The American Exception
How faith shapes economic and social policy
Historian R.H. Tawney famously explored the ties between Protestantism and economic development in Religion and the Rise of Capitalism (1926). Now, nearly a century later, in a new book under the same title, Maier professor of political economy Benjamin M. Friedman undertakes a searching exploration of a different sort. Beginning from a simple question—“Where do our ideas about how the economy works, and our views on economic policy, come from?”—Friedman establishes that the revolution wrought by Adam Smith and others was not a purely rationalist, Enlightenment upwelling of secular humanism, but instead reflects ideas that have “long-standing roots in religious thinking,” and indeed in the new theological currents then swirling around Smith and his contemporaries.
Friedman’s final chapter, on “Economics in the Public Conversation,” turns to the ideas that underlie Americans’ views toward high-stakes economic policies. Why is it, political analysts want to know, that the United States has much less generous safety-net programs than other rich, developed countries? And why do lower-income Americans often v ote against higher income-tax rates for the very rich, or inheritance taxes that only the wealthiest families pay? Looking beyond the purely political explanations that have been advanced, Friedman discerns a strong pattern of religious beliefs, particularly among evangelicals, that powerfully determines attitudes not only toward responsibility for ameliorating social problems, but also toward the possibility of effecting social progress (even the desirability of attempting to achieve it)—the underlying determinants of economic policymaking.
His narrative may help many readers understand the distinct worldviews shaping some of the divisions so evident in U.S. society today. Across the spectrum of beliefs, from progressive activist to libertarian, it may be productive for Americans—and those observing from abroad—to perceive the deep reasons why, as Friedman puts it, “religiously committed Americans of all faiths see less need for government services and government intervention than do most citizens of other high-income countries.” In that spirit, we present this excerpt from the final chapter.
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These connections between Americans’ views on matters of economic policy and their individual religious affiliation, especially among evangelical Protestants, no doubt reflect a variety of influences. Three, however, stand out.
First, the continuing influence of the historical turn away from pre-destinarianism, which laid the basis for the Smithian revolution in economic thinking in the eighteenth century, remains readily apparent in the American public’s attitudes toward matters of economics and economic policy. In Adam Smith’s day the most significant consequence for economics stemming from this change in religious thinking was an expanded vision of the possibilities for human choice and human action—under the right conditions, which Smith centered in competitive markets. By now the general public has largely absorbed that insight. In addition, especially among Americans, beliefs about the possibilities for individual economic success strongly conform to a non-predestinarian view as well. Most Americans reject the idea that some factor apart from their own ability and efforts—divine election in Calvin’s thinking, simple luck in the more modern secular vocabulary—determines their individual destinies. In today’s secularized context, the belief that anyone can achieve spiritual salvation has its parallel in the belief that anyone can get ahead economically through talent and hard work.
The predominance of non-predestinarian thinking, and its reflection in attitudes toward opportunities for individual economic success, are all the more striking in light of the continuing belief in a divinely intended destiny for America as a nation. Few Americans now speak of Manifest Destiny, and only a small fraction of Protestants belong to denominations that place predestination, in anything like the form spelled out in the Westminster Confession, among their creeds. (The largest ones that do are the Presbyterian Church (USA), with one and a half million members, and the Presbyterian Church in America, with fewer than 400,000.) Yet most Americans, including most Protestant evangelicals, do believe that the United States, with the country’s long-standing democratic political institutions and its historical tradition of civil freedoms, has a special role to play in the world. Many see this role as a divinely ordained mission to lead the world toward freedom and democracy—or if not that, then as the inspired consequence of some kind of historical Providence. On the eve of World War II, Harold Ockenga mused that “it is almost as though God pinned His last hope on America.” Forty years later Ronald Reagan spoke for more than just his own political supporters when he asked, in accepting his party’s nomination for president in 1980, “Can we doubt that only a Divine Providence placed this land, this island of freedom, here as a refuge for all those people in the world who yearn to breathe freely?”
Americans mostly support economic policies—for example, a welfare system that is highly limited compared to what other high-income countries have—that make the most moral sense if people’s economic destinies are indeed in their own hands.
For the great majority of Americans, however, this special character and preordained role attributed to the nation as a whole does not carry over to predestined fates for individuals, especially in matters of economics. As a result, Americans continue to believe that the United States has greater economic mobility than other countries, even in the face of increasingly contradictory evidence. More to the point, Americans mostly support economic policies—for example, a welfare system that is highly limited compared to what other high-income countries have—that make the most moral sense if people’s economic destinies are indeed in their own hands. Similarly, they support policies, like low tax rates and absence of government regulation, designed to give broad scope for individual economic initiative and to reward its success. Moreover, Americans’ attitudes toward such economic policies depend in part on their individual religious commitments, with evangelical Protestants offering the greatest support even when their own economic interest lies elsewhere.
Glossary of Terms
Westminster Confession of Faith: promulgated in 1647, a classic statement of Calvinist belief, written by an assembly of clergy convened under England’s Puritan-dominated Parliament
Harold Ockenga: long-time pastor of Park Street Church in Boston; chief organizer and first president of the National Association of Evangelicals
Francis Wayland: Baptist minister and for nearly 30 years president of Brown; author of the best-selling pre-Civil War U.S. economics textbook
Social Gospel: a movement within American Protestantism, in the late 1800s and early 1900s, calling for the church to take a more active role in addressing poverty, inequality, and other economic problems
Carl Henry: Baptist minister, the first professor of theology at the Fuller Theological Seminary, and founding editor of the leading evangelical magazine, Christianity Today; intellectual leader of American evangelicalism
Premillennialism: belief that the thousand years of freedom from evil foretold in the New Testament book of Revelation will occur after the end of the world as we know it; a literal interpretation of prophecies of the end of days
The Fundamentals: a set of essays by multiple authors, published from 1910 to 1915, advocating traditionalist Protestant views such as premillennialism and biblical inerrancy); origin of the term “fundamentalist” to refer to someone subscribing to these views
Second, many of these attitudes, especially among evangelicals, reflect the strong historical tradition of Protestant voluntarism. Even before the American Revolution, leading clergymen like John Witherspoon made clear that they saw robust religious institutions as a precondition underlying their belief in the argument for limited government that they took from political theorists like Locke and Montesquieu. Witherspoon was himself an influential figure in the debate over the creation of the new United States—he signed the Declaration of Independence—and his influence was even greater through his student James Madison, whom he mentored while serving as president of the College of New Jersey (later renamed Princeton). But he was also active in church affairs, convening the Presbyterian Church’s first General Assembly in the United States and serving as the body’s moderator.
According to Witherspoon and others who shared his viewpoint, religious institutions were essential to a polity like the new democratic republic they were establishing. Strong religious institutions cultivated the civic virtue that made individual liberty possible, and they therefore filled the vacuum that limited government necessarily left as the counterpart to that liberty. The argument was analogous to Adam Smith’s assumption—at just the same time—that the individual moral behavior about which he wrote in The Theory of Moral Sentiments underpinned the functioning of the market economy as laid out in The Wealth of Nations. (As the twentieth-century economist Kenneth Arrow put it, “a great deal of economic life depends for its viability on a certain limited degree of ethical commitment. Purely selfish behavior of individuals is really incompatible with any kind of economic life.”) In Witherspoon’s thinking, religious institutions filled a dual role: circumscribing individual behavior so as to enable people to live together amicably, and providing for the material needs of those who for one reason or another failed to provide for themselves—in both cases, so that government would not have to do so.
Illustration by James Steinberg
The numerous religiously based voluntary societies that so struck Tocqueville in the 1830s—the American Bible Society, the American Tract Society, the American Temperance Society, the American Anti-Slavery Society, to name just a few—grew out of attempts during the early federal period to fill just that vacuum. In his Elements of Political Economy, written just a few years after Tocqueville’s visit, Francis Wayland likewise recognized the importance of institutions other than government to address the needs of those whom the free markets that he advocated would inevitably leave behind, and he pointed to religious institutions in particular for this purpose. “To relieve the sick, the destitute and the helpless, is a religious duty,” he wrote, “and therefore should, like every other religious duty, be a voluntary service.” In a moral and religious community, charity should mostly come from individuals out of their own resources, or from the resources of voluntary associations, not from the government. Just as Witherspoon was not merely an American founding father but also a Presbyterian minister, Wayland was America’s leading political economist of the first half of the nineteenth century as well as a Baptist minister.
This deep-rooted commitment to the role of religious institutions has continued to underpin much of American Protestant thinking ever since, especially among evangelicals. The revivalism of Charles Grandison Finney and Dwight Moody bore a strong relation to concepts of political liberty, and Moody in particular displayed a deep distrust of government. A free society required a moral core, and it was the church’s role to provide it. The Social Gospel’s call for government action, at the end of the nineteenth century and in the early decades of the twentieth, was a departure in this regard, prompted in part by the emergence of large-scale production in an increasingly national, even international, economy. Even so, its proponents were never clear just what balance they looked to achieve between the respective roles of government and of the churches in meeting the needs that this new economy created.
During the Depression of the 1930s, the religious opposition to Roosevelt’s New Deal initiatives was in part based on a more general antipathy to activist government, but it also reflected a particular resistance to the prospect of government’s usurping what many thought was properly the social mission of the nation’s churches. Later on, the energetic mobilization of America’s religious communities in opposition to the threat posed by world communism drew in part on the same religiously based antistatism. In the 1980s, Carl Henry argued that “A society that responds voluntarily to its needs is superior to one in which the welfare of humanity becomes the sole responsibility of government.” Also in the 1980s, in his widely read “Judeo-Christian defense” of free enterprise, the evangelical theologian Harold Lindsell insisted that while God demanded protections like fair treatment of employees, safe working conditions, and provision for the sick and the injured and the elderly, those steps were legitimate only if employers implemented them voluntarily. In light of this history, it comes as no surprise that today more than two-thirds of white evangelical Protestants in the United States say they think the government is performing services that should be left to religious groups and private charities. It is also no surprise that even among evangelicals who stand to benefit most from various forms of government regulation, many are nonetheless opposed to it.
And third, a continuing part of what distinguishes American evangelicals not only from mainline Protestants but from other Americans more generally is their almost unanimous premillennialism. Americans’ views of eschatology have changed asymmetrically over the last century. Today the explicit postmillennialism that attached religious significance to secular progress in earlier times has mostly disappeared. Most mainline Protestant churches take no official stance on the millennium, or even a Second Coming. But ever since their initial embrace of The Fundamentals, just over a century ago, conservative American Protestants have been premillennial in their eschatology, at least at an informal level. The Statement of Faith of the National Association of Evangelicals includes Jesus’s “personal return in power and glory.” Most Adventist, Pentecostal, Holiness, and fundamentalist denominations, altogether representing sixteen million members, officially embrace the prediction of a Second Coming and many have an official premillennialist interpretation. Most Baptist denominations—including the Southern Baptist Convention (15 million members) and the National Baptist Convention USA (seven million)—likewise insist on the belief that Jesus will personally return to the earth, but take no official position on the millennium; the great majority of their members, however, apparently understand this future event through a premillennialist theology. The Mormon Church, with more than six million members, is not formally Protestant but it too officially embraces premillennialist doctrine.
Moreover, for many evangelicals these are not predictions of some indefinite or far-off event. A survey taken in 2010 found that 41 percent of all Americans expect that Jesus will either definitely (23 percent) or probably (18 percent) have returned to earth by the year 2050. Here too, evangelicals stand out. Fewer than one-third of Catholics hold this belief, and little more than one-fourth of mainline Protestants do. But 58 percent of evangelical Protestants think the Second Coming either definitely or probably will happen by 2050.
The prevalence of premillennialism among evangelical Protestants has numerous easily visible reflections in American culture, ranging from the continuing popularity of Hal Lindsey’s 1970 book The Late Great Planet Earth, to Tim LaHaye and Jerry Jenkins’s subsequent series of Left Behind novels, to the ready embrace of religiously based conspiracy theories surrounding one after another contemporary development. Just as the threat of communism—and especially the news that the Soviets had acquired atomic weapons—spawned widespread apocalyptic interpretations a half-century ago, the atrocities of September 11, 2001, the unending wars in Afghanistan and Iraq, and the seemingly permanent threat of religious-based terrorism continue to do so in the current era. Nonmilitary threats to social stability have drawn similar reactions. In the 1930s many Americans interpreted the Great Depression in eschatological terms. In the 1960s many interpreted the urban riots and other upheavals associated with the civil rights movement in the same way. Some saw the 2008 financial crisis that way. Most recently, nearly half of Americans surveyed thought the COVID-19 pandemic and the associated economic collapse represented either a wake-up call to faith or a sign of God’s coming judgment, or both.
As has been true since the nineteenth century, belief that human history in its current form will end with the Second Coming, and that this event will precede the thousand years of blissful existence foretold in Revelation—which therefore will not occur within human history as we know it—has often proven inimical both to acceptance of the possibility of progress in society and to attempts to achieve that progress before these end-of-days events occur. The tension between such theologically grounded temporal pessimism and the urge nonetheless to bring about reform has long been a central feature of American evangelical thinking. Nineteenth- and early-twentieth-century evangelicals stood apart from many efforts to improve living conditions and society more generally. Even so, they not only worked alongside mainline Protestants to eliminate specific evils like slavery and drunkenness but energetically sought government intervention in the effort to do so, culminating first in abolition and later in Prohibition.
At the middle of the twentieth century, Carl Henry lamented that “evangelical Christianity stands divorced from the great social reform movements,” and he laid the blame on what he argued was a wide-spread misuse of premillennialism. Harold Ockenga likewise called for a more activist evangelicalism, preaching that “It is the Christian’s duty to occupy till Christ comes. This means that we shall be engaged in humanitarian activity as well as evangelism and missions.” Henry’s and Ockenga’s shared concern was a key element motivating the founding of the National Association of Evangelicals and, soon thereafter, the group’s Commission on Social Action. Billy Graham, while certainly looking to the government to resist communism, mostly preached revivalism as an alternative to government attempts to reshape domestic society at home. “The government may try to legislate Christian behavior,” he wrote in the 1960s, perhaps recalling the failure of Prohibition, “but it soon finds that man remains unchanged.”
As a result, not only do two-thirds of evangelical Protestants think the government is carrying out functions better left to religious groups and other private charities, but religiously committed Americans of nearly all faiths see less need for government services and government intervention than do most citizens of other high-income countries. In conjunction with the far greater share of Americans who identify with one or another religion, and who participate in church services and other religious activities, the implication for the public discussion of economics and economic policy—and ultimately for actual economic policy too—is profound.
From its inception as a recognizable intellectual discipline, economics has been influenced by religious ideas. At first that influence had a narrow circumference, bearing mostly on the thinking of the moral philosophers and then political economists who were working out the subject’s fundamental theory and structure. Over time, following the usual pattern, as the discipline matured its professional thinking became less subject to such external influences. But in the meanwhile, as America’s modern economy took shape, and as the government grew to play a larger role in it, matters of economics and especially economic policy took on ever greater importance for the public at large, and the influence of religious ideas on economic thinking bore increasingly on popular opinion rather than the work of professional economists. Americans, with their far greater religiosity than citizens of other countries at a comparable stage of economic development, have been particularly subject to this influence, and the public discussion of economics and economic policy in America shows it. The non-predestinarian and voluntarist orientation of American Protestantism in general, and the premillennialism of evangelical Protestants in particular, today mark its most powerful substantive features.
Thomas Carlyle famously called economics the dismal science. It is a pity that the label stuck. Carlyle was writing at the end of the 1840s, when Britain’s growing population seemed to be outrunning the country’s ability to produce food—the period was popularly called the Hungry Forties—and Karl Marx’s “immiserated” urban labor force was crowding the country’s cities and manufacturing centers. John Stuart Mill, in what would become the world’s best-selling economics textbook for the remainder of the nineteenth century, was analyzing the economic “steady state” characterized by zero growth and no other form of progress either. But by the 1840s, and especially in Britain, such thinking was hardly new. By then secular pessimism about economic matters had dominated British political discussion for half a century—ever since Malthus had warned of the supposedly inevitable pressure of population, growing at a geometrical rate, against food supply which he thought grew only arithmetically. To Carlyle, it seemed all too true.
But economics, as an intellectual discipline, remains at its core a child of Enlightenment thinking, with all the optimism about the human enterprise that that epochal movement entailed. Moreover, neither Malthus’s nor Mill’s nor Marx’s analysis bore much relation to the very different situation of America anyway. Instead of too many people pressing up against too little available land, America was (and to this day largely remains) a continent with vast uninhabited areas to be filled. Far from embracing any notion of a steady state, the American ethos has from the beginning been one of progress, specifically including improvement in material living standards. And for most of the nation’s existence, the combination of technological advance and physical expansion—at first expansion of agricultural land under cultivation, and later expansion of the stock of factories and machinery— has delivered on that promise. (At times when it has not, the public has dramatically manifested its disappointment, often with predictably unfortunate social and political consequences.) Far from becoming immiserated, America’s growing workforce doubled its standard of living roughly once every 40 years over nearly two centuries.
Along the way, economic thinking has mostly reflected the expansive vision of human possibilities that this experience of growth and improvement has validated, together with an optimism about the world’s future that the dominant religious thinking of the English-speaking world has imparted to it ever since the time of Adam Smith and David Hume. The historical image of economics as a product of the Enlightenment is accurate. The idea that because of this parentage economics has been uninfluenced by religious thinking is not. The era in which Smith and Hume lived, and from which modern Western economics sprang, was also one of fundamental transition in the religious presumptions shared by much of the population. Especially during the extended period while this transition in religious thinking was in progress, the contention surrounding it was sufficiently fierce to attract the attention of the public at large, including those like Hume (certainly) and Smith (probably) who self-consciously took little interest in such matters. The basic religious ideas at issue in those long-ago debates profoundly affected their view of the world. What they thought about economic questions reflected that influence.
The idea that improvement is possible rests on basic presumptions about the world in which we live, and our capacity to shape it by actions we collectively choose.
Even the very notion of economic policy, as we know it today, is in large part a consequence of these ongoing changes in religious thinking. The point of any public policy is, consciously and deliberately, to change aspects of society for the better. Economic policy is no different. But the idea that such improvement is even possible rests on very basic presumptions about the world in which we live, and our capacity to shape it by the actions we collectively choose. The new religious thinking of the late seventeenth and then the eighteenth century, and in America on into the nineteenth, provided the cultural soil in which men and women could contemplate such possibilities. That creative thinkers would then direct this endeavor to such a central feature of everyday life as the economy in which they lived and worked and earned their livelihood was only natural. With the passage of time, and ever greater availability of information and ever broader opportunities for public participation, it was natural as well that the general public took up an interest in the debate. But that engagement has likewise rested in part on a worldview shaped by the era’s prevailing religious presumptions. It does so today.
No doubt economics is far from the only subject of human thought and debate that religious thinking has influenced, and continues to influence, in this way. But focusing on economics in this context is important, for two reasons. Because it is true that economics emerged from the Enlightenment, and because the conventional image of the Enlightenment downplays the importance attached to religion in favor of humanistic thinking, the commonplace assumption is that economics in turn likewise stands apart from religious ideas. This is not true, nor has it been, ever since the inception of economics as a modern intellectual discipline. Taking account of the influence of religious thinking is essential to a full understanding of one of the great areas of modern human thought.
And because practical matters of economic policy are so pervasively important for most citizens, today far more so than in Adam Smith’s time because of the more national character of the economy and the greatly expanded role of government in it, public engagement with the ongoing debate over whatever are the economic policy questions of the day—taxes and government spending, support for industry and job creation, incentives to undertake research, impediments to international trade, regulation of the workplace for purposes of safety and of products for purposes of consumer protection, environmental restrictions, what degree of economic inequality is acceptable and what to do when prevailing inequities are excessive, even how to preserve economic activity in the face of a disease pandemic—is increasingly central to modern political life in a democratic republic.
Ordinary citizens, however, likewise bring to this debate whatever worldview they hold. Whether consciously or not (and in most cases not), that worldview too rests on presumptions that originate in the religious thinking of either today or sometime in the past. No one in a democratic society is going to tell citizens that their religious presumptions are wrong, or that the implications that follow from them for economic policy are flawed. But clearly understanding the substance and origins of the worldview that underlies our fellow citizens’ participation in this essential part of our democracy is sure to make it work better.