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DOI 10.1007/s00712-007-0302-2
Ekelund, R. B. Jr, He´bert, R. F., and Tollison, R. D.: The Marketplace of Christianity. X, 355 pp. The MIT Press, Cambridge, MA, London 2006. Hardcover £ 19.95. This book is an ambitious assessment and deep analysis of the evolution of Christianity in the post-Reformation period that adopts both microeconomic theory (industrial organization, full-price theory, public choice, economic interest groups) and the new institutional economics to explain how economic determinants affects forms of religion in religious markets. By taking religion as an expression of rational economic behaviour, the Authors develop a brilliant theory of the demand and supply for various types of religious services. Their main assumption is that preferences for religion are given (exogenous), being neither true nor false, desirable or undesirable: the Authors pass no value judgement about religious beliefs. However, religious preferences exist for reasons that are deemed rational and the ultimate purpose of the book is to enquire about their actual effects on society and welfare, both individual and collective. Indeed, like other markets, religious ones may produce outcomes that are beneficial or detrimental to people. Needless to say, the measuring rod of outcomes is utility as conceived in mainstream economics. However, this poses a first problem. The broad notion of self-interest that is needed to sustain the entire discourse in the first place raises the question of whether there can be non-selfish motivations underneath people’s choices. Experimental economics strongly suggests that humans have innate dispositions for self, for others and against others that generate a-social, anti-social and pro-social behaviour. The homo oeconomicus behaviour is only one of the three – the first one – and it is not the one in (numerical) majority. The upshot is that the Authors’ case for treating demand for religious services on the basis of a model of individual choice that severely restricts the scope of human identity is much weaker than they think. Chapter 3 is the core chapter where, after an accurate definition of the subject matter – religion is a set of organized beliefs and a Church is an organized body of worshippers – the Authors specifically derive demand and supply functions for religious services in a ‘‘Beckerian’’ mood. They are well aware of the difficulties involved, since assurance of eternal salvation is not the only object of demand. Religion serves different wants such as social services, political cohesion, access to business contacts. Still, the demand curve is specified in a way that the quantity demanded of religion as a Z-good
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– a device borrowed from Gary Becker in his study on household production to formalize the idea that religious services, whatever their final output, are produced by combining capital goods, labor and market goods – is inversely related to the full price paid by the faithful (‘‘Full price is the total cost to an individual in terms of money outlay and resources foregone . . . such as time spent . . . on rituals and observance of religious precepts’’, p. 5). As it is the case within a partial equilibrium set-up, the position on the Cartesian plane of the demand curve depends on a set of demand shifters, such as income or wealth, the full price of substitutes, member’s propensity to risk, education. An analogous procedure is followed to derive the supply function. Chapters 4–7 present accurate historical examples of how economic determinants affect forms of religion. Here, the declared intention of the Authors is to demonstrate the usefulness of the economics of religion apparatus in explaining a set of important episodes in the cultural and economic history of the West. Two, in particular, receive special attention. The first one deals with the critical point of entry by Protestants into the market for Christian religion. ‘‘We assert that by the late Middle Ages the Catholic Church was pricing its product too high in full-price terms to dissuade market entry by rival Protestant churches’’ (p. 106). Therefore, Reformation may be seen as a lower full-price entry into the market for Christian beliefs which was successfully occupied, until then, by an incumbent monopolist – the Roman Catholic Church. By making redemption cheaper and by increasing benefits to believers through reductions in transaction costs, Protestantism was able to overcome the monopoly power of Catholicism. The second major episode explained in the book refers to the evaluation of the Roman Catholic Church response to market entry: the CounterReformation. The Authors carefully examine the ensuing developments that led to open competition in the market for religion among members of various denominations. With a wealth of interesting details, they show how the Catholic Church was forced by new competitors to adjust its policies, with mixed degrees of success, in order to regain market share. The subsequent developments of Protestantism are also carefully considered. The elimination of intermediaries and of doctrinal interpretation – this was the essence of Luther’s, Calvin’s, and Zwingli’s breakaway – opened the door to the competitive evolution of thousands of forms of Christian beliefs, especially in the New World. The book offers a variety of thought-provoking claims and insights to this regard. Chapter 8 is entirely dedicated to a thorough discussion of Max Weber’s thesis that the advent of Protestantism encouraged the development of
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capitalism via the well-known Protestant work ethic and the notion of a calling. The Authors correctly underline that Weber’s argument employs a preference-based explanation of Protestantism’s impact and this may give reason of the many convincing critiques levied against it. To overcome this lacuna, the Authors supplement Weber’s view with a supply-side explanation: tastes certainly changed, but so did, and perhaps more, constraints. Yet one wishes that the Authors had more fully explored the Reformation episode as a case of heterogenesis of ends. Luther and the early leaders of Reformation were hostile to economic issues and even ignorant of the working of market institutions. They were fighting against the corrupt clerics of the Roman Catholic Church, preoccupied to protect religion from the market, yet, according to Weber’s interpretation, by posting the 95 theses on the door of the Wittenberg Cathedral, Luther was posting a capitalist manifesto! A recent paper by Becker and Woessmann (2007) – who use regional data within Prussia and not cross-country data that are inevitably plagued by endogeneity problems – convincingly shows that Protestantism was effective on economic success not because of any difference in work ethic, but simply because it favoured literacy and universal schooling. People had to be literate to be able to read the Bible – Luther and Calvin insisted. The ensuing literacy had the unintended effect to increase people’s productivity and thus prosperity. Indeed, after controlling for the positive effect of literacy on economic growth, there remain no significant difference in economic success between Protestant and Catholic counties. The final chapter explores the contemporary impact of Christianity’s historical evolution on today’s hot religious issues such as the liberalconservative debate, celibacy, sectarianism, women–gay clergy, competition from other religious traditions. The authors – on the basis of a rich empirical material – show how their model may offer insights into current policies of contemporary religious forms and how these policies may lead to emerging schisms in a number of denominations. However, such likely splits that produce continuous product development in the market are a sign of vitality for Christianity, since as the French poet Andre´ Suare`s – quoted at p. 268 – once wrote: ‘‘Heresy is the lifeblood of religions. It is faith that begets heretics. There are no heresies in a dead religion’’. Overall, the Marketplace of Christianity is a remarkable piece of work that adds in a significant way to the flourishing literature on the economics of religion, an area of research that after the seminal contribution of Adam Smith remained dormant for about two centuries, while sociology of religion and history and anthropology of religion continued to receive a growing
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attention. The Authors have to be credited for their unflinching insistence on the merits of modern economic mindset to understand contemporary developments in the forms of Christianity. But just for this reason, one may wonder if the Authors’ argument is solid enough to maintain what it promises. To me the basic problem with their account is twofold. ‘‘Economic rationality can be seen to derive from either self-interest or public interest . . . [However] our reading of economic and religious history indicates that Churches do not regularly behave in this way [in conformity to public interest]. By contrast, a private interest approach . . . seems to more closely describe historical events and facts’’ (p. 37). Few pages earlier, the Authors write: ‘‘A basic question is whether the law of demand applies to religious activity . . . It may be that some people (e.g., Joan of Arc or Mother Teresa) do not fit the standard model of economic behaviour . . . Our observations, however, . . . convince us that this is not the case for most demanders of religion’’ (p. 6). How can we know how many Mother Teresatype of individuals are present in a religious market? Observations are always arrived at from a particular point of view. Facts do not speak by themselves; they need to be defined, collected and interpreted: all this occurs in the light of a particular theoretical hypothesis. Indeed, as the great physician Heisenberg discovered some time ago, observing the data often alters the data. The Authors leave unexplained the epistemological underpinnings of arguments that require such underpinnings, and once we enquire into them, we find certain difficulties in accepting some of their conclusions. The other problem is linked to the fact that the authors stick, throughout the book, to the well-known interpretation of religious markets that stresses the therapeutical and consoling value of religious services. According to this interpretation, popularized by B. Malinowski, Churches are prone to take advantage of people’s weaknesses to increase their resources and wealth. The selling of indulgences is part of this view, as well as the concept of ‘‘Cafeteria-style Christianity’’ (p. 260), where certain tenets of spirituality are accepted and others rejected. However, there is another interpretation of religious markets. Christianity is the only one, among the largest religions, that is founded upon the mystery of Incarnation: God makes himself man. The old fathers of the Church designed Incarnation as Sacrum Commercium, a Sacred Commerce between humanity and divinity, to underline the circumstance that it is certainly true that salvation comes as a gift from God, but such a gift has to be reciprocated by the human being. As such, salvation is gratuitous, but not free in the economic sense. If God made himself man, let us search in man’s practices the face of God: this was the theological precept that pushed towards the creation of all the major ingredients and
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pillars of a modern market economy from the eleventh century onwards. Bills of exchange; double entry bookkeeping; joint stock companies; banks; the Franciscan Mons Pietatis (pawn bank); hospitals; universities, etc. are only some of the fruits of this blossoming. It was especially during the civic humanism period (fifteenth century) that the notion of business as a legitimate, morally demanding profession was born and properly systematized on theoretical grounds. (By the way, this remark helps us to understand why already in the first half of the nineteenth century a substantial change in Protestantism occurred both in Europe and in the USA in the direction of a severe critique of the theory and practice of capitalism, conceived as a product of Enlightment thought and not of Reformation). ‘‘Our theory predicts that, other things equal, rent-seeking societies would reject Protestantism, whereas profit-seeking societies would embrace it’’ (p. 120). It is really difficult to maintain that Tuscany – to give just one example – in the fifteenth to sixteenth centuries was a rent-seeking society. The Marketplace of Christianity represents an important addition to the economics of religion literature. The authors have rendered us a great service by contributing so much to this urgently needed area of inquiry. The closely knit narrative tells a fascinating story, so much so that the reader feels that one cannot leave it aside too lightly. I would strongly recommend its reading.
Reference Becker S, Woessmann L (2007) Was Weber wrong? A human capital theory of protestant economic theory. CESifo Working paper 1987
Stefano Zamagni, University of Bologna, Italy
DOI 10.1007/s00712-007-0303-1
Galasso, V.: The Political Future of Social Security in Aging Societies. XVII, 257pp. The MIT Press, Cambridge, MA, London 2006. Hardcover £ 22.95. It is a well-known fact that aging populations in industrialized countries are the main factor which undermines the financial stability of the social security systems and, at the same time, are the reason why those unstable systems are not subjected to suitable reforms. From an economic perspective, the shift of the age composition of generations towards higher ages increases the number of retirees who receive social security benefits and decreases the number of