The Divine Economy

Religion continues to exert a powerful influence on human affairs globally. It shapes people’s preferences and influences public policy. It provides a social framework to help people form communities and supply meaning. Paul Seabright’s The Divine Economy: How Religions Compete for Wealth, Power, and People offers novel interpretations of religious behavior in the tradition of classical political economy. 

Adam Smith pioneered the economics of religion. He claimed religious people responded to incentives just like everyone else. If you change the institutional environment, people alter their behavior. He illustrated this principle by examining the religious marketplace, particularly the demand side. People’s preferences for religious goods varied depending on the costs. Some people want strict rules, while others prefer lax ones. Religious markets emerged that required different levels of involvement. Some churches require weekly attendance, while some ask for much less commitment. Smith argued that competition allowed people to sort themselves into like-minded groups. Given the enormous variety of preferences, no one group would become too big, and as a result, minimal conflict would arise. Smith’s framework notably omits consideration of the transcendent or divine dimensions of religion. 

Unfortunately, Smith’s insights lay dormant for nearly two hundred years. Once economists rediscovered Smith’s application of economics to religious behavior, the rational-choice approach to religion emerged as a field. Scholars such as Roger Finke, Laurence Iannaccone, and Rodney Stark applied microeconomic reasoning to understand religious behavior. Specifically, they applied club theory to analyze religious participation. 

Club goods provide non-rivalrous benefits to a group of people but prevent nonmembers from enjoying them. Gated communities with pools or a clubhouse are an example. Religious organizations have club-like characteristics. Believers do not exist in a social vacuum. They engage others and want to associate with those who have similar beliefs. These interactions produce religious goods and services. Religious organizations develop rules that screen out potential free riders so that the benefits accrue to those who bear the costs of providing religious goods and services. A key criticism of this approach is that it effectively removes religion itself—treating religious organizations as secular entities governed by material incentives, with little room for transcendence. 

Paul Seabright builds on the club theory to develop his novel approach to religion. He focuses on how religious institutions gain and retain adherents and how they interact with the political system. Seabright interprets religions as platforms. They offer space for people to interact, practice their faith, and pursue meaning with others. Because religious platforms “facilitate relationships that could not form so easily without them, the terms under which the platform allows its members to participate have an impact on the types of relationships that form” (p. 96). Religious platforms address the social needs of people in an environment that allows them to flourish. 

Seabright begins with two chapters that lay out the empirical relevance of religion in the modern world. To his credit, he rejects the secularization hypothesis: that modernization, scientific progress, and rising incomes inevitably lead to religious decline. Rather, he recognizes that religions change form as the world evolves. They must do so to maintain their relevance. Evangelization efforts of the past no longer work as people have more access to information and alternative social networks have become much more numerous. In response, religious groups now offer live-streamed services, social initiatives like “Pints with Aquinas,” and QR code–enabled donations. 

Seabright then covers material that political scientists and sociologists have documented for decades. For example, he reviews the demand for and supply of religion in Chapters 3 and 4. Not surprisingly, he finds that people participate in religious activities for reasons other than eternal salvation or spiritual enlightenment. Theological arguments rarely lead one inside a religious building. Many people participate in religious activities to make friends, find partners, or become part of a community and its social events. 

When discussing the relative benefits of activities, Seabright distinguishes the religious from the secular. People make trade-offs between them. For example, attending a church, mosque, or synagogue is a religious activity, whereas a pickup basketball game is secular. But religious behavior takes many forms. I may invite an acquaintance to play basketball with some friends to get to know them. I may also wish to spread the good word. Maybe not immediately, but if a friendship emerges, I may ask them to join me at religious services. “Road to Damascus” moments—sudden, dramatic conversions—are rare. More often, belief emerges gradually through social connection. Apparent secular activities form the basis of longer term religious activities. The distinction between the sacred and secular may exist only in the mind of the outside observer. 

Chapter 4 is the key chapter of the book. Seabright sketches out his claim that religious institutions provide platforms for individuals to associate with one another. He argues that his model goes beyond viewing religious institutions as club goods. But how does a platform differ from a club good? Both provide a space for groups of people to interact and consume benefits. So far, no difference. But Seabright argues that the platform aspect arises because “members of platforms are more than consumers of benefits that are provided for them—they are assets of the platform, and active in the delivery of such benefits to each other” (p. 99). Members join not just for shared benefits, but to form friendships, romantic relationships, or business partnerships. The other members provide benefits beyond religious goods and services. 

Seabright extends his platform model to include the role of identity in religious communities. Identity represents multiple aspects of a person that extend beyond the religious. Someone could be a sports fan, someone’s child, a parent, a connoisseur of Southern African history, and a lover of economics. These aspects of identity matter at different moments. My identity as an economist matters little when I watch a Pittsburgh Steelers game, and vice versa. 

For many people, their religion forms their core identity. They primarily define themselves as Catholic, Jewish, Muslim, and so on. It may be a margin on which one is not willing to make trade-offs. Even though I remain hopelessly devoted to the Steelers, my Catholic identity precludes me from leaving Mass early to watch Sunday kickoffs. Religious identity helps to form groups, but the groups need more to sustain themselves. 

Seabright adds religious rituals to the platforms. These involve engaging in activities that, at first, make little sense. They do not appear to have a rationale. Why pray five times a day rather than three? Why five decades of the rosary rather than ten? But over time, the rituals gain meaning. They become understandable, although not necessarily completely. These rituals help to maintain social bonds with fellow group members. 

Religious rituals precede belief. Through the repetition of rituals, people come to accept religious claims. According to Seabright, “accepting doesn’t require believing, and believing is optional in practice for most members, most of the time (even while it passionately preoccupies some other members). It’s only after joining that most members start to shift their beliefs in the direction of the religion’s doctrines—and they do it because it comes naturally to them, not because their membership requires it” (p. 127). Repetition has shaped preferences and reduced the costs of accepting previously unintelligible beliefs. 

Ritual is not enough to sustain the group. Seabright incorporates narratives into his explanation of the persistence of religious institutions. Humans tell stories as a way to bond. Religions provide accounts and “histories” that communicate hope and common understanding. They “brought consolation to the downtrodden, and thereby increased their values as allies to a privileged elite” (p. 172). They offer opportunities for collaboration across social divides. 

The book’s third part focuses on the political economy of religious power. First, he examines the interaction between religion and politics. Often, when the two become intertwined, both lose legitimacy. So why do political and religious institutions encroach on each other’s space? Religion legitimizes politics. Politicians recognize that by co-opting religion, they can increase support. Similarly, politicians support religious groups through subsidies or limiting competition. 

To his credit, Seabright notes that political leaders do not solely maximize revenue or the probability of electoral victory. Sometimes they trade off money for more believers. He provides an example of a poll tax imposed by Muslim rulers on the non-Muslim population from the first caliphate until the mid-nineteenth century. The authorities set the tax above the revenue-maximizing level. Non-Muslims could avoid the tax by converting to Islam. Seabright writes, “The example shows that it’s sometimes hard to draw a sharp line between religious conversion through force and conversion through persuasion” (p. 245). Another interpretation is that those who “converted” did not change their beliefs. Publicly, they professed one faith to avoid the tax, while at home or with close friends they continued to practice their true faith. 

This part of the book culminates with an attempt to explain the abuse of power by religious institutions. The author emphasizes how secrecy and silence obstruct the exposure of abuse. Secrecy prevents people from sharing information with others about abuses; silence does the same. As a result, group members underestimate the extent of abuse, since no one has much more than anecdotal information. Seabright correctly notes that these features characterize secular institutions as well. What, then, enables abuse to persist in religious contexts? 

Seabright argues that it begins when someone with power (for example, a charismatic religious leader) interacts with vulnerable individuals. Platforms provide space for this to happen. Given the closeness of spiritual interactions, secrecy becomes normal. Unfortunately, abuse becomes harder to detect as those with power exploit those from low-status or other marginalized groups. Group identity helps to sustain abusive relationships. Members of religious groups seek to protect their reputations. The revealed actions of one bad apple could spoil the group’s reputation. They may deny any accusations of abuse or rationalize away “bad” behavior. They tell stories to explain away deviant behavior for fear that the group will unravel. 

Seabright concludes with some speculations about religion’s future. It will not disappear. In some parts of the world, it will continue to grow. In others, it will become less important. However, it will continue to evolve to offer platforms for people who seek them out. Noticeably absent from Seabright’s book is a serious engagement with the large literature that emerged beginning in the 1980s. Rodney Stark, probably the most distinguished social scientist of religion, appears here and there, but Seabright ignores most of his contributions. Anthony Gill’s writings on religious liberty are not mentioned. A quick perusal of the references suggests that twentieth-century contributions are either implicitly incorporated into more recent contributions or are not worth engagement. This vice extends across many areas of twenty-first-century economics. 

Yet, for all of its thought-provoking ideas, Seabright’s book suffers from the same problem Adam Smith had in understanding religion. Seabright approaches the topic as an engaged observer but seems unable, or perhaps unwilling, to access religion’s transcendent dimension. Kenneth Boulding (1968, Beyond Economics: Essays on Society, Religion, and Ethics, University of Michigan Press) noted this in Smith’s writing. He wrote: 

Adam Smith could never have had any real knowledge of the mind of the Wesleys. Mystical experience of any kind, he would have dismissed as “fanaticism and enthusiasm.” He is in some sense almost the ideal of the “good” intellectual; a very good, very moral, admirable, almost one might say a pious man. Yet there is clearly a realm of experience into which he does not penetrate. He can tell us a great deal about the forces that make for decay in religion as it becomes entangled with the world; he can tell us very little about the ultimate sources of its life and power. 

Seabright does not address the “ultimate sources” of religion’s “life and power.” The transcendent part of religion eludes him. When he does discuss transcendence, he emphasizes humanity’s ability to suspend “disbelief” and engage in “cognitive extravagance” to accept supernatural and, therefore, non-falsifiable claims. What defines religion is assumed away and replaced with evolutionary explanations of “irrational” beliefs. Rather than grappling with what many believers view as essential—mystical experience, divine presence, or miracles—Seabright substitutes evolutionary and cognitive mechanisms for belief. In doing so, he offers insight into institutions, but not into the soul of religious life.