Pennies from Heaven
Is God to blame for the global market meltdown?
For many people, the wild fluctuations of global markets over the past few weeks were simply bad luck or a sign of the looming and dreaded double-dip recession. But for a large number of Americans, apparently, they were a sign from God. A recent survey by Baylor University shows that around 20 percent of Americans see God's hand at work in the economy -- even if they also strongly support a market free of all non-divine influence. "They think the economy works because God wants it to work. It's a new religious economic idealism," study co-author Paul Froese told USA Today.
For many people, the wild fluctuations of global markets over the past few weeks were simply bad luck or a sign of the looming and dreaded double-dip recession. But for a large number of Americans, apparently, they were a sign from God. A recent survey by Baylor University shows that around 20 percent of Americans see God’s hand at work in the economy — even if they also strongly support a market free of all non-divine influence. "They think the economy works because God wants it to work. It’s a new religious economic idealism," study co-author Paul Froese told USA Today.
For these religious economic idealists, the connection between financial success and belief highlighted by the likes of television preachers Jimmy Swaggart and Joel Osteen makes perfect sense. And they’ve got a rich history of academics backing them up. Max Weber’s The Protestant Ethic and the Spirit of Capitalism, for example, has gained new popularity among economists trying to explain why some countries are rich and others poor. But before we begin a search for an unindicted evangelist of the prosperity gospel to replace Ben Bernanke at the Fed, it might be worth having a closer look at the real relationship between God and mammon.
Weber’s theory goes like this: Protestants are upstanding and hardworking citizens because they want to make it clear that they are part of the elect. They don’t spend money on fripperies, because that would be a sign of Catholic indolence; instead, they invest and become even richer. Hence, Protestant Northern Europe became much richer than the Catholic South.
Most recent reinterpretations of Weber downplay the Protestant-Catholic distinction in favor of Christianity vs. the rest or even just the religious vs. the godless. The Baylor survey provides evidence that a number of Americans have some sympathy with a "neo-Weberian" view of the world that equates any kind of faith with wealth. People who strongly believe that God had a plan for them were also twice as likely to support the idea that "success is achieved by ability rather than luck."
But the Weberian worldview, it turns out, doesn’t do a great job of explaining which people or countries are rich and which are poor. Economist Davide Cantoni of the Universitat Pompeu Fabra in Barcelona, Spain, studied the Holy Roman Empire, where the Protestant Reformation began, to investigate whether regions that swung Lutheran developed faster than regions that swung to Rome. The answer: Not at all.
And economists Sascha Becker and Ludger Woessmann of the Ifo Institute at the University of Munich argue that any link from Protestantism to wealth in Northern Europe is due not to the sense (or reality) of being elect, but to the fact that Protestants liked reading the Bible (encouraging literacy).
Some have argued that choice of religion does matter — it’s just that Weber focused too narrowly on branches of Western Christianity. Marcus Noland of the Peterson Institute for International Economics uses global evidence to suggest that Buddhism or Orthodox Christianity may be your best bet if you want to see rapid economic growth. Countries with larger Buddhist and Orthodox Christian populations grew faster than the world average between 1913 and 1998, all else being equal.
For others, the faith-wealth nexus isn’t about what name you put on your religion, but about the substance: For example, might those motivated by the fear of hellfire work harder and earn more? The Baylor study suggests that people who believe in heaven and hell are more likely to be satisfied in their jobs, committed to their organization, and motivated by their faith to pursue excellence at work. And these results are backed up by economists Robert Barro and Rachel McCleary of Harvard University, who have argued that countries where lots of people believe in hell see a growth rate higher by 1.0 percent per year.
And yet, as economist Steven Durlauf of the National Bureau of Economic Research and colleagues have pointed out, the evidence of a link is far from clear-cut. Take one example: According to World Values Survey data, only 19 percent of Norwegians believe in hell, compared with 72 percent of Americans, and yet the World Bank suggests the average Norwegian has $5,000 more a year in income (not to mention the universal health care and long paid maternity leaves).
The safest conclusion appears to be that there is no stable relationship between any particular brand of religious belief and economic performance. The Baylor survey’s results, meanwhile, suggest that those who strongly agree that God has a plan for them are about half as likely to earn more than $100,000 a year than those who strongly disagree — evidence that some who assume God is on their side may be categorically mistaken.
Given the widespread disdain for material possessions among religious figures from East and West, perhaps this shouldn’t come as a surprise. Being religious may well make you happier. And, if you pick right, it may make an afterlife far more pleasant. But don’t expect it to make you — or your country — rich.
Charles Kenny is the director of technology and development and a senior fellow at the Center for Global Development and the author, most recently, of The Plague Cycle: The Unending War Between Humanity and Infectious Disease. Twitter: @charlesjkenny
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