Theology and Neoliberal Economics by Prof. Michael Hudson

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by Prof. Michael Hudson
Global Research, May 23, 2010

The Friedman Institute Upgrades Theology to Condone Neoliberal Greed. What would Jesus Say?

Many academics recently received a petition signed by 111 University of Chicago faculty members, explaining that “without any announcement to its own community, [the University] has commissioned Ann Beha Architects, a Boston firm, to remake the Chicago Theological Seminary building into a home for the Milton Friedman Institute for Research in Economics (MFIRE) and has renewed aggressive fund-raising activity for the controversial Institute.”

It would be hard to find a more fitting metaphor than what the press release characterizes as “conversion of the Seminary building into a temple of neoliberal economics.” Even the acronym MFIRE seems symbolically appropriate. The M might well stand for Money in Prof. Friedman’s MV = PT (Money x Velocity = Price x Transactions). And the FIRE sector comprises finance, insurance and real estate – the “free lunch” sector whose wealth the Chicago monetarists celebrate.

Classical economists characterized the rent and interest accruing to the FIRE sector as “unearned income,” headed by land rent and land-price (“capital”) gains, which John Stuart Mill described as what landlords made “in their sleep.” Milton Friedman, by contrast, insisted that “there is no such thing as a free lunch” – as if the economy were not all about a free lunch and how to get it. And the main way to get it is to dismantle the role of government and sell off the public domain – on credit.

As Charles Baudelaire quipped, the devil wins at the point where the world believes that he does not exist. Paraphrasing this we may say that free lunch rentiers achieve economic victory at the point where government regulators and economists believe that their returns do not exist – and hence, do not need to be taxed, regulated or otherwise subdued.

By “free market,” the Chicago Boys mean giving free reign to the financial sector – as opposed to the classical economists’ idea of freeing markets from rent and interest. Whereas traditional religion sought to lay down precepts for regulation, the Friedman Institute will promote deregulation. Physically replacing the theology school with a “temple of neoliberal economics” is ironic inasmuch as one tenet that all the major religions held in common at one point or other was opposition to the charging of interest. Judaism called for Clean Slates (Leviticus 25), and Christianity banned interest outright, citing the laws of Exodus and Deuteronomy.

The Chicago Boys thus have inverted traditional theology. Yet the teaching of economics as an academic discipline began as moral philosophy courses in the 18th and 19th centuries. The leading universities of most countries were founded to train students for the ministry. The moral philosophy course evolved into political economy, dealing largely with economic reform and taxation of the unearned income accruing to vested interests as a result of legal privilege. The discipline was stripped down into “economics” largely to exclude political analysis, and the distinctions between productive and unproductive investment, earned and unearned income, value and price.

The classical economists saw rent and interest as a carry-over from Europe’s feudal conquest of the land and the privatization of money and finance into an institutionally based debt and monopoly overhead. The classical economists sought to tax away such “unearned income,” to regulate natural monopolies or shift them into the public domain.

Needless to say, this history of economic thought will not be taught at the Friedman Center. The first thing that the Chicago Boys did in Chile when they were given power after the 1973 military coup was to close down every economics department in the country – and indeed, every social science department outside of the Catholic University where they held sway. They realized that “free markets” for capital required total control of the educational curriculum, and of cultural media generally.

What free marketers realize is that without an Inquisition authority, you cannot have a “stable” free market – that is, a market free for the financial predators who presumably are targeted as the major potential donors to the U/C’s Friedman Center. Chicago School monetarists have achieved censorial power on the editorial boards of the major refereed economics journals, publication in which has become a precondition for career advancement for academic economists. The result has been to limit the scope of economics to “free market” celebration of rational choice theory and a narrow-minded “law and economics” ideology opposed to the ideas of moral justice and economic regulation that formed the basis of so much Western religion.

I had a foretaste of this inquisitorial spirit when I attended the U/C Laboratory School. I remember the large banner strung over the blackboard in Mr. Edgett’s social science classroom in 1953: “Give them all what the Rosenbergs got.” After the Freedom of Information Act opened up FBI files, my fellow classmates got quite a kick out of reading the reports filed on them and their political views by U/C professors and those of its associated Shimer College.

Who would have anticipated that economics would end up more right wing and authoritarian, more explicitly opposed to the very idea of human rights and distributive justice than theology? Or that the latter discipline itself would be so inverted? The classical economists were reformers, after all, seeking to free markets from unearned income – the “free lunch” of land rent by Europe’s hereditary aristocracies, and from monopoly rents administered by the royal trading corporations created by European governments to pay off their war debts. But the Chicago monetarists seek to deregulate monopolies and usury laws, favoring rentiers rather than the “real” economy of labor and capital. Their focus is on financial and property claims on income and on assets pledged as collateral: bank loans, stocks and bonds, for which they urge tax cuts. And to increase the market for leveraged buyouts, the Chicago Boys advocate privatizing the public domain, starting in Chile after 1973.

So what is inverted is not only the classical idea of free markets, but the economic core of early religion. Today, the Chicago Boys deem those most in need of salvation to be high finance, real estate and monopolies in their fighting to reverse the past seven centuries of classical economic reform since the Churchmen debated how to define a Just Price (socially necessary costs of production) for banks to charge back in the 13th century.

It seems largely about fund-raising, but isn’t that true of most religion nowadays? The University of Chicago was financed by John D. Rockefeller, prompting Upton Sinclair to call it “The University of Standard Oil” in The Goose Step. When I attended in the 1950s, Lawrence Kimpton had replaced Robert Hutchins as chancellor, and in 1961 became general manager of planning (and subsequently, director) for Standard Oil of Indiana. His most famous act (apart from supervising the Manhattan atom bomb project) was to suppress The Chicago Review issue that contained excerpts from Robert Burroughs’ The Naked Lunch. Significantly, the reason he gave was that publication might discourage financial grants being given to the university.

Mr. Rockefeller at least duly gave his tithe to “those in need.” In a contrasting spirit, Herman Kahn’s wife, Jane, told me that once at a party, Milton Friedman replied to her suggestion of better public welfare and medical care, “Mrs. Kahn, why do you want to subsidize the production of orphans and sick people?” This is not exactly the classical religious spirit.

The problem with the Friedman Institute is that its economic doctrine rose to notoriety in the Pinochet period, the high tide of the Chicago Boys in Chile. Privatization of public enterprise, “freeing” markets from usury laws and promoting deregulation is the antithesis of nearly all religions, whose guiding purpose after all was to socialize their members and create a moral state.

Friedmanite monetarism has been characterized as a post-modern ideology which, like religion, has its own sacred cows and idols – and an Inquisition. In place of tithing of unbelievers as in Islam, we have the tax shift off the religion of finance capital onto labor standing outside its gates. As the press release reports: “wide protest … has centered on the Institute’s strong ideological bias toward free market fundamentalism in the Friedman tradition. In this way and others, its nature runs contrary to the University’s tradition of free inquiry and unfettered debate.”

Well, I’m not sure about how recent that tradition of unfettered debate was. But  the announcement concludes with a note that “FOR FURTHER INFORMATION CONTACT:  Robert Kendrick, Professor of Music (rkendric@uchicago.edu, 773-702-8500) or Bruce Lincoln, Caroline E. Haskell Professor of History of Religions (blincoln@uchicago.edu,  773-702-5083).”

© Copyright Michael Hudson, Global Research, 2010

The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=19299

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32 thoughts on “Theology and Neoliberal Economics by Prof. Michael Hudson

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  6. natureboy — i am getting ready to write an article on the concept of Hell in the work of Bosch ‘s ” Garden of delights”. to let the cat out of the bag a little early , let me state that i think that Bosch’s hell is not just on the right side of the panel . it is the whole tryptich ! in other words. …the delighting in the garden itself is the outward manifestation of what is what he draws that is going on inside the person on the far right panel . why ? BECUASE DESIRE CAUSES SUFFERING . these are basic metaphysical truths . Buddha s noble ones . cravings , cravings , cravings.
    blaming God for seeking to intevene is stupid . the reason why Jesus was forsaken on the cross was to carry our sin and seperation from God so that we can be reconnected to the divine . that is the good news.
    rabbi Kushner said it best ”we really dont get away with anything in this life . we just think we do ”.
    that is the deception . self deception . Karma is really . reaping what one sows is real . so is mercy , and the divine intervention . but what if someone rejects divine intervention ? they are asking for hell .

    • I wish people really didn’t get away with hell, & that vile, evil humans were punished, even by their own conscience.

      But in our religion of “Friedmanite monetarism”, evil and selfishness is rewarded and applauded, especially by christians.

      Prayers by the righteous go categorically ignored, we’re long overdue for a few miracles here… But greed is based in biology, the epic war between life and death, selfishness & compassion is born of nature, and the universe at large clearly doesn’t care one way or another. It’s entirely up to us.

      “Friedmanite monetarism” hasn’t supplanted christianity as the most destructive force on earth, rather they were craftily spliced for purely manipulative political goals in the service of globalized selfishness.

      Prof. Hudson’s revelation that the friedmanites were incubated in pinochet’s fascism needs to be blasted at GLEN BECK like the mud into the oil well, so he sees that his fundamentalist corporatism combined with his fundamentalist christianity IS precisely the fascism he’s constantly and cluelessly ranting about.

    • That’s the favorite of Bosch. See also Breugel the elder for fantastic trippy phantasmagoric menagerie of miseries.

      • just between you and me pal …i think that Bosch is the first modern painter . his horrors outstrip Goya . listen , when i post this , i want you to really respond since Art is your bag. ok ?

        • Paintings are not my bag exactly (nor are ‘isms’ in general)… ‘Modernism’ in European art was largely a whiteboy knockoff of so-called primitivism. I think the best of the real genre in Europe started with Michelangelo’s unfinished esclaves, or more likely the Etruscans… but modernism likely really began somewhere in Africa, with extended arms between Easter island and Oceania.

          El Greco was sort of an expressionist. But Bosch was a category unto himself, almost an outsider it seems, I wish more was known about him, definitely no typical dutch master!

          But hell was palpable then, check out Grunevald’s Eisenheim Altarpiece. Plague, with all of its resultant horrific superstitions (like slaughtering jews and burning witches, flocks of self flagellating freaks) was all not terribly distant history (periodically returning), wars were constant, life was short, suffering ubiquitous. Hell on earth.

          Guernica was our modern version in terms of paintings.

          Sounds like it’s time to revisit William Blake!

        • i love Blake ! you read my mind on the Etrucians . they are in my article on Bosch , as the great frustration of history exstinct. personally i think that Pollak is THE primitivist of all time .
          Heaven , Hell ,etc in art form and poetic form are fascinating subjects.

  7. Capitalism is commensurate with clergy. It’s all corrupt:

    “rentiers achieve economic victory at the point where government regulators and economists believe that their returns do not exist – and hence, do not need to be taxed, regulated or otherwise subdued.”

    Neither one pay nah r’assclot tax.

    It’s the idiocracy that the clergy & capitalists prey on who pay (and pray) for the corporate church (which in turn preys on them). It’s all the same.

    • that is the very reason natureboy that there must be a counter example to what the real gospel of jesus is and how it operates economically . look at the Amish , the Quakers , the Catholic workers , etc .
      this all ties into why Christ taught that those who dont care for the needy and the hungry and the naked , etc will be cast into eternal damnation ( matthew ch 25 ).

  8. “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”

    ~ John Kenneth Galbraith

    It seems selfishness is not enough, only economic tyranny will suffice …

    • Mckinney, I think everyone is giving the hedge-fund class way too much credit. It’s far from tyranny, they are kids, just like the pres. in their 40’s, my generation, making crazy money. It’s not a global conspiracy, it’s just crazy money made by yuppies. While we, the honest slime who believe in an honest buck are going down, they’ve been making mad money ALL THis TIME! Make no mistake about it, just hang out on the street (and try not to throw up).

  9. Prof. Hudson, in this short essay you have touch on so many issues with this metaphor of religion and economics. I will just take a broad stroke of the pen here.

    As someone who is an armchair economist and sees moral philosophy and religion as everyone’s business, I like your essay.

    I feel that when economists defend the new paradigm, as the new theology I do not like it. I do not like it at all. I do not even know if they are aware they are doing it. The world is truly a war of ideas.

    Further, I am aware that so much of academia is fund-raising and rubbing elbows.

    That being said, my two cents about economics in
    general –

    However, I am a believer in letting the markets work, with people acting on enlightened self-interest.

    I live in Poland and there is no way anyone is going to convince me that government intervention or some collective minds have a better understanding about the market than I, a simple humble participant in it.

    To try to convince a Pole otherwise would be a hard task after the the moral theology of socialism destroyed their country and their lives.

    However, people should not look at an economic ideal as some summum bonum for life, it is just economics not religion, they are two different things.

    • Mark , to state that economics and relgion are 2 different things is to not take into account what Christ taught and how it was played out in the book of Acts. The Apostles and their disciples lived in true blue economic equality , becuase they owned nothing .
      when Jesus said in the gospel of Luke ”Blessed are the poor , for theirs is the Kingdom of God ” …the word poor translated from the Greek is ”destitute” .
      in a Grrek play ther gof wealth looks at poverty and destitution and arrogantly says ”well , arent you a pair ”. to which poverty replys ”do not confuse us . at least i work , and have dignity ”.
      Waht Christ is saying to the mindset of the Maria Nostra culture is that not only are the destitute not forsaken of God , but they are blessed above all . is it any wonder that even Marx himself had a flirtation with the gosples ? so yes , relgion and economics have everything in commen . this is called ”Inversion theology ”. the teachings of Christ inverted ALL of the issues of the time –rascism , sexism , agaism , rich verses poor , etc.
      When one sees this inversion , a sane from of economics for all will begin to come into focus . until then we are lost with inequitys .

      • This is a great open debate and something close to many people’s hearts, including myself. Ethics is everyone’s business, can you imagine science without any limits such as in WWII? Ethics clearly are needed give people wisdom about decisions, including economics. However, economic decisions and ethics are about the individual not a system as a whole for society.
        When individuals act on enlighten self-interest they will give benefits to everyone. I believe people are generally good and this free system will result in a more just society. It is because I think about ethics, is that I am for this, as ironic as it may seem.
        So you are right, economics and ethics are interrelated.
        Further, if I miss your point again let me know.
        However, I see Christ as not prescribing economics at all but more about a personal direction of your heart.
        I think there are quotes that could make people think it was about economics but I think his mission was only about conversion of the heart. “give to Caesar what is Caesar’s”.
        Interesting ideas here.

        • mark , true about Christ going after the heart. but proof that a heart is given to God is loving ones neighbor in a very concrete way . and the 3 things that Christ spoke most of were love , hell , and the dangers of the love of money .
          on a macrocosmic sociological level , what made the early Jesus movment diifferent from the pre-christian era of Diogenes and the Cynics is what is called ”Commensiality ”.
          Both the Cynics and the Christians had in commen the concept of world negation . but one of their differences were one of economics . Diogenes instructed his followers to be self suffecent and to carry the things needed for that purpose. on the other hand Jesus said ”take nothing fro your journey ”.
          NOTHING FOR YOUR JOURNEY . why did he command this ? in order for those communitys that they came to would have the oppurtunity to build without political or governmental assistence true communal living .
          Ergo , tho there is a component for sure that spirituality -economics , and the individual go together, on the microcosmic level , one must take into account this Kingdom of God on earth building that Jesus was doing while alive on the earth via the economic commensiality on the socio-macrocosmic . also , this is not to be confused with a new form of ethics , though there is an ethos to it . it is a deeply spiritual thing that is manifested in the world that seeks to transorm it in the here and now .

        • Jesus taught that hell is for people that dont love others . those who turn away the wretched of the earth . those who turn away the destitute . those who wont visit prisoners . those who wont clothe the naked ,or feed the hungry . the seperation of the sheeps and the goats as laid out in matthew ch 25 is a chilling thing .
          do i believe hell is literal ? i honestly dont know . but i know this much , that it is a coffin .. living with a hard heart against humanity forever. and without the prescence of a loving God . all becuase one chooses to in this life to say no to God ‘s commands to love their fellow man in the way that really matters.

        • And let’s not forget that EU’s land-rent and tithe was largely done NOT only by barons & aristocracy, but by MONKS & MONASTERIES, the bastion of rockets myth of RELIGUN.

          Theology, all of it, is the opiate of the idiotic addict administered by ideological dictators which the pawns believed to their deserved demise. Neither heaven nor hell will receive them, only dust in the wind.

          There is such a thing as the ideological packrat who rants and repeats (and believes?) pentographic constructs postulated in obsolete superstitious texts, understanding nothing of life on earth.

          Welcome to the sucker right wing of the alcoholic bible belt. Selling Snake oil, same reason white boys try to sing the blues. It’s a freak show in a sweltering circus of fake god-fearing sycophants.

        • what you fail to see natureboy is that the afterlife begins NOW when one wakes up to Jesus as messiah that gives new birth , new life , and changes ones heart. the best things in life are irrational ./ like falling love. life is not lived on paper . as if this and that should make sense. life is uncertain . do expect salvation to be any different. ?
          and make no mistake about this pal , no matter how much people have abused the gospel of jesus , and how much you complain about it , that makes it no less true . it still has the power to really change people lives .

        • No doubt believers live better lives. A simple answer to complex questions is always an easy way out and very satisfying.

          The question is can you believe it? The body has a heart, but it also has a head, a belief system that brings out our humanism would need to satisfy both.

          So far only our natural compassion and its biological basis fulfills both, bringing the animists and the Buddhists more in line with the common good and spiritual peace.

          Admittedly I can only get through gideons bible on the road in measured doses and ultimately gave up, (I don’t much groove on myths, not even greek nor norse nor native American– and they believed their own myths as deeply as Christians do theirs).

          But it seems the asceticism and wisdom of jesus vs. his ultimate torture and death at the hands of the romans are two completely different things, conflating his ‘chains’ with his wisdom about suffering & humanity is a confusion. His god did indeed forsake him, and it was unforegivable (ie, he didn’t exist, is not listening, and doesn’t care!).

          Had there not been the myth of the resurrection (seems somebody made off with his body, and IMO it likely wasn’t god…), the cult of jesus would have gone the way of the other afterlife jewish cults of his era.

          We have to find a societal wisdom and humanism without the bizarre constructs compiled by all the superstitious writers of the mythology in new testament over centuries. None of it jives to the unindoctrinated, nor do the roman gods, the Egyptians, et. al. (The architecture of all is profound, but that was made by humans, not their gods).

          We need a contemporary secular faith to save our souls and our lives, since christianity is so corrupted by punitive pretensions that don’t work, and continues to fail so miserably on such a massive scale.

        • Why be compelled to rant at christianity (apart from equal animosity to islam and zionism)? I’m certainly no theologist nor philosopher nor intellectual. I’ve never been traumatized in a catholic upbringing like Maher or Carlin, never been raped by a priest, and I’m no atheist activist.

          (Certainly righteous christians should never take such rants seriously, and some of the people I’ve admired most are righteous Christians, and I do see the positive power of belief in some few individuals).

          In short, I indict evangelical biblical fundamentalist Dominionism and each & every dumb amerigoon who espouses it. This has been a force of contemporary destruction, war, environmental hell and waste since I came of age.

          I blame them for being suckered by the corporatists and voting all this deregulated greed into power for the past 30 years. And still they proselytize, Palin & Beck and Hagee and even still raygun are a huge influence on policy to the world’s severe detriment. This is the real right-wing conspiracy.

          Wikipedia has a powerful resource on the various abusive ideas built around Dominionism, the american exceptionalist myth that the US is a christian nation and should therefore be made more so.

          Worth reading (before somebody changes something!): http://en.wikipedia.org/wiki/Dominionism

        • natureboy — let try another angle with you on what Hell is . rememebr in the christmas carol by Dickens , where jacob marley talks about the chains he formed in this life by being so self absorbed would live with him for eternity ?
          well , that is what is going on with all of us . in the meanwhile with Gods great mercy , God is trying to intervene thru the power of his death and ressurection amnd give us the grace to break the chains of self so that we can live for others 100 percent .
          the problem isis that mankind as a whole keeps turning away this great good news of such grace, and it shows. Hell is what follows. more of the same , but worse beyond the grave.
          so , our choice is Christ and his cross or Marleys chains . one is liberation the other is bondage.

        • Of all the myths of hell out there, yours sounds most like the Bahá’í. Certainly doesn’t sound biblical.

          Hades/Hell/Purgatory/punishment in the afterlife by a wrathful, vengeful god is required by biblical Christians, as is the unquestioning belief in the afterlife reward of heaven/salvation/virgins/dates.

          Are you sure your philosophy is best served by the particular constructs of Christianity? There are other ways more focused on enlightenment and compassion if that’s your motive…

          (But really rocket, putting non-human people through undeniable hell on earth so you can have your burgers because they ‘taste good’ definitely makes any ‘christian’ believer into the devil incarnate, categorically disqualifying them from hypocritically preaching about ‘compassion’ no matter how many inmates you visit. Much to learn and practice before preaching!)

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