Friday, March 17, 2006

Do irrational beliefs harm economic growth?

Dr Simon Singh certainly believes so:
"BRITAIN is entering an "age of irrationality" caused by the rise of fundamental religion, creationism and the fad for unproven alternative medicine, one of the world's leading science writers has told The Scotsman.

Dr Simon Singh, author of the best-seller Big Bang, said he believed the economy would start to decline because of the lack of interest in science in this country compared to emerging economies such as India.

Dr Singh, said: "We are entering an age of irrationality. I can go into a chemist and buy a homeopathic remedy that's never been proven to work. We seem to be going back to a dark age of voodoo and witchcraft."

He added: "A recent example of Britain's growing anti-science culture is the rise of intelligent design in a few of our schools."

The trend away from science and towards irrationality had to be addressed for the sake of the economy, Dr Singh said. "I think the UK could rapidly go down the drain because economies thrive by having innovative pioneers, creative people," he said."
That's the article in it's entirety so the short answer is no, he doesn't provide any evidence. Nevertheless, it's an interesting question.

In terms of the examples he uses, I very much doubt that there'll be much evidence for the "homeopathic medicine as a drag on economic growth" hypothesis and I've often been struck by how sometimes dynamic economies, which have at various times in economic history reinforced their competitive advantage through the application of the best technology available to the business of production - like Japan and the United States - achieve this whilst simultaneously supporting a myriad of strange and exotic individual religious allegiances, attachment to parvenu denominations, belief in monotheisms, polytheisms, and pantheisms, as well as those superstitions requiring neither ethical or social commitment such as astrology, spiritualism, homoeopathy and alternative remedies of various kinds.

Rather than damaging economic growth, isn't it more likely that these are a product of its relative success? Industrialisation broke the traditional semi-theocratic power of ecclesias such as the Church of Scotland in the nineteenth century because population migration, the growth of cities, the rise of other entertainments, and the onslaught of scientific criticism rendered the Kirk minister - with his power based on the virtually closed community of the parish - almost completely impotent relative to his prior, near absolutist status.

Further prosperity would surely increase the tendency for people to choose from a supermarket of beliefs and religions? Generally speaking in a prosperous society, to be an apostate no longer means financial ruin. This was not always so.

The experience of the United States would tend to indicate that the application of new technology in industry isn't necessarily inconsistent with the belief that the world is created in six days. Whether the rise in irrational beliefs has in Britain led to a decline in the take-up of science at university, and that this is a source of economic disadvantage, is an interesting one - but the piece provides no evidence or argument for this, so it can't be discussed any further at this point.

However, that religious belief can harm economic growth is, I'd argue, easily demonstrable from economic history. I think it doubtful that religious belief per se damages economic growth. Indeed Max Weber argued that on the contrary, the development of capitalism was aided in the Occident by an ethos that was irrational from the perspective of individual utility and this he found, famously, in the Protestant Ethic.

His theory has some problems but refutations of his thesis on the grounds that the economic history of Calvinist Scotland doesn't fit the data should be rejected. Or rather it should be adapted because Weber didn't factor in the experiences of Scotland and Geneva as they functioned under Calvinistic theocracies. Here I think there can be no question that this form of political religiosity was highly detrimental to economic development. The reasons for this are many but they fundamentally flow from the lack of civic freedom implicit in theocracy - and more specifically in this case, the prohibition on usury.

Once the Church of Scotland's theocratic power had been broken, the economic history of this country would tend to confirm, not refute, Weber's ideas - for these had to do with religion as an individual ethos rather than a political ideology.

Individual irrationality doesn't at first glance appear to have at any particular point in economic history been an obstacle to economic development but theocratic government of all kinds, I'd argue, always have and always will be. It may sound too economically-deterministic for some but while I obviously share the concern over the rise in politicised religious movements, I have no doubt that in the long-term they must fail because they have the problem of the Soviet Union with bells on - this being a fundamental failure to gear their societies to the application of the best technology to the productive process.

The term "theocracy" joins the long list of terms that have been degraded by cheap political debate and overuse - like fascism, totalitarianism, racism, and genocide. But properly understood as ecclesiastical rule, rulership by priests, it has always been an economic failure. Because whether it's Calvinist Scotland, Taliban Afghanistan, or the quasi-theocracy of the Iranian Republic, societies where nothing is ever an end in itself, where the ends people choose for themselves must conform to the collective pursuit of the millennium - these tend to stifle and thwart a proper understanding of economic production as nothing more or less than a human contrivance to satisfy human wants. Or more simply, with theocratic government you tend to get repression, men in frocks and a moribund economy.

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