European Society for the Philosophy of Religion

Oxford University
August 26-29, 2010

The Political Economy of Religion in the Public Sphere

James A. Montanye
Economics Counsel
Falls Church, Virginia USA

• I propose to illuminate religion’s public structure and conduct using the bright lights of Public
Choice and Austrian economics, and a few equally bright flashes of sociobiology.

• The first order of business is to ascribe analytical meaning to some familiar concepts.

• The first of these is ‘economics.’ I offer this brief description, as given by the late Austrian
economist Ludwig von Mises:

“The economic principle is a general principle of ... all rational action [that is] capable of
becoming the subject matter of a science. ... All rational action is economic. All economic
activity is rational action. All rational action is in the first place individual action. Only the
individual thinks. Only the individual reasons. Only the individual acts.” Socialism (1922),
pt. II, §I, ch. 5, 1-2.

• This description is apropos for our purposes because both the demand for, and the
supply of religion in the public sphere are consequences of rational, individual action.
(See, e.g., Paul Oslington, ed., Economics and Religion, 2 vols. [2003].)

• The next concept for clarification is ‘society.’

• A society is a complex web of relationships that constitute a stock of ‘social capital.’

(See Robert Putnam, Bowling Alone: The Collapse and Revival of American Community
[2000].)

• The texture of a ‘pluralist’ society reflects the disparate, rational choices made by
individuals acting through this web.

• A corollary of the economic perspective adopted here is that a society per se,
unlike the individuals it comprises, is not animistic. It has neither intentions nor a
will of its own, and it neither chooses nor acts of its own accord.

• The actions taken on behalf of society are taken by inherently self-interested

individuals.
 • Moreover, a durable pluralist society cannot be the product of intelligent design. This is
so because the necessary knowledge is irretrievably dispersed throughout the populace.
(See F.A. Hayek, The Fatal Conceit: The Errors of Socialism [1988].)

• Furthermore, an imposed social design necessarily privileges some individuals at the

expense of others. Creating special privileges often is the social designer’s tacitly intended
purpose. But in any event, special privileges necessarily disrupt the natural web of
spontaneous and cooperative social relationships.

• Finally, analytical distinctions must be drawn among the terms ‘private,’ ‘public,’ ‘personal,’
and ‘political.’

• An activity is ‘private’ in the economic sense to the extent its costs are borne, and its
benefits are captured – that is to say, costs and benefits are ‘internalized’ – by the
individual(s) undertaking the activity.

• Conversely, an activity is ‘public’ to the extent its costs and benefits are ‘externalized;’
that is, to the extent they spill over into society at large. (See James Buchanan, The
Demand and Supply of Public Goods [1968].)

• Characterizing an activity as ‘personal,’ by comparison, implies nothing about the

distribution of costs and benefits. Most personal activities entail both private and public
economic consequences.

• Finally, an activity is deemed to be ‘political’ if its underlying purpose is to elicit

conduct that is compulsory rather than voluntary.

• We, as individuals, obviously welcome the benefits that other individuals externalize.
We are biologically predisposed to stigmatize – using words like ‘un-assimilated’ – those
individuals and groups that internalize benefits too fully.

• Conversely, we clamor for political action to mitigate, and to compensate for those
externalized costs that burden us without our consent.

• Consequently, our laws and social norms generally proscribe and punish the infliction of
significant cost externalities, but tend to disregard those smaller burdens that are
approximately offsetting across all individuals over time.

• Moving now beyond definitions and clarifications, I have ten propositions that apply these
analytical precepts to religion in the public sphere.

• Proposition #1: Religion entails both private and public economic aspects.

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 • Religion is private where its costs and benefits are internalized. It is public to the extent
costs and benefits are externalized.

• The next two propositions elaborate this point.

• Proposition #2: Propitiating God through prayer is an economically private activity.

• Prayer externalizes essentially no costs, and cannot be claimed a priori to externalize

any benefits.

• Matthew 6:6 asserts that God rewards worshipers who pray in private. This often leads
theologians and philosophers to conclude that religion per se begins and ends with
prayer. However ...

• Proposition #3: This conception of religion is too narrow because many individuals realize
substantial rewards of other kinds by propitiating God in ways that externalize both benefits and
costs.

• For example, religion is publically beneficial where it fosters wealth-creating

cooperation, divisions of labor, and the exchange of economic goods.

• On the other hand, religion externalizes two types of cost within pluralist societies:

• Some religious activities – like ritual sacrifices, the torture and killing of infidels,
the forceful overthrow of civil authority, and so forth – externalize potentially
extraordinary and odious costs;

• Religion burdens society when it gains exceptional influence over civil

institutions. Religion cloaks naked self-interest especially well, and State power,
ironically, is the ‘weapon of choice’ in modern Hobbesian warfare. Consequently,
politics and piety are particularly disruptive when combined. Otherwise, public
issues involving religion would be both fewer and simpler.

• In sum, pluralist societies tolerate religious externalities, by and large, so long as two
conditions are satisfied:

• The public benefits outweigh the associated costs;

• The public costs are neither extraordinary nor odious.

• Proposition #4: Religions compete for relevance within pluralist societies. They compete, not
only against each other, but also against secular organizations.

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 • All social organizations compete for relevance by producing tangible and intangible
benefits that induce individuals to join, and to remain affiliated.

• Accordingly, both affiliation and apostasy ultimately are rational, individual choices –
which is to say they are purposeful, economic choices.

• Proposition #5: Religion competes for relevance, not only against other organizations, but also
against the State.

• Both religion and State foster social cohesion and wealth creation, and both alleviate
private despair by providing ultimate objects for faith, worship, and devotion.

• Moreover, both religion and State form around biologically evolved predispositions that
cause individuals to seek reciprocal relationships, not only with the people around them,
but also with gods, as in the case of classical religion, and with charismatic and numinous
individuals, as in the case of secular, civil religions.

• Western governments have developed the appearance of functioning as personal States,

as if possessing all the essential qualities of a personal god, including omniscience,
omnipotence, and benevolence. Government paradoxically epitomizes the deification of
secular power.

• The competition between religion and State has two significant implications:

• First, religion’s influence everywhere is greatest where the State is indifferent,

ineffectual, hostile, corrupt, or untrustworthy.

• Examples include Polish Catholicism under Soviet communism, and

modern Islam in countries where the State is predatory and self-serving.

• Religion becomes ascendant in such places because it facilitates

cooperation and exchange among ordinary and disaffected individuals.

• The second implication, conversely, is that religion’s significance wanes – or as

Nietzsche wrote, “God is dead” – where the State delivers prosperity.

• America, for example, has become a ‘post-Christian’ society that

practices consumption and worships redistributive democracy.

• Notice here that civil prosperity diminishes not only God’s public
significance, but also the significance of mankind’s three instinctive virtues
– cooperation, reciprocity, and trust. These virtues ground the natural and

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 rationally selfish social process that sociobiologists call ‘reciprocal
altruism.’

• Notice finally that the substitutability between religion and State implies that the world’s
present fiscal difficulties eventually will affect the structure and conduct of religion.
Watch for these substitution effects as they develop over the next few years.

• Proposition #6: The process of economic cooperation and exchange spontaneously balances
competing religious and secular interests across the breadth of pluralist societies.

• Individuals routinely trade off – that is, they rationally exchange – one state of affairs for
another of greater subjective value.

• A pluralist society is defined by the aggregate pattern of these exchanges.

• Unfortunately, we tend to deny the legitimacy of tradeoffs where religion is at issue. This
denial results, in part, from a pair of ancient philosophical errors. (See Isaiah Berlin,
“European Unity and its Vicissitudes,” in The Crooked Timber of Humanity [1991], pp.
201-02):

• All genuine questions of value have a single true answer;

• All genuine answers are knowable, harmonious, compatible, and never in

conflict.

• These conditions rarely are satisfied in pluralist societies. Consequently, the problems
arising from conflicting interests have no single, ‘true’ solution. Tradeoffs therefore must
occur, either cooperatively or through compulsion, in order for any semblance of social
equilibrium to exist.

• Accordingly, the American legal scholar Steven Smith, like many contemporary
thinkers, concludes that:

“The function of a theory of religious freedom is [either] to mediate [i.e., to trade-

off] among a variety of competing religious and secular positions and interests, or
[else] to explain how government ought to deal with these competing positions
and interests.” Foreordained Failure: The Quest for a Constitutional Principle
of Religious Freedom (1995), p. 63.

• Proposition #7: This either/or characterization of theory overlooks the social dynamics that
distinguish durable pluralist societies.

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• These societies tend to mediate conflicting interests spontaneously through orderly
social competition. Orderly competition mitigates the social cost of conflict, whatever the
sources. It also obviates the collateral damage that often occurs where the metes and
bounds of religious pluralism are fixed by the compulsions of civil law.

• Notice here that America’s First Amendment secures more than just religious freedom.
It nominally protects the overarching process of social competition. It does so by
insulating, against various kinds of State interference, all legitimate forms of speech, press,
and assembly.

• Accordingly, blasphemy laws are presumptively unconstitutional, not only because they
are contrary to the First Amendment’s “establishment” prohibition, but also because they
necessarily would privilege some competing interests at the expense of others.

• Competing social interests are called ‘factions.’ The First Amendment’s author, James
Madison, echoed David Hume (Of Politics in General [1742]) by defining ‘faction’ as:

“... a number of citizens, whether amounting to a majority or minority of the

whole, who are united and actuated by some common impulse of passion, or of
interest, adverse to the rights of other citizens, or to the permanent and aggregate
interests of the community.” The Federalist No. 10 (1788).

• Madison saw that factions of all stripe threatened the fabric of American democracy.

• But rather than attempting to control factions directly, Madison’s constitutional design
instead permitted all factions to compete freely and equally in the public sphere. In
Madison’s view, as in Montesquieu’s, allowing “ambition ... to counteract ambition”
would further the spontaneous mediation of competing positions and interests. The
Federalist No. 51 (1788).

• Modern political economy complements this view by providing several reasons for
preferring orderly and robust social competition to a legislated, pluralist design:

• Knowledge is irretrievably dispersed;

• Values are subjective and incommensurable;

• Imposed social designs privilege some individuals over others;

• Designs entail unintended and adverse social consequences;

• Decision-makers in pluralist societies are inherently self-interested;

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 • And finally, even if an optimal social design were to be imposed, as could occur
only by coincidence, the result could not be recognized as being optimal. This
inevitably would leave all factions feeling cheated by the political process.

• Some practical difficulties of fine-tuning religious pluralism are analyzed in Roger

Trigg’s recent book, Religion in Public Life (2007).

• Proposition #8: The rules of orderly social competition are enforced both by norms, and by
civil law. (See Eric Posner, Law and Social Norms [2000].)

• In the absence of law, social order is maintained through such innate behaviors as
shunning, excommunication, and occasional violence. In particular, those individuals who
are not expected or trusted a priori to behave cooperatively and reciprocally are
penalized regardless of whether their offending behavior arises from spiritual beliefs and
religious practices, or out of innate self-interest.

• The law, by contrast, is a more complicated institution. While the social result ought to
be about the same under law as under norms, nowadays it usually isn’t. Here’s why.

• Social norms, like the old common law, are a patchwork of tradeoffs that emerge
spontaneously over time. This patchwork often appears to be arbitrary, but this is
because norms, like the common law, are the product of experience rather than
logic. (See Oliver Wendell Holmes, Jr., The Common Law [1881].)

• Modern statutory legal systems, by contrast, tend to be patchworks of ad hoc

political tradeoffs that favor the narrow interests of society’s most influential
factions. The common good often suffers as a consequence.

• Civil law ideally complements, to the fullest extent feasible, the universal regularities that
arise spontaneously in cooperative relationships. These regularities stem from mankind’s
innate virtues of cooperation, reciprocity, and trust, which also give rise to mankind’s
instinctive sense of ‘natural law,’ ‘natural rights,’ ‘fairness,’ ‘justice,’ and the ‘rule of
law.’ (See, e.g., Heinrich Rommen, The Natural Law: A Study in Legal and Social
History and Philosophy [1947].)

• Proposition #9: All of mankind’s biologically-conditioned virtues – including those that

ground spiritual beliefs and religious practices – are privately beneficial on balance. If they were
not, then evolution could not have selected for them.

• These virtues evolved as efficient, biological responses to the fundamental challenges of

mankind’s existence. The most conspicuous of these challenges is the natural scarcity of
economic value. Both mankind and religion would have evolved in unimaginably
different ways in the absence of scarcity, if indeed they evolved at all.

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 • But note, however, that these privately beneficial virtues need not be publically
beneficial. This is because evolution operates through individuals, not through groups.

• Proposition #10: No public religious or secular activity legitimately is privileged absolutely, as

a matter of ‘right,’ in pluralist societies. For example:

• Article 10 of the French National Assembly’s Declaration of the Rights of Man and the
Citizen (1789) required that:

“No one must be persecuted on account of his opinions, including religious ones,
provided the manifestations of these do not disturb the public order established by
legislation.”

• The same sentiment grounds America’s First Amendment (1791), which reflected
James Madison’s view of religious rights – and indeed, of all human rights – as ‘property
rights;’ that is, as individual claims on scarce economic resources. Madison drew from
John Locke, and foreshadowed John Stuart Mill, when writing that property:

“... embraces every thing to which a man may attach a value and have a right; and
which leaves to every one else the like advantage. [It includes] ... a man’s land, or
merchandize [sic], or money ... [as well as] ... his opinions and the free
communication of them. He has a property of peculiar value in his religious
opinions, and in the profession and practice dictated by them.” Property (1792).

• These libertarian conceptions of rights imply the same broad, but clearly not unlimited
protection for religion as for every other rational, individual activity effected within the
public sphere. Thus, individuals are free to create private value by cooperating and
exchanging in public – under the umbrella of religion – but they are not free, as a matter
of right, to externalize related costs and other burdens without limit.

• Conclusion: A society is at its best, not when its decision-makers seek to engineer religious
pluralism, but rather when they promote instead those virtues of reciprocal altruism that are both
rationally selfish and publically beneficial; that is, when the State enlarges liberty by protecting
the freedom of all individuals to enter into voluntary relationships and commitments, to expect
that agreements will be kept, and to expect that extraordinary and odious costs will not be
externalized without the consent of adversely affected individuals.

Related Writings

Montanye, James A. 2009. ‘Civilization Without Romance.’ Essays in the Philosophy of

Humanism 17:2 (Fall/Winter), pp. 102-28. Available at
http://www.scribd.com/doc/26313747/Civilization-Without-Romance

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–––. 2009. ‘Faith and Reason: A Darwinian Synthesis.’ Unpublished conference presentation.
Available at http://www.scribd.com/doc/16293779/Faith-and-Reason-A-Darwinian-Synthesis

–––. 2008. Book Review: ‘The Israel Lobby and U.S. Foreign Policy.’ The Independent Review
13:1 (Summer), pp. 119-23. Available at
http://www.independent.org/publications/tir/article.asp?a=694

–––. 2006. ‘The Apotheosis of American Democracy.’ The Independent Review 11:1 (Summer),
pp. 5-17. Available at http://www.independent.org/publications/tir/article.asp?a=582

–––. 2002. Book Review: ‘The Holocaust Industry: Reflections on the Exploitation of Jewish
Suffering.’ The Independent Review 6:3 (Winter), pp. 469-74. Available at
http://www.independent.org/publications/tir/article.asp?a=156

–––. 2000. ‘Values, Virtues, and the New American Testament.’ The Independent Review 4:4
(Spring), pp. 577-600. Available at http://www.independent.org/publications/tir/article.asp?a=262

–––. 1999. ‘Freedom of Speech: Constitutional Protection Reconsidered.’ The Independent

Review 3:3 (Winter), pp. 327-54. Available at
http://www.independent.org/publications/tir/article.asp?a=329

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