not so much explained as explained away. This tendency is especially marked in the case of early economists with whose policy positions Dorfman is not in sympathy. That would emphatically include Francis Wayland, whose treatment by Dorfman comes close to cynicism.

In the ten pages he devotes to “The Reverend Francis Wayland: Ideal Textbook Writer,” Dorfman tells us that Wayland studied at Union College under “the famous Reverend Eliphalet Nott, who was highly successful in acquiring a fortune for himself, in obtaining funds from the New York legislature for the college, and in teaching students the ways of God and the world.” He states that Wayland received at Union “a thorough indoctrination in the Common Sense philosophy.” He sketches Wayland’s changes in vocational plans in a way that suggests flightiness or instability. He tells us that Wayland “took an active interest in all the movements that a respectable person should” after becoming President of Brown. His account of Wayland’s position on slavery is highly misleading and seems designed to discredit Wayland rather than to present his actual views. The same might be said of his sketch of Wayland’s position on the wage-fund doctrine. Dorfman seems almost to postulate bad faith and apologetic intent, as in the claim: “As the cry for tariffs and government relief became more insistent with every depression, Wayland became increasingly adept at mollifying the one and denying the other.”65 The reader would never suspect, for example, that Francis Wayland taught pacifism in his textbook on moral philosophy, raising and rejecting each of the standard arguments by which traditional ethical thought had attempted to exempt national governments from the prohibition against returning evil with evil.66 Dorfman’s ad hominem arguments are not only irrelevant but also often unfair and occasionally even false, or at least as false as innuendo can ever be.

Omission

May’s principal source, however, was O’Connor’s meticulously researched Origins of Academic Economics in the United States. Because Wayland’s Elements of Political Economy was the most important text to emerge from the “clerical school,” O’Connor presents its contents in some detail. The account is careful and balanced; but there is no systematic criticism of Wayland’s economics. The reason for this omission emerges in the concluding chapter, where O’Connor lays out the lessons he would have the reader draw from his study.

The clerical school of political economy, according to O’Connor, was the social instrument of the northeastern merchant-capitalist elite, valuable to them because it taught an ideology that was useful in countering populist political pressures. These religious economists, in supporting the theory of automatic natural-law control, were in reality endorsing the social power of the merchant-capitalist groups and making it easier for that class to enjoy its privileges with a clear conscience. The clerical economists were rewarded with financial aid for the institutions they headed. Their influence lasted well into the twentieth century because cultural lag is so prominent among academics, and because they are willing to use textbooks for sixty or seventy years. The time has now come, however, to purge this obsolete but lingering ideology from economics courses and textbooks and to create a new economics that will “reflect the current social forces of the country” and enable these social forces “to play as directly as possible upon the introductory courses.”67

In short, there is little point in criticizing Wayland or other representatives of clerical laissez-faire because their economics merely reflected their objective social position. The task now is not to construct an economics that will more adequately explain social reality, but to construct a system of economic education that will “command the faith of the people.” O’Connor concludes:

If what purports to be “pure” economic theory can so easily be dismissed by critics as ideology, what fate awaits an economics that is explicitly theological? O’Connor may be extreme in his willingness to reduce social theory to class-based ideology; but he is probably representative in his reluctance to take seriously any theological-ethical justification or defense of a social system of which he disapproves.

Conclusion

This paper began with James Schall’s comment on the church’s failure to relate Christian ideas to the productive achievements of capitalism. After examining one major effort to do exactly this, we find ourselves wondering at the end what worthwhile purpose it serves. Does theological economics do anything more than polarize discussion? Those who already approve a particular economic system are generally pleased to read arguments showing that the system is also superior by theological and ethical criteria. Those who disapprove of the system are much less likely even to read a theological-ethical defense of it, and the likelihood is still less that they will read it fairly and sympathetically.

Theological economics or economic theology seems to possess a powerful capacity for turning conjectures into convictions and for making the rejection of favored hypotheses seem like moral cowardice. Significant issues that could be illuminated or even resolved by careful empirical inquiry are instead “settled” on the basis of what fits most comfortably into the system. That healthy suspicion of one’s own argument which is always difficult to keep alive when one is working toward a thesis seems almost impossible to maintain in theological economics. Even more serious is the tendency of those who practice theological economics to assess the cogency of their opponents’ arguments by attacking imputed (and, of course, assumed) motives. It is so tempting and so easy, when we imagine ourselves to be standing on the high ground of theology or morality, to slander our opponents by accusing them of slander—or other hidden and malicious intent.

The fate of George Gilder’s Wealth and Poverty strikes me as sadly instructive. Here is a popularly-written but nonetheless serious and well-documented attempt to examine some of the relationships between economic behavior and religious beliefs. The book deserves the careful attention of any American who is both concerned for the health of the United States economy and convinced that an adequate economic system must satisfy important ethical criteria. The point is not that Gilder is correct: it is rather that he has raised most of the important questions in a careful and responsible way, citing his evidence and spelling out his reasoning. The sadly instructive fact is that his argument for the moral merits of capitalism has not been taken seriously by the moral critics of capitalism within the churches. The book has hardly been reviewed in the religious press. Where it is mentioned, it is usually caricatured, with some such phrase as “a bible for those who have recently come to make absolute claims for private enterprise.”69

There is little to be learned from those who make absolute claims about economic systems, and even less to be learned from those who imagine that a caricature constitutes a rebuttal.

PART 5

On Teaching and Learning

[* ] Reprinted from Religion, Economics, and Social Thought, ed. W. Block and I. Hexham (Vancouver: The Fraser Institute, 1985), 125-52, by permission of The Fraser Institute. First draft presented at a Liberty Fund/Fraser Institute conference on “Religion, Economics, and Social Thought,” directed by Walter Block, Paul Heyne, and A. M. C. Waterman in Vancouver, British Columbia, 2-4 August 1982.

[1. ] James V. Schall, “Catholicism and the American Experience,” This World (Winter/Spring 1982), p. 8.

[2. ] Edwin R. A. Seligman conferred this distinction on McVickar in “Economics in the United States: An Historical Sketch,” reprinted in his Essays in Economics (1925), p. 137. Michael J. L. O’Connor, in the course of surveying existing literature on the origins of American economics, has shown that McVickar’s title is open to challenge. O’Connor, Origins of Academic Economics in the United States (1944), pp. 6-18.

[3. ] “That science and religion eventually teach the same lesson, is a necessary consequence of the unity of truth, but it is seldom that this union is so early and so satisfactorily displayed as in the researches of Political Economy.” John McVickar, Outlines of Political Economy: Being a Republication of the Article upon that Subject [by J. R. McCulloch] Contained in the Edinburgh Supplement to the Encyclopedia Britannica, together with Notes Explanatory and Critical, and a Summary of the Science (1825), p. 69. See also McVickar’s notes on pp. 88, 102-3, and 159-60 and his Concluding Remarks on pp. 186-88.

[4. ] Henry F. May, Protestant Churches and Industrial America (1949), p. 14.

[5. ] O’Connor, op. cit., p. 189.

[6. ] Charles Dunbar, in a centennial review of “Economic Science in America, 1776-1876,” mentioned “President Wayland’s book” as “the only general treatise of the period which can fairly be said to have survived to our day.” Charles Franklin Dunbar, Economic Essays, edited by O. M. W. Sprague (1904), p. 12. Joseph Dorfman devotes a chapter to “The School of Wayland” in The Economic Mind in American Civilization, Vol. II (1946), pp. 758-71. John Roscoe Turner’s 1921 essay on The Ricardian Rent Theory in Early American Economics states: “[Wayland’s] Elements of Political Economy (1837) was, as a text, the best work previous to the Civil War, and probably as popular as any American text on this subject. It survives, and is used as a text in some places to this day.” p. 61.

[7. ] See A Memoir of the Life and Labors of Francis Wayland, D.D., L.L.D., assembled and written by his sons Francis Wayland and H. L. Wayland, originally published in two volumes in 1867 and reprinted in a single bound volume by Arno Press in 1972.

[8. ] Gladys Bryson, “The Emergence of the Social Sciences from Moral Philosophy,” International Journal of Ethics (April 1932), pp. 304-12.

[9. ] Francis Wayland, The Elements of Political Economy, p. iii. All page references will be to the 1857 edition (Boston: Gould and Lincoln).

[10. ]Ibid., p. iv.

[11. ]Ibid.

[12. ]Memoir, Vol. I, p. 380.

[13. ] Francis Wayland, The Elements of Moral Science, p. 25. The edition used is the 1854 edition (Boston: Gould and Lincoln).

[14. ]Memoir, Vol. I, p. 233.

[15. ] Wayland, The Elements of Political Economy, pp. 128-30; Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book V, Chapter I, Part III, Article 2d.

[16. ] Wayland, ibid., pp. 311-13; Smith, ibid., Book I, Chapter X, Part I.

[17. ] Wayland, ibid., pp. 188-288, especially pp. 211-12, 231-32, 259-61, 278-79; Smith, ibid., Book II, Chapter II.

[18. ] Wayland, ibid., pp. 145-51; Smith, ibid., Book IV, Chapter 11.

[19. ] Wayland, ibid., pp. 391-97; Smith, ibid., Book V, Chapter II, Part 11.

[20. ] Bryson, op. cit., p. 309.

[21. ]Memoir, Vol. I, p. 32.

[22. ]Ibid., p. 227.

[23. ]Ibid., Vol. II, pp. 39-40, 289-90.

[24. ] Wayland, Political Economy, p. 171.

[25. ]Ibid., p. 46.

[26. ]Ibid., pp. 55-56.

[27. ]Ibid., p. 91.

[28. ]Ibid., pp. 159-60.

[29. ]Ibid., p. 378.

[30. ]Ibid., pp. 176-77.

[31. ]Ibid., pp. 343-44.

[32. ]Ibid., pp. 105-8.

[33. ]Ibid., p. 108.

[34. ]Ibid., pp. 109-13.

[35. ]Ibid., pp. 113-18.

[36. ]Ibid., p. 119.

[37. ]Ibid., pp. 119-20.

[38. ]Ibid., p. 122.

[39. ]Ibid., pp. 123-32.

[40. ]Ibid., pp. 133-40.

[41. ]Ibid., pp. 140-41.

[42. ]Ibid., p. 151.

[43. ]Ibid., p. 152.

[44. ]Ibid., p. 128. For his views on how government should offer financial assistance to education, see pp. 399-403.

[45. ]Ibid., pp. 403-4.

[46. ]Ibid., pp. 184-86. 404-5.

[47. ]Ibid., p. 405.

[48. ] George Johnson Cady, “The Early American Reaction to the Theory of Malthus,” Journal of Political Economy (October 1931), pp. 601-32.

[49. ] Wayland, Political Economy, pp. 293-94.

[50. ]Ibid., p. 305.

[51. ]Ibid., pp. 305-7.

[52. ]Ibid., p. 308.

[53. ]Ibid., pp. 19, 26, 98-99, 154, 297, 301, 320.

[54. ]Ibid., pp. 47-48.

[55. ] For an excellent and fairly recent survey of these events, see A. W. Coats, “The First Two Decades of the American Economic Association” (American Economic Review, September 1960), p. 555-74. Joseph Dorfman probably offers the best general introduction to the period in The Economic Mind in American Civilization, Vol. III (1949), pp. 113-212.

[56. ] Ely reproduced the prospectus in his autobiography, Ground Under Our Feet (1938), p. 136.

[57. ] Dorfman, op. cit., Vol. III, pp. 56-63; O’Connor, op. cit., pp. 265-66.

[58. ] Arthur Latham Perry, Principles of Political Economy (1891), pp. 251-52.

[59. ] See especially Ely’s contributions to the 1886 exchanges in Science between the “old” and the “new” sciences of political economy: Ely, “Economics and Ethics,” Science (June 11, 1886), pp. 529-33; “The Economic Discussion in Science,” ibid. (July 2, 1886), pp. 3-6 (a rejoinder to Simon Newcomb); and his reply to a negative review by N[icholas] M[urray] B[utler] of his book The Labor Movement in America, ibid. (October 29, 1886), pp. 388-89. For Ely’s comments on Perry, see Ground Under Our Feet, pp. 127-28.

[60. ] Charles Howard Hopkins, The Rise of the Social Gospel in American Protestantism, 1865-1915 (1940), p. 25.

[61. ] George N. Boardman, “Political Economy and the Christian Ministry,” Bibliotheca Sacra (January 1866), pp. 73-107; Hopkins, ibid.

[62. ] The best survey of this literature with which I am familiar, covering both the social gospel and the “new” political economy, is that of Sidney Fine, Laissez Faire and the General-Welfare State: A Study of Conflict in American Thought, 1865-1901 (1956), pp. 167-251.

[63. ] May, op. cit., pp. 15, 16, 91, 111, 141.

[64. ] John Rutherford Everett, Religion in Economics (1946), pp. 143-44.

[65. ]Ibid., Vol. II, pp. 758-67. Dorfman’s treatment of the slavery issue should be compared with Wayland’s Elements of Moral Science, pp. 206-16. Dorfman accords John McVickar, the other leading clerical economist of this period, a similar treatment: Ibid., pp. 515-22, 713-20.

[66. ] Wayland, The Elements of Moral Science, pp. 390-95.

[67. ] O’Connor, op. cit., pp. 277-89.

[68. ]Ibid., p. 289.

[69. ] The phrase is from John C. Bennett’s lecture on “Reaganethics,” reprinted in Christianity and Crisis (December 14, 1981), p. 340.