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The Economics of Religion

Written By: Jason Shafrin - Apr• 09•07

Since Easter just passed yesterady and we are still in the midst of the Passover holiday, today I decided to blog on the economics of religion.  No, this title is not an oxymoron. A Businessweek article from 2004 (“Economists are getting religion“) cites the Economics of Religion as an emerging field.  One of the leading figures of this specialty is UCSD economist Eli Berman. According to the Businessweek article:

The economics of religion is founded on the belief that people are just as rational in their choices about religion as they are about, say, buying a car. ‘Producers’ of religion — churches, synagogues, and mosques — compete for ‘customers’ by seeking converts, drawing members from other congregations, or combating the pull of secular society. Some strains are ‘cheap’ in the sense that they place modest demands on adherents, while others are costly but presumably offer bigger rewards.

Mansi Kakatkar of the Spandan blog gives some more insight into Berman’s philosophy:

Berman’s mainly argued that ‘God’ or ‘religion’ is not the central motive of a member of a radical* group**. Instead the motives are altruistic. Ariel Morari, an Israeli psychiatrist studied suicide bombers and their families to conclude that they do not mention religion and heaven/afterlife as their motives. Neither is the primary motive seeking revenge for a personal attack nor economic deprivation. These people do not show any suicidal tendencies and are not depressed. Instead they have altruistic motives along with delusions about self-importance. They generally aim to change the status-quo or the current government they are unhappy with.

According to Berman every person tries to be a part of that group which provides him resources and benefits to run his family. Generally it is the government. But it could also be the radical group. These groups are involved in providing basic services like schools (even if in the form of mercenary schools), hospitals or health services, loan facilities and the like. The person will be a part of whichever of the two he thinks provides him better facilities. This to me has two implications. One, a country with a weak and inefficient government has a greater risk of strong radical groups. Two, a country/region afflicted by presence of violent radical groups can be treated by creating a strong government that efficiently provides the social services.

For those interested in some of Mr. Berman’s recent work on the Economics of Religion, see “Hamas, Taliban and the Jewish Underground: An economist’s view of radical religious militia groups” or “Religious Extremists: The good, the bad and the deadly.”

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