Материал: The Routledge Companion to the Study of Religion by John Hinnells
Chapter 27
Economics of religion
Laurence R. Iannaccone and
William Sims Bainbridge
In recent years there has been a revival of interest in economic explanations of religious behavior, backed up by extensive theoretical and empirical work that has placed this field on a solid footing. To be sure, topics such as church finances and giving have long been studied by economists, and many principles of management and marketing can be applied without much modification to religious organizations. However, the modern economics of religion is much broader and deeper than that, potentially addressing many of the topics covered by other social sciences and by religious studies. This essay will examine the major questions.
Economics is a rather technical science, fraught with mathematical equations and technical terminology, so we must translate into comprehensible language for a wider audience. Yet, we will use metaphors carefully, so they communicate accurately what economists of religion actually think. In particular, we organize this essay in terms of three familiar roles that people play in an economic system: consumer, producer, and investor. When we apply these three terms to religion we are not using analogies; the economics of religion really does assert that people primarily play these roles while engaged in religious behavior. We begin by describing each concept, then explain how they interact to form a religious market.
Consumers
Only humans manage money, but all vertebrate animals possess the fundamental prerequisite for economic behavior, decision-making on the basis of experienced and anticipated rewards (Skinner 1938). Like our mammalian forebears, we seek the things we desire and avoid the things we fear. Like them, we enter the world immature and dependent upon parental caregiving. Humans are a social species, but so too are bees and beavers, ants and elephants, and all social species have evolved complex mechanisms for resource sharing and defense. No other species appears to possess religious faith, but economic principles suggest that religion may be a natural human consequence of intelligent reward-seeking through social interaction in a world of uncertainty and deprivation.
In his classic, The Wealth of Nations, Adam Smith (1776) wrote brilliantly about the character of religious markets. Though these passages were long ignored, Smith’s observations helped spark renewed interest in economic theories of religion fully two centuries after he wrote. Self-interest motivates many people to seek religious rewards, self-interest prompts other people to supply valued religious goods and services, and the combination yields a religious market in which the churches compete for customers.
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Christian Churches and their non-Christian counterparts provide many of the same services as secular businesses (setting aside for the moment some special expected benefits peculiar to religion, which will be covered in the section on investors). Like a school or daycare center, Sunday school supervises and educates children. Like a theater or a symphony orchestra, church services provide drama and music. Like a country club or tourist resort, religious organizations host recreational activities. Religious charities can substitute for government welfare and social work (Gruber and Hungerman 2007). Many writers have drawn analogies between religious counseling or confession and their secular equivalents, professional or educational counseling and clinical psychology or psychotherapy (Bakan 1958; Frank 1961). In these latter examples, a client goes to a professional for a specialized service, whether the professional’s credential is religious or secular, and the chief economic difference may be whether there is a set fee for a given service.
Different industries routinely compete to satisfy the same needs. Depending on relative costs, you may therefore drive your car to a conference, take a bus, fly on a plane, or use your computer to “meet” over the internet. But each industry provides products that differ from those provided by competing industries, and these products often come bundled in very different packages. With respect to social services, most religious organizations operate like department stores, providing one-stop sources of an array of different goods and services demanded by individuals and households.
Religious organizations can sometimes provide ordinary products more efficiently than secular organizations. A familiar example is moral education for children. Political pressures and legal rulings limit the extent to which public schools can inculcate values, but as voluntary organizations largely insulated from politics, religious organizations indoctrinate quite openly. Religion’s ability to attract customers seeking cure of physical or mental illnesses depends on how well secular organizations are doing that job, which differs dramatically across ailments. One traditional function attributed to religion is that it authenticates members as good and trustworthy members of the community, a function that credit rating agencies also perform but not always as well (Klein 1997).
Renewed interest in economic theories of religion can be traced in large part to the work of Nobel-prize winning economist, Gary Becker. In one of his most famous essays, Becker (1976:5) argued that “the heart of the economic approach” lies in “the combined assumptions of maximizing behavior, market equilibrium, and stable preferences, used relentlessly and unflinchingly.” Market dynamics are easier to address after separately reviewing religious production and consumption, but the other two assumptions can be illustrated by consumption alone. A formal statement of the maximizing principle is this:
Individuals act rationally, weighing the costs and benefits of potential actions, and choosing those actions that maximize their net benefits.
Maximizing behavior is simply the point made earlier, that humans seek to gain the most reward at least cost. Given two alternatives whose contingencies are well known, a person will rationally choose the more advantageous one. Thus, the economic perspective on religion, and Becker’s work in general, is often called rational choice theory (Stark and Iannaccone 1993; Iannaccone 1997).
This term has two disadvantages. Most obviously, it emphasizes just one of the three fundamental economic assumptions. One might just as well have focused on either of the others, for example calling this the religious markets approach (Jelen 2002). More subtly,
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“rational choice” ignores comparable terms used by people in other disciplines, thus obscuring the extent to which the theory enjoys a broader scientific basis than just economics. For example, operating from almost identical assumptions and giving great prominence to concepts from economics, the sociologist George Homans (1974) used the term learning theory, and thereby emphasized connections to behavioral psychology as well. But whatever name we use, the assumption that humans maximize is key to an economic understanding of religion. Rational choice has the advantage of making it clear from that start that religious behavior is often quite rational, rather than a consequence of mere ignorance, superstition, or wishful thinking.
The maximizing assumption is often criticized as tautological. An economist asserts that “customer A buys brand X rather than brand Y because the former maximizes the customer’s expected utility.” And how does the economist know it maximizes the customer’s utility? Because he observed him choosing it! This certainly sounds like a tautology, which many declare a waste of words. But some tautologies, including those derived from mathematical definitions and axioms, turn out to be tremendously useful. Euclidean geometry is a case in point. Although one can derive illuminating alternative systems of geometry, this does not negate the relevance of standard geometry for describing the vast majority of situations encountered by humans. In a similar manner, the system of “tautologies” derived from standard economic assumptions yields one of the most valuable intellectual structures ever developed for social-scientific description, analysis, and theorizing.
In connection with religion, the chief substantive objection to maximization is the claim that it ignores altruistic behavior. This argument has also been raised in connection with simplistic theories that biological evolution is “survival of the fittest.” Altruistic behavior, from the standpoint of sociobiology, represents inclusive fitness (Wilson 1975), action that helps the individual’s genes survive and reproduce through benefit to close family relatives, not necessarily to the individual who takes the action.
Economists need not adopt this principle from sociobiology, because they have two other legitimate responses. First of all, altruism seems paradoxical only because we presume to fully know what a rational individual’s preferences and reward contingencies should be. Yes, nobody wants to die, but a parent may value the lives of their children sufficiently to risk their own lives, and most examples of altruism in fact involve relatively minor sacrifices of momentary personal benefit to help exchange partners who will reciprocate in future. Second, the function of a scientific theory is not to explain everything, but rather to explain much with great clarity and to provide some guidance as to what phenomena fall beyond the scope of the theory. If empirical research turns up cases where the maximizing assumption really fails to apply, then economists will be motivated to search for new principles that do provide an explanation – as is in fact the case in the new and rapidly growing fields of behavioral economics, neuroeconomics, and experimental economics.
Turning to the assumption of stable preferences, the third core assumption in Becker’s list, one cannot but wonder how economists deal with the fact that it is a rare (and strange) person indeed who always maintains the same tastes, values, beliefs, and behavior. However, a little more detail will help us understand what economists mean by “stable preferences,” and how they handle behavioral change. Here is a formal statement of the principle:
The ultimate preferences (or “needs”) that individuals use to assess costs and benefits tend not to vary systematically from person to person or time to time.
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Note, first of all, that the principle is hedged by the phrase “tend not to vary systematically,” which acknowledges that variations do occur but often can be ignored. More importantly, the stable “tastes” or “preferences” in question are ultimate preferences (Becker 1996).
Much of what people seek in life is but a means to an end. Consider, for example, the aphorism “in for a penny, in for a pound.” What does pound mean? It refers to British currency. Americans should properly say, “in for a penny, in for a dollar.” People in Britain prefer pounds while Americans prefer dollars, not because their ultimate preferences differ, but simply because they employ different currencies. Pounds and dollars facilitate the exchanges that enable people to satisfy their wants. Their value is instrumental not ultimate, and external conditions can change how valuable they are as means to achieve people’s ultimate goals.
The real import of the stable preferences assumption is that it focuses our attention on external, market conditions that shape behavior by changing the relative costs and benefits associated with different actions. Economists leave to psychologists and neurobiologists the task of studying substantial differences in the mental apparatus of different individual people. As a social science, economics concerns what happens between people more than what happens inside them. This is not blindness, but the division of labor across the human sciences, and economists need to focus their vision on the factors that create and sustain markets, to discover new insights. We do not fault the Palomar and Hubble telescopes for failing to detect radio waves, because they were the best optical telescope of their eras, and wholly different designs were required for radio telescopes. Similarly, we should ask how far we can see with the tools of the economics of religion, not whether we can see absolutely everything in every direction.
One example of how economic thinking helps us understand religious behavior is the differences in what people with different incomes contribute to their religious organizations. For sake of simplicity, conceptualize each person’s contribution as a combination of time and money that together constitutes his or her total “payment” for religious goods and services. People differ in the wage rates they can command for their work time, so the time of high wage earners truly has more monetary value, and it is only natural that they seek to obtain religious rewards through actions that require relatively less time and relatively more money. Though other considerations routinely influence people’s contributions, this simple tradeoff accounts for many of the differences between rich and poor congregations – differences that are rarely even noted by non-economic researchers (Iannaccone 1990).
Producers
Producers are human beings, so their behavior follows the same principles as that of consumers. They too maximize, but the relevant maximizing now relates to the supply-side of the religious economy. Whether pastors, priests, rabbis, or imams – religious producers will tend to adjust behavior so as to maximize the return to their efforts. They are in this sense profit maximizers, even though the profits in question may derive from a complex mix of monetary and social rewards. The profit motive and entrepreneurial spirit is most clearly visible in new religious movements, but by no means absent in established denominations.
In a survey of alternative theories, Bainbridge and Stark (1979: 288) sketched the entrepreneur model of cult formation. They employed the concept of compensator, which will be considered more closely in the section on investors. This word refers to expectations of future rewards from religion, especially supernatural rewards promised in another life. Religious cults emphasize new supernatural hopes, manufactured and sold by their founders:
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1Cults are businesses that provide a product for their customers and receive payment in return.
2Cults are mainly in the business of selling novel compensators.
3Therefore, a supply of novel compensators must be manufactured.
4Both manufacture and sales are accomplished by entrepreneurs.
5These entrepreneurs, like those in other businesses, are motivated by the desire for profit, which they can gain by exchanging compensators for rewards.
6Motivation to enter the cult business is stimulated by the perception that such businesses can be profitable, an impression likely to be acquired through prior involvement with a successful cult.
7Successful entrepreneurs require skills and experience, which are most easily gained through a prior career as the employee of an earlier successful cult.
8The manufacture of salable new compensators (or compensator-packages) is most easily accomplished by assembling components of pre-existing compensator-systems into new configurations, or by the further development of successful compensator-systems.
9Cults tend therefore to cluster in lineages. They are linked by individual entrepreneurs who begin their careers in one cult and then leave to found their own. They bear strong “family resemblances” because they share many cultural features.
10Ideas for completely new compensators can come from any cultural source or personal experience whatsoever, but the skillful entrepreneur experiments carefully in the development of new products and incorporates them permanently in his cult only if the market response is favorable.
Because most religious organizations incorporate as non-profits and describe their activities with a distinctive, non-economic vocabulary, the extent to which they operate like commercial firms and reward their leaders is obscured. But most cults are too new to have developed institutional arrangements that cover (or constrain) the worldly benefits desired by their leaders, and thereby witness to a broad truth: successful religions are businesses that yield a steady stream of rewards for their employees, and especially their top managers.
As in the world of commercial business, compensation can come in different forms. The New Thought religious organization called Unity was set up originally as a business, then morphed into a non-profit organization (Vahle 2002:147). David Berg (Moses David), founder of the Children of God (The Family) displayed substantial interest in sexual rewards, whereas L. Ron Hubbard seemed more interested in money (Bainbridge 2002b; Lewis 2009). Alternately, it could be that Berg and Hubbard adapted their business models to different segments of the religious market, with Hubbard targeting the wealthy and Berg selling to those who could only pay with time and services. The obvious entrepreneurial orientation of many cults routinely leads to accusations that they exploit their followers, but as in the secular business world, unsatisfied customers soon become ex-customers (Barker 1984).
The idea of clergy as profit-maximizers is probably the most controversial part of the economic theory of religion. Yet, clergy do benefit from their jobs (Bainbridge 2002a). Wellestablished denominations provide a good deal of economic security, considerable status in the community, and the pleasures of sociability. Some of these benefits, notably economic security, may have been even more important in earlier centuries, when few people in secular society enjoyed them. Some of the historical controversies about the churches precisely concern how much of which rewards clergy should enjoy, for example how much luxury versus asceticism and even celibacy. One possible explanation for the difficulty the Roman