Religion, Altruism and Social Capital [Smith_N]
Nathan Smith
People participate in religion, among other reasons, to meet people, make friends, and form communities. We all know this, yet this fact remains largely opaque to economic theory. If we try to regard community as a “good” which is bought and sold, then who are the buyers, who are the sellers, what is the price, and what is the “technology” by which the good is produced? Yet community clearly is a good that people value, and their desire for it affects their economic behavior, and one of the things they do for its sake is religion. They hire preachers and choir directors, build churches, burn gas driving to church on Sunday mornings, submit, more or less, to some restrictions on behavior, so that they can, in the process, make a lot of friends, with whom they organize church socials and holiday celebrations and Bible studies and parties, and whom they turn to for aid in times of need, for job references and advice, for help moving house, and sometimes to buy and sell things, arrange business partnerships, rent property, and give things away. To the extent that religion’s benefits are supernatural or realized only in the afterlife, economists have some excuse if their explanatory efforts remain somewhat incomplete (though the study of the market for “supernatural” goods has been surprisingly productive). But seeking social connections is the type of this-worldly motivation that should be accessible to economic analysis. Nonetheless, economic studies of how community and social connections serve to motivate religious participation remain few.
It sometimes occurs that a scientific discipline finds some observed fact about the world inexplicable not because it hasn’t made the key observation and conducted the right experiment, but because some fundamental flaw in the paradigm of that science makes it unable to think about the problem in the right way. In this paper, I will argue that the fact just mentioned—that people go to church for the community, among other things—is just this kind of fact with respect to the paradigm of standard microeconomic theory, as characterized by such assumptions as perfect information, complete contracts, exogenous preferences, and self-seeking “rational agents.” I will sketch an alternative paradigm of human interaction, rooted in the game-theoretic analysis of social capital and behavioral assumptions that allow for altruism, which can sometimes be externally induced. (The new paradigm sketched here includes the old paradigm as a special case.) In the process, I will provide a definition of “social capital” which I hope will be an advance over what has been provided in the literature so far, by clarifying precisely in what sense social capital really exists, and by showing how social capital may be regarded as a “private” good. I will then apply the paradigm to the question at hand—how does community motivate religious participation? My hope is that although the paradigm’s development remains somewhat open-ended, it will be clear to readers how it can render this puzzle transparent.
File: NSmith - Religion, Altruism and Social Capital 9-21-07.doc [374.00KB]
Published 11/02/2007
Filed under: *smith_n, @asrec'07, altruism, social capital