Larry Witham's "Marketplace of the Gods: How Economics Explains Religion"

This was an interesting read. I had high expectations. They were not fully met but there was sufficient material that I found of interest to sustain me through the book.

Initially I was put off with the push for the viewpoint of rational economics. But he showed sensitivity to the critiques of idealization, so I was willing to play along with the text. I found the opening chapters to be a nice overview of economic thinking. A bit of a surprise since this is a book about religion, but the author felt a need to establish his bona fides and make clear the methodology he was going to use in exploring religion. The subtitle of the book implies that he will "explain" religion, but he doesn't. He examines religion from an economic theory perspective:

At least traditionally, religion falls on the side of investing for the future. It counsels restraint in day-to-day gratification. In this sense, of course, religion and economics could not be more different, since the latter generally encourages optimal consumption -- you can have it now. But in looking to future rewards, religion sets up a situation of uncertainty. As the study relating church attendance and seat belt use (and smoking) suggests, people treat religion "like other goods that exhibit uncertainty and that provide for a delayed expected future payoff." Some people feel like getting something now is a better bet than an uncertain promise of getting something in the future. This might be an apt description of a teenager. On the other hand, another type of person likes to plan for the future. For example, surveys find that people who go to church tend to be more educated than the general population. When it comes to a time preference, these individuals may be showing a basic liking for investment in the future: putting their time into education and into religious participation.

And.

In East or West, the religious consumer faces the same problem: how to verify the quality of a religious good. One way, as we've seen, is to sample many in hopes that some of them are genuinely effective. But as with picking a brain surgeon, we'd like to pick a religion that is safe and effective from the start. So let's return to the skyscrapers and cathedrals. In the world of supply and demand, consumers want a good product and sellers want to win consumer confidence. This goes for all goods in the marketplace, but especially for something that economists call "credence goods."

Credence goods are items whose quality cannot be judged before or after purchase. We buy them because we trust the credibility of the supplier. Examples of credence goods abound. Consumers must trust a medical diagnosis, for instance. They must accept the word of a mechanic who says the transmission needs repair. The same goes for services provided by counselors and therapists. In many such cases, we turn to a third party to gain proof of reliability. Doctors, mechanics, and therapists all need a license. Producers offer warranties and money-back guarantees to reassure consumers. And they advertise, which, as we will see, can be a signal of reliability.

Religion is the credence good par excellence. ...every religion must continue to make its case as reliable and valid. Religion can't offer a warranty, so it must use every other means. "No church offers a money-back guarantee to a soul that is dissatisfied with his or her afterlife experience," write the economist Robert Ekelund. In religion, therefore, the demand for credibility, honesty, fairness, and sincerity in religious institutions and leaders goes far beyond what is expected of business firms. By worldly experience, everyone knows he or she can be hoodwinked, especially when it comes to credence goods. "Unfortunately, sellers of credence goods have incentives to cheat consumers by overstating the product's merits (and so raise its price)," writes economist Brooks B. Hull. "Buyers and honest sellers of credence goods gain if honest sellers can somehow assure their honesty." So, for example, a church cannot prove eternal life. But "it can assure consumers that priests sincerely believe in life after death and believe that certain steps must be taken to achieve it.

So this book looks at religion like a business and explains how new religions start at small businesses (cults), grow into local thriving business (clubs, sect), and finally into a widespread big business (firm, church). This bit from the book hammers the business angle home. Witham is explaining how Rodney Stark got his first lesson in viewing religion like a business:

...Stark went to interview the pastor of an Italian Catholic parish. This was on the eve of the Second Vatican Council. The pastor took Stark to the front steps of the church and pointed across the street to a white frame church with a huge vertical neon sign on the bell tower: "Jesus Saves, Italian Pentecostal Church." Gesturing at the neon sign, the pastor explained to Stark, "Everyone over there came from over here. Every time you are tempted to cut corners, remember that." What Stark remembered, to great effect in his future work, is that religion lives or dies in a competitive marketplace.

Here is the economic approach to religion:

As Stark and Bainbridge viewed the world, individuals organized themselves according to exchanges, thus accounting for groups and power structures. People faced scarcity of resources. Every choice for one thing was a denial of another thing. People also tried to solve problems in how they lived their lives and understood reality. In the latter case, religion offered explanations, and the exchange of belief systems was an important human reward. Individuals made religious commitments and joined groups -- cults, sects, and churches -- on the basis of judging the costs and benefits of the explanations. Founders of religions,priesthoods, and organized religion all supplied these explanations. And, as history testified, consumers were eager to have them, whatever the cost.

This economic approach explains why "liberation theology" grew quickly in some areas of Latin America and not in others:

...where Protestant competition was highest, the bishops were strongest in opposing the government, their former benefactor. In Brazil, Chile, El Salvador, Nicaragua, and Panama, for example, religious competition was high and it was in these countries that the bishops' anti-regime rhetoric was loudest during the 1970s. Opposition to the regime was especially acute in Brazil and Chile were Protestant proselytizing at the grassroots was the most aggressive. In countries where bishops remained neutral toward the dictators -- Argentina, Bolivia, Honduras, Paraguay, Uruguay -- there was little Protestant competition.

I liked this insight and reference to the earliest serious economist:

Adam Smith also looked at the powerful force of individual self-interest. But in passages of his Wealth of Nations that are often overlooked, he spoke of how religion can discipline the lives of individuals. He identified two "schemes or systems of morality" in most societies. The wealthier class, which has wealth enough to adopt "loose" ethics and morals, is nevertheless kept in check by the need to retain reputation and credibility in society. In the lower classes, or in the anonymous setting of urban life, people with fewer resources or no standing in society have little to rely upon. That is the setting in which strict religions provide an "austere" moral system and small groups that pay attention to the behavior of their members. On vices and the "common people," Smith said that "a single week's thoughtlessness and dissipation is often sufficient to undo a poor workman for ever.

This book by Witham points out that there are benefits and costs to religion. I think as the above shows, most of the benefits accrue to the lower classes who use the strictures of religion to help them face the cruelties of the free market economy. But here is a more general statement:

Another study of sixty-six nations covered by the World Values Survey also found a correlation between religion and upbeat economic activity. The survey asked about economic attitudes toward cooperation, government, working women, legal rules, thriftiness, and the market economy. There did not seem to be a clash between religious people and basic market economics, the study concluded. "On average, religious beliefs are associated with 'good' income and growth." As we will explore later, however, religion also creates enclaves rather than openness to markets. The one deleterious finding in this sixty-six nation survey, for example, is that religious people are more prejudiced against outsiders. They are also more likely to oppose women leaving the home for the workplace. Religions differed on these and other topics, but overall, "Christian religions are more positively associated with attitudes conducive to economic growth."

This book is interesting and thought provoking. It has a perspective on religion that I find useful, but I remain antagonistic toward the more "strict" religions while finding the liberal religions acceptable but not of personal interest to me. I follow a scientific world view. I enjoy the religious impulse and understand it, but I remain convinced it needs to be tamed by a watchful government that ensures no aggressive religion "takes over" and dictates beliefs. History is too full of religious tyrannies for me to rest easy.

The book is well worth reading.