Russ Roberts

Anthony Gill on Religion

EconTalk Episode with Anthony Gill
Hosted by Russ Roberts
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Anthony Gill of the University of Washington and host of the podcast Research on Religion talks with EconTalk host Russ Roberts about the economics of religion. The conversation focuses on the relationship between religion and the State--how does religion respond to a State-sanctioned monopoly? Why do some governments allow religious liberty while others deny it? The conversation concludes with a discussion of how property rights interact with religious freedom.

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0:33Intro. [Recording date: December 23, 2013.] Russ: Before getting started I want to mention that if all goes well, this is the first episode of 2014, and I'd like to hear from you out there in the listening audience about your favorite episodes of 2013. So send me an email with a list of your 5 favorite episodes. They don't have to be in order. But it's episodes, not guests. So if you like Mike Munger, for example, you have to pick and choose which episode of his is your favorite. You can put more than one in the top 5, if you'd like. Send me an email at mail@econtalk.org and put Favorites in the Subject line. And after a few weeks we'll tally the results and release them via Facebook, Twitter--you can follow me there @EconTalker--and on my blog at CafeHayek.
1:50Russ: Now for today's conversation with Anthony Gill on the economics of religion. I want to start by putting this in perspective. Economists and political scientists don't pay a lot of attention to religion as a subject worthy of study. Why do you think that is? Guest: That's a really interesting question and it seems to be a very big blind spot within economics, political science, and a few other fields as well. And I'm amazed that when I first started my career at the U. of Washington and was researching religion and politics and somebody came up to me and said, 'Oh, after you finish writing this stuff you are going to go on to more mainstream political science'. And I thought a minute and I said: Well, as political scientists and there are political economists we examine organizations, formal organizations such as states and political parties and things like that, and I asked his person, 'What is the longest-standing historical institution that's alive and well here on earth here today?' And the answer is the Catholic Church, as a formal hierarchy. You can either date it back 2000 years if you want to go back to the birth of Christ, or, say, 1700 years if you want to think about the formalization of it at the Council of Nicea. And I bring this to mind because most of the states and other organizations that we study and put a lot of effort into, they've gone. They've come and gone. Every Chinese empire has come, gone, hasn't lasted 1700 years. The Egyptian empires, the Soviet Union, etc., etc. And I turned to my colleagues and I said, Well, wouldn't you want to know why an institution like this has existed for so long? And it gets them to pause. They say, Oh yeah, maybe we aren't really paying enough attention to religion. So it is rather interesting why we don't. There might be some reasons for this. I think part of it in the modern academy today, we tend to have--well, I-don't-know-anybody-who-voted-for-Nixon syndrome, that not too many academics go to church. There are still a lot of people that do, that attend religious services. But it's not as frequent in the common population, so it's a little bit out of sight and out of mind. And other issues such as that it might be very difficult to quantify the various aspects of religion. And we tend to think of it only in terms of theologies rather than in terms of institutions. And theologies are very difficult to measure. We can't put them into our regression equations or anything like that. So, 'well, if we can't measure it we can't really study it and it must not be important.' Russ: I think there is--the I-don't-know-anybody-who-voted-for-Nixon, which I think, by the way, is a quote from Pauline Kael, the New Yorker reviewer of film, which was a statement about the social circles that she swam in, and it is certainly true of academics that we swim in similar social circles relative to religion. I think there is something more than that, though. It's not just out of sight, out of mind. There's something--for most academics, religion and religious practice is alien. And because it's so alien, I think it's hard for people in the academic world to think of it as something that is rational or predictable or amenable to analysis, partly for the reason you mentioned, which is the measurability issue. But I think also it's something different. Most academics don't think of it as something that falls within the purview of their disciplines. Guest: I think that's true. As scientists, as social scientists, we often try to figure out the logic of life and the causal processes. And a lot of religion or at least the very core of religious beliefs is that, 'I'm going to take a leap of faith. I don't know whether God exists or not, but I'm going to believe, and I'm going to believe this theological story. I can't sit down and necessarily reason it.' I know some theologians have done this--Thomas Aquinas and Blaise Pascal have done that, for instance. But for most people it's just an act of blind faith rather than sitting down and reasoning. Now, that said, the actual act of believing in God or believing a certain theological doctrine is different than what we have in regular social life, that people do believe these things and then they come together in organizational forms and take actions. And all of those things actually do have a logical process to them. Churches exist in the world of scarcity, and as such, economics would seem to be applied to that. I've run across a number of philosophers and scholars who have said, 'Well, economics is good when you talk about banking or setting up a business but when it comes to churches, economic logic doesn't apply.' And again, I'm somewhat flummoxed by this. I said, well, a pastor only has 24 hours in a day; they have to allocate scarce resources whether it be monetary resources, volunteer resources. And so therefore they have to make decisions just like a business entrepreneur or anybody else would. And this is really where the study of economics of religion comes in. It's not so much analyzing whether God exists or not, but it's taking people's beliefs and seeing how they organize them in social life. Russ: And of course, most religious leaders have to be entrepreneurial, or, depending what country they are in, they are not going to have any customers. So, it can be useful to think of religion, not literally as a business, not as a profit-maximizing business, but as an organization that, as you say, faces many of the same challenges and constraints and informational shortcomings that any institution does. Guest: Absolutely. In fact, when I go around and tell people what I do, I will tell scholars and philosophers and they say, Oh, economics of religion--you can't study religion with economics; that's just silly. But when I talk to pastors and bishops and rabbis and say, 'This is what I do,' they are very responsive. They say, oh, yes, this is what I have to do on a daily basis; I have to figure out whether we are going to use our resources for our youth group or for our missions abroad. This, that, and the other thing. There are collective action problems, there are principal-agent problems they deal with. And so the actual practitioners of religion are very open to this kind of analysis.
8:16Russ: So, let's get into it. We had, a long time ago, Larry Iannaccone, an economist--one of the few--who does study religion. And one of his themes is that competition is good for the customer. It's good for religious followers, just as it is in other areas of economic activity. What's your take on that? And what evidence do we have that allowing religious freedom is 'good for' religious adherents? Guest: I think religious competition is very important for growing religion or religious vitality within a society. We can go back to none other than Adam Smith to talk about this; and I think you did talk to Larry Iannaccone about this in the past: but if you look at the full volume of Adam Smith's Wealth of Nations, in Book 5 he actually has a fairly long discussion what he calls 'adult education' that deals with this issue of religiosity in society. And one of the things that he notes, sitting there in Scotland, he says, 'Well, you know, if you have a state-run monopoly on religion, the clergy will'--and this is one of my favorite lines in the entire book--'the clergies will repose themselves on their benefices.' When they receive their sustenance from the states, which is forcibly collecting taxes from people, they don't have to do very much. They don't have to worry about getting donations from the congregants and giving them essentially what they want. And on top of it, they oftentimes ask the state to exclude competitors. And if you don't have any competitors and all your money is guaranteed from the state budget, there is little you have to do in order to really energize the congregation. And Smith went on and was looking across the Atlantic ocean; and the case of Pennsylvania specifically he mentions. And he says, well, they have a lot of religious freedom and the clergy there are required to, basically, for their own sustenance, engage their congregants and give them dynamic sermons and meet with them on a regular basis. And not surprisingly religion is extremely vital, vibrant in the United States. Russ: And there's no doubt about that. That's continued. We are a country that has an unusually high level of religious freedom and we have an extremely dynamic religious marketplace. But I've always wondered whether that's kind of an outlier--whether we are just unusual or different. It's possible. In terms of other countries, what other evidence do we have that there is--and as you admitted earlier, it's hard to measure, so it's hard to get empirical evidence. But what kind of evidence do we have that might suggest this is a more general phenomenon? Guest: Well, Larry and some of his colleagues have actually gone out and tried to measure this. He's used the index of industrial concentration, the Herfindahl index, in order to figure out which countries are more pluralistic and not; and has seen that countries that tend to be more pluralistic tend to have more active participation in religious organizations. Some of that has been challenged. People have decided the Herfindahl index might have some internal biases for this. But in my own work, and this was at the time that Larry was publishing some of his work, I went down to Latin America and I was very interested in why the Catholic Church during the 1960s and 1970s was really changing its pastoral tone and was taking a more what we would call preferential option for the poor. And in some countries that was happening, but not in all countries. And one of the interesting things that I discovered was that wherever the Church was taking this preferential option for the poor by engaging poor, creating what were known as Christian-based communities, and working with people more so than they had in the previous centuries, there were a lot of Protestants around. And I said, 'That's kind of funny; I wonder why that is.' And it was at the same time that I discovered Larry Iannaccone's work. And so I hopped a plane and went down there and lo and behold you found out that a lot of the Catholic priests in areas where there were a lot of Protestants were saying, whoa, if I don't get my act together, all my congregants, my flock, who are supposed to be Catholic--and they've been Catholic for 400 years because that's been the only church in town. But now they are becoming Protestants. I had better work much harder in order to retain these parishioners or to attract them back than I have in the past. And this was even reflected in church policy. During the 1970s and 1980s they had a theme of the re-evangelization of Latin America, and it was explicitly stated: Listen, Protestants are coming in; they have the freedom in some countries to do so now; and if we don't really engage our congregants, they are going to leave us. And so, not surprisingly, they put more effort into recruiting priests, importing priests in to minister to the population. As an effect, I would say that more people are engaged in religious activity today than say 100 years ago when the Catholic Church was basically the monopoly church.
13:53Russ: So let's talk more generally about the role of the state. The state interacts with religion, government interacts with religion, in all kinds of ways, sometimes regulating it, sometimes liberating it. Let's talk about some of the variation to start with. And then I know you have some ideas and theories about why these differences might occur. But certainly there's an enormous variety of ways that the state interacts with religion. So discuss some of those. Guest: Yeah. This is the bulk of my work, looking at what I call church-state bargains and how governments regulate religious organizations or alternatively decide to deregulate religious organizations, which is the issue of religious liberty and we'll get to why they might do that in a second. But, historically, I have noticed--when you take a broad sweep of history--you'll find out that church and state--and by 'church' I'm referring to other religious traditions as well, synagogues, mosques, etc. etc. These religious organizations form fairly tight bonds with the state. And in pursuing this line of research I sat down and I said, okay, first of all, what we have to do is figure out why the government, why political rulers or the state would be interested in this kind of thing. And you sit down and you say, okay, what do political leaders want? And the first thing that comes to mind, and this harkens back to a podcast you did with Barry Weingast on the violence trap a few months ago, was the desire to survive in office. And we know that here in the United States it's the reelection imperative: you need to win office in the next election cycle, otherwise you are not in Congress, and if you are not in Congress you can't implement policy; so therefore being elected is-- Russ: You don't have any fun, either. It's not just you can't save the world. Guest: That's true. Russ: You don't get that job. Everybody likes to keep the jobs they like. That's a pretty human phenomenon. Guest: It is. And it's actually one that we as political economists oftentimes overlook. We look thinking about the public interest rather than the interest of the person who is making the policy. And I think it's very important to start with. So, political survival is very important. And then once you are beyond that, the next thing that political rulers tend to like is revenue. And I should back up and say that the imperative to stay in office is not just something you see in democracies, but it's also in autocracies. That, okay, there's not going to be an election coming up in the Soviet Union or Zimbabwe or something, but all those leaders are very concerned about military coups, palace coups within their own ranks or within revolutionary movements. So political survival is first and foremost important. The second is basically bringing in revenue. Being able to control some of the resources of society. That way you might be able to build a nicer palace for yourself or distribute it to other individuals who pose a threat to you. So revenue becomes very important. And the third thing that I talk about, too, is economic growth. Most political rules would prefer to have economic growth rather than not have economic growth. We know that there are many cases that political leaders do not pursue policies that would seem to produce economic growth. Again this goes back to Barry Weingast's podcast episode that you had before. But it's because of those other things--political survival and increased revenue take precedence over that. So that's what political leaders want. And we have to look at the other side of the equation here to figure out how this church-state bargain comes about. And I've said, well what do religious leaders want? And there, I'm going to take religious leaders at face value and say they are very concerned about preaching the word of God. I will take that at their word, that they believe the doctrines that they promote. And they want to reach as many people as they can with this. So basically the preeminent desire of religious leaders is to maximize market share--if we can put this into economic terms. We could say they want to proselytize, evangelize, to as many people as they want to bring into their ranks. Now there are some non-proselytizing religions--Judaism is one of those. But it's not that they want to expand necessarily; but they certainly don't want to shrink. They don't want to disappear. And so maintaining a large number of people affiliated with your faith is good. And the other thing is revenue. And these leaders, the religious leaders, they understand that in order to bring in people, in order to evangelize and missionize, you need to have priests, clergy, who need to be paid; and you need to house them, etc., etc. So you need to basically bring in revenue. So now you start thinking about the connection between state interest and religious interest. And from the religious side, one of the easiest ways to make sure you that you can maximize your flock is to get the state to exclude all competitors. Because first of all it's very easy to set up a religion. It doesn't take that much: you've got some ideas and you walk around and you tell people and if they like your ideas they'll start to join up with you. And so that's great. It's not like building a steel mill or anything. And so religious organizations are fairly vulnerable to competition--false sects or different competitors. And it's really tempting for religious leaders to go to state officials, who have the ability to coerce the population, and say, Hey, could you keep these 'false religions'--you hear that term a lot when you deal with state churches: Oh, these false religions will corrupt the culture--could you keep them out? Put up barriers or just put them on planes and get them out of the country, if their missionaries tend to come in. And the other thing, too, that the church is very interested in or religious organizations are interested in the state, is that it's a pretty easy way of getting funding. And for religious organizations it's oftentimes very difficult to get people to contribute. Most of the time it's voluntary contributions. Difficult to price theological doctrines. So, the constant complaint among clergy even today, but you can see this throughout time, is that people never tithe. They are supposed to give 10% and they only give 2%. So how can we solve our resource problem? Well, again: Let's go to the state, go to the government, and say: We're very important; could you possibly fund us? Collect some taxes and in places like Germany today, they still have on their income tax you pay into the Catholic Church or the Lutheran Church. Then the state collects it and distributes it back to the different organizations.
20:54Russ: So, that makes sense to me, right? The only thing that I would add is that just as public officials have a mix of private and public motives, they care presumably about making the world a better place, [?] about themselves. I suspect that many in the clergy have the same temptations, across the religious spectrum. So they do care about their faith; they care about their adherents; they do care about resources to make the world a better place. They also care about resources for themselves. So they want to be paid well; they want to have influence; they want to have nice--everything that most human beings want. There are some who don't; there are some religions that emphasize the ascetic life. But in general, religions tend to amass power and resources that seem often to go beyond the goals of just helping the religion. And in my experience those get worse when the role of the state gets tighter. So when they are in competition with each other they tend to serve the religion and their adherents better than when they have monopoly and they can exploit some of their own personal desires, whether they do that knowingly or not I don't know. And I might be wrong. But that's my first thought. My question though is, in a situation of an authoritarian state, most authoritarian states it seems to me through history often have seen religion as a competitor. And so their overwhelming desire, of officials and politicians in those dictatorial, authoritarian regimes, is to crush religion, not to fund it. Is that not a general truth? Or is it wrong? Guest: There are a couple of cases that really stand out in there. I think most people would say there's the Soviet Union, when Lenin and Stalin really went after the Russian Orthodox Church and tried to purge it. And then also contemporary China where underneath Mao and during the Cultural Revolution, any whiff was trampled upon; and nowadays there is the official church that the Chinese government controls; there are black market churches that are unofficial that they try to stamp out; and then there is this gray market in there. Those are the two big examples. But again if you go back and you look historically and you look at various kingdoms, there is usually this church-state alignment. And so trying to understand why the Soviet Union would stamp out religion or why China would takes on another part of the research agenda. And I want to come back to that in a little bit. But answer your question about how churches do tend to--think about public good for the world but then when they get attached to the state the individual interests oftentimes take over. It's a very insightful comment, because you take a look at Christian history: its first 300 years it was pretty much on its own in a fairly hostile environment. There was a degree of religious liberty there, but occasional persecution. It's when Constantine has his conversion and says, you know what? We're going to recognize the Christian Church; and through the Council of Nicea and over the next few decades basically starts to fund it. That's when you start seeing the Church of Power, to use a term that Rodney Stark has used, rise up. And to finish the equation I was talking about before in this church-state bargain, religious organizations have always historically for a variety of reasons been very good at solving collective action problems. And they can mobilize people in ways that are just utterly fascinating. A lot of social scientists study new social movements, and I said, you should really think about studying old social movements, because churches have long ago solved this collective action problem. You think of the history of Judaism over 5000 or so years; they still are a social movement; and they are able to mobilize people, to get people to act upon their beliefs. And this becomes a big threat to political rulers. So, here's another source of authority; they have a set of rules and behavioral norms that they adhere to. And if this is used against us, well that could threaten our number one priority which is to get up tomorrow morning and make sure that we're still in office. And so from that regard, rulers are very interested: okay, if we can co-opt the power of this religious organization we'll go ahead and do it. We'll keep out your competitors; we'll keep funding you; if you need funding, that's great; just give us ideological legitimation and/or you keep your people from organizing and rebelling against us. Russ: That's a great point. It really is--if you can't beat 'em, join 'em; and joining 'em can be cheaper than beating 'em. That's a great way to think about it. Guest: Exactly. In the case of the Soviet Union, then, you would say, well, if there's ever a change in leadership it would seem that the rational strategy would just be: go to the Church and renegotiate the deal, saying, here it is; the old rulers, we put them in prison or hung them, and we're the new ones in charge, so we'll keep away your competitors and keep funding you. The question though is: to what extent the church can offer a credible commitment in supporting that regime. And in the case of the Soviet Union, the Russian Orthodox Church was so tied to the Czars that folks like Lenin, with a very rapid change in leadership, would say, well, I don't know if we trust you folks. And so it was just easier to crush them. What is interesting though is that Stalin--and we know Stalin as not one of the great guys in history. He wasn't very accommodating to many of his opponents. But nonetheless he falls into this trap, too, of supporting this church-state bargain, because as WWII starts to roll around and he's saying, 'I'm worried about the Germans off there to our west, and we need to rally the Russians for nationalism,' he turned to the Russian Orthodox Church, he says, 'Listen, guys, sorry about all the killing of your clergy, but we need to support you now; we'll pay you for your clergy,' etc., etc. And they basically set up a modus movendi. You see this I think as well with the Chinese government as well. The rapid revolutionary change; anything from the ancient regime we have to get rid of rapidly and so we crush all possible forms of dissent. But over time you say, well, I guess we couldn't really crush this religion, so let's start to try to deal with this. And you see this in the late 1970s or early 1980s; Deng Xiaoping says, let's--you want to have religion, we'll give you an official religion. And I can't remember the exact name but they have some consortium of Christian churches which is officially recognized, and it's a pretty tame church, and they let that exist. There are also these other groups that are unofficial that they tolerate so long as they don't pose a threat to the survival of the regime. Anne Applebaum has written an interesting book, I think it's called the Iron Curtain, where she talks about, in Eastern Europe, how the Soviets reacted to all kinds of volunteer organizations, not just religion but clubs and other forms of what is called 'civil society' because they realized that these organizations, not only are they competing in the sense that they were establishing an identity for people independently of the state, but also they were a place where people could get together, learn to trust each other, potentially cause some trouble. When you break up groups like that and you make people suspicious of their neighbor, it gets really hard to conspire. And I think that was one of the factors.
28:55Russ: The other thought I had about your conversation on the Soviet Union is that, I assume there are a lot of different sects and religions in the Soviet Union up until its fall in 1989 and early 1990s. And that made it a lot harder. There wasn't an obvious team to back. There was a lot more existing competing elements in the religious landscape, I would think. Guest: And you are talking here in the early 1990s? Russ: No, I'm thinking about from the Revolution onward. I'm thinking 1917 to 1970, 1980, 1990--the years of the Russian Revolution when the Soviet Union was established certainly post-WWII, the challenge of co-opting religion would be a lot harder. It's one thing to say, the Russian Orthodox Church is the big player so you are nice to them. But when you have the diverse set of peoples in the Soviet Union that they had, it would seem to be a trickier problem to create a state monopoly. Guest: Yeah. That is very interesting. In part, if you look at Russia per se, the Russian part of the Soviet Union, that was largely dominated by the Russian Orthodox Church, and this church they bargained leading up to 1917. They were very cozy with the Czars and so pretty much everybody was Russian Orthodox by fiat. And as the Soviet Union expanded, it expands into some different territories, going on the 'stans in the South, and so you start bringing in Muslims; and then as you go out East there are some Buddhists there. And then you also have the Jewish population that was interspersed throughout there. What's interesting about these different churches was that they tended to be very ethnically and geographically bounded. And so there wasn't a great deal of competition. And so the deal that you cut with the Russian Orthodox Church, this modus movendi that Stalin eventually came to, you can kind of do that in the South with Muslims. Russ: That's interesting. Guest: You say, as long as you don't challenge us, okay. And the same thing--as long as Jews didn't cause any problems, fine, you do your Jewish thing and no big deal. Same thing with Buddhists. Russ: Yeah, but the Jews were kind of a special case. Because they were spread out. Guest: Right. Russ: And my impression of Jewish life in the Soviet Union is that it was never very good, and sometimes it was awful. Although there was a Chief Rabbi, who was--I don't know how much, if he was a pawn of the state, a pawn of the regime. To some extent, he was, I assume. And I think that's true of a lot of totalitarian systems; they are serving at the pleasure of the regime in a very different way than a leader of a religion would in a more free country.
31:39Russ: Let's move on to the other case, the other end of the spectrum. Why would political leaders favor religious freedom? Not just toleration or co-opting or creating a monopoly or a church-state bargain like you've been discussing, but why would politicians favor religious liberty? Which is surprisingly common in some dimension. Certainly historically we're living in a time when there is a relatively large amount of religious liberty in many places--not all, but many. What might explain that? Guest: I think we have to first start off by saying that religious liberty is a multi-faceted concept here, and it's not something that you either have or you don't have. And I think this is one of the misunderstandings we often get to. So when you say, 'we have religious freedom around the world quite a bit,' well, everybody has a constitutional delcaration that says 'freedom of conscience.' But the question comes down as how you regulate very specific aspects of religion to raise the cost or to lower the cost of going out and organizing your religious faith and organizing and proselytizing, etc. And if you start to look at it that way you start to see more variations, and start to say, oh, there might not be as much religious liberty today as we might think if we just look at that question. But to get to your main question, I found this to be a very interesting and puzzling one, especially from a public choice, political economy perspective: Why would a government that has control, has regulatory control over religion, ever want to deregulate that? It just would seem to go against the interests of the rulers. Well, we have control over this; they are supporting us; we've co-opted their leaders; why would we ever want to disestablish that? And again it goes back to looking at: What are the interests of the rulers? Because there are people who put pen to paper and decide to make these rules. And you have to think about, what are they trying to maximize? What are they trying to gain in life? And what other things are going around them at the same time? And before I get to that, the study of religious liberty and why it comes about has largely been a focus of scholars through an ideational lens, wherein people think-- Russ: What is that? Guest: In terms of the methodology or the theory of studying how things come about, certain scholars emphasize the role of ideas more than incentives. And so frequently, when I'm reading in the religious liberty literature, you'll see things like: well, John Locke sat down and wrote his "Letter Concerning Toleration" and that was very influential in London at the time, and then it got overseas and Madison read that letter and was very influenced by the ideas of Locke; and he told other people and they had a big debate about it. And the debate was won by the people who like religious liberty. And it's a perspective that many of us scholars tend to like, because we deal in the currency of ideas. Russ: Yeah. Makes us seem more important. It's a Keynesian argument: academic scribblers have more influence than you'd think. That's always an appealing idea. Guest: Yeah. And so you feel out of this, well, if you can just convince enough people then policy is going to be made. But when I sat down and thought about this problem--and I started by looking at the American colonies, the British-American colonies in the 1600s and 1700s, and said, well, is it just the idea? Because there were a lot of people that thought religious liberty was a really good idea. But there were also a lot of people who still didn't like it. And ironically, and I think many people forget this, but the Puritans themselves, we think about the Pilgrims coming overseas and landing on Plymouth Rock to escape religious persecution and so they are fighters for religious freedom; but as soon as they got over there to the Rock, and especially as the Puritans in subsequent decades came in, they set up their own state churches, essentially. And so religious freedom was fairly limited there. And so how did this stuff emerge? And again, you look at the incentives of politicians, of people who put pen to paper and write the policy. And they are interested in political survival; they are interested in getting more revenue; and they are interested in economic growth. And the most amazing thing--when I started to read the colonial history of the Americas, you saw this argument made continuously about how religious liberty and economic trade and revenue were connected with one another. So take for instance, William Penn. He's known as one of the great champions of religious liberty. He was a Quaker; settled Pennsylvania; and everybody is very impressed that he allows a great deal of religious liberty. And you can read his collected body of works, and he talks about the virtues of religious liberty. But when it comes down to it, when it comes time to write to the King--this is King Charles II. in the middle to late 1600s--he basically made a very explicit point to him. He said, listen, if you want to have economic growth in the colonies, which is going to get you a lot of gold doubloons or pounds or whatever the currency was, you need to allow religious liberty. And if I can, I have a quote from William Penn, if I could read that. Russ: Sure, go ahead. Guest: It's from a 1686 lettered called "A Persuasive to Moderation to Church-Dissenters, in Prudence and Conscience". And they have this lovely way of talking back then, so I'll try to clean it up for the 21st century audience. He says:
As religious persecution has many arguments for it--and here he was talking about the Puritans' saying if we let false sects then Christianity will decline--but as persecution has many arguments for it that are drawn from the advantages that have would come to the public, so there are diverse mischiefs that must unavoidably follow the persecution of the centers that may reasonably dissuade us from such severity.
So there he is warning, okay, maybe there is a case for restricting religious freedom, but here is a good case for why we should have it. And note where he goes with this. He says,
For they, the dissenters, must either be ruined, flee, or conform, and perhaps the last is not the safest. If they, the dissenters, are ruined in their estates and their persons imprisoned, modestly compute, a fourth of the trade and manufactury sinks. And those who have helped to maintain the poor must come under the Poor's Book for maintenance.
First of all, I have to love how he uses the word 'manufactury.' Some of these words are just wonderful there. But what he is telling the King is that, listen, we're Quakers here in Pennsylvania and we'd just love if everybody were Quakers. But there are Presbyterians that come over here; there are some Anglicans, and a few other groups that are coming in. And they are all pretty useful for society, because they make things, and they trade things, and if we excluded these people, the economy is really going to suffer; and oh, by the way here, King, if they suffer, you are going to suffer because you are not going to be collecting as much revenue. And this might lead to social unrest as well; and dear King Charles you certainly do not want that, if you remember that civil war you just had in England a few decades ago. And so it's a very explicit appeal. Russ: But I don't quite understand it. So, what he's worried about--there are a lot of arguments you can make for the virtues of religious liberty on economic activity, and maybe we'll talk about it in a minute. But he's worrying about, I thought, conformity. So why is he disturbed? If, say, Quaker faith becomes the only faith of Pennsylvania or if Puritan set of beliefs became the only proper and acceptable form of belief in Massachusetts, he is suggesting that it would be a less interesting and economically productive place. Is that because--I mean, conforming would seem to be okay. I think he must be implying that when faced with those choices of conform, or I forget the other two, that they'd flee, they wouldn't show up. Is that correct? Guest: Yeah, so I'm thinking of the context that Penn is writing in, and I think as a devout Quaker he would say, I would love if everybody was conforming to the Society of Friends' theological [?]. That would be a big win for him. But in reality that's not what the case is. In fact, Penn is dealing with some colonies just there to the east of him called the Massachusetts Bay Colony, that's filled with a number of Puritans. And any time a Quaker goes to trade in Boston or in Plymouth and simultaneously starts to pray or do their own Quaker thing or whatever that might be, they get thrown in prison. And the Puritans were known for hanging people; Mary Dyer, there's a statue of her on Boston Commons, that as a fighter for religious freedom, she was a Quaker that just kept going back to Boston; they kept imprisoning her and throwing her out, and eventually just hung her; said, don't come back again. Russ: That would do it. Guest: Yeah, it would do it. Russ: Sorry to say. Guest: And she didn't. She didn't come back again. Although maybe her ideas or influence did. But Penn was making the case saying, listen, I'm probably not going to convince all these Puritans to become Quakers, and they are not going to convince us Quakers to become Puritans. And if we continually exclude one another from trade with one another, we are both going to be worse off. So let's just put aside these differences, our theological differences, right now and go ahead and trade and allow for religious liberty. This was indeed a lesson that was learned in the Netherlands as well. The Edict of Nance was revoked in France; and the Edict of Nance was originally to allow French Protestants to have freedom in the country; and then under the influence of Cardinal Mazarin, I think the King was influenced to revoke this and to crack down on the Protestants; the Catholic Church didn't like all these Huguenots and they cracked down. And a bunch of these French Protestants fled. And Penn is actually making reference to this. They end up going. And where did they go? They went to the Netherlands, where the Dutch said: We embrace you. You are wonderful people, you set up businesses, you trade, and you have wonderful capital assets. Come and engage in commerce with us. And the Netherlands flourished at that period of time. And so Penn looks at this and says, we're in a world that there is going to be religious diversity. We can either fight it out--and we could possibly be the losers. Or we could just put aside our differences, try to engage our congregants as best we can; and let's just go about trading. Everybody will be better off for that. It's almost a balance of power argument, that if there is a multiplicity of religious denominations, it's just best that everybody sets aside their differences, agrees to disagree, and then goes about their daily business. Because in the end what you see is everybody flourishes.
43:25Russ: Well, the other thought I had, which I think is a Hayekian point in some dimension, is that when you live in a pluralistic world, you are forced to be tolerant to some extent. And it helps for trade. If you are going to deal with strangers, which you have to do in a world of specialization and trade, it's good to be respectful of those strangers. It's good to have an ideology, which is another benefit the United States has, of this idea of a melting pot. It's not, in the United States, it's not just religious; it's ethnic. At least that was the idea. I think we've lost some of that, for better or for worse. There are some good things and bad things about it. The other thought I had is that throughout history Jews have been expelled from lots of countries. They've been put in jail and they've been hanged, and burned, and killed. And it's interesting you mention the Netherlands, because I think after the Spanish Inquisition, which starts in the late 14th century in persecuting Jews--and I assume others, but I am more aware of the Jewish part. The Jews ended up being expelled from Spain in the magic year of 1492, where they had been a very prominent part of the economy. They go to the Netherlands, a lot of them--the go a lot of places, obviously; they scatter around the Middle East, they scatter around the Mediterranean. But one of the places they go is to the Netherlands, which as you say was very welcoming of different kinds of people. And I'm sure they had a positive effect on the economy of the Netherlands. And I don't think Spain did so well after that. That could be a coincidence. Correlation is not causation. But certainly having an intolerant attitude toward other people versus a more tolerant one is going to change how well your economy performs. Guest: Yeah, absolutely. This is one of the things that William Penn is looking at, at the time. The other challenge that William Penn had was to populate his colony. And he just basically needed warm bodies there to get the economy growing. And so he said, listen, we're Quakers here, I'm a Quaker, but if we only restrict to the Quakers not enough people are going to come out. And so, you know, I've seen the ill effects of my brethren in the Massachusetts colony be persecuted; they don't want to go there. But what if we let Puritans come by us? Or Presbyterians? Or German Lutherans? In fact, he actually advertised for people to come to this new colony, in Germany, and said, 'We promise you religious liberty. You are not Quakers; we're Quakers; but you know what? That's fine. You come and be industrious; we'll populate this area; and it will work pretty well.' I don't know if you know this guy but this will be something fun for the listeners here. There is a political economist, he is known as America's, the United States's first political economist, a guy named Tench Coxe. Have you heard of him? Russ: I have not. How do you spell it? Guest: It's a very strange name. Tench; and then his last name is Coxe. Interesting cat. He's probably not very well known because his economics is all over the map. He was free market; he was interventionist; etc., etc. He wrote in 1794 I believe; he wrote a collection of works called a "View of the United States of America." And he noticed what Penn had been saying. He said, 'Such is the present situation in Pennsylvania, which is more or less the same in several other states where they have religious liberty: New York, Maine, Virginia, the Carolinas, Georgia, Vermont. But though not so in the rest.' And here he is pointing his finger at Massachusetts. 'The principle difference is that they are so fully peopled--so this is Pennsylvania, New York, Virginia--they are so fully peopled that there are no new lands of value unsold and farming lands which are not improved. In those states, agricultural, commerce, manufacturers, the fisheries, navigation afford comfortable sustenance and ample rewards of profits to the industrious and well-disposed amidst the blessings of civil and religious liberty.' And so he looked across [?]--Pennsylvania, what a multiplicity of different concessions. How wonderful and how productive you are. But when you restrict certain people from coming in on some criteria that's not at all related to whether or not they can make good furniture or watches, glasses, whatever it might be, you aren't going to flourish. So religious liberty set that aside. And oh, by the way, we should make this a general policy here in the United States. He was one of the big advocates of, as a member of the Continental Congress, of the first Amendment. Russ: That's nice to know about. I look forward to learning more about Tench. I'd like to know how he got his name--both first and last. It sounds like a pseudonym. He's actually a well-known person hiding, masquerading, under the pseudonym of Tench Coxe. What a great name. Guest: Yeah. You would think that is. But they had such great names back in those days. There was Gouverneur Morris and Cotton Mather--you have a name, your first name was 'Cotton.' It was a wonderful name. In reading some of the history of the Colonial Americas, I just happened to stumble across somebody in a footnote, had read something, oh, Tench Coxe said religious liberty is important; I go, well, who is this guy? And they called him the first political economist of the Americas. I said, well, I've got to look into this guy. And I pulled out his book; he's a political economists much in the 18th century sense in that he was examining much of social life. One of his observations was on religious liberty. I should also mention: he was also a big advocate of the Second Amendment, of the right to bear arms, and stuff like that. So he was a very interesting guy. Russ: We'll look into him and put up some links if we can find some.
49:26Russ: Let's move on to a different topic that I know you've written about lately, which is property rights. Why are property rights important to religious organizations? Guest: Well, as we mentioned before, the concept of religious liberty is really multi-faceted. It's somewhat incorrect to look at it as a dichotomy--you either have it or you don't. Because again, the way I view it, is any kind of restriction or that raises the cost of religious adherents who want to organize and proselytize, that's a restriction on religious liberty. As most economists, even the most libertarian economists, know, there are going to have to be some rules and laws in society. You can't have a completely religiously free market, saying, we allow murderous sects to exist for the sake of religious liberty. No, because that imposes externalities or bad things on other people. So there can be some limits to this. And the question is how you draw those lines. And when I teach my political economy classes, students are all, well, choose the best policy. And I say, okay, let's choose the best policy. But when it comes to [?] that policy, you do have to draw a bright line. So, where do we draw the bright lines? Now, interestingly, one of the areas where religious liberty issues are really becoming important here in the United States as well as elsewhere around the world, is this issue of property rights. And people go, why would property rights matter? Well, religious individuals oftentimes like to congregate. They get together and form groups and they like to have regularized meeting places where they can come and profess their faith together. We call these churches, synagogues, mosques, etc. And having access to that space is very important. And what you can do with your property and your physical assets such as building as well as other assets such as the people who work for you, etc., becomes very important. And one of the things that I noticed about a decade ago is that a number of local governments around my area here in the state of Washington were really trying to zone churches to the nether world, in many cases. There was actually a case in early 2001 where the county that I live in declared a moratorium on church growth in the unincorporated or rural areas. I said, Well, that's kind of odd. The argument that they made for this is that, well, if you build churches out there in the rural world, then [?] subdivisions will crop up around there and it will create a lot of congestion; it will ruin the rural world, landscape; and that will just be horrible. And I scratched my head because at the same time that they are trying to prohibit churches from expanding in these areas, they were building these high-density neighborhoods in the same areas. And I said, well, hmmm, what is going on here? Why do they say they are concerned about churches creating congestion but still building these very high-density suburban housing complexes? And again, I go back to: What are politicians interested in? They want to get re-elected. They want government revenue. Aha. If you give 20 acres of land to a church, that's 20 acres of land that is not taxed at the same rate as, say, 70 standalone houses. And so one of the big threats that I've seen emerge in the United States today is how governments are biasing decisions against churches in order to find uses for land, real estate, and property that generates them more tax revenue. And there was never a clear case in one that happened down in southern California, a little more than a decade ago. There was a church called the Cottonwood Christian Fellowship[?]; it started as a bible study group. And they collected their nickels, dimes, and quarters and saved up to, as they expanded, build a very large, what we'd call mega-church now. And right when they were about to break ground in the city, the City Council stepped in and said, Nope, we're declaring eminent domain, and you cannot use this property, which you purchased legally, for this kind of purpose. Because it would create all sorts of problems. One of the arguments that the City Council made was that building a very large church on this plot of land would actually create congestion. So, what are you going to use the land for? Well, it's going to be a big box retailer. Because of course there's never congestion around a Wal-Mart or Costco. Russ: That's just such a fascinating example. Because the property tax aspect of it is obviously very germane to the interests of those politicians. Having said that, it's hard to believe that would survive a 1st Amendment challenge. Guest: And that is really interesting. And this is I think something for people who are interested in this topic need to be aware of. Because that court case--and it went to court and was winding its way through the various levels of court systems--it was eventually settled out of court. Somebody with some property just down the road said, We'll sell you this and can everybody be okay, and all the parties got together and agreed to sign. But the case was very reminiscent of another Supreme Court case that was going through the system at the same time and eventually did make it to the Supreme Court, which was Kelo vs. New London. Which is an immensely important court case. I'm surprised that so many people are unaware of it. And the argument was that tax revenue could be considered a public good and therefore justified eminent domain seizures by local governments. And previously, eminent domain was only invoked if you had some kind of physical building--a sewage treatment plant or a freeway that could only go through this neighborhood. But now you've opened the Pandora's Box of tax revenue as a public good, because you can use it for police and firefighters and puppy dog shelters, etc., etc. It give local governments enormous power. Russ: And temptation. Guest: And temptation. Yes. And I remember when that Supreme Court case was decided--so many local officials came out and said, Don't worry about it; we're not going to just start taking your property. And two months later they were talking about gentrifying downtown neighborhoods and taking people's property away from them. Russ: But, there was a legislative backlash, because people were very upset about it. And a lot of--my understanding is at the time--maybe it's changed since then--but a lot of legislatures tried to reverse--not reverse, but assure people that they would not take advantage of that. Is that true? Guest: They did; and I remember this in the state of Washington there were efforts to do this. Local city councils made commitments: Don't worry, and that. But if you just start looking you see all these little expropriations based upon this. And all these things are going to have to be legislated again, and I think this is going to be a big area for legislation in the future, and one that affects churches. Because when it comes to it, I don't think it would be politically astute to use eminent domain to seize an existing church. That looks like you are kicking puppy dogs. And so no politician would want to do that. Plus you have the collective organization, the collective action of the church really can bring a lot of people marching downtown at city hall. But, a church that wants to expand its property or wants to plant a church somewhere--it's going to be much more difficult, because now governments can say, Well, you know, you are not going to pay very much tax on that property that you have; it tends to be tax exempt or taxed at a much lower rate. And we're going to put in the local Piggly-Wiggly store here because they are going to generate more property tax revenue and sales tax revenue, etc., etc. And so there will be a tendency toward a bias against church growth in some of these areas. Now, there is a piece of legislation from Congress known as the Religious Land Use and Institutionalized Person's Act that tries to prevent against that, trying to say, You can't discriminate against churches just because they don't generate as much revenue as a big box store or something of that nature. But its intention, I should say, with that Kelo vs. New London, and I think if Kelo vs. New London is ever overturned or decided differently, it's going to be based on some kind of church that says, Listen, we want to build a church here but you are excluding us because this grocery store is going to generate more revenue; you can't do that. It's something that I think is coming down the pipeline in the next decade or so.
58:51Russ: So, let me just go back to this First Amendment issue, because I think it's going to be relevant down the road. And I want to close by asking you a different question, because we are getting short on time. I've been involved with a couple of synagogues that wanted to put new facilities in neighborhoods that were not zoned for a church or a synagogue or a religious institution. I'm not sure--I think they were zoned for houses, period. So, putting anything there other than a house was probably not allowed. So, somebody bought the land. The religious community, the Jewish community bought the land, the synagogue, and then they wanted to build something there. And they were, both times that I was involved in it, challenged by local residents who for a variety of reasons--they didn't want a synagogue in their neighborhood--it was usually done on congestion arguments, that was the usual argument. In both cases, although it appeared they had the law on their side because of the zoning issue both cases that the synagogues won and the buildings were built despite the zoning regulation because of the First Amendment. And I think--I'm not sure there has ever been a successful stopping of an organization that wanted to build a religious building because of the zoning regulation. I think it's very different to stand up to that 1st Amendment. But I think your point, which is that it's a slippery slope or gray area, is the right one. It's going to be interesting to see how that plays out. It's a fascinating example. It seems to me the way to solve that problem for people who care about religion is to give up some of that subsidy and the tax-exempt status. There's an economics argument for a tax-exempt status for a religious institution, which is that it's common property to some extent; it helps community members overcome some of the free-riding problems by making it a little bit cheaper. But it seems to me on purely moral grounds--and I say this as a person who is actively involved in his synagogue and makes contributions and understands that these are real issues--but still it seems to me that to force people who don't agree with your principles to subsidize the tax codes seems to me to be just wrong. And I think as people who care about religion we should give up that subsidy and make it more attractive for the state to not be prejudiced against religious institutions on those property tax grounds. Guest: I'm very sympathetic to that view, with the caveat that any time you start introducing complexity into the tax code, you open up this issue of rent seeking, where I can get the subsidy because I do wonderful things for the community, etc. The argument that you are making, that I'm very sympathetic to, for me really requires a much simplified tax code that is equally applied across all individuals and groups in society and is very transparent and difficult to change. Now, if we could get that I would be one happy camper. But maybe that's a topic for another interview. Russ: We're all in favor of that; we don't know how to get there from here. We're not all in favor of it. Two of us are--you and me.

COMMENTS (23 to date)
Morgan Dubiel writes:

If there were no NFP exemption in the tax code would there even be corporate taxes? How many churches and other NFP organizations would sit silently as their taxes went up and up?

Matěj Cepl writes:

I really liked the show, but I have just two nits to add:

* Although economical thinking is usually exercise in cynicism, I think it would be fair to emphasize that among people of faith there is a bit higher probability of finding somebody whose action is driven by higher goals than safety of his position and safe income. I just saw again the movie “Amazing Grace” about William Wilberforce and I don’t see much in safety coming from his actions.
* On the other hand, I have probably much more cynical explanation for the Founding Fathers will to promote religious toleration. When having one common enemy, I don’t see any other way how to unite all those diverse sects living in then America (heck, even Catholics in Maryland ... that must be really tough accept for good Englishmen).

Anthony Gill writes:

For Matěj Cepl,

1. First, I would caution one on thinking that economics is an exercise in cynicism. I actually have been quite joyfully liberated by understanding what I call the "wonderment of the mundane" -- e.g., the story of "I, Pencil" wherein hundreds, if not thousands, of anonymous strangers cooperate via voluntary market transactions to produce a simple writing instrument. It does not take any "higher goals" to motivate people to provide such a useful product, that has drawn such beautiful pictures and penned (or penciled) inspirational literature; just people pursuing their own self-interest by trying to meet the needs of others.

That said, note that during the interview that I said that I take religious actors at face value -- i.e., that they are interested in spreading the Word of God to people and perhaps celebrating God's glory by helping others. Nonetheless, even the most virtuous of actors (e.g. Mother Teresa) live in a world of scarcity and must make trade-offs. Sometimes these decisions might seem rather crass to our eyes, but are perfectly rational from the institutional vantage point of those actors.

When it comes to trying to promote one's faith, one of the main obstacles that most clergy encounter is that their "industry" is one with low barriers to entry and as such is very vulnerable to competitors. If you are ardent in your belief that you have "The Truth" (capital T), then you would want -- for the good of your flock -- to protect them from false doctrines. With minimal resources, turning to the state for assistance in raising barriers to entry (e.g., banning missionaries) is an attractive "low cost" (to you) policy. Let's cooperate with the state to make it easier for us to evangelize the population!

This plays out in a very interesting way with respect to the Catholic Church. While promoting the idea of religious freedom during Vatican Council II (Dignitatis Humanae), Catholic bishops pushed for greater religious freedom in Asia and parts of Africa where they were the religious minority and would do best with fewer restrictions on religion, but were at the same time lobbying governments in Latin America for greater restrictions (often property restrictions) on Protestants, who were encroaching in their territory. Same institution, same doctrine, but different actions/choices based upon their incentive structure.

Anthony Gill writes:

Second comment for Matěj Cepl:

2. As per your second point, my book "The Political Origins of Religious Liberty" talks exactly about your second point. During the mid-1770s it became imperative to create a sense of unity within the nation to mobilize forces against England. Although certain denominations tend to have a dominance in some regions (e.g., Congregationalists in New England, Anglicans in Virginia), no single denomination had a majority market share across all 13 colonies. It was in the interests of all patriots to follow a policy of tolerance (later institutionalized as religious liberty) nationally. Interestingly, a few state churches still existed into the early 19th century, most notably in Massachussets and Connecticut.

Perhaps more interesting was the colonists response to Catholics. Up until the War of Independence, Catholics were much hated and discriminated against and the British declaration of the Quebec Act only fueled this anti-papism. However, when it came time to rally the support of the French and French Canadiens for the war effort, Catholics were tolerated and given greater freedoms. See Charles Hanson's book, "Necessary Virtue: The Pragmatic Origins of Religious Liberty in New England."

The points I was making during the interview tended to relate to the late 17th to mid-18th century. Folks like William Penn and Samuel Davies made explicit appeals to the king of England that promoting religious liberty (via the 1689 Act of Toleration in Britain) would lead to greater levels of commerce, which could then be taxed. "Please king, grant us the liberty we seek so that you can enrich your coffers." (Paraphrasing both Penn and Davies, among others.) You can find several more examples of this in my book.

Anthony Gill writes:

As for Morgan's comment:

I really enjoyed our (all too) brief exchange on the tax code and religious organizations. I could have talked about this for hours, but you probably got the gist of my main point -- I'm all for taxing churches to the extent that we have a simplified, transparent, and difficult-to-change tax system.

Indeed, I think it would be worthwhile to raise a more general discussion about the taxation of churches as a means of opening the Pandora's box that is our current tax code, and hopefully prompting the creation of a system that yields less rent-seeking opportunities.

A few delightful educational nuggets about tax history would arise in this discussion, including how the 501(c)(3) tax exemption that limits the political action of clergy on the pulpit came to be. This part of the tax code was largely the result of Senator Lyndon Johnson trying to silence some of his critics during campaigns back in the 1950s. As such, the "tax exemption" of churches doesn't really come "free," but at the price of a Faustian bargain wherein you trade some of your other civil liberties for the opportunity to incentive generosity. I find that a rather repugnant trade-off.

Nonetheless, I am fascinated by tax history and tell my students if they want to understand political history they need to study the "evolution" of taxation. Churches factor into this discussion and it is one worth having.

david writes:

I found this interview really interesting. The discussion about eminent domain/first amendment was particularly provocative. Russ, I'm not sure if you are familiar with Steven Eagle. He is a professor of law at George Mason. He testified before Congress about the Kelo decision. I've never met him personally but my mother, who lives in Bozeman, Mt., is somehow acquainted with him and his wife. She sent me this link to an interview he did on C-Span. http://www.c-spanvideo.org/program/314739-6 He seems like he would make an interesting -- and accessible -- guest.

Halvard writes:

Thanks for an interesting topic. This is meat to the bone for everybody with interests in political science, economy and history.

Some comments:
Scandinavia has countries with a state church. But the employees in the church do not get paid well. It is an expectation that they should follow their call and work for less. So even if it is a kind of monopoly, the priests and bishops do not get rich.

I know Soviet and China are used as example on dictatorships where religion was the enemy. But those are just two countries, and if we look at all the dictatorships the last 200 years, religions have had no problem and in many countries supported cruel leaders. Italy-Mussolini, Germany-Hitler, Spain-Franco, Chile-Pinochet, South-Africa, South-America. I have worked in the Emirates and Saudi.

But also look at Poland and the Catholics church, where the church did help on the road to democracy.

Religion can also be used to limit freedom. Just think about all the Christians in the South in the US up through the years. Southern Baptist Convention had no problem supporting segregation.

So as I said, this topic needs a lot more attention :-)

Kenneth Gauck writes:

Good podcast, but I would point out that the plurality of religions can be a complex issue. For example, Virginia wasn't tolerant of anyone, although Gill described Virginia as free at one point. Virginia began as Church of England, and remained almost exclusively so prior to the Great Awakening. Afterward, its diversity was a product of successors of the English Church in light of the new impulses of the Great Awakening, the Baptists and Methodists. Tolerating one's daughter religions is a different matter than tolerating rivals, because of the shared assumptions. Likewise, the case of Pennsylvania can appear to be diverse, and in some sense it very much is, but Penn didn't just recruit settlers anywhere, he sought out areas where other Protestants had undergone similar revisions that would be congenial to Quakers and were persecuted by local authorities. As such, recruitment in the Rhineland was heavy and in other area much less so. Its in the Rhineland where Calvinism and Lutheranism mixed most freely leading to the kinds of new approaches that Penn found likely compatible. So while the number of sects may seem significant, they were happy to settle among tolerant fellows of similar sentiments even when not formally the same. This is not to deny the importance that co-existing different sects had on the development of pluralism as a civic value in America, but to caution that this pluralism was often less distinct than we might imagine.

Samuel Luke writes:

Great episode. Only point I took issue with was the comment that after the 1492 expulsion of the Jews from Spain the Spanish somehow went downhill. Spain was of course the dominant world power for at least a century after.

Ron Crossland writes:

Enjoyable discussion and it does point to a couple of ways research could be conducted on the confluence of economics and religion.

Abrahamic faiths have an eye towards industry - in fact, to use a simplistic example, all versions of the "idle hands" proverb are used to promote a Utilitarian ethic. Both state and religious attitudes subscribe to this, despite Benthem's advocacy for the separation of the institutions.

One research angle then could be, to investigate to what degree religious affiliation/attitude influences economic thinking/behaving.

The second angle is to investigate the modern day replaying of William Penn's proposal. While one part of the proposal suggested diversity stimulates productivity, another part suggested the church's role in attending to the poor, relieving some portion of state expense. A taxation tit for tat. It seems this is being replayed in modern parlance with the zoning negotiations discussed toward the end of the podcast. It could be a fertile area for a researcher to tease out how a community makes preferential choices to tithe at Target rather than temple.

Anthony Gill writes:

@Samuel Luke,

It may have been a long downhill with a gradual slope.

Actually, this was Russ's comment and I probably should let him explain, but here is my take on it. The Jews were expelled in 1492 the same year that Columbus sailed the ocean blue. New colonies generated a new influx of resources into Spain via a mercantilist system and there is probably no doubt that this led to a spur in economic activity. The methodological question would be in the form of a counterfactual -- would that economic spurt been even greater had the Jews remained? Empirically, I would guess that there might be a way to examine the local economies around cities where Jews were concentrated and somehow compare them with areas where there weren't as many Jews. Maybe a study to this effect has been done, but if it needs to be done I will leave that up to someone more ambitious.

Anthony Gill writes:

Halvad writes:

Scandinavia has countries with a state church. But the employees in the church do not get paid well. It is an expectation that they should follow their call and work for less. So even if it is a kind of monopoly, the priests and bishops do not get rich.

The same might be said of many community college professors. Nonetheless, "reposing on one's benefices" need not simply entail a large salary. A secure, tenured employment and pension, along with housing allowances may suffice. Indeed, this was quite common among the Anglican clergy in the British-American colonies in the 18th century. They were given a modest stipend to serve as the local pastor, along with a house and plot of land upon which they could farm. But even beyond this, the trade-off between a lower salary and a "life of contemplation" might be one that some individuals prefer. And with low rates of religious attendance in Scandanavia, it is not like this is hard pastoral work! (Jesting, a bit, but I'm sure I will hear from some folks about this.)

Anthony Gill writes:

Halvad continues,

I know Soviet and China are used as example on dictatorships where religion was the enemy. But those are just two countries, and if we look at all the dictatorships the last 200 years, religions have had no problem and in many countries supported cruel leaders. Italy-Mussolini, Germany-Hitler, Spain-Franco, Chile-Pinochet, South-Africa, South-America. I have worked in the Emirates and Saudi.

One empirical correction to start with, which will lead me to my theoretical point. Other than a brief period of uncertainty, the Catholic Church, which was more or less the hegemonic religious institution in the country, did not support Pinochet in Chile. In fact, it is often hailed (along with Brazil) as being one of the most outspoken religious institutions against dictatorship in the region. Pinochet did get some support from a handful of Protestants (Consejo de Pastores), but there were also Protestants who opposed the regime or didn't make any stand. I write about this case extensively in my first book, "Rendering unto Caesar: The Catholic Church and the State in Latin America."

The interesting thing to note is why this occured, and the thesis of that book claims that were Protestants were competing successfully for the "souls of the poor," the Catholic Church had to take a more prophetic stand for the poor lest it continue to lose membership. (You could wait for the movie, but purchasing the book will actually give you a sense of what I'm talking about as well.) Where Protestants were sparse, namely Argentina and a handful of other places, the historic church-state bargain between Catholics and political leaders (often autocrats) stayed intact.

The case of Islam, with particular reference to Saudi Arabia, is interesting. While there are extensive restrictions on non-Muslims (i.e., little religious liberty), within the faith tradition there is actually quite a bit of freedom. Indeed, the organizational structure of Islam lends itself to a very competitive market in that each imam is a "mosque unto himself" and, in accordance with Adam Smith, cannot afford to "repose on benefices." They gotta work hard. In Saudi Arabia, some "flavors" of Sunni Islam do get preferential treatment, but for most clergy, the ability to pay for one's sustenance requires a great deal of hard work in tending the flock. In essence, the religious liberty afforded to independent Islamic clerics combined with the decentralized nature of the faith, lends itself to a vibrant religious landscape. I do think there needs to be more "economics of religion" research done on Islam; us folks who do it mostlyl work on Christian and Jewish traditions.

Anthony Gill writes:

@Ron Crossland,

It just so happens that I'm involved in a big research project to do just that. It is being run through the Religious Freedom Project at Georgetown's Berkley Center for Religion, Peace, and World Affairs with generous support from Templeton and Baylor. We are involving some very cool (and well-known) economists. I can't name names yet (I don't think), but one such economist's name might rhyme with Kimur Turan. (wink)

You can see "the opening salvos" via panel discussions over at my podcast, Research on Religion.

Jonathan Brown writes:

This was an interesting discussion.

I was surprised that Russ would so quickly concede that exempt status for religious organizations is somehow a "subsidy" to religion.
Ultimately, the exemption for religion is an organizational principle (as recognized in the First Amendment) - government is not granting anything. As we formed this government we recognized that there are some parts of society that are outside the purview of government ("render unto Caesar that which is Caesar's).

If you follow the logic that an exemption from taxation is granted by government - then government can ultimately take it away or modify it. That is not a road we should tread down.

David Zetland writes:

I was also glad to hear that both of you were in favor of removing the tax exemption for churches -- as I would for all organizations/charities/etc. The state's role in "anointing" one organization as socially useful over another (totally ignoring the benefit of for profit firms) is complicated at best and corrupting @ worst (and often). Zoning laws may have their uses, but taxes are abused. (I'm a fan of taxing individuals and property over orgs/corps)

Oh, and the Dutch have been "tolerant" for a LONG time, with excellent returns: www.aguanomics.com/2010/04/tolerance.html‎

Halvard writes:

Anthony Gill

You wrote:
And with low rates of religious attendance in Scandanavia, it is not like this is hard pastoral work! (Jesting, a bit, but I'm sure I will hear from some folks about this.)

This could be a sign that the countries are in a state where the population do not need to cling to religion as a last hope. What countries are score high on happiness, low on poverty, high on equality both money and gender, the Scandinavians. I guess you are right. It is not that hard work :-)

Is there one thing we know from history it is that religion has no problem living side by side with dictatorships. This was my point with listing up several countries where the church maybe not supported actively, but had a ok life side by side with the dictators. Just look at Christians supporting segregation.

Roger McKinney writes:
“But for most people it's just an act of blind faith rather than sitting down and reasoning.”

I don’t think that is the case at all. As someone deeply involved in religion, academic and at the street level, I would say that most people use reason and the small amount of evidence they have in front of them. I have never known a person who made such a leap of faith.


“' I know some theologians have done this--Thomas Aquinas and Blaise Pascal...”

Actually, hundreds of great theologians and philosophers have done it. Aquinas started with Aristotle’s arguments. Lately there was CS Lewis and today we have Alvin Platinga.

I think it’s important to understand that the Netherlands, originally the Dutch Republic, didn’t like religious freedom at first, either. They reluctantly accepted it after decades of bloody fighting with no clear winners. It was the least worst alternative. But after a few decades of tolerance they began to see the benefits, especially the economic ones. We should keep in mind that freedom of religion is nothing more than freedom of thought. If the state can take away free thought, it will easily take away property.

Economic history is even more suited to the study of religion and economics. Helmut Schoeck wrote in several places in his “Envy: A Theory of Social Behavior” that Christianity unlocked economic growth in the 17th century by finding a way to limit the effects of envy. And in the field of institutional economics, many have recognized that institutions are shaped by religious beliefs. Of course, some economic historians see the influence of the Church scholastics at Salamanca, Spain on the rise of capitalism because of their emphasis on property, limited government and free markets.

Charlie Weesner writes:

The discussion of religious liberty in Pennsylvania misses one item I think matters. Quakers, unlike any other religion that I know of that time period, emphasize individual relationship to God. There is no established clergy. The Meeting consists of gathering to observe, in individual fashion, God as you perceive Him.

That philosophical basis would seem to be more tolerant of alternate views and alternate worship.

Charlie writes:

The beginning of this podcast is very strange. The question, "Why don't economists study religion more?" is posed and the answers given are basically that Economists haven't realized it's important to study religion or that religion in general is a blind spot.

That's very strange. There aren't many economists with more visibility than Robert Barro, and he has worked on Economics and Religion (with RM McCleary)and published the work (among other places) in the QJE--one of the most important journals in economics. That it just hadn't occurred to economists to study religion is somewhat preposterous.

I found it striking that neither one of you made any attempt to offer an economic explanation for why there isn't more research into religion. After all, economics research itself is constrained by scarce resources. I think its clear that subfields in economics like Religion along with other humanities (notably history) are in relative decline, because the resources available to scholars in those subdisciplines are in relative decline. The salary differential between economists and the rest of humanities such as history and religious studies is stark and the gap is widening. How many young economics PhDs when choosing a dissertation topic are inspired to think, well if I don't get an econ job I can always go into a religious studies department?

Compare this to the growing and vibrant subfields like Law and Economics and many business school disciplines, that would allow aspiring scholars to lever their Econ PhD up to higher paying law school or B-school jobs. And we haven't even mentioned the public and private sector resources that stimulate fields like macro, labor, and mechanism design.

If we want more research into the Economics of Religion (and I'm not sure we do). We'll, first and foremost, have to devote more resources into the field.

Ed writes:

I listened to this podcast with great interest and admiration of Dr. Gill's recall of religious tolerance by William Penn and the Pennsylvania colony. Outstanding interview all around!

Great misunderstanding seems to follow much of the debate about religion's role in society and how much should be "accepted" or "tolerated." In a constitutional system like ours, where government's role needs to be restrained rather than enhanced, the role of religion should be straightforward, as it generally seeks to be a civilizing force to the "animal spirits" of our society and economy (I'm much more sympathetic to the Austrian school than Keynes so forgive me if "animal spirits" came across as an epithet!).

A capitalistic economy by definition does not concern itself with a social services net, but with increasing productivity and risk-taking to generate wealth - it seeks to remove the "weak" from competition, and give room for the "strong" to survive and thrive. Those who aren't able to plow the field or manage the corporation must accept a different (not lesser) role in society. Where "religion" comes in, especially the Christian church, is as an outward demonstration of love or compassion for the downtrodden or injured. So we see many Christian-based orphanages, elderly facilities, hospitals, and food banks operate around the country and world. They may not be perfect, but neither is a government system managing welfare, healthcare, or compassion for the poor!

A competitive system needs to have reinforcements to replace the players on the field who fall to injury. Thank you to Russ Roberts and Anthony Gill on one of the most fascinating topics yet on EconTalk!

Todd Kreider writes:

Guest Anthony Gill accounts for 7 comments. I don't remember this amount of feedback has ever happened on EconTalk, but it is a great precedent.

Gerald Smyth writes:

Regarding Tench Coxe: I bet his surname is a variation of Cox and pronounced the same....g

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