End-of-quarter Thoughts on the Blog

I welcome your feedback on the value of the blog. Please take a few minutes to answer the following questions.

1. Which one or two blog posts did you like the most?
2. What did you like about the blog? What did you not like about it?
3. In what ways did the blog contribute to the class, if any?
   
4. Would you come back to visit this blog later even though you will not be a student in the class?
   

Any other comments are appreciated as well. If there is interest, I can continue to post stories even though the class has ended. I have enjoyed our interaction on the blog, and I hope it has contributed to your understanding of the economics of religion.

Book Club - God is Back #5

At the close of their book, God is Back, the authors point us to the future of religion. I want to highlight two particular points made in their conclusion.

The first is that religion is not inconsistent with modernity:

The great forces of modernity--technology and democracy, choice and freedom--are all strengthening religious rather than undermining it. Give people the freedom to control their lives and, for better or worse, they frequently choose to give religion more power... The triumph of pluralism means that all religious beliefs (and indeed all secular beliefs) become competitors in the marketplace. (Pp. 355-356)

This discussion fits in well with the economic approach to religion. Many religious goods do not have close substitutes, and the fact that religion has persisted for so long ought to clue us to the fact that religion provides something valuable to many of people's daily challenges.

A second point of the authors is that America has failed to appreciate "the ability of religion to solve problems as well as create them" (p. 362). They consider the USCIRF, which we will study more in this class, to fall short in this respect because it is focused too much on American policy and "does not make a robust intellectual case for religious freedom as a fundamental building block of a civilized and successful liberal society" (p. 362). On the second point, I think the authors expect more from the USCIRF than it was designed to accomplish. Its policy focus is intentional, and a government agency should not be expected to make intellectual arguments--intellectuals and academics should.

But here, then, is the challenge for you: can you make a case for why religious freedom is a fundamental building block of a free society? Or can you make a case for why religious freedom is a stumbling block for a free society?

Book Club - God is Back #4

In Ch. 10-12 of God is Back, the authors look more to the future and lay out where they see rising tensions between religious and secular and between religion and religion. Ch. 10 is quite provocative in pitting Muslims and Christians against each other in a battle for world domination, or so the book seems to read. The authors claim that Christians will win out in the long run, and let me list some of their argument in my words.

1. Muslims are less willing to translate the Koran than Christians are the Bible. This fosters more adaptation in Christian groups, thus suggesting that they might be amenable to competition with substitutes. (P. 273)
2. Christians are more willing to combine religion with commercial enterprises in disseminating the Bible, again suggesting greater flexibility in competition with substitutes as different versions of the Bible can appeal to different market niches. (P. 275)
   
3. The Christian population is wealthier overall and has more resources to devote to spreading its message. (P. 277)
   
4. Christianity and its various denomination forms has proven adept at competing in open religious markets, while Islam's strongest manifestations are in state-supported nations. If religious freedoms are trending upward around the world, then Christianity has a leg up in succeeding. (P. 277)
5. Islam has not confronted modernity and pluralism to the extent that Christianity has, and this hinders the spread of Islam in an increasingly modern and pluralistic world. (P. 278)

I wish the authors included some numbers to support their overall argument. I certainly agree with their points that Christianity has proved adept at facing various religious and secular challenges. However, consider these points. (See this Pew Forum Report for more information on the first two points, but this is not required reading.)

1. Islam is the fastest growing religion tradition (as distinguished from denomination) in Europe, due to both immigration and high birth rates. Muslims comprise about 5% of the European population today, but are predicted to comprise 10% by 2020. This suggests Muslims can compete with Christians on their own turf.
   
2. The rise of Muslim populations in Europe has led to increased persecution and restrictions--sometimes even state sponsored--on Muslims in Europe. Those on the European political right disagree religiously with Islam, while those on the political left disagree with Muslim culture. Many Christians fear Muslim competition enough to start changing the rules of the game.
3. Muslims often try to use democratic methods to enact policies in line with their teachings, which suggests that Muslims are more adept at operating in pluralistic societies than the authors give credit.

Maybe the authors are right that the Bible will win the "Battle of the Books," but with Islam on the rise in many parts of the world, we should be careful to not underestimate the ability of Islamic entrepreneurs to compete with their Christian counterparts.

Who do you think has the edge in this "Battle of the Books," and why? Does one have a competitive advantage in the religious marketplace?

Book Club - God is Back #3

In chapters 5-7 of their book God is Back, the authors explore why and in what ways religion is thriving in America. One argument they make is that religion provides something that is without close substitutes and that is demanded just as much in today's modern world as in the past. Another claim is that Evangelicals, which form one of largest categories of highly engaged religious persons, have ramped up their intellectual credibility. But it is another claim that I want to explore here:

The American religious marketplace is almost a study in perfect competition: there are no real barriers to entry, the domestic market is big enough to support a mind-boggling variety of religious producers, and new religious entrepreneurs are always rising up to challenge incumbents. (P. 174)

I agree with their conclusion, yet their discussion misses a glaring issue. How is it that the religious marketplace is so competitive when there are such strong network effects that work in favor of religious monopoly?

Network effects, also called network externalities, arise when one person's consumption of a good influences another's consumption of that good. For example, my benefits from using Facebook are more enjoyable if all of my friends also use Facebook. A similar effect arises with religion: if all of my friends belong to religion X, then I would enjoy religion X more than if they were not in religion X.

Economists have long recognized that network effects often result in natural monopolies, which arise when a single-supplier is the most efficient industry structure. That religion exhibits network effects but has not led to a natural monopoly in the U.S. may be due to the other characteristics of religion that are not found with other natural monopoly settings, such as low barriers to entry.

What other reasons help explain why religion in the U.S. is quite competitive despite the network effects that work in favor of natural monopoly?

Book Club - God is Back #2

In chapters 1-4 of God is Back, the authors offer an explanation for why religion is so different in the United States than in Europe. One of the biggest factors they cite is the American First Amendment. In the authors' words:

[The First Amendment] created tolerance in its fullest sense: not just the top-down tolerance involved in allowing dissent but the bottom-up tolerance that recognizes that individuals have a right to choose their own religious opinions. And it introduced competition: churches had to get people in through the door. (P. 62)

Why did this make lead to religious vitality in the U.S. while religiosity declined in Europe?

Adam Smith gave the best answer to this question more than two centuries ago in The Wealth of Nations: a free market in religion forces clergy to compete for market share. (P. 64)

By drawing lines between churches and the state, religion was actually, and perhaps surprisingly, strengthened. This is less surprising if we imagine that government, should it intrude into churches, would undermine churches' innovation in the face of competition, just as government intrusions into other markets could undermine innovation. In fact, religion might be one of the best examples of this.

Government involvement in religious markets can be justified by arguments similar to those used to justify other government interventions. For example, if religion is a public good that is under-supplied in open markets, then government intervention would be warranted according to standard economic theory. The fact that religion thrives in places like the U.S. where it is not provided by government raises questions. Is there something about religion that makes it different from other goods that we believe ought to be supplied by government? What exactly makes it different? What are the economics behind any difference?

Book Club - God is Back #1

In the introduction to their book, God is Back, Micklethwait and Wooldridge set up a number of arguments of interest to us. Instead of summarizing them all here, let me highlight one of their claims that they will attempt to establish during the course of the book.

They explore the distinction between what they call the American and European views of the relationship between religion and modernity. They say that whereas Europeans (and non-European intellectuals) tend to view modernity as undermining religion, Americans have believed that religion can thrive in the face of modernity. With this in mind, they notice a trend:

It now seems that the American model is spreading around the world: religion and modernity are going hand in hand... The very things that were supposed to destroy religion--democracy and markets, technology and reason--are combining to make it stronger. (P. 12)

More specifically:

The biggest problem for the prophets of secularization is that the surge of religion is being driven by the same two things that have driven the success of market capitalism: competition and choice. (P. 21)

Here's the big question for us to chew on: How might competition and choice, as they increase, actually lead to a surge in religion?

One simple explanation is that religious goods are like other goods in an important way: competition breeds innovation, which increases the choice and quality of goods available in the market, and leads to an increase in amount of goods consumed by market participants.

But this answer needs more. Innovations are also occurring in the markets of substitutes for religion, so how is religion keeping up? Will religion eventually reach a saturation point once previously closed countries have been open a sufficiently long time? Does an increased awareness of religious choice imply that religious groups are catering to satisfying what people want rather than trying to convince people to change what they value and therefore imply less staying power as people religious tastes change?

So back to the big question: If the authors are correct that God has surged back into people's lives, can we attribute any credit to increased competition and choice, and if so, how much?

Book club rules and information

This quarter for our ECON 17 book club, we will be reading God is Back: How the Global Revival of Faith is Changing the World, Penguin Press 2009, by Micklethwait and Woolridge, two writers for The Economist Magazine.

The book is required reading; exam questions will address ideas from the book. Please obtain your copy ASAP via amazon.com if you have not already.

We will read the book during weeks 2-7 of the quarter. Here is the schedule (also on syllabus):

• Oct 8 - Introduction.
  
• Oct 15 - Ch. 1-4.
  
• Oct 22 - Ch. 5-7.
• Oct 29 - Ch. 8-9.
• Nov 5 - Ch. 10-12.
• Nov 12 - Conclusion.
  

On each of the six dates above, I will post on the blog some thoughts and discussion questions based on the assigned reading for that day. You are encouraged to participate in an online discussion when each post goes up. Online participation is not mandatory, yet a comment I consider to be of very high quality result in extra credit (maximum five extra credit points during the quarter for good blog comments). So that we may properly assign extra credit, please use your first name and last initial when making the comment. (If you do not use both, we cannot guarantee the extra credit.)

ECON/RELSTD 17 Course Information Fall 2009

This blog will act as our course's web site for the ECON 17 course in the Fall 2009 quarter at UCI. Please bookmark this page in your browser and visit it daily.

Relevant course materials (syllabus, lecture notes, homework assignments and solutions, etc.) will be available for you to download via links in the sidebar.

You can also participate in online blog discussions. Once or twice a week I will publish a post on some topic related to our course that is inspired by current events or lecture material. Everybody is encouraged to make comments.

Finally, this web site will also serve as the hub for our book club with God is Back by Micklethwait and Wooldrige, with more details to follow.