The Economics of Religion

Saturday, February 28th, 2009

I’ve been enjoying Russ Roberts’ EconTalk podcast immensely. Economics is not purely, or even primarily, about money, and his talk with Larry Iannaccone about the economics of religion aptly demonstrates this.

As Roberts points out, Adam Smith laid the foundation for an economics of religion more than two hundred years ago:

In an important, but largely ignored chapter of The Wealth of Nations, Smith argued that self-interest motivates clergy just as it does secular producers, that market forces constrain churches just as they do secular firms; and that the benefits of competition, the burdens of monopoly, and the hazards of government regulation affect religion like any other sector of the economy. Consider, for example, the following passage:
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…. (An Inquiry into the Nature and Causes of the Wealth of Nations par. V.1.190, Cannan edition. Also, Glasgow edition, Liberty Fund, 1981 vol. 2 p. 789].)

Leave a Reply