Religiously Economical or Economically Religious?

As I’ve mentioned before, I regularly listen to the Econtalk series of podcasts; along with TEDTalks, they are one of the highlights of my [vod,pod]cast week.

An Econtalk podcast on the subject of religion a few weeks ago was the first I haven’t fully enjoyed. Larry Iannacone, the guest that week, outlined a theory he has spent many years developing: the amount of religious participation in a market (e.g. a country) is correlated with the amount of religious freedom permitted. He alleged that the USA was a good example - somewhere that had constitutionally guaranteed religious freedom, and subsequently widespread religious belief. This argument has intuitive power (when people are more free to do stuff their own way, they are more likely to take part in it), and seems empirically justified too (I didn’t spend long on the ARDA website he linked to, which contains more statistics on this than one can shake a stick at).

However, Iannacone went on to say some things about average education levels of religious folk vs. non-religious folk that, as an agnostic atheist, made me rather uncomfortable. He didn’t really discuss how these education levels were measured, or how, if at all, they might be biased towards religion. Further digs at Ayn Rand (I’m not an objectivist, but I am a libertarian) seemed a bit below the belt.

This isn’t to say that Iannacone’s statistics seemed implausible; quite the opposite. If anything, they are a good illustration of how economics can sometimes clue us in on the truths we don’t really want to hear. Nevertheless, I couldn’t help but feel a little more comfortable when I saw the case for the defence (admittedly without the economic content) presented by Richard Dawkins a few days later in The Root of All Evil - which is worth seeing, even if the arguments are a little simplistic.


On rationality..... there was a very interesting article on Marginal Revolution the other day: The argument was that people are far closer to how economists expect them to be than experiments would suggest (i.e. they act in their rational self-interest when they think nobody is looking :-) ) I've downloaded the paper referenced but haven't had chance to read it yet
Hmm, maybe as a wannabe-intellectual, I just have trouble believing that there are people who are knife-edge ambivalent about God's existence. Your upbringing argument seems more convincing. It being rational to be religious is certainly a cool concept, but I can't help wondering how much bias there is in the logic: economists like to think of people as always rational, as it makes the theories work. We all know that's bunk at least some of the time (I'm not knocking economics, but you've gotta know the limitations of the tool).
Good question. I'm not sure that the PodCast went so far as to allege that believers were deliberately (or at least subsconsciously) deceiving themselves or joining for the wrong reason. But I think it might be fair to conclude that, for people that are truly ambivalent about the existence of a god, there will be some for whom the benefits of a religiously-based social group outweighs any downside risk of plumping for the "there is a god" option. However, there is another group of people: those for whom their *default* is belief in a god (due to upbringing, for example). In such cases, all a religion has to do is ensure the benefits outweigh the costs to ensure most people don't question themselves too hard. And, *perhaps* it is those with more intelligence who feel the incentive most keenly (i.e. those who could see the consequences of losing their religion make sure they never allow themselves to contemplate it). I'm not sure whether I believe these arguments entirely or if I have characterised them correctly but I do like the idea that it could be rational to be religious :-) (if only because it's nice seeing Dawkins when he's annoyed)
True, I didn't understand a lot of the baseball one either. But those are good points. Are you alleging that a lot of religious folk are not in fact really religious? (not that they are necessarily lying; just kidding themselves). In other words, they join for the other benefits, not because of their belief in the supernatural? Maybe that's what I didn't get in the original podcast.
I happened to like that PodCast (I found the one on baseball unlistenable... I didn't get into economics to hear about SPORT!!) As for this one, however, the "average intelligence of believers is greater than non-believers" result was interesting. My take on it is that the social and other benefits of involvement in a religious grouping was shown in the podcast to be high. Therefore, if it truly is the case that the downsides are dominated by the upsides, surely the more intelligent someone is, the more likely they are to participate? I, too, prefer Richard Dawkins' approach but he does miss the key economic insight: that claiming belief in the "flying spaghetti monster" can be viewed as the price to pay to receive the greater benefits of membership. His argument is, essentially, there is no flying spaghetti monster. Therefore, the religious are stupid. The PodCast opened my mind to the possibility that things are more subtle than that