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The Economic Modeling of Religion


I usually view economic modeling as a more asymmetric activity than, modeling in physics. In physics, models are used to both understand why something happened or happens, and predict what will happen in future circumstances - the twin pieces of understanding and prediction. This is probably a biased view on my part, or a woeful lack of knowledge of the predictive power of economic modeling, but it seems to me that most economic models I read about are more useful in explaining the past. Any extrapolation of the model into the future basically depends on assuming similar conditions. Physics models are often tested by finding out what they predict for future situations under different conditions. (I am not including econometric modeling here, which I consider to be a qualitatively different activity - it is modeling that is more empirical in the sense that data crunching is used to establish the coefficients of the model equations.)

Again, my opinion may be totally nearsighted. If it is, let me know.

I write this because of a recent book titled The Marketplace of Christianity by R. Ekelund, Jr., R. Hebert, and R. Tollision, which was described in a recent issue of the Chronicle of Higher Ed. (Nov. 3, 2006, page A13) In the book the authors use economic analysis to describe such things as the number of different Christian churches through the centuries and the different acceptance rates of the Protestant Reformation.

Some of the models, at least as reported by the Chronicle, seem very far-fetched - a huge, Procrustean stretch, if you will.

The Reformation is the biggest example. For example, the authors view the Reformation as a reaction to the monopoly of the Catholic Church. On a basic level, the metaphor of Church as monopoly does seem on the mark. It’s when the authors bring in subsequent price/market explanations that the model appears a bit outlandish.

Thus the concept of purgatory is claimed to be invented so that the Church could charge folks exorbitant sums of cash to move the souls of their loved ones on to heaven. (I note that purgatory is now closed for business, Pope Ratzinger having banished limbo earlier this year.)

There’s more: Luther single-handedly helped create a "competitive market in Christianity ", with the Catholic church increasing their holy days to keep peasants from drifting to Protestantism. Meanwhile, Protestantism was burgeoning because it had a simpler, less expensive "pricing scheme."

Ok, maybe this is more fun than I thought. Certainly the Catholic Church had no competitors when it came to greed and avarice, as is graphically portrayed in Barbara Tuchman’s A Distant Mirror and March of Folly. There were times when the church and its leaders - especially the popes of the middle ages - behaved as a sort of theological Enron , selling indulgence futures.

The problem I have with all this is that I can’t think of a topic, institution, or social movement where economic modeling can’t be used to explain it. It’s only when predictions are made and tested that the qualitative difference between physics modeling and church-as-economic-agent modeling is brought out in stark relief.

And the predictions of the church using the economic model are not earth-shattering.

For example, the author’s prediction that religion will always be around because of "existential angst concerning human existence" is a weak and obvious one. The other main prediction is that Westerners will continue to demand forms of religion that are "cheaper" in terms of time, money - a statement that is almost tautological.

I am always leery when models are used for social institutions because of this inability to produce models that correctly predict future situations. The church analyzed economically is one of the most feeble at this - the predictions can be made without the economic trappings, so why force -fit the economic analysis?

In other words, don’t show me the money - show me the understanding and prediction. With that I’d accept any model.