The Economics of Religion

Economics, like Darwinism, is a universal acid - "it eats through virtually every traditional concept it touches," to borrow a metaphor from Daniel Dennett's Darwin?s Dangerous Idea. Through the work of economists like Gary Becker, economics has been applied to such areas as law, crime, family interactions, and yes, even sexual orgasms.

Critics call this economic imperialism - and rightly so. We don't like to think about the difficult choices we must make in a world of scarcity - we prefer the comforting and romantic notion that trade-offs between the things we value need not be made. Instead of dealing with these trade-offs, as we inevitably must do, we complain when economists encroach upon territories once thought to be sacred.

But nothing is too sacred for economic analysis - not even religion.

What could economics possibly say about religion? Apparently a great deal, judging from this website, run by George Mason University professor Laurence Iannaccone.

When analyzing religion, economists differ from other social scientists on the issue of rationality. Although all social scientists "seek to explain religious belief, behavior, and institutions in human terms," economists assume that individuals act rationally, even when their behavior is based on or influenced by religion. Other social scientists do not make this initial assumption, although they may reach rationality as a conclusion.

One area where economics of religion may be useful is explaining why various religions have different beliefs about reward-and-punishment in the afterlife. Glen Whitman has been blogging about the effects these theories may have on human action. Just as secular punishments can provide a disincentive for certain kinds of behavior, so too religious theories of heaven and hell can encourage praiseworthy activities and discourage sinful activities, even if we don't have evidence of their enforcement in this world. Different afterlife theories will have different effects on behavior.

Although Glen doesn't state it explicitly, we could test his hypothesis by examining the history of religion. If a religion introduced a certain afterlife theory at a time when many people were committing a specific kind of sin (a sin that would be socially beneficial to deter), then we would expect the afterlife theory to be especially good at deterring that sin. Alternatively, if, despite the existence of a certain afterlife theory in a religious society, people were committing a sin that was not well addressed by that theory, we might expect either a modification of that religion's theory, or the emergence of an offshoot or breakaway religion with a better theory.

One interesting example that I learned in sociology, but could just as well have come from an economist, is the sacred cow in India. One theory for why Hindus in India came to believe that cows are sacred, so much so that those with this belief would not eat beef even at risk of death through starvation, is as a means of capital conservation. In times of famine, people would kill their cows for food. But because cows were extremely scarce relative to demand, most cows were used for capital production - farming, milk, and dung - rather than food. If people killed their cows during famines, they would have no way to survive when the famine was over. Thus, a religious prohibition against killing and eating cows came into being as a way of promoting long-term community interests over short-term community interests.

Who knew religion could be so rational?

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It is pretty obvious that

It is pretty obvious that many religious laws are based on real world problems that people observed but did not know how to solve. The ancient Hebrews noticed that people who ate pork or shellfish often became very, very ill. So, the leaders either:

a) concluded that YHWH did not want them to eat those foods, and that the sickness was a punishment for that behavior

b) concluded that telling telling the "common man" that YHWH did not want them to eat those foods was the best way to get people to stop eating those foods and making themselves sick

c) a combination of a) and b)

d) some other conclusion I have not thought of

I would contend that in a modern society, the remaining reasons for avoiding pork or shellfish are largely aesthetic. Yet some modern people still keep kosher. What now is the rationale for doing so?



Richard A. Posner's: The

Richard A. Posner's: The Economics of Justice -- anecdotally speculates in this regard.

My understanding of the pork

My understanding of the pork prohibition (and social/religious rules surrounding pork exist in numerous societies, including pork eating as well) is somewhat different. Nearly all desert societies have taboos against pork consumption. The underlying issue is power, not health. Pigs require lots of water, enough per pig to support a family (of people). When water is the critical limiting resource for the size (and strength) of a society, diverting it into luxury-food production leaves the overall society weaker and exposed to outsiders. In short, raise pigs and end up conquered by the folks from the next oasis who don't. Pigs are also not producers (milk/wool/etc), and so represent a large capital asset whose value is ONLY realizable at slaughter, making them ideal targets for plunder. Bad all around in an area like the Middle East.