Religious Economics and the Economics of Religion Author(s): Timur Kuran Reviewed work(s): Source: Journal of Institutional and

Theoretical Economics (JITE) / Zeitschrift fr die gesamte Staatswissenschaft, Vol. 150, No. 4 (December 1994), pp. 769-775 Published by: Mohr Siebeck GmbH & Co. KG Stable URL: http://www.jstor.org/stable/40751766 . Accessed: 27/06/2012 04:55
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of and Journal Institutional Theoretical Economics (JITE) 150/4 (1994),769-775 Zeitschrift die gesamte fr Staatswissenschaft

Economics theEconomics Religion of and Religious

by
TlMUR KURAN

1. Introduction in realm socialthought leastsincethelate-nineteenth of at Squarely thesecular moderneconomicshas tendedto developindependently fromboth century, and thestudy religion. of Untilquiterecently, theoloclerics, religious thought and economistsall promotedthis compartmentalization, gians, partlyby thatcut acrossthedisciplinary boundaries avoiding subjects generated the by It economists religious and thinkers werein tacit Enlightenment.is as though to neither allowedtowander intothe agreement liveinseparate neighborhoods, other's territory. Economists the outside respected agreement leaving by religious phenomena thescope of economic Withfewexceptions, the thought. theyshunned study of religion, neoclassical usuallyunderthe pretext the that economicshas to to Marxistsgenerally the in nothing contribute the studyof preferences, belief thatreligion no future. their has For clerics students religion and of part, showedlittle interest matters central in of concernto economists. Veryfew entered debates suchissues theviability central on as of the of planning, merits free the of fiscal and of trade, effectivenessKeynesian stimuli, theefficiency markets. Therealwaysexisted, course, of clerics who werepursuing, notinitiating, if economically potentpoliticalagendas.In the UnitedStates,manyministers stood at the forefront efforts eradicatediscrimination; of to MartinLuther King is onlythebestknown.For another example, Malaysia's Islamicestablishment playeda leadingrolein thecampaignto improve economic has the of do It standings Malays.Butsuchexamples notnegate earlier my point. is one to pursue focused a economic another havea broadeconomic to thing agenda, and in of philosophy, stillanotherto participate thedevelopment economic One can fight inequality an without a coherent viewofhowthe thought. having to of to of evolved, say nothing contributing therefinement general inequality theories economicdistribution. of As we reach the end of the twentieth century, steps are being taken to the On integrate two intellectual neighborhoods. the one hand,variousreliand are to secular economic giousactivists scholars seeking replace approaches withones grounded sacredtexts, in And on theother, values,and traditions.

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interests beginning applychoice-based are to economists multidisciplinary with the stratethatrangefrom recruitment to religious phenomena methodologies The motivesunderlying the of of cultsto the persistence orthodoxies. gies of course,from thoseunderlying to economics from differ, crossings religion a in The reflect desireto subordithecrossings theoppositedirection. former all the to nate economicsto some religion, lattera commitment explaining of individual actions. as social phenomena theoutcomes purposive with of of is review thetwotypes crossings, Whatfollows a critical starting thosefrom to economics. religion 2. Religious Economics as characterized In variouspartsof theworld, movements religious generally the are to or "fundamentalist" "fundamentalist-like" trying restructure social over to the of sciences partof a broad attempt reassert authority religion as attention are To domains that has secularized. this end,they drawing modernity havepromoted. socialscientists to thefailures political of agendasthatsecular to Andthey arguing thefailures be mitigated returning religion are that by may of in and inspiration theformulation social ideas and as a sourceof guidance are activists thatreligious emphasize ones that agendas.Many of thefailures for In and economic policies institutions. theUnitedStates, implicate prevailing activists VariousChristian is a instance, focusof criticism thewelfare system. for welfare blame the government-run system social ills like urbanpoverty, In all of and crime, theweakening thefamily. thesamevein, acrossthe teenage for un-Islamic economic are responsible policies globeIslamicactivists holding backwardness. and official suchas poverty, corruption, technological problems for Western are Secular governments at fault,theyare claiming, pursuing thanan Islamicone. economic agendasrather economicpoliciesare not comingonly To be sure,assaultson incumbent forth criticisms on are circles.Diversesocial thinkers putting from religious now is thatthe chorusof criticism variousnonreligious My point grounds. witha reliloud includes voices,and also thatreforms increasingly religious than and are beingadvancedmorecommonly moreconfidently giousidentity of variants of decadeshaveseentheemergence several in thepast.Thus,recent economics"- economicsgroundedin some what may be called "religious "Buddhist "Christian We economics," religion. hearof "Islamiceconomics," 1 of and "Hindu economics." Thoughtheproponents theseapeconomics,"
1 For a see of a]. critique theseapproaches, Kuran [1993 Focusedcricomparative have beenoffered Behdad [1989]and Kuran [1993 b]. by tiquesof Islamiceconomics Keyes [1993],Buddhist Christian Iannaccone [1993]examines economics; economics; to references keyworks contains Each ofthese Hindueconomics. and Lal [1993], essays economics of Insofar thevariants religious as literature. critical and also to therelevant the merit label"fundamenand inerrant their their sources consider fixed, they teachings talist."

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of proachesengagein almostno interchange ideas,theyall sharetheaim of economies to religious And restructuring according stipulations. forone reason or another, all believe thatiftheir ideas wereputintopractice, economic they wouldbecomemoreharmonious lessdisruptive communiand of development ties. of Islamiceconomics has economics, Amongtheseveralvariants religious takenby farthemostsignificant to put its ideas intopractice. Several steps Muslimcountries now feature run predominantly officially Islamicredistributionsystems. Islamicbanksarein operation morethan60 countries, And in all to be doinginterest-free business satisfy to Islam's presumed on ban claiming interest. Some countries, Pakistan,have gone so faras to outlaw including interest-based As Islamiceconomics has matter, however, banking. a practical notrevolutionized economic relations. Evenin Pakistan, and borrowing lendremains the from ingat interest verycommon, onlydifference past practices is as or beingthatinterest now givenand received a "fee," "commission," Islamicredistribution schemes have had no "markup."And the established noticeable effect poverty vagrancy. on or Each variantof religious economics features manyof thecleavagesfound in secular discourse. Just as neoclassical economics harbors numerous schoolsthatdiffer manymatters, theadherents religious on so of economics can be sympathetic hostileto market or freedoms, pro- or anti-regulation, and for or againstmajor redistribution. Such lack of coherence hardly is becausemostreligious texts traditions subject interpretaand are to surprising, tion.Indeed,they often feature and silences, eveninconsistencies, ambiguities, which allowthem be putintheservice a widevariety economic to of of agendas. One mustnotinfer becausereligious economics the that, replicates divisions within seculareconomics, is of negligible it social significance. is It present the principle that the ultimate in resolving economic promoting authority is In it law,or precedent. practice, might disputes religion notlogic,evidence, be said,religious leaders whohavesought reshape to economics havedisplayed remarkable For example,the AyatollahKhomeinifrequently pragmatism. in to conditions. did so without He ever changed positions response evolving of steppingoutside Islamic discourse,for the diversity Islamic economic allowedhimenormous The thought flexibility.2 critical pointhereis thathis maneuvers served sustain claimthatthetraditional to the sources Islamoffer of a viablebase on which buildand runa modern to also economy. Theyserved to challenge segregation religion the of fromeconomics, thusadvancing the all control. goal of bringing social domainsunderreligious

are ch. Manyexamples givenby Rahnemaand Nomani[1990,especially 3, 6].

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3. The Economics Religion of I shallreturn religious in to economics theconcluding section. Our nexttaskis to survey crossings from economics intoreligion. Thesefallintotwobroad the of the of consists efforts explain to and patterns categories, first which religious variations individual in thatis, without trends solelythrough opportunities, at variations. The secondcategory includes works appealing all to preference to mechanisms thatattribute in both phenomena involving changes religious and opportunities preferences. literature LaurenceIannaccone, is A leadingcontributor thefirst to whose in no worksassumethatparticipants the"religious marketplace" experience needsor dispositions. Giventhisstarting point,he changesin their religious on phenomena entirely individual places the burdenof explaining religious For he religious opportunities. example, and his colleaguesexplainSweden's rate thatthecountry's state-run low participation bynoting strikingly religious inefficientdelivering at services. Church is Church extremely Lutheran spiritual in churches attendance much is they higher, go on to observe, thenon-Lutheran of of thatenjoytheadherence a tenth Sweden'spopulation.3 This argument makes a good case that the supplyside of the religious Yet contributor theobserved to is patterns. itdoes not marketplace a significant be GiventhatSwedesenjoy thatthedemandsidecan safely ignored. establish have the is of freedom choice, why itthatonlya smallminority deserted official wouldmaketheexisting nonis desertions If church? theanswer thatfurther of too whathas blockedtheestablishment addichurches crowded, Lutheran can be answered thatsuch questions tionalones? It is unlikely convincingly thathave turned and to psychological social mechanisms without appealing nation. Swedesintoan exceptionally irreligious because theyremain such mechanisms The supplysidersavoid exploring has to viewthateconomics nothing conneoclassical weddedto theorthodox other Free of this pessimism, tributeto explainingpreference patterns. of the are economists applying tools and insights economicsto explainthe I ones.For an illustration,myself of evolution preferences, religious including who lie at the footof have addressedthe issue of whythe "untouchables" like India's caste hierarchy commonly acceptdoctrines, karmaand dharma, on In their thatsanctify hinges my lowlysocial status. a nutshell, explanation Indian social pressures that,over the ages, have regulated self-reproducing and and of on rights responsibilities, publicdiscourse matters viceand virtue, Indiansof all reflection lifeand death.Withthecostsof independent making tenets the from worldviews their ranksderive publicdiscourse, central largely truths.4 to be acceptedby manyas self-evident came of Hinduism eventually
3 of 40 attend of services, against percent Americans. Sunday Onlytwopercent Swedes see For further details, Iannaccone, Finke and Stark [1995]. 4 For thefull see and evidence, Kuran [1995,ch. 8, 12]. argument supporting

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of does not denythesignificance thesupply-side religion. of The argument Indianshavefoundtheir constrained the options by Through ages,individual ideas and practices. thesame time, arguAt the thelocallyavailablereligious to feedback effects from that ment admits publicreligious patterns thebeliefs It provides, a fuller accountof underlie therefore, private religious dispositions. than mightan analysisrestricted the supplyside. Most to Indian religion itoffers intothespreadand persistence Indianreligious of significantly, insights thought. The limitations thesupply-side of an approachmay be illustrated through additional Iannaccone [1992]has developeda valuable,if incomexample. for of cultsto maketheir members plete, explanation theefforts certain engage in practices thatcut themofffrom social mainstream, whentheHare the as Krishnasmake theirmembers shave theirheads, wear pink robes,and go in thatsuchpractices bindmembers to dancing crowded squares.He observes thecultand ensure their in thus activities, participation congregational regular a But whydo peoplejoin cultsin thefirst solving freerider problem. place? Iannaccone's is answer, supported someevidence, thatcultstendto attract by secularopportunities, as highschooldropouts. such peoplewithlimited For all itsinsights, thesis this leavesunexplained of whyonlya minority the individuals with limitedsecular opportunities join religiouscults. George Akerlof [1991]has developed modelthatgoes someway towardfilling a the void.He explains howindividuals with normal psychological dispositions may end up joiningcultsthatwillcut themofffromtheir social netpreexisting works.The gist of his argument that the demand for cult membership is not a of develops all at oncebutthrough series mini-decisions. Alongtheway, theindividuals willendup joiningthecultfind costofabandoning who the the initiation exercises highrelative thecostofproceeding thenextstage. too to to In thismanner, unintended unplanned and they undergo changesofpersonalMinordifferences relative in costscan makeone personcontinue withthe ity. cult'sinitiation after another withidentical secularopportunities has program out. dropped To reiterate, and theories religious of behavior not are supply- demand-side rival and mutually Each is an essential incompatible analyticalconstructs. of I add theories notshed do component a single story. might thatsupply-side on of itself. Nor do they for light theexistence religion providea framework the under which needforreligion the or exploring conditions dampens intensifies.As Ekkehart Schlicht [1995]has shown, insights suchquestions for into one needsto pay attention thecognitive to mechanisms use to cope with we The mechanisms I with the interact,wouldinsist, complexity. relevant cognitive social processes thatshape thecorpusof publicinformation from whichwe derive muchof our knowledge.

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4. TheFuture theIntegration of This briefsurvey the ongoingcrossings of between and economics religion or should have made clear that theydo not forma coherent coordinated theirmethodological the of differences, initiators the campaign.Whatever of are in rather than economics religion all interested understanding religion, of economics in transformingAnd fortheir it. thefounders religious are part, interested in mastering less moderneconomicsthan in givingit a religious in are endeavor to character. twogroups not,then, The engaged a cooperative are talking to each otherbutpast not and economics. They integrate religion each other. no of efforts headed?At present, variant reliWhereare theintegrationist to ideas thatseculareconomists likely take are is giouseconomics producing influence partof a as economics Still,religious seriously. might gain political has already broad reaction secularinstitutions, as Islamiceconomics to just have in whereIslamicfundamentalists obtained attained influence countries in introduce! thenameofreligion reforms may political power.The economic or do notbe coherent viable,butthey nothaveto be. For all their impracticalfor achievedvast publicsupport of ity,theeconomic principles communism unrealistic have and In muchofa century. Iran,Pakistan, elsewhere, objectives intolaw. alreadybeencodified to of is the Likereligious economics, economics religion likely be an expandthe future. has barely It for explored reasonswhy ingpursuit theforeseeable it and thefunctions serves. Suchtaskswillrequire exists usinga richer religion used by thesupplysiders.Important thanthatcurrently being methodology literature contributions wellgrowout of theexpanding interdisciplinary may has thisliterature in on theroleof trust morality social systems.5 and Though for not yetfocused religion se, manyof itsinsights on implications carry per in of will sooneror laterbeginanalyzing issuesthatthe economics religion depth. References
ReAmerican Economic and Akerlof,GeorgeA. [1991],"Procrastination Obedience," view, 1-19. 81, in IslamicEconomic Thought: Behdad,Sohrab[1989], Rights Contemporary "Property A Critical Review Social Economy, 185-211. 47, Perspective," of Free Press: a Toward New Economics, Etzioni, Amitai[1988],TheMoral Dimension: New York. Role of theEmotions, Reason: TheStrategic H. Frank, Robert [1988],PassionsWithin W.W.Norton:New York. Basil Relations, Cooperative Gambetta, MakingandBreaking Diego (ed.) [1988],Trust: New York. Blackwell: 5 For some see contributions, Etzioni [1988],Frank [1988],Gambetta important [1988],and Wilson [1993].

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in and R. "Sacrifice Stigma: Iannaccone, Laurence [1992], Reducing Free-Riding Cults, Journal PoliticalEconomy, and 100,271-291. Communes, OtherCollectives," of -- [1993],"Heirsto theProtestant of FundamentalEthic?The Economics American and R. ScottAppleby ists,"pp. 342-366 in: Martin (eds.),Fundamentalisms Marty and of and theState: Remaking Polities, Economies, Militance, University Chicago Press:Chicago. -- and Finke,Rogerand Stark, Rodney[1995],"Deregulating Religion:The Econ33. and State,"Economic omicsof Church Inquiry, in and Fundamentalism Burma F. "Buddhist Economics Buddhist Keyes,Charles [1993], and R. ScottAppleby and Thailand," 367-409 in: Martin (eds.),FundaMarty pp. and and mentalisms theState: Remaking Polities, Economies, Militance, University of ChicagoPress:Chicago. and Kuran, Timur pp. [1993a],"Fundamentalisms theEconomy," 289- 301 in: Martin and Martyand R. Scott Appleby(eds.), Fundamentalisms the State: Remaking of and Polities, Economies, Militance, University ChicagoPress:Chicago. [1993b], "The EconomicImpact of Islamic Fundamentalism," 302-341 in: pp. and Martin and R. ScottAppleby (eds.),Fundamentalisms theState: RemakMarty of and Economies, Militance, ingPolities, University ChicagoPress:Chicago. - 9951,Legaciesof Conformism, MA. Press:Cambridge, HarvardUniversity Lal, Deepak [1993],"The EconomicImpactof Hindu Revivalism," 410-426 in: pp. and Martin and R. ScottAppleby (eds.),Fundamentalisms theState: RemakMarty of and Economies, Militance, University ChicagoPress:Chicago. ingPolities, Ali Politics and Rahnema, and Nomani,Farhad[1990],TheSecularMiracle: Religion, Economic Policyin Iran,Zed Books: London. Schlicht, Ekkehart [1995],"EconomicAnalysisand OrganizedReligion,"in: E. L. Jonesand V. Reynolds(eds.), Survivaland Religion:BiologicalEvolution and Cultural Change, Wiley:Chichester. Wilson, James [1993],TheMoral Sense,Free Press:New York. Q. Timur Kuran Professor Department Economics of University Southern of California Los Angeles, 90089-0253 CA U.S.A.