The use of economics to understand religion isn’t new. In The Wealth of Nations Adam Smith observed:
The teachers of [religion]…, in the same manner as other teachers, may either depend altogether for their subsistence upon the voluntary contributions of their hearers; or they may derive it from some other fund to which the law of their country many entitle them…. Their exertion, their zeal and industry, are likely to be much greater in the former situation than the latter. In this respect the teachers of new religions have always had a considerable advantage in attacking those ancient and established systems of which the clergy, reposing themselves upon their benefices, had neglected to keep up the fervour of the faith and devotion in the great body of the people….
However, in recent years, economists such as George Mason University’s Larry Iannaccone have sought to understand in more detail how religions grow and decline using economic principles. In this interview with Econtalk he discusses his research in some detail.
Of particular interest is Iannaccone’s observation that there is an inverse relationship between the regulation of religion by the state and people’s religiosity. He compares Scandinavian countries with the United States. In Sweden, for example, the Church was essentially a branch of government with its clergy acting as civil servants. Iannaccone found that church attendance was low (as it was in other Scandinavian countries). He then contrasted this with the United States and was able to demonstrate that the more competitive the ‘religious market’, the greater the overall religiosity of the people. See this paper [PDF] and this site for more details.
Iannaccone makes many more interesting and surprising observations. It’s certainly worth a listen if you have the time.
2 comments ↓
Salam, I’ve heard the inverse of regulation argument before and found it convincing. But, there are two sides to this: we would have two theoretical extremes where religious scholars either give the people everything they want or on the other hand, give them nothing they need. For example, a government religion, as in Iran, has little need to listen to the people. In contrast, the traditional Shi’a murtaji’ structure in Iran requires people choose a scholar to follow in taqlid and donate to them, which is a very market-oriented solution. In practice, I think scholars’s integrity prevents them from completely following whim and the culture of the people usually remains more of an anchor than it does a force for extreme change, which is probably a good thing.
If we compare Iannaccone’s account with Smith’s, we see a difference in the theoretical presuppositions, even though the “data” would be the same.
Smith seems to presuppose that people’s desire for religious instruction and inspiration is fairly stable, while their behaviour may not be. For Iannaccone on the other hand, being a good empiricist, since communal worship is taken as the proxy for “religiosity” , behaviour and desire are, for all practical purposes, identical (or less charitably, there is no desire in Iannaccone’s account, only behaviour).
For Smith, people’s religious behaviour (attendence at sermons, etc.) seems to be positively related to (1) the zeal of the instructor, (2) the ease of comprehension of the message by the uneducated, and (3) the “common touch” of the instructor. The satisfaction of these conditions is more likely to occur among the new “dissident” religionists in part because they are kept lean and mean by the discipline of the religion-market (their income is based on piece-work).
This fits well with Iannaccone’s observation of zealous, dumbed-down personalised churches in the U.S. It also fits well with fact that there is still a veritable menagerie of constantly spawning New Age Spiritualities in the U.S. (McKabbalah being the latest).
Something that doesn’t “gel” with Smith’s account however is the constant growth of the evangelical churches in the U.S. An implication of Smith’s account is this: if the instructor is no longer so disciplined, due to, say, gaining government protection or by gaining monopoly-power via “product differentiation” and “economies of scale”, then the above conditions - (1), (2), (3) - would no longer hold. The instructors would basically become lazy, bookish and refined (in Smith’s words acquire “the virtues of gentlemen”) and let their popularised ministry go to the dogs. Yet this is precisely not what happens in the U.S.
What I think is missing from both Smith’s and Iannaccone’s account is the cultural differences in the conception and practice of religion. In the U.S., in contrast to Scandinavian countries (and Europe more generally), religion is conceived of as being a literal commodity, and religious practice by many of the instructors is seen as being a literal business enterprise. That sort of idea is regarded with at best deep suspicion and at worst utter contempt in Europe.
Yes, there are evangelicals in Scandinavian countries, and they sound and behave pretty much like their U.S. counterparts, but are regarded by most as charlatans and cranks by Scandinavians. In the U.S. however, they are regarded as the very chalices of God. In short, sure, “market regulation” may have something to do with it, but cultural (or “demand-side”) factors probably also play a part - and it also seems likely that these factors are themselves related historically.
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