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