In: R. Segal, K. von Stuckrad (eds.), Vocabulary for the Study of Religion Vol. 1-3 (VSR), Leiden, Boston: Brill 2015. 11 pp., URL: http://referenceworks.brillonline.com/browse/vocabulary-for-the- study-of-religion Economy Religion is part of the cultural meaning system in which economic systems and the regime of capital are also embedded. On the one hand, culture is partly altered by new systems of commerce, and on the other hand it is an autonomous environment opposing, acquiescing to, or assimilating these changes. It has been prognosticated that the future of religion will take shape in an expanding global religious marketplace. In this marketplace, individualism is associated with the demand for products in an on-going process of self-construction through the self-stylization of everyday life, often as part of a commodity aesthetics. In the context of vigorously intensified communication across continents, markets supplying religious services have become global with respect to exchange as well as with respect to imagination. As a result of these trends, economy has become an essential structural element of the religious field, and thus an imperative theme in the study of religion. This also leads to ambivalence with regard to the distinction secular-sacred: according to Charles Taylor and others, the new and specifically modern forms of social coordination, like the market economy, the public sphere, and the democratic state are deeply secular immanent orders. Thus, the intense interrelationship between religion and economy raises anew the issue of the de-/ secularization of the field. Instead of accepting the importance of economy and market forces for religion, some critics argue that religious production should not be seen as taking place in a market, and that the rationale of agents in religious contexts is not related to profit seeking. Overall, the concepts connected with the economics of religion are highly controversial. The Systematic Relationship between Religion and Economy Several relationships between economy and religion are common in societal debates, such as Koch A._Economy.indd 1 debates on development assistance, poverty reduction, and charity. As a first orientation and more systematic approach, Max Weber’s discussion of socio-economics (Sozioökonomik) might help (1949 [1904]). Weber develops three relations of interaction between economy and society. Taking religion as part of society, three options arise: 1. 2. 3. Religion as an economic phenomenon (e.g. religious firms as employers), Religion as a non-economic phenomenon that has economic effects (e.g. the influence of mental models on consumer behavior, or Christmas fairs), or Religion as an economically conditioned phenomenon (e.g. the spread of religion along commercial routes, a good example being Islam in East Africa, Ensminger 1997). In this line of thought, where religion and economics are considered as distinct fields, Peter L. Berger distinguishes religion as a “formative force” and as a “dependent formation” of “economic culture” (1967: 128). Another branch of research growing out of this relationship is economic ethics, as a further way of relating and interrogating the terrain of economy and religious ethos. To relate economy and religion in such ways already presumes their distinctiveness. This gives rise to many methodological queries and has prompted questions as to how to operationalize religion and causal dependencies or cultural interferences: What are relevant sociometric parameters to describe religion in its possible impact on shadow economies? How relevant to this impact is closeness in the religion-state relationship? And, more generally, how is historical causality to be conceived? Religion is not a distinct factor in pre-market economies, in cultures of exchange, or with regard to its embeddedness within market economies or social networks. Such ideas have led to questioning of the concept of rationality for describing religious as well as economic activities, 9/22/2014 6:44:22 PM 2 despite the central role of rationality in standard economic theory. Notwithstanding these difficulties, religion has all along been treated as if it were an entity on its own, that has guided economic treaties, exchange rates and taxes. Even today economists often overestimate the autonomy of religious institutions as cultural forces. Besides the taxonomy of Weber and Berger, there is a tendency to use economy as a term in cultural studies. Bourdieu and others see cultural and religious practices as ways of production, circulation, and consumption within a material and symbolic cultural economy. The specification of a sacred economy is considered to be the “productions, circulations, and contestations of transcendent claims and sacralizing practices that operate within any network of social relations” (Chidester 2008: 84). Thus, the fundamental operation within a political economy of the sacred is to set apart the sacred in the sense of Durkheim’s understanding of religion. In this economy of signification, signs in religion as well as in the arts are transformed into commodities that can generate profits. A wellknown problem associated with the peculiarity of the concepts of religion as well as economy is due to this expanding of meaning to all sociallyembedded practices. It is difficult to determine practices as religious and at the same time to keep away from a substantial and universal understanding of religion. For some years now, a specialized discourse on the economics of religion has grown up that addresses these questions historically and systematically. This strand of research opens up an option according to which religion and economy are not distinct realms but share a framework based on action theory parameters. Always relevant are the behavioral parameters of choice, trust, risk, and investment. There are culturally-dependent rules concerning how much payback is expected from insuranc and investments, how to prevent or seek risks, strategies of hedging against losses, and stockpiling and value-creating. A merely metaphorical use of economic vocabulary, and thus only limited forms of economic expression Koch A._Economy.indd 2 economy and modeling, must be distinguished from the expansion of economic theory as in economic anthropology. Systems of Commerce The historic examples chosen to test issues and groups were momentous for theory-building in cultural economics. In the first place, economic anthropology observed small-scale indigenous societies and exchange markets with a low degree of complexity, or societies in transition to capitalist economies. Therefore the prevalent theoretical elements were often reciprocity, barter, gift, and exchange, which are common in small groups. In the literature on economics of religion, a distinction is also made between simple gift economies and complex finance market transactions. A market economy does not evolve automatically, or parallel to social evolution from the exchange setting. The constitution of a marketplace is dependent on further factors, such as nation-building or a military conquest, where there is an urgent need for goods and human capital. Apart from reconstructions of basal economies in economic anthropology, a classical discourse on religious economy has existed for a long time, discussing sacrificing to gods and bargaining with gods (do ut des). These debates were fed into economic theory by Adam Smith and led to a renewed economic approach to religious agents and activities. Capitalism, communism, liberalism, and transitional economies between pre-capitalist and capitalist economies (Roberts 1995) have all been discussed in the light of their religious premises, ethics and consequences. In the Soviet Union, for instance, Communism attempted to extinguish the demand for religion by supplying Communist doctrine and political ceremonies (Pfaff 2010). The high degree of market regulation by the Communist Party undercut the production of religious goods and significantly raised their consumption costs (for example travel costs increased with a thinner religious infrastructure). 9/22/2014 6:44:22 PM Economy Religious coping phenomena go hand in hand with rapid, destabilizing, overwhelming, and often incomprehensible economization processes: prosperity religion, cargo cults, and occult economies appear at the margin of these capitalizing processes. Debates about the varieties of capitalism, for instance in comparative economic research, refer to economic reproduction in local modernities. There, urbanization or de-traditionalization are not automatically linked to a decline of religious affiliation, but may be adjunctive to an increase in prosperity religion. From an economics of religion perspective, it is therefore impossible to state universal correlations, for instance regarding the decrease of religion in conditions of economic growth (Barro and McCleary 2003). Observations are also made on the way occult economies revitalize religious and magical conceptions and practices as a way of coping with the rapid introduction of finance market capitalism. In order to explain the attractiveness of “magical” products in impoverished societies, it is argued that these “modern” economic instruments are unfamiliar, that they create inequality and thus offer ample scope for fantastic ideas and practices (working zombies, bewitching credit cards) (Comaroff and Comaroff 2001). Religious economies often play an important role in identity construal. Islamic banking, for example, gained popularity as an ethical expression of a modern Islam in the aftermath of September 11, 2001. Attempts at environmental sustainability, eco-friendly production, and ethical consumption have led among other things to nature spirituality. The Institutions of Market, Organization, and State In the past few decades the cultural and social embedding of institutions has shifted into the forefront of attention. Religious traditions have also been taken into account as institutions, meaning in their principal constructedness and as sets of social practices. Institutional arrangements can Koch A._Economy.indd 3 3 be seen as answering the challenge of how coordination und cooperation in a society can best be solved. The organizational field always communicates under economic conditions. Within this newer theory-building, where new institutional economics is one strand, the ideal and inadequate concept of the neo-classical market was elaborated. Markets are no longer seen as self-regulating, atomistic, competitive, ruled by procedures of utility-maximizing of rational agents with complete contracts, and open for exit and access at any time. To a greater degree these new approaches in economic anthropology, as well as in the new economic sociology, favor the steering and control of markets, the bounded rationality of agents, incomplete contracts that also always rely on social trust, networks instead of atomistic agents, and the opaqueness of the economic dynamics with unpredictable outcomes. New-institutionalism sees institutions as ranging from informal rules and habits to formal rules, constitutions, and organizations with materializing tendencies and buildings that enable religious aims to be transformed, memorized, and spread. Several aspects are relevant here: the main tasks are the institutional mediation of expectations, control, legitimacy, trust, and sanctions. They are performed in local religious markets, in organizations outside of markets, in religious organizations, through state regulation of religion, state religion, and transnational religious institutions. Economic transactions can only be understood with reference to global contingencies and determinants. A bilateral exchange no longer exists, even in remote corners of the world. A supply-market-demand complex with diverse actors at each step determines the meaning of products, their value, and pricing. The Shanghai stock market, for example, even though mimicking this global capitalist institution, is in its specific realization a fetishization of the Chinese state (Hertz 1998). These mechanisms as a whole constitute the political economy that has been examined by Marx in a different way from Weber. Issues of comparison are economic ethics, conditions of labor 9/22/2014 6:44:22 PM 4 and production, state regulation, denominations and wealth, and the socio-economic position of religious institutions. The new institutional theory of organizational fields allows for religious aspects of organizations, as well as for the organizational structure of religions (Demerath et al. 1998). The religion-state relation is economically significant in so far as it creates regulations, restrictions or support, and a certain sort of legality. In China, for instance, most religions were forbidden under communist rule before the opening and reforming of the party. Some therefore distinguish a gray market, where religions have an ambiguous legal/ illegal status, and a black market, where they are banned (Yang 2005). Markets are coordination mechanisms and locomotives of religious pluralism. In the literature, one sometimes gets the impression that market means the same as economy, but this impression is a simplification. Market ethnographies see the abstract market principle as a continuum ranging from diffuse interaction to empirical marketplaces. Some economic transactions take place outside the market, like those within firms or those overseeing the market, such as cartel authorities. Religious agents, institutions, and firms are active in several sectoral markets, such as education, social services, the production of goods (printing companies, retreats, breweries), and outside the market (ethic commission work, volunteer work). In these transactions, religious institutions play diverse economic roles, such as supplier, demander, club, principal, agent, employer, distributer, consumer. From a historical perspective, early modern European markets that were relatively closed have been examined for their denominational features. Their political economy is characterized by regional differences in economic activities and political party affiliation, depending on whether Catholics or protestants are in the majority. The pluralistic religious market in the United States of America has been the central paradigm in US-American sociological marketplace models since the 1970s. This mirrors American pluralism by the mere fact of a strong Christian denominational plurality supplemented Koch A._Economy.indd 4 economy by new religious movements. Market regulation on the part of the state is said to have severe consequences on the competitive exit criteria of religious suppliers and their initial investments. Neoclassical economics maintains that the less a market is regulated the more it will tend to encourage competition, thus increasing the demand for religion. According to the neoclassical axiom of market equilibrium, these endeavors will lead to a condition where maximum utility is reached between demand and supply. In Karl Polanyi’s market model, as well as in rational choice economics of religion, a market is mainly determined by competition, monopolies, demand, and supply. According to this normative model, in so far as these markets are autonomous and self-regulating, the state should not intervene, and all factors of production (labor, land, human resources, etc.) are marketable. In the context of secularization theory, the religious economy knows “winners and losers” who either disappear after a short time or grow by triggering demand due to a pluralistic supply of religious goods. According to the latter approach, the Catholic or Protestant monopolies in some regions, as well as state regulation, are predicted to correlate with lesser participation and productivity than pluralistic religious markets. So-called exceptions from this rule prompted further debates (Jelen 2002). Religious demand is a “macro-level concept describing the presence of segments of the population that are potential consumers of religion” (Pfaff 2010: 236). It is not unproblematic that in this theory religious demand is an axiom. People are said to perpetually seek religious satisfaction, salvation or belonging to a transcendent order. The market model is not only idealized but culturally disembedded and normally does not reflect the market’s idiosyncrasy. Commodities and Goods A frequent substantialist misunderstanding of economic theory involves the introduction of a reli- 9/22/2014 6:44:22 PM Economy gious type of goods (sacred goods, salvation goods) or even spiritual or religious human capital. There is no reason to introduce a new kind of goods or human capital so long as there is no autonomous feature from the perspective of culture theory. The sacred is a contextual construction that can easily be described analog to promises, future benefits, and values, for instance as in the home buyer or life insurance markets. From the point of view of cultural theory, part of Iannaccone’s definition of religious goods is therefore problematic: He describes them as those household commodities that rely on supernatural forces (1992: 125). This definition is only valid if understood in emic narrative. It is true that such commodities are produced not for market exchange but for the producer’s own consumption, with the benefit of religious capital-building which may correlate with greater religious satisfaction (if this religious capital is understood as a kind of context-specific capital, like that of regular opera-goers, and not as a new kind on its own). Economic goods do not need to be tangible. When Weber speaks of salvation goods, he has an action theory concept in mind that sums up the ultimate goal of many activities in the religious field. Donations and charitable gifts are goods that bring a moral or social intangible good in return, which is this-worldly, such as belonging, or being pleasing in the sight of God. Stolz elaborates a typology of goods which are the means of reaching a goal in a religious context, and combines it with rational choice (2006). He keeps the Weberian good of religious authority and calls it a positional social good. The remaining two types of social religious goods are communal (rituals) and collective (norms). Private goods in the religious context are consumer goods (objects, courses), membership, and personal goods (human capital, eternal life). Commodities consist of goods and services. The economic theory of goods is not uniform. Some work in economics of religion adopts the distinction between search goods, (post)experience goods, and credence goods. This approach addresses the uncertainty associated with promised features and the quality of goods. In the con- Koch A._Economy.indd 5 5 text of religion the quality of search goods can be assessed upon inspection, as with a book, a scent or a funeral speech. A middle position of (un)certainty is represented by experience goods, such as fee-for-services in yogic practice, mediumistic séances, healing stones, etc. In the context of charismatic born-again Christianity, for example, the utility can be experienced only after conversion, and as such is not testable from outside the religious system. Credence goods back-shift utility to a payoff in the afterlife, or bind it to the existence of supernatural beings. In the marketplace model combined with the microeconomic household production model, the benefit of household commodities is their otherwise unobtainable reward in respect of afterlife, salvation, conciliation, etc. In collective production, the problem of free riders occurs, which can be solved by costly demands. By this strategy of exclusion, the produced goods are club goods. Another distinction that is regularly applied to religion is that of public goods that are non-rival, like the demand for meaning in life. This good is not in competition with others in so far as many persons might see the same meaning in life without thereby decreasing each other’s good: in other words, my use of the good does not make it scarce for others. However, commodities in religious production are generally not nonrival or public in the sense of non-excludable: religions also create artificial shortages, for example by limiting the number of the chosen, by creating a shortage of salvation by godly temper, by limiting the emission of miraculous powers to specific times such as festivals, to specific places or to ritually bewitched substances. The century-long provision of public goods by pious foundations in the Islamic Middle East can be seen as a signaling of commitment by property owners which gave them security and property rights in return for their social services (Kuran 2001). In the context of the economization of modern life, a commodification of religion is often described. Fetishism of commodities, from Marx to the spirit of things (hau, see Marcel Mauss), 9/22/2014 6:44:23 PM 6 economy suggests that commodities are crucial for masking or revealing social relations. In a consumer culture, religious communication is often achieved by the marketing of religion. Cultural tensions may arise between the two driving forces of (Romantic) hedonism and Puritan asceticism (Campbell 1987). Symbolic goods constitute identity through their consumption, and communicate the person’s peculiar commitment. “What would Jesus buy?” bracelets bought by evangelical protestants, for instance, serve as a reminder of their anti-consumerist counter-identity. Religious consumer choice is patterned and in most approaches seen as somehow rational. But what are relevant parameters for consumption? Some point to other social identities besides class, like race, gender, being young, or coming from a specific area. How diverse religious affiliations intervene in these parameters to reinforce symbolic identity by the purchase and display of goods is an open field of research. Ideology, Mental Models, Risk, and Trust As early as Weber, affective and traditional practices were seen as constitutive environments of economic behavior. Informal and formal institutions are closely bound together by trust and habit that both rely on a shared framing of values or → ideology. These shared mental models or worldviews are economic issues in so far as choice and the securitization of transactions are important economic challenges. In his Philosophy of Money, Georg Simmel wrote that trust is a socio-psychological feeling similar to religious belief. Trust in money gives a feeling of personal security and is based on confidence in state organization. In the absence of this trust in monetary worth, for instance, economic activities would become so risky that they would have to be hedged, causing a high transaction cost of protection. Against this background, institutions are to be understood as predictable reactions towards actors’ expectations. It is common in today’s economics of religion to Koch A._Economy.indd 6 interpret religion as a complexity-reducing shared mental model which saves transaction costs, meaning costs that arise from control, search for information, making contracts, etc. A specific religious risk management and the signaling of trustworthiness are important for saving costs. Risk management is especially difficult with respect to beliefs concerning the last days and post-mortem existence. Iannaccone transfers two customary strategies for coping with risk from economics to religion: diversification and use of experts (1995). Private production diversifies the risks of religious promises remaining unfulfilled by limiting buying to smaller portfolios and experience goods on the base of fee-for-service transactions; the benefit obtained is instantaneous and is not shifted to the future or to a post-mortem world. With experts and witnesses on the supply side of religious institutions, the risks are minimized by information, specialization, and credibility. Very recently, new practices of binding the future have arisen in the context of a cultural change in societal risk management: risk is not avoided but sought for. With new financial products (securitizations, derivatives, swaps, etc.), the finance market does not negotiate goods or services, but administers future time in the form of the possibility of taking a decision at some point in the future. Behavioral economics has yielded many insights regarding fairness, altruism, and reciprocity as rational behavior, intertemporal counting for payoff, probability estimation, sunken cost, and social choice. Some have already been transferred to religion: religious altruism as in the self-offering of agents in suicide, the calculus of a millenarian splinter group (Alles 2004), trust (Tan and Vogel 2008), the correlation between cooperation and frequency of ritual (Ruffle and Sosis 2006). Conclusion Taking economic activity as a culturally-embedded realm of human action, it becomes evident that it is closely linked to other human actions and 9/22/2014 6:44:23 PM 7 Economy institution building. For this reason, research tools and insights into economic circulation, organizations, behavior, and marketplaces are more than relevant for the humanities. This relevance does not mean there are no differences between economic activity and other sectors of cultural production. Nevertheless, interdisciplinary work that is informed by economic theory is still rare. A desideratum for the economics of religion is the ability to distinguish between different kinds of markets: commodity, stock, labor, and capital markets follow different rules. At least Chidester mentions that the “sacred” is produced through the religious labor of interpretation and ritualization (2008: 89). Future reflections should touch on the peculiar religious labor market, and the particular religious production which is its context. Furthermore, the goals and pay-offs of religious activities are frequently contested: religious symbolic production may work as an instrument of empowerment, or subjugation, or both, depending on who performs it. There has also been no discussion so far of the phases of market development and their distinct challenges for economic action. It makes a difference for the expansion of religious movements and organizations whether they expand into a saturated monopolist or pluralist market, or whether the product is mature or still in the process of development. Against this background of market phases, the enormous success of modern Western postural yoga, for instance, can be interpreted by the absorption of the new technology of relaxation therapy (progressive muscle relaxation), the marketing of it as ancient Indian and spiritual (see Raya Yoga at its outset), and the created need for deceleration in popular discourses of early industrialization (to name just a few important elements). Much greater use could be made of economic concepts. Financing and pricing could be starting points. Cheap and expensive religions have been distinguished. High prices have been used as a strategy to stop free riders, and to signal commitment, trustworthiness, and cooperation, especially in ritual economics. Some themes have been Koch A._Economy.indd 7 poorly understood, for instance the role of religious organizations in non-profit markets, multilevel strategies like community building and social signaling, the implementation of highly complex aim chains like fighting against evil, poverty, discrimination, and depression. Not easy to evaluate are claimed successes and benefits such as the saving of souls, human growth, altered consciousness, or detachment from earthly interests. The same goes for the effects of governmental welfare interventions in the organizational field, inasmuch as charitable, religious, and worldview-based associations have to apply as faith-based organizations. Bibliography Alles, G., “Speculating on the Eschaton: An Economic Re-Reading of Harvey Whitehouse’s Inside the Cult,” Method and Theory in the Study of Religion 16: 266– 291, 2004. Barro, R.J., and R.M. McCleary, “Religion and Economic Growth,” American Sociological Review 68(3): 760– 781, 2003. Berger, P.L., Sacred Canopy: Elements of a Sociological Theory of Religion, Garden City, 1967. Campbell, C., The Romantic Ethic and the Spirit of Modern Consumerism, Oxford, 1987. Chidester, D., “Economy,” in D. Morgan (ed.), Key Words in Religion, Media and Culture, 88–95, New York, 2008. Comaroff, J., and J.L. Comaroff (eds.), Millennial Capitalism and the Culture of Neoliberalism, Durham, 2001. Demerath III, J.N., P.D. Hall, T. Schmitt, and R.H. Williams (eds.), Sacred Companies: Organizational Aspects of Religion and Religious Aspects of Organizations, New York, 1998. Ensminger, J., “Transaction Costs and Islam: Explaining Conversion in Africa,” Journal of Institutional and Theoretical Economics 153(1): 4–29, 1997. Hertz, E., The Trading Crowd: An Ethnography of the Shanghai Stock Market, Cambridge UK, 1998. Iannaccone, L.R., “Risk, Rationality, and Religious Portfolios,” Economic Inquiry 33: 285–295, 1995. 9/22/2014 6:44:23 PM 8 ———, “Religious Markets and the Economics of Religion,” Social Compass 39(1): 123–131, 1992. Jelen, T.G. (ed.), Sacred Markets, Sacred Canopies: Essays on Religious Markets and Religious Pluralism, Lanham, 2002. Kuran, T., “The Provision of Public Goods under Islamic law: Origins, Impact, and Limitations of the Waqf System,” Law and Society Review 35: 841–897, 2001. Pfaff, S., “Religion under Communism: State Regulation, Atheist Competition, and the Dynamics of Supply and Demand,” in R. McCleary (ed.), The Oxford Handbook of the Economics of Religion, 235–255, Oxford, 2010. Roberts, R.H. (ed.), Religion and the Transformations of Capitalism: Comparative Approaches, New York, 1995. economy Ruffle, B.J., R. Sosis, “Cooperation and the In-GroupOut-Group Bias: A Field Test on Israeli Kibbutz Members and City Residents,” Journal of Economic Behavior and Organization 60(2): 147–163, 2006. Stolz, J., “Salvation Goods and Religious Markets: Integrating Rational Choice and Weberian Perspectives,” Social Compass 53(1): 13–32, 2006. Tan, J.H.W., and C. Vogel, “Religion and Trust: An Experimental Study,” Journal of Economic Psychology 29(6): 832–848, 2008. Weber, M., “ ‘Objectivity’ in Social Science and Social Policy,” in Essays in the Methodology of the Social Sciences, 64–65, New York, 1949. Yang, D.-R., “The Changing Economy of Temple Daoism in Shanghai,” in F. Yang (ed.), State, Market, and Religions in Chinese Societies, 113–147, Leiden, 2005. Anne Koch Koch A._Economy.indd 8 9/22/2014 6:44:23 PM