20 July 2018

Does shunning religion make us richer?


Does being less religious make you wealthier?

That might be your conclusion from reading the headlines about a study released this week, which suggests that societies become richer once they have become less god-fearing.

The joint research from the Universities of Bristol and Tennessee is the latest academic effort to quantify or explain a link between religious practice and economic development. As the authors note, the early 20th century sociologist Max Weber argued that the “Protestant work ethic” was a core reason for the explosion of prosperity in the Western world.

It’s not an explanation that has stood the test of time: just look at the success of Japan and South Korea, not notable hotbeds of Calvinism. Nor, incidentally, does removing the “Protestant” bit necessarily change things. Throughout human history, the vast majority of people’s lives have been characterised by working very hard and remaining very poor.

Weber’s contemporary Emile Durkheim, widely regarded as the founding father of academic sociology, contended that religion would wither away in the face of technological and economic progress.

More recent studies have drawn similar conclusions. Here are academics Pippa Norris and Ronald Inglehart in their 2004 book Sacred and Secular: Religion and Politics Worldwide.

“As lives gradually become more comfortable and secure, people in more affluent societies usually grow increasingly indifferent to religious values, more skeptical of supernatural beliefs and less willing to become actively engaged in religious institutions.”

What’s interesting about this week’s report is that it specifically rejects this argument. The researchers took data from the World Values Survey spanning the entire 20th century to gauge the importance of religion to people in 109 different countries around the world.

“Our findings show that secularisation precedes economic development and not the other way around,” says leader researcher Damian Ruck. So, societies tend to become less religious and then become more prosperous, rather than being rich and then doing away with religion.

However, to conclude from this that secularisation causes prosperity would be a classic case of confusing correlation and causality. Rather than one being a consequence of the other, we might more plausibly posit that both are the result of other factors, which we might broadly define as greater freedom of thought and action.

Or, as the report’s authors succinctly put it: “Secularisation only leads to economic development when it is accompanied by a greater respect for individual rights.”

This is not a snide point about religion being silly, or scientifically advanced societies “seeing the light” – it is just that, given the choice, some people will subscribe to a theistic worldview, while others will not, in much the same way as some people will support one political party, and some another.  We need only look at America, which has combined high levels of religious observance with strong economic performance, to observe that religiosity is no barrier to prosperity. What’s instructive about the US example is that all faiths and none are embraced and tolerated as part of a political system based on those all-important individual rights.

Equally, the idea that doing away with religion will engender prosperity clearly does not stack up. After all, communist societies have all been avowedly atheist, but have not generally been noted for their stellar living standards.  The key difference, clearly, was that in countries like the Soviet Union atheism was forced on the population, rather than developing more or less organically.

We can reasonably infer, then, that it is only a liberal secularism, rather than a state-mandated abandonment of religion, that precedes economic progress. That is because the same principles that allow freedom of conscience and assembly are also the bedrock of a successful market economy.

As the economists (and self-described Protestants) Art Carden and Deirdre McCloskey argue, the key ingredients for prosperous societies are “liberty, dignity and equality for entrepreneurs”.  Indeed, this week’s report is explicit about the importance of treating citizens with dignity, as the data suggests that countries which are the most tolerant are liable to be the best off economically. It is, in other words, a defence of the open society – not only is affording all our citizens equal treatment ethically right, but it makes us all better off.

But what should we make of illiberal, authoritarian, but increasingly prosperous China? The world’s emerging economic superpower is an interesting test bed for the idea that abandoning religion begets prosperity, as it has been anti-religious and dirt poor and is now still anti-religious but increasingly wealthy. The not-so-mysterious key ingredient here is obviously Deng Xiaoping’s economic reforms of 1979, which opened up a command economy to a measure of market forces.  One might equally argue that China has never been “secular” in a meaningful sense, because its people have not been able to exercise freedom of conscience or religious practice.

At the same time China’s explosive economic success is, on the surface, a troubling rejoinder to those who argue that individual rights, freedom of speech and the rule of law are pre-requisites of a prosperous society. To which one might reply that China has not yet finished its journey from a middle income country to a rich one – in all the excitement about China’s rise, it’s worth remembering that average salaries are still far below those in the West.

Moreover, it’s hard to see how clamping down on free speech is a crucial ingredient for long-term, widespread prosperity. Given the evidence from pretty much every other advanced economy it seems more likely that China is succeeding in spite of its authoritarianism, rather than because of it.

This week’s research suggests it is economic good sense, rather than mere preachy moralism, to assert that the best path to sustained economic development is through offering people the freedom to think and act as they see fit.

John Ashmore is Deputy Editor of CapX