Economics Of Religion 101

Recently there was alarm exressed about wealthy benefactors within established religious denominations funding liberal versions of theology.  Conservative factions within these denominations expressed outrage that liberals would do such a thing.

 Conservatives have done this as well.  The founder of Domino’s Pizza funded lots of conservative projects within the Catholic Church and now is trying to establish a conservative town and University.

I know personally about wealthy atheists and gays funding liberal projects.  Some of the new atheist billboard activity is funded by an annonomous atheist.

But, the war of the wealthies can only go so far.  The direction of religious belief and participation has always been, and continues to be, in the street level marketplace of religion.

Here, people put money in the collection plate.  They contribute only if they like what they hear.  If not, they move to another church.  Some churches survive, others do not.  In this way, the theology preached from the pulpet is written by the faithful sitting in the pews.

I’ve read that what is unique today, compared to times past, is the tendency of people to change churches.  So, not only is the deity people worship an invisible one, the entire enterprise is guided by what Adam Smith called, “the invisible hand”. 

While the percentage of our population that is atheist continues to rise, the percentage of church people falls.  The marketplace treats us well.   Twenty years ago, economist Robert Heilbronner wrote, “Trying to stop changes in the marketplace is like putting toothpicks in front of a bulldozer.”

20 Responses

  1. entech

    … it is the irregular events of nature only that are ascribed to the agency and power of their gods. Fire burns, and water refreshes; heavy bodies descend, and lighter substances fly upwards, by the necessity of their own nature; nor was the invisible hand of Jupiter ever apprehended to be employed in those matters. But thunder and lightning, storms and sunshine, those more irregular events, were ascribed to his favour, or his anger. Man, the only designing power with which they were acquainted, never acts but either to stop, or to alter the course, which natural events would take, if left to themselves. Those other intelligent beings, whom they imagined, but knew not, were naturally supposed to act in the same manner; not to employ themselves in supporting the ordinary course of things, which went on of its own accord, but to stop, to thwart, and to disturb it. And thus, in the first ages of the world, the lowest and most pusillanimous superstition supplied the place of philosophy.
    I do hope that this is the invisible hand you meant. The other two uses in Moral Sentiments and Wealth of Nations are so badly misused in modern economics that they are caricatures. Metaphor turned to axiom, for a science that tries to claim scientific and mathematical precision introducing a magical entity is?


      1. entech

        Sorry I forgot the attribution. This is from “the history of Astronomy” an essay written by the young Adam Smith probably in his days at Oxford and not published until after his death. Smith was very circumspect about his (lack of) religion as he preferred to keep working at the University of Glasgow, his friend David Hume was excluded from any academic position by the Church of Scotland which had huge power and influence at the time. Indeed the Church was instrumental in the hanging of the young Thomas Aikenhead for blasphemy only ten years before Hume was born.


        1. David 11:23 What an interesting time the late 1700’s were. There was Adam Smith, who had this ability (plus the time and money to dovote to writing because he was a bachelor and tuitored a wealthy family’s boy), to get his arms around both the structure of society and a “business model” and marry them in an understandable way that lives on. Then, in the United States, the founding fathers crafted a Constitution in 1787 that has also stood well the test of time.

          1. entech

            It was a fascinating period. The book Smith is most usually quoted from is, “An Inquiry Into the Nature and Causes of the Wealth of Nations”; the full title is never used. This is a pity, in my mind, because I always think of Smith as an observer and philosopher and his observation was that a market system generally gave a better result for everyone: it is not a prescription or text book on economics.
            The book was published in 1776 the same year as the Declaration of Independence. At this time very few declared as atheist, not too much earlier atheist was a term of derision for someone who did not adhere to the recognized common religion: it was commonly thought that not to believe in God was impossible. Deism was increasingly common at the time: the idea was that God created the universe and then did not interfere in any way. This could account for the apparent religiosity of some of the early leaders, Jefferson
            Hume never declared himself as atheist, but the Church did want to charge him with Infidelity, presumably the same as apostasy, which to their shame is a capital offense in many Islamic countries.

          2. David 12:37 Correct me if I’m wrong, but as I recall from my long ago history of economic thought, the writing about economics prior to Smith was all done by clergy. Thus, agricultural production, physical work, wealth and so on all had explanations from the Bible and Popes. Smith was the first to come up with an explanation of economic activity that was entirely within the realm of human rational thinking. I can imagine the uproar that must have gone through the halls of the clergy at him ignoring them.

  2. entech

    A very mixed bag from my limited knowledge. Quite retrograde was the support for the Divine Right of Kings, which gave serfdom and an approach to economic life that stultified markets and incentives in favour of accumulation by the monarchs and the barons. Leading to the mercantilism that Smith so strongly castigated.
    On the other hand in the 9th to 15th centuries the City States of Northern Italy while still strongly Catholic developed free market and commercial economies, the average incomes tripling in this period. Northern Europe with absolutes Monarchs and serfdom lagged a long way behind.
    And then you have the highly regarded theologian Luis de Molina (1535-1601) who gave an analysis quite similar to Smith. He spoke of supply and demand giving market prices, forward purchasing power theory of exchange rates, individual liberty and property rights etc. Even giving justification for lending at interest for investment at a time when interest was still considered immoral.
    Even Aquinas had a series of arguments to say that selling for more than an item was worth. According to Molina this would be costs plus a reasonable profit. But he finally came down in opposition to the idea based on some words from Mathew.
    I would be interested to hear more, and be told if I am wrong.


    1. David 5:45 “…from my limited knowledge.” You are obviously a scholar of note in this field. I want to know more on theologian Luis de Molina. So, he had a prettly rational handle on the concepts of market prices, forward purchasing, “just” profits and interest, but changed his mind. Could you explain what in Matthew caused him to change his mind and what he what then considered the true theology of commerce to be?? Thanks.

      1. entech

        Now you put me on the spot, I got to reading Smith through an interest in Anthropology and his descriptions of the progress through stages of development: Hunter/Gatherer, agricultural/herding and through to the commercial age in which he lived. Smith is at the same time hero and villain to socialists and liberal economists, his habit of wandering a bit off topic to follow a thought and use of metaphor means he can be interpreted in many ways (bit like the Bible). Critics say he was not original and drew on many sources, which is true, but, he never denied it and often gave attribution. One critic mentioned the Salamanca School in Spain and some similarities in the economic thoughts in the 16rh century to Smith and the beginning of the commercial era. Part of what they were trying to do was reconcile Aquinas to current thinking, that merchants weren’t all evil etc.

        I was trying to contrast this to Aquinas on cheating in the Summa Theolgica.
        Whether it is lawful to sell a thing for more than it is worth?
        1. It would seem that it is lawful to sell a thing for more than it is worth. On the commutations of human life, civil laws determine that which is just. Now according to these laws it is just for buyer and seller to deceive one another: and this occurs by the seller selling a thing for more than it is worth, and the buyer buying a thing for less than it is worth. Therefore it is lawful to sell a thing for more than it is worth
        2. Further, that which is common to all would seem to be natural and not sinful. Now Augustine relates that the saying of a certain jester was accepted by all, “You wish to buy for a song and to sell at a premium,” which agrees with the saying of Prov. 20:14, “It is naught, it is naught, saith every buyer: and when he is gone away, then he will boast.” Therefore it is lawful to sell a thing for more than it is worth.
        3. Further, it does not seem unlawful if that which honesty demands be done by mutual agreement. Now, according to the Philosopher, in the friendship which is based on utility, the amount of the recompense for a favor received should depend on the utility accruing to the receiver: and this utility sometimes is worth more than the thing given, for instance if the receiver be in great need of that thing, whether for the purpose of avoiding a danger, or of deriving some particular benefit. Therefore, in contracts of buying and selling, it is lawful to give a thing in return for more than it is worth.

        On the contrary, It is written (Mt. 7:12): “All things . . . whatsoever you would that men should do to you, do you also to them.” But no man wishes to buy a thing for more than it is worth. Therefore no man should sell a thing to another man for more than it is worth.
        I answer that, it is altogether sinful to have recourse to deceit in order to sell a thing for more than its just price, because this is to deceive one’s neighbor so as to injure him .

        The Philosopher in argument 3 is Aristotle. The 3 reasons why it is OK to sell for more than it is worth are negated by a single line from Mathew. This is part of what I meant when I said I thought the relationship between religion and economics was a mixed bag.
        The Aquinas part is from Heilbroner’s Worldly Philosophers.

        Hope this reads OK it is way past my bedtime.

        1. Spitzer was actually talking about this on CNN last night. I just paused briefly on my way up the dial to a hockey game so I don’t even know who his guest was, but the guest was advancing what sounded a lot like the first arguement above in defense of financial institutions unloading what they knew to be bad assets onto their customers. Rationalizing that vendors who lie to their customers soon cease to have customers.

          Possibly a rational economic arguement but decidely not a winning PR move. I’d imagine that the rebuttal (and justification for regulation) would center on information asymmetry. Mr. Spitzer accomplished this visually by contorting his face asymmetrically.

          1. entech

            Aquinas also talks about selling something for more than you paid for it and relevant to your comment: “Whether a sale is rendered unlawful through a fault in the thing sold?”
            The argument is along similar lines to the discussion on selling for a higher value. The conclusion is: “In all these cases not only is the man guilty of a fraudulent sale, but he is also bound to restitution.”
            You would need a lot of good luck with that approach.

  3. I think that there are some “churches” where their survival is dependent on people who “like what they hear” or “like the Pastor” but these churches are not true Biblical fellowships. “Church jumpers” who go looking for what they “like” are not true Christians either. Those are mere social organizations. I am familiar with true Christian fellowships where the Bible message is the most important and the people either tithe or give because of their gratitude to the Lord for His mercy and grace.
    Incidentally those are the churches (Biblically sound and more like the first NT fellowships) where there are never “fund raisers” or public turkey dinners or rummage sales or “bazaars” (bizarres to me). Those churches are supported by faith, love and true charity.

  4. PS to my first comment: an astounding statement by a church member locally was that their church would not be able to survive if it weren’t for their food stand at the Rollag Threshing Bee!!!!
    I think the gospel account of Jesus throwing the money changers out of the Temple might be applicable.

    1. buffalogal 2:55 I can see you are certain about your views on this on the cross fertilization of the marketplace and the faith. I would only respond with a couple to observations. One is the excellent review, here, by David about the changing theological dynamics of theologians over the centuries about this relatonship–it is not a straight line from start to finish. Then, about the actual practice of religion. When Elaine and I used to go to Mexico a lot, decades ago, the BIG day for local commerce was Sunday. People could only afford to make the trip into the village once a week. So, the marketplace was in the Plaza surrounding the church. It looked seamless to me. Just one other observation, would not you, yourself, agree that you made a choice among approaches to the faith when you joined your current church? While you obviously have no inclination to change churches, that you once made a choice among churches is kind of my point.

      1. I definitely made a choice in choosing my current fellowship.
        My choiced is based on simple criteria: is the Word of God taught here with purity and simplicity?
        Does the fellowship send missionaries out to teach the Word of God?
        All else follows including the stewardship of money.

  5. Wanna B Sure

    Virtually all the topics presented here deal with things that could easily be considered adeaphora, (things neither commanded or forbidden). These subjects have nothing to do with Christology (the central message of the Church). The things included with adeaphora are the things that detract from the message of the Church, and cause controversy. Nothing to do with “Church” at all. Controll of ritual, economics, culture, and custom are all factors in this controversy. The importance of which is at the mercy of the controllers, or the controlled. Again, none of which is the central message of the Church Proper. If their custom in Italy is different from that of Mexico, fine. Let it be so. When adaphora is inforced, the abuse begins. Kings, Popes, Councils, central governments, and unions have all been guilty of inposing rules and values on others for personal gain for wealth or power in general. There is no theology here in the smallest, and if it appears to be so, it is out of convenience (excuse), to justifythose abuses, (or misunderstanding) (well intentinoned or not).
    As for what determines the value of something, during the Middle ages and later, Kings and Popes were in controll, and the motivation wasn’t as pure as it should have been. That value should be determined by how bad you want to sell it, and how bad you want to buy it. Years ago, there was a term “fair trade price”. Example; A Jeans company put the price of a pair of Jeans at xx. This was stamped on the label. The retailer had to sell it at that price. No reduction. Well this sounded fine until they went out of style, and the retailer was lucky to sell at half-price. How sound was that in the sense of forced value? You can go to any number of stores today, look at a shirt tag, see the price, and immediately it is one-third off right away. Reason? Looks like a good deal, but in reality, the sale price is now the retail price. All smoke and mirrors. The government has attempted to do the same thing from time to time, and that hasn’t always worked. Farmers have been known to trade land, and not equally acre for acre, for the sake of gaining land closer to the farmstead for closer convenience. There is a value for convenience, and that was determined between the individuals. There is some question however in the valuation of land for the sake of taxation, but that is another subject.

  6. Wanna B Sure

    You may or may not notice that I didn’t mention the “seed-faith” crowd. You know, the “Plant your seed,(58 dollars, 1000 dollars, etc, and receive a hundred fold back as a harvest) crowd. I have nothing but utter contempt for them. (As seen on TV.)

  7. think & rethink
    Capitalism is a fanatic religion shugercoated with democratic principals of
    Greed & again coated with philontrophy & ego boosting shield of charity
    It’s real real raw material is poverty on wich it thrives
    The best possible financial &governing structure going paralar to religious org structure

    1. salgaokar 4:28 Thanks for your comment. I would respond by saying that, while capitalism might not have written the Bible (though we don’t know for certain who the various people were who wrote and edited it), capitalism is the single largest force in interpreting what it means.

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