Smith and Hume on Religious Markets
AbstractAdam 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).