Atheism linked to economic innovation, productivity

By Mathew Goldstein

We can reasonably assert that philosophical naturalism has nothing to do with anything beyond the belief that the physical universe obeying natural laws is all that there is.  Nevertheless, beliefs about how our universe functions are unavoidably going to tend to influence individual day to day decisions that could, in turn, have larger implications for society.  The Journal of Institutional Economics recently published a study by two economists, Travis Wiseman of Mississippi State University and Andrew Young of West Virginia University titled Religion: productive or unproductive? that claims to have found evidence for negative correlations between religious belief commitments and some macro economic activity.

The researchers used religion data from a variety of sources: the Pew Form’s 2007 U.S. Religious Landscape Survey; the Gallup Poll’s State of the States surveys from 2004 and 2008; and the Census Bureau’s Religious Congregation and Membership Study of 2000 and 2010.  Religiosity was determined by four factors: regular attendance at religious services, strong belief in God, regular prayer, and viewing one’s religion as “very important.”  “Productive entrepreneurship” was calculated using a combination of new businesses created, new businesses created with 500 or more employees, per-capita venture capital investments, patents per capita, and the growth rate of self-employment.

They found that the percent of individuals reporting as atheist/agnostic is positively associated with productive entrepreneurship.  Conversely, all of the religious variables they tracked “tend to correlate negatively and significantly” with a state’s productive entrepreneurship score. The percentage of a state’s residents who are self-described Christians in particular “robustly correlated” with a lower score in productive entrepreneurship.

Chicago/Conservative Views of Economics

by Don Wharton                 

Milton Friedman

Economic theories are to a great extent ethical claims. They assert that shared outcomes will be better if we engage in certain policies of governance, taxation and fiscal policy. The outcomes for people living under those laws will be vastly different depending upon which theories and which laws we adopt. Economics is asserted to be a science and in theory we should be able to compare the theoretical claims with the empirical data.

Milton Friedman was one of the central figures creating the conservative Chicago school of economics. A prime feature of this variety of economics is a belief in largely unrestricted free markets. This can be very effective in increasing or decreasing commodities, manufactured goods and services in response to changes in relative demand by our society. If there is a shortage of corn the price will rise. There will then be more land, labor, fertilizer and machinery allocated to corn production, satisfying the demand.

Friedman wanted an extremely minimal government and disliked things such as permits and licenses as a matter of almost quasi-religious belief. He was opposed to licensing medical doctors. Of course, this would have opened up the market for medical services to a vast variety of medical fraud and quackery. To be fair, there are laws against fraud and in principle Friedman would argue that these laws would limit misbehavior.

Alan Greenspan was a supporter of Friedman's views. He saw no problem with the proliferation of sub prime, low documentation loans for real estate or the slicing and dicing of bundled mortgages to finance the recent housing bubble. This fraud was endorsed by rating agencies that seemed willing to give AAA ratings to repackaged mortgage instruments sold to credulous buyers. The ratings agencies were in effect bribed by the financial institutions that were requesting the ratings. Once again laws against fraud in theory apply. A few people have been prosecuted under such laws but only a very tiny percentage of the army of people who built the housing bubble that destroyed many trillions in American assets. The fear of prosecution was almost totally absent during the building of the housing bubble. The very minimal current levels of prosecution suggests there would be no fear of consequences when future markets become similarly disconnected from reality.