Saturday, November 19, 2005

God and Mammon go together like peanut butter and jelly

I realize I have similar relationships to economics and theology: I'm not a true believer in either, but I'm fascinated by the theories of both, and the little self-consistent model worlds they create. So I was doubly fascinated to see this debate on the nature of the relationship between economics and religion: Is Religion Rational? The Economics of Faith, a debate between Larry Iannaconne and Bryan Caplan.

More here.

Now, I thought that "Bob" Dobbs and L. Ron Hubbard had perfected the union of religion and moneymaking some time ago, but apparently there is more to it than that. The core of the theory seems to be investigating reasons why people might rationally choose to believe irrational things. I guess it goes back to Pascal's wager.

Here's a sample of the flavor:
The combined actions of religious consumers and religious producers form a religious market which, like other markets, tends toward a steady-state equilibrium. As in other markets, the consumers' freedom to choose constrains the producers of religion. A "seller" (whether of automobiles or absolution) cannot long survive without the steady support of "buyers" (whether money-paying customers, dues-paying members, contributors and coworkers, or governmental subsidizers). Consumer preferences thus shape the content of religious commodities and the structure of the institutions that provide them. These effects are felt more strongly where religion is less regulated and, as a consequence, competition among religious firms is more pronounced.
Apparently it's a whole subfield (but what isn't). Seems pretty dry, and I'm dubious whether any meaningful concepts can bridge the gap between the radically individualist models of economics and religion, which if it's anything other than a scam is about getting outside of the egotistical, individualist frame of mind.

Another quote:
However one defines religion and religious goods, it is clear that religious activities involve a large amount of risk. The promised rewards may never materialize, the beliefs may prove false, the sacrifices may be for naught. In this respect, religion is the ultimate "credence good", a fact noted by several authors... Expected utility models might seem like the natural first step, but as Montgomery (1996b) has emphasized, objective religious "information" may simply not exist, leaving no rational way to assign probabilities to most religious claims.
Uh, yeah, that could be a problem.

File under: amusing academics


goatchowder said...

Well there are a lot of parallels.

Religion, and business, and politics (for that matter) have a common evolutionary origin: they are all part of the kingdom of BULLSHIT.

Success in each of these endeavors is predicated on lies and deception, ignorance, disinformation, and mendacity.

Indeed one could argue that they also serve a useful or even necessary purpose. I'm not sure I'd disagree. My point being simply that religion and business go together very well partly because success in both of these endeavors requires hiding the truth from people or outright lying to them. Add politics to the mix too; it fits in pretty well.

Feeling especially cynical today.

Ben Hyde said...

Silly academics indeed.

It's fun to critique the presumption that religon is a credence/experiance good. Lots of services rendered are difficult to assess in any reasonably time frame: health advice, education - to take two examples. Meanwhile a lot of the quality of the service a religion delivers can be assessed in a reasonable timeframe - vibrant community, lifestyle patterns that make one happy, etc.

All those assertions about markets are particularly silly! They aren't stable, they don't listen to consumers, and less regulation rarely makes them better. Naive economics is as bad as naive evolutionary thinking.

mtraven said...

I always am surprised when actual professors of economics turn out to be simple-minded libertarians. You'd think they would be better off complexifying rather than simplifying their problem domain.

Perhaps the answer is that economics actually is a religion.