Joost Hengstmengel
Journal of Economics, Theology and Religion, vol. 5, no. 2 (2025): 244-247
Publication history
Published: 17 December 2025
The author of this slim volume, Benjamin Friedman, is the William Joseph Maier Professor of Political Economy in Harvard University’s Department of Economics. The curriculum vitae of this acclaimed economist reveals two remarkable—and from this journal’s perspective, fortunate—shifts. For the first three decades of his academic career, Friedman established himself as a monetary economist, publishing on monetary policy, interest, and public debt. In the early 2000s, however, he developed an interest in how economic growth (or stagnation, for that matter) shapes the moral character of societies, culminating in The Moral Consequences of Economic Growth (2005). In that book, especially in Part I, he first articulated ideas that would evolve into his new scholarly focus: the role of religious ideas in shaping economic thought. The motto of the opening chapter, drawn from Daniel Bell—“Economic growth has become the secular religion of advancing industrial societies”—speaks volumes. Between 2005 and 2010, Friedman’s attention shifted decisively toward the intersection of economics and religion. This “conversion,” if one may so describe it, led him to produce several articles (2010; 2011a; 2011b; 2025) and, eventually, a monograph borrowing its title from Richard Tawney, Religion and the Rise of Capitalism (2021; cf. 2024).
Since Friedman entered the field of economics and religion (or theology), his main lines of argument have remained largely consistent. First, he argues that innovations in theology paved the way for the Smithian revolution in thinking about self-interest. According to Friedman, it was the decline of orthodox Calvinism—especially the fading of the belief in predestination—that made possible Adam Smith’s conviction in the potential social benefits of self-interested behavior—also known as the invisible hand idea. He summarizes this argument, not unhelpfully, as “[Max] Weber on his head.” Second, Friedman contends that religious influence on economics did not end with Smith. Religion, he maintains, shaped the reception of Smith’s The Wealth of Nations in the United States before the Civil War, inspired American economists associated with the Social Gospel movement thereafter, and continues to influence economic policy debates today. In tracing these enduring resonances, Friedman echoes Robert Nelson in suggesting that some have come to regard modern mainstream economics with its commitment to free markets as a kind of religion in its own right.
Friedman’s latest booklet, comprising fewer than 70 pages of text, largely tells the same story. It is based on a lecture he delivered in 2022 to an audience of practicing economists gathered in Zurich for the annual Karl Brunner Distinguished Lecture Series organized by the Swiss National Bank. As such, the book is expected to address a topic “of key importance to central banking” (Series Foreword). Yet the relevance of Friedman’s exploration of religious influences on economic thinking for central banking—or, more broadly, for Brunner’s field of monetary economics—is nowhere made explicit. Unless, that is, one accepts Friedman’s introductory claim that ideas have consequences: the economic arrangements we take for granted, including the structure of our economy and its financial institutions, are in part the product of ideas about economics. A particularly influential idea, the “centerpiece” of modern economics, is the First Fundamental Welfare Theorem (FFWT). Friedman defines it as the proposition “that individuals, acting merely in their own self-interest in a competitive market setting, take actions that make not just themselves but also others better off” (7). His lectures, in essence, trace the religious roots and resonances of this theorem. The book can thus be read as a case study of Friedman’s broader thesis that central economic ideas were, at least in part, enabled by earlier currents of religious thought.
As the author rightly notes, in the Western tradition the pursuit of self-interest had long been regarded with deep suspicion. In the age of the central figure in Friedman’s account, the Scottish moral philosopher and political economist Adam Smith, this remained the dominant climate of opinion. According to Friedman, at the beginning of the eighteenth century it was widely assumed that people were scarcely capable of discerning their true interests; that even correctly perceived self-interest would make only the acting individual better off; and that, for these reasons, self-interested behavior was considered vicious. Within a century, however, these assumptions had been almost completely overturned, in a manner consistent with the logic later captured by the FFWT. Friedman argues that the “principal impetus” behind this reversal was Smith. It was the author of The Wealth of Nations, he contends, who revealed the “secret” of how self-interest could serve others when operating within competitive markets. While acknowledging that the Scotsman did not use the term in the most relevant passages of the book, this argumentation can be summarized as the invisible hand argument.
The central question of the book is this: what enabled Smith to formulate these revolutionary ideas? Friedman identifies several intellectual influences on Smith’s treatment of self-interest (including Pierre Nicole, Pierre de Boisguilbert, Bernard Mandeville, Joseph Butler, and Josiah Tucker) as well as the broader neo-Stoic and Newtonian intellectual climate. Yet these influences alone, he senses, cannot fully explain Smith’s intellectual breakthrough. What ultimately made Smith’s ideas acceptable to his readers, Friedman argues, was the surrounding theological and religious context. To make this case, the author describes the influence of Calvinism on British Protestantism and the theological disputes over human depravity, free will, and divine purpose that accompanied it. By the time the famous Scottish moral philosophers appeared on the scene, Calvin’s pessimistic and minimally anthropocentric views had been transformed into or, better yet, replaced by far more optimistic ones articulated by English Latitudinarians and Scottish Moderates. They emphasized human goodness over depravity, free choice over predestination, and human happiness over divine glorification as the central purpose of earthly life. According to Friedman, Smith and his contemporaries “secularized” these new theological insights—mostly unconsciously, in all likelihood. People could understand their own best interests, act on that understanding, and in doing so promoted the well-being and happiness of others.
With much of what Friedman writes, I can only agree. The formative influence of religious and theological ideas on early modern economic thought, the importance of those ideas for an eighteenth-century readership, and their modern resonances in increasingly secularized form—all of this is plausible to any historically sensitive reader. Yet one may wonder whether Friedman does not make the story more complicated than necessary. Was Smith’s theoretical justification of self-interest truly the secularized outcome of debates on sin, predestination, and divine providence? Unlike The Theory of Moral Sentiments, his other major work, The Wealth of Nations makes virtually no claims about the goodness of human nature or the freedom of the will. Its author simply assumes that individuals are self-interested—an assumption, incidentally, quite compatible with traditional Calvinist theological anthropology. If Smith’s book required any theological anchoring to make it acceptable to contemporary readers, it was surely a deistic worldview that portrayed Providence or “Nature” as an immanent force conducive to human happiness. Such a transformed, or secularized, if one prefers, version of the older doctrine of providence was precisely what Smith’s age offered.
A second, closely related point concerns whether Friedman overstates Smith’s importance. While the exceptional quality of Smith’s contribution to the science of political economy is now recognized by friend and foe alike, it did not trigger an immediate intellectual landslide upon its publication in 1776. Nor was it necessarily Smith’s version of the FFWT that stood out to his early readers. Moreover, the invisible hand idea (to use that convenient shorthand) was not unique to Smith, except perhaps in its phrasing. The belief that a benign divine providence could employ evil (self-interest) to produce good (social benefits) was characteristic of Enlightenment thought more generally. The application of this idea to the problem of self-interest, or “self-love,” appears already in authors such as Boisguilbert and Mandeville in the late seventeenth and early eighteenth centuries, and in Tucker in the mid-eighteenth century. Friedman mentions these figures, but suggests that Smith carried their conjectures further by introducing the role of the market mechanism. This assessment, however, does injustice to these earlier writers, who were themselves quite aware of the neutralizing effects of competition.
Let me close this review with the final words of Friedman’s booklet, which I wholeheartedly endorse: “Economics has been, since its inception, a child of the Enlightenment, with all of the optimism about the human enterprise that that epochal movement entailed. Religious thinking has been part of this story throughout” (66). Religion and theology were indeed more important to Smith’s early modern contemporaries than our secularized worldview is inclined to recognize.
References
Friedman, Benjamin M. 2005. The Moral Consequences of Economic Growth. New York: Knopf.
Friedman, Benjamin M. 2010. “Addressing America’s Economic Problems: Is There a Role for Religious Thinking?” Reflections: A Magazine of Theological and Ethical Inquiry 97, no. 1.
Friedman, Benjamin M. 2011a. “The Influence of Religious Thinking on the Smithian Revolution.” In Adam Smith as Theologian, edited by Paul Oslington, 19–23. New York: Routledge.
Friedman, Benjamin M. 2011b. “Economics: A Moral Inquiry with Religious Origins.” American Economic Review: Papers & Proceedings 101, no. 3: 166–70.
Friedman, Benjamin M. 2021. Religion and the Rise of Capitalism. New York: Knopf.
Friedman, Benjamin M. 2024. “Religion and the Rise of Capitalism.” Proceedings of the American Philosophical Society 165, no. 1: 32–43.
Friedman, Benjamin M. 2025. “The Influence of Religious Thinking on Economic Thinking: America’s Social Gospel, with Thoughts on Rerum Novarum.” The European Journal of the History of Economic Thought 32, no. 1: 85–110.
Rashid, Salim. 2021. “Review of Benjamin Friedman’s Religion and the Rise of Capitalism.” Journal of Economics, Theology and Religion 1, no. 2: 217–25.
