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New Thinking on Adam Smith and Economics

Paper Session

Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PST)

Manchester Grand Hyatt, America's Cup C
Hosted By: Association of Christian Economists & History of Economics Society
  • Chair: Edd Noell, Westmont College

Smith and Hume on Religious Markets

Paul Oslington
Alphacrucis College-Sydney


Adam Smith’s Wealth of Nations considers the economics of religious education and competition among religions, responding to his friend David Hume’s hilarious discussion of church establishment in Hume’s History of England. Smith and Hume of course are not alone, and economic arguments have been deployed in disputes about church establishment, religious competition, financial support of clergy etc long before the formation of the discipline of economics in the late 18th and early 19th centuries (Oslington 2017). Exponents include Richard Hooker, William Warburton, William Paley, Josiah Tucker, Jeremy Bentham, Edmund Burke, Richard Whately, and Thomas Chalmers. In the text which is the focus of this paper, Smith argues in Book V of the Wealth of Nations for the virtues of religious competition, for voluntary contributions alongside state support of religion, and limited democracy in relation to church appointments. A properly constituted religious market Smith suggests will generate large benefits for society.
It is important to recognise that Smith’s arguments about religion flows from his theologically framed account of human nature, and his understanding of the fall and divine providence. In other words, there are connections between the religious background of Smith’s thought and his discussion of religious markets, and these connections have been neglected in the literature. We must avoid anachronistically reading contemporary rational choice theory and utilitarian ethics back into Smith. His analysis is very different in its aims and modelling to the contemporary economics of religion (Iannaccone 1991, 1998, Ekelund Hebert and Tollison 2005, Iyer 2016). Smith’s analysis, while not nearly as comprehensive, is in some ways richer. How much did Smith’s thinking about religious markets shape his general view of markets? Anderson (1988) perhaps exaggerates (and is criticised by Leathers and Raines 1992, 1999, 2008 among others).

Economists on Adam Smith on Economics and Religion

Ross Emmett
Arizona State University


In 1987, A.M.C. Waterman provided a taxonomy for categorizing the possible relationships between economics as a social scientific discipline and religion(s) as practices and doctrinal/ethical systems. Waterman’s taxonomy provides useful categories for the examination of the range of writings by economists about Adam Smith on economics and religion since 1987. At the time, Waterman argued that: (i) Smith was the only economist since the late 1700s who had used economic analysis to examine the operation of religious institutions; (ii) Smith’s revisions of The Theory of Moral Sentiments removed material that creat a conversation between Christian morality and Smith’s theories of morality and economics; and (iii) the Christian political economy of the early nineteenth century combined Smith’s invisible hand with orthodox and Evangelical theodicies. Gary Anderson launched the post-1987 literature surveyed here with a Journal of Political Economy article on Smith’s economics of religion. Since 1990, the literature has exploded, with a considerable body of literature across many of the categories in Waterman’s taxonomy. The survey details the literature, and what we can learn both about the relation of Smith to religion and about how economists have found ways to apply Smithian insights to religious practices, doctrines, and ethical systems.

Smith and the Scholastic Tradition on Markets and Their Moral Rationale

Edd Noell
Westmont College


JEL Classifications
  • B3 - History of Economic Thought: Individuals
  • Z1 - Cultural Economics; Economic Sociology; Economic Anthropology