Puritanism = Constructivism?

This book also highlights two enduring alternative paradigms about the fundamental nature of economic systems. The early Puritans had viewed the market essentially as a human activity, and, as such, less than perfect. That being assumed, economic behavior needed boundaries defined by human institutions (churches and governments). The impact of commerce on the local community was a matter for regulation. By the time essentially secular Enlightenment ideas had been hallowed by eighteenth-century clergy, the market had ceased being a human invention and been transmuted into an expression of natural law and a divine construct (p. 249). As such, of course, the economy became sacred and untouchable — perhaps to be worshipped, but never to be reformed by mere mortals. The way was set toward nineteenth-century laissez-faire. The distinction between the economy as an imperfect human invention, always the proper object of reform, and the economy as an expression of some kind of perfection (perhaps general equilibrium), it seems to me, plays out to this day in contemporary politics and economics. As this book shows, these alternative paradigms are largely matters of faith. Recognition of this might greatly improve contemporary political discourse.

That’s Donald Frey, reviewing Mark Valeri’s Heavenly Merchandize: How Religion Shaped Commerce in Puritan America (Princeton, 2010) for EH.Net. It’s an insightful point, contrasting what Hayek called “constructivism” — the view that all social institutions are the result of human design, and hence subject to redesign — with the idea of markets and other institutions as emergent processes not easily reconstructed. (Menger called them “pragmatic” and “organic” institutions, respectively.) Hayek would argue, however, that Frey sets up a false dichotomy by characterizing emergent processes as “divine,” suitable for worship and sacrament; they are man made, simply not designed. Nor would Hayek, or contemporary Hayekians, accept that choice between constructivism and sensitivity to emergent order is itself a matter of faith! (Here’s a whole journal devoted to it.)