The Golden Calf Explains How Economism Lead to the Divine Right of CEOs

Our fellow blogger (on Hooked: Ethics, Medicine and Pharma), family physician and bioethicist Dr Howard Brody, has written a book on economic ideology that helps explain some of the issues we frequently discuss.

Dr Brody's book, The Golden Calf, is about how the social science of economics has been taken over by an ideology he and others call "economism." 

Economism

Economism consists of these major ideas:

• "'The economy' is a separate and distinct sphere of society."  This means that economic planning can be independent of consideration of the rest of society.
• "Even if only a part of society, the economy is the primary part."  Thus economic planning, thinking, policies etc take precedence over other planning, thinking, policies, etc.
• "People are, at core, economic beings.  The laws of the marketplace describe virtually asll of their behavior and the reasons for it.  People are beings of economic exchange, driven first to make money and then to spend on the goods obtainable in the marketplace."  So all other human thought, values, emotions, etc are less important.  The answer to the question, "what does love have to do with it?" is nothing.  Neither does honesty, morality, or ethics have to do with it.
• "Economic calculation is the best way to understand, value, and manage human life.  It is appropriate that every aspect of our lives be thought of and analyzed in terms of economic calculations."  This essentially asserts that economists, economic thinking, and the marketplace should rule the world. 
• "The economy, above all else, must be managed solely with an eye towards its own technical requirements - that is, what economists study.  There ought to be no interference from politicians, or policymakers, or moralists, or anyone else."  Thus, not only should greed be considered good, but greed ought to be enacted into law. 

Economism's Prescription for Health Care

Stated so baldly, economism may seem absurd.  However, it is easy to see its influence.  For example, Dr Brody explained how economism would state:

what sort of health system the U.S. ought to have. It would be one that is governed by the laws of the market, and that treats all aspects of health care as consumer goods. How much any person 'needs' health care would be determined by one thing only - what that person is willing to pay on the open market. Anything else would be denounced as illegitimate interference with the market by politicians, policymakers, and other do-gooders.

This, of course, corresponds very well with a lot that is said about health care by its current leaders. How often have we heard about the health care market, and how the only way to improve health care is market-based reforms? (Look here).  How often have we heard leaders of hospitals refer to their "industry?" How often have we heard of patients as consumers, and doctors as providers? The list can go on.

The problems are that economism does not provide good tools for prediction or management of the economy. Worse,

If we want to live in a society that reflects basic human values, including acceptable moral rules, economism is a very poor guide. Yet economism is blind to its own deficiencies. it claims to be able to tell us the definitive answer to any problem in any aspect of human life, and accuse us of being irrational if we disagree with its proposals. If a powerful elite takes over control of a society, wedded to economism as their belief system, then the results for that society could be disastrous.

The origins of economism provide an explanation for a phenomenon we have often seen in health care, the lack of accountability of health care leaders, which we sometimes have described as CEO exceptionalism. We have noted how health care leaders almost never seem to need to take responsibility for their organizations' misbehavior and its outcomes, (look here) and in fact can command ever increasing compensation, no matter how badly they or their organizations do.

The Religious Origins of Economism
To understand this explanation, first note that Dr Brody suggested that economism is not a science. It did not arise out of an effort to use logic and reason to explain evidence. Instead, it seems to have come from two strains of religious thought that got translated into economic terms.  Dr Brody suggest that while it may make sense to think of economism as an ideology, it functions more like a religion, so that viewing economics ruled by economism as a social science would be a very big mistake.

The first strain was the Protestant evangelism found in England in the 18th century. Evangelicals of that time

regarded poverty as part of a divine program. Evangelicals interpreted the mental anguish of poverty and debt, and the physical agony of hunger or cold, as natural spurs to prick the conscience of sinners. They believed that the suffering of the poor would provoke remorse, reflection, and ultimately the conversion that would change their fate [in the afterlife]. In other words, poor people were poor for a reason, and helping them out of poverty would endanger their mortal souls.

Thus, people who fail in the marketplace of life are sinners. Markets should not be regulated to prevent such failure, because doing so would prevent their still possible salvation.

On the other hand, the Puritanism of the 17th and 18th centuries, and its 19th century evolution in the US

was creeping up on the idea, not only that material wealth and worldly success was a good thing in the eyes of God, but that seeing oneself become successful and wealthy was the strongest possible sign of God's grace and one's status among the Elect.

Things then got more extreme.

The moderate idea that those who enjoy material wealth in the earthly life may have been especially favored by God seems gradually to have morphed into the extreme idea that God wishes us to bestow on the super-rich our adulation and unquestioning allegiance.

So,

For example, Reverend Russell Cornwell's lecture called 'Acres of Diamonds' proved so popular after he first wrote it in 1870 that he was called upon to give it six thousand times over the next quarter century. He preached: 'I say you ought to get rich, and it is your duty to get rich.'

Thus,

We have been conditioned to believe that wealth is an infallible sign of God's favor.

Here is the religion behind CEO exceptionalism, lack of CEO accountability, outrageous CEO compensation, the imperial CEO. CEOs can become extremely wealthy, and "wealth is an infallible sign of God's favor," generating the notion of the divine right of CEOs.

Summary

No wonder that we have yet to see any logic or evidence to support CEO exceptionalism. Instead, we have seen logical fallacies used to support lack of CEO accountability and immense CEO compensation. The wealth of our leaders cannot be addressed with logic and evidence if it is a sign of God's favor.

Thus, anyone whose religious beliefs are perfectly compatible with 18th century English evangelism and 17th through 19th century British and American Puritanism and its aftermath might be happy with the divine right of CEOs, and with economism in general.

However, Dr Brody makes the powerful point that economism functions like a religion, and at best is an ideology, not scientific paradigm. Anyone who is uncomfortable with the religious beliefs that underlie it ought to be very uncomfortable with its precepts, as should anyone who believes that economics or health care should be based on evidence and logic.

Specifically, in health care and in the larger economy, anyone who does not believe that rich CEOs are especially favored by God should question why they should be so rich, and why they should be so unaccountable.

Dr Brody has written a powerful and important book which goes a long way to explain the irrationality that has infected health care. People of all, or of no religious beliefs should pay attention.