Thursday, December 4, 2008

Is God An Economist?

Economists are not known for their modesty or humility. We have even been accused of being the 'high priests' of a new religion:
Growth and the pursuit of growth is the secular religion of the western world, and its dogma is gradually infecting every society on Earth via globalisation. Every cult needs its clergy, and the high priests of growth are our economists. Purporting to understand such magic as the "hidden hand of the marketplace", economists have been feted by presidents and parliaments as the new alchemists, with their dazzling theories suffused with the promise of technological transubstantiation that will somehow lift us beyond the mortal limits of our fragile blue planet.
That's John Gibbons in today's Irish Times. Luckily we're more New Testament than Old Testament, otherwise John might be dodging thunderbolts ...

He's talking nonsense of course: last time I checked most Prime Ministers, Presidents and Taoisigh were non-economists - and wield a great deal more power than any banker, business man or economist I've ever met. If I had to pick a profession with undue influence on the ways of the world I'd opt for lawyers - do we really need so many new laws every year? Come to think of it, there's a lot of them in government: and isn't the Minister for Finance a barrister?

But back to economists: two papers caught my attention recently. The first is A Model of Religion and Death - catchy title. The gist of it goes as follows:
Fear of death is defined as an expected drop in utility at death. Those who believe that the probability of death being the end of existence is less than 1 can invest in religious capital to increase the subjective probability of going to heaven rather than hell. Heaven is assumed to give positive utility, hell negative utility and nonexistence, zero utility. Atheists have no incentive to invest in religious capital and fear death to the extent that life gives them positive utility.

Those who place a small probability on the existence of an afterlife, rationally invest little in religious capital. This results in a large subjective probability of going to hell rather than heaven. Consequently, they fear death more than pure atheists who only have to worry about the zero utility of nonexistence. Individuals who place a higher probability on the existence of an afterlife will rationally invest more in religious capital.

This increases the subjective probability of going to heaven rather than hell. This may result in a lower fear of death than less religious individuals and perhaps even lower than atheists.
And he has the quadratic equations to prove it. Death, where is thy discount rate? The author is hoping to extend his model to an analysis of suicide bombing ...

So much for the micro-economics of religion: what about macro? Next up is The Economic Performance of Great Religions, which takes over where Weber and his Protestant Ethic left off. The author ranks the world's great religions in terms of their consistency with economic performance and identifies the following explanatory criteria:
... four direct consistency criteria (the preference for absolute wealth, the type of asceticism, the level of encouragement for productive saving and the level of prohibition of interest) and seven indirect ones (the kind of divinity, the kind of salvation, the encouragement of obedience, the power of men over women, the type of social justice which is encouraged, the level of separation of religious authorities from earthly ones and the type of organization of the church).

... none of the rankings for each criterion seems to contradict the following general consistency ranking (in descending order): Judaism, Protestantism (Calvinism, Lutheranism), Catholicism, Orthodoxism, Islamism (Sunnis, Shi’a), Confucianism and Buddhism.
Invest in Israel seems to be the message ... I jest of course - a God-Like Economist would not put all her investments eggs in one basket. Even if it would keep John Gibbons from fretting about all that horrid growth (and employment and wealth and leisure and innovation and democracy) that evil economists are responsible for.

My God, maybe that's it: the Devil is an economist - oops!


  1. Very good article.

    Brian Lenihan has a lot to learn, but because he is a barrister, I (an economist of sorts as well as a barrister of sorts) am confident that he will ! Whether it will be enough, only time will tell.

    Unfortunately, BL2 is the only barrister in Government. Cowen and Ahern are mere solicitors. (Willie O'Dea is in a special category of his own, but you knew that.)

    I won't speak for solicitors, but I am not the only barrister who agrees that there are too many laws.

    The real culprits for the proliferation of legislation tend to be the same people who support the irrational obsession known as "the Project". I feel confident that I need not be more specific.


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