A number of development economists have found higher gender inequality to be associated with slower development. Amartya Sen (1990) estimated a large number of ‘missing women’, which resulted in skewed sex ratios, and argued that this has been one of history’s crucial development hurdles. Stephan Klasen, with various co-authors, used macroeconomic regressions to show that gender inequality has usually been associated with lower GDP growth in developing countries during the last few decades (Klasen and Lamanna 2009, Gruen and Klasen 2008). This resulted in development policies targeted specifically at women. In 2005, for example, UN Secretary General Kofi Annan stated that gender equality is a prerequisite for eliminating poverty, reducing infant mortality, and reaching universal education (UN 2005). In recent periods, however, a number of doubts have been made public by development economists. Esther Duflo (2012) suggested that there is no automatic effect of gender equality on poverty reduction, citing a number of studies. The causal direction from poverty to gender inequality might be at least as strong as in the opposite direction, according to this view.
…In a new study, we directly assess the growth effects of female autonomy in a dynamic historical context (Baten and de Pleijt 2018). Given the obviously crucial role of endogeneity issues in this debate, we carefully consider the causal nature of the relationship. More specifically, we exploit relatively exogenous variation of (migration-adjusted) lactose tolerance and pasture suitability as instrumental variables for female autonomy. The idea is that high lactose tolerance increased the demand for dairy farming, whereas similarly, a high share of land suitable for pasture farming allowed more supply. In dairy farming, women traditionally had a strong role, which allowed them to participate substantially in income generation during the late medieval and early modern period (Voigtländer and Voth 2013). In contrast, female participation was limited in grain farming, as it requires substantial upper-body strength (Alesina et al. 2013). Hence, the genetic factor of lactose tolerance and pasture suitability influences long-term differences in gender-specific agricultural specialisation. In instrumental variable regressions, we show that the relationship between female autonomy and human capital is likely to be causal (and also address additional econometric issues, such as the exclusion restriction, using Oster ratios, etc.).
Age-heaping-based numeracy estimates reflect a crucial component of human capital formation. Recent evidence documents that numerical skills are the ones that matter most for economic growth. Hanushek and Woessmann (2012) argued that maths and science skills were crucial for economic success in the 20th century. They observed that these kinds of skills outperform simple measures of school enrolment in explaining economic development. Hence, in the new study we focus on math-related indicators of basic numeracy. We use two different datasets: first, we use a panel dataset of European countries from 1500 to 1850, which covers a long time horizon; second we study 268 regions in Europe, stretching from the Ural mountains in the east to Spain in the southwest and the UK in the northwest.
Average age at marriage is used as a proxy for female autonomy. Low age at marriage is usually associated with low female autonomy. Age at marriage is highly correlated with other indicators of female autonomy, such as the share of female household heads or the share of couples in which the wife was older than the husband. Age at marriage is particularly interesting because of the microeconomic channel that runs from labour experience to an increase in women’s human capital. After marriage, women typically dropped out of the labour market, and switched to work in the household economy (Diebolt and Perrin 2013). Consequently, after early marriage women provided less teaching and self-learning encouragement to their children, including numeracy and other skills. Early-married women sometimes also valued these skills less because they did not ‘belong to their sphere’, i.e. these skills did not allow identification (Baten et al. 2017).
What do they find?
Figure 3 depicts a strong and positive relationship between average age at marriage and numeracy for the two half centuries following 1700 and 1800. Most countries are close to the regression line. Denmark, the Netherlands, Germany, Sweden, and other countries had high values of female autonomy and numeracy – interestingly, many of the countries of the Second Industrial Revolution of the late 19th century, rather than the UK, the first industrial nation. In contrast, Russia, Poland, Slovakia, Italy, Spain, and Ireland had low values in both periods.
In our regression analyses, we include a large number of control variables, such as religion, serfdom, international trade, and political institutions. We find that the relationship between female autonomy and numeracy is very robust.
We also study the relationship between female autonomy and human capital formation at the regional level in the 19th century. Numeracy and age at marriage (after controlling for country-fixed effects and other control variables) yield an upward sloping regression line (Figure 4).
…In sum, the empirical results suggest that economies with more female autonomy became (or remained) superstars in economic development. The female part of the population needed to contribute to overall human capital formation and prosperity, otherwise the competition with other economies was lost. Institutions that excluded women from developing human capital – such as being married early, and hence, often dropping out of independent, skill-demanding economic activities – prevented many economies from being successful in human history.
I started my MA program in Government at John Hopkins University this past month. Homework is therefore going to take up a lot of my time and cut into my blogging. Instead of admitting defeat, I’ve decided to share excerpts from various assignments in a kind of series. I was inspired by the Twitter feed “Sh*t My Dad Says.” While “Sh*t I Say at School” is a funnier title, I’ll go the less vulgar route and name it “Stuff I Say at School.” Some of this material will be familiar to DR readers, but presenting it in a new context will hopefully keep it fresh. So without further ado, let’s dive in.
A recent Pew study showed that millennials are less religiously affiliated than any other previous cohort of Americans (sometimes called the rise of the “nones”). Given the emphasis Tocqueville places on the role religion plays in creating a culture that helps to keep democracy in America anchored, analyze these developments through Tocqueville’s viewpoint[.]
The Stuff I Said
Tocqueville would likely have a strong affinity for Baylor sociologist Rodney Stark’s research on religion. Stark’s sociological analysis of religion takes a similar approach to Tocqueville, acknowledging that the religious competition and pluralism (i.e., religious free market) that resulted from religion’s uncoupling from the state produces a robust, dynamic religious environment. He puts it bluntly in his book The Triumph of Faith: “the more religious competition there is within a society, the higher the overall level of individual participation” (pg. 56). It is the state sponsorship of churches, he claims, that has contributed to Europe’s religious decline.
I was struck by the claim in the lecture that 95% of Americans attended church weekly in the mid 19th-century because it contradicts the data collected by Stark and Finke:
On the eve of the Revolution only about 17 percent of Americans were churched. By the start of the Civil War this proportion had risen dramatically, to 37 percent. The immense dislocations of the war caused a serious decline in adherence in the South, which is reflected in the overall decline to 35 percent in the 1870 census. The rate then began to rise once more, and by 1906 slightly more than half of the U.S. population was churched. Adherence rates reached 56 percent by 1926. Since then the rate has been rather stable although inching upwards. By 1980 church adherence was about 62 percent (pg. 22).
Tocqueville might also be more optimistic about the state of America’s religious pulse. For example, Stark has criticized the narrative that often accompanies the “rise of the nones”:
The [Pew] findings would seem to be clear: the number of Americans who say their religious affiliation is “none” has increased from about 8 percent in 1990 to about 22 percent in 2014. But what this means is not so obvious, for, during this same period, church attendance did not decline and the number of atheists did not increase. Indeed, the percentage of atheists in America has stayed steady at about 4 percent since a question about belief in God was first asked in 1944. In addition, except for atheists, most of the other “nones” are religious in the sense that they pray (some pray very often) and believe in angels, in heaven, and even in ghosts. Some are also rather deeply involved in “New Age” mysticisms.
So who are these “nones,” and why is their number increasing–if it is? Back in 1990 most Americans who seldom or never attended church still claimed a religious affiliation when asked to do so. Today, when asked their religious preference, instead of saying Methodist or Catholic, now a larger proportion of nonattenders say “none,” by which most seem to mean “no actual membership.” The entire change has taken place within the nonattending group, and the nonattending group has not grown.
In other words, this change marks a decrease only in nominal affiliation, not an increase in irreligion. So whatever else it may reflect, the change does not support claims for increased secularization, let alone a decrease in the number of Christians. It may not even reflect an increase in those who say they are “nones.” The reason has to do with response rates and the accuracy of surveys (pg. 190).
Finally, Tocqueville was right to recognize the benefits of religion to society. As laid out by Stark in his America’s Blessings (pg. 4-5),the religious compared to irreligious Americans are:
Less likely to commit crimes.
More likely to contribute to contribute to charities, volunteer their time, and be active in civic affairs (a recent Pew study provides support for this last one).
Happier, less neurotic, less likely to commit suicide.
More likely to marry, stay married, have children, and be more satisfied in their marriage.
Less likely to abuse their spouse or children.
Less likely to cheat on their spouse.
Performing better on standardized tests.
More successful in their careers.
Less likely to drop out of school.
More likely to consume “high culture.”
Less likely to believe in occult and paranormal phenomena (e.g., Bigfoot, UFOs).
Overall, I think Tocqueville would be pleased to see data back up his observations.
A classmate pointed to a recent study claiming that when one controls for social desirability, the amount of atheists in America possibly rises to over a quarter of the population. The study is certainly interesting, though I wonder if this would hold up in other countries. Based on Stark’s The Triumph of Faith, these are the following average percentages of atheists across the world:
Latin America: 2.5%
Western Europe: 6.7%
Eastern Europe: 4.6%
Islamic Nations: 1.1%
Sub-Saharan Africa: 0.7%
Other (Australia, Canada, Iceland, New Zealand): 8.4%
As for the unaffiliated Millennials, unchurched and irreligious are two different things. A Pew study from last year found that 72% of the “nones” believe in some kind of higher power, with 17% believing in the “God of the Bible.” Even 67% of self-identified agnostics believe in a higher power, with 3% believing in the “God of the Bible.” But unchurching can lead to other forms of spirituality. The Baylor Religion Survey has found, perhaps surprisingly to some, that traditional forms of religion and high church attendance have strong negative effects on belief in the occult and paranormal. In other words, a regular church-goer is less likely than a non-attendee to believe things like Atlantis, haunted houses, UFOs, mediums, New Age movements, alternative medicine, etc. This is probably why Millennials are turning to things like astrology, alternative medicine, healing crystals, and the like.
Political institutions, ranging from autocratic regimes to inclusive, democratic ones, are widely acknowledged as a critical determinant of economic prosperity (e.g. Acemoglu and Robinson 2012, North, Wallis, and Weingast 2009). They create incentives that foster or inhibit economic growth. Yet, the emergence and global variation of growth-enhancing, inclusive political institutions in which people broadly participate in the governing process and the power of the elite is constrained, are not well understood. Initially, inclusive institutions were largely confined to the West. How and why did those institutions emerge in Europe?
This article contributes to the debate on the formation and global variation of inclusive institutions by combining and empirically testing two long-standing hypotheses. First, anthropologist Jack Goody (1983) hypothesized that, motivated by financial gains, the medieval Catholic Church implemented marriage policies—most prominently, prohibitions on cousin marriage—that destroyed the existing European clan-based kin networks. This created an almost unique European family system where, still today, the nuclear family dominates and marriage among blood relatives is virtually absent. This contrasts with many parts of the world, where first- and second-cousin marriages are common (Bittles and Black 2010). Second, several scholars have hypothesized that strong extended kin networks are detrimental to the formation of social cohesion and affect institutional outcomes (Weber, 1958; Todd, 1987; Augustine, 1998). Theologian Augustine of Hippo (354–430) pointed out that marrying outside the kin group enlarges the range of social relations and “should thereby bind social life more effectively by involving a greater number of people in them” (Augustine of Hippo, 354-430 / 1998, p. 665). More recently, Greif (2005), Greif and Tabellini (2017), Mitterauer (2010), and Henrich (forthcoming) combined these two hypotheses and emphasized the critical role of the Church’s marriage prohibitions for Europe’s institutional development (pg. 2).
The analysis demonstrates that already before the year 1500 AD, Church exposure and its marriage regulations are predictive of the formation of communes—self-governed cities that put constraints on the executive. The difference-in-difference analysis does not reveal pre-trends and results are robust to many specifications. They hold within historic political entities addressing concerns that the relation is driven by other institutional factors and when exploiting quasi-natural experiments where Church exposure was determined by the random outcomes of medieval warfare. Moreover, exploiting regional and temporal variation in marriage regulations suggests that the dissolution of kin networks was decisive for the formation of communes.
The study also empirically establishes a robust link between Church exposure and dissolution of extended kin networks at the country, ethnicity and European regional level. A language-based proxy for cousin marriage—cousin terms—offers a window into the past and rules out that the dissolution was driven by more recent events like the Industrial Revolution or modernization. Moreover, the study reports a robust link between kin networks, civicness and inclusive institutions. The link between kin networks and civicness holds within countries and—getting closer to causality—among children of immigrants, who grew up in the same country but vary in their vertically transmitted preference for cousin marriage. Kin networks predict regional institutional failure within Italy, ethnicities’ local-level democratic traditions and modern-day democratic institutions at the country level. Measures for the strength of pre-industrial kin networks rule out contemporary reverse causality or the possibility that the estimates are driven by contemporary omitted variables. The analysis also demonstrates that the association between kin networks and the formation of inclusive institutions holds universally—both within Europe and when excluding Europe and countries with a large European ancestry. This universal link strengthens the hypothesis that the Church’s marriage regulations, and not some other Church-related factor, were decisive for European development.
Underlying these early institutional developments was most likely a psychology that, as a consequence of dissolved kin networks, reflects greater individualism and a more generalized, impartial morality (Schulz et al. 2018). This is a building block not only for inclusive institutions but also for economic development more generally. For example, transmission of knowledge across kin networks and the shift away from a collectivistic culture toward an individualistic one, a culture of growth, may have further contributed to Europe’s economic development (Mokyr, 2016; de la Croix, 2018).
…To build strong, functional, inclusive institutions and to foster democracy, the potentially deleterious effect of dense kin networks must be considered. Also, simply exporting established formal institutions to other societies without considering existing kin networks will likely fail. Policies that foster cooperation beyond the boundaries of one’s kin group, however, have a strong potential to successfully diminish the fractionalization of societies. These can be policies that encouraging marriages across kin groups. More generally, policies that foster interactions that go beyond the boundaries of in-groups such as family, close friends, social class, political affiliation or ethnicity are likely to increase social cohesion (pg. 41-42).
Anthropologist and cultural psychologist Joseph Henrich has defined our peculiar subset of the world population as WEIRD: Western, Educated, Industrialized, Rich, Democratic. How did this psychological variation arise? A new working paper offers a very interesting answer:
A growing body of research suggests that populations around the globe vary substantially along several important psychological dimensions, and that people from societies characterized as Western, Educated, Industrialized, Rich and Democratic (WEIRD) are particularly unusual (1–6). Often at the extremes of global distributions, people from WEIRD populations tend to be more individualistic, independent, analytically-minded and impersonally prosocial (e.g., trusting strangers) while revealing less conformity, obedience, in-group loyalty and nepotism (3, 5–13). While these patterns are now well documented, efforts to explain this variation from a cultural evolutionary and historical perspective have just begun (13–20). Here, we develop and test a cultural evolutionary theory that aims to explain a substantial portion of this psychological variation, both within and across nations. Not only does our approach contribute to explaining global variation and address why WEIRD societies so often occupy the tail ends of global distributions, but it also helps explain the psychological variation within Europe—among countries, across regions within countries and between individuals with different cultural backgrounds within the same country and region.
Our approach integrates three insights. The first, drawing on anthropology, reveals that the institutions built around kinship and marriage vary greatly across societies (21–23) and that much of this variation developed as societies scaled up in size and complexity, especially after the origins of food production 12,000 years ago (22, 24–29). In forging the tightly-knit communities needed to defend agricultural fields and pastures, cultural evolution gradually wove together social norms governing marriage, post-marital residence and in-group identity (descent), leading to a diversity of kin-based institutions, including the organizational forms known as clans, lineages and kindreds (21, 27, 30). The second insight, based on work in psychology, is that people’s motivations, emotions, perceptions, thinking styles and other aspects of cognition are heavily influenced by the social norms, social networks, technologies and linguistic worlds they encounter while growing up (31–38). In particular, with intensive kin-based institutions, people’s psychological processes adapt to the collectivistic demands and the dense social networks that they interweave (39–43). Intensive kinship norms reward greater conformity, obedience, holistic/relational awareness and in-group loyalty but discourage individualism, independence and analytical thinking (41, 44). Since the sociality of intensive kinship is based on people’s interpersonal embeddedness, adapting to these institutions tends to reduce people’s inclinations towards impartiality, universal (non-relational) moral principles and impersonal trust, fairness and cooperation. Finally, based on historical evidence, the third insight suggests that the branch of Western Christianity that eventually evolved into the Roman Catholic Church—hereafter, ‘the Western Church’ or simply ‘the Church’—systematically undermined the intensive kin-based institutions of Europe during the Middle Ages (45–52). The Church’s marriage policies and prohibitions, which we will call the Marriage and Family Program (MFP), meant that by 1500 CE, and likely centuries earlier in some regions, Europe lacked strong kin-based institutions, and was instead dominated by relatively weak, independent and isolated nuclear or stem families (49–51, 53–56). This made people exposed to Western Christendom rather unlike nearly all other populations.
Integrating these insights, we propose that the spread of the Church, specifically through its transformation of kinship and marriage, was a key factor behind a cultural shift towards a WEIRDer psychology in Europe. This shift eventually fostered the creation of new formal institutions, including representative governments, individual rights, commercial law and impersonal markets (17, 57). This theory predicts that (1) societies with less intensive kin-based institutions should have a WEIRDer psychology and (2) historical exposure to the Church’s MFP should predict both less intensive kin-based institutions and, as a consequence, a WEIRDer psychology.
To illuminate these relationships for diverse populations, we (1) developed measures of the intensity of kin-based institutions, (2) created historical databases to estimate the exposure of populations to the Church (along with the MFP) and (3) compiled 20 different psychological outcomes, including laboratory experiments, validated scales, survey questions and ecologically-valid observational data. We examine the predicted relationships from three complementary perspectives. Across countries, we can observe the broadest range of variation in the largest number of psychological outcomes. Across regions, we can track the historical Church as it lumbered across Europe and detect its footprints on the psychological patterns and marital arrangements of modern Europeans. Finally, by comparing second-generation immigrants in Europe based on their links to the kin-based institutions of their ancestral communities around the world, we eliminate many alternative hypotheses for the relationships we’ve illuminated.
According to Paul Reeve, “one of [the book’s] most significant contributions…is…its exploration and thorough documentation of the racial universalism inherent in the first two decades of Mormonism” (pg. 193). As Bringhurst explains, “Initially, however, the status of blacks did not differ from that of any other ethnic group. As objects for probable Mormon salvation, black people fell within the purview of Mormon universalism. The Book of Mormon proclaimed a basic desire to preach the Gospel among all peoples, blacks as well as whites. “All men are privileged the one like unto the other and none are forbidden” (2 Ne. 26:28). Joseph Smith expressed this same universalism throughout the Doctrine and Covenants. According to Smith, the voice of the Lord was “unto all men” and he was “no respecter of persons” (D&C 1:2, 38:16).3 As for the gospel, it was “free unto all” regardless of “nation, kindred, [or] tongue” (D&C 10:51).4 “All those who humble themselves before God” would “be received by baptism into his Church,” including the “heathen nations” (D&C 20:37, 45:54). The Mormon Prophet instructed missionaries to go “into all the world” and preach the gospel “unto every creature . . . both old and young, both bond and free” (D&C 43:20). Finally, the Mormon gathering to Zion would include the righteous from “every nation under heaven” brought together “from the ends of the earth” (D&C 45:69, 58:9, 45)” (pgs. 32-33).
[W]hile I was already convinced of the theologically bogus nature of the temple/priesthood ban, I came across yet another reason to question its veracity: the whole notion of a temple/priesthood ban based on “lineage” is undermined by another teaching put forth by both Joseph Smith and Brigham Young, namely that the Holy Ghost purges Gentiles of impurities and makes them the literal seed of Abraham. Bringhurst writes, “In fact, the Saints were anxious to “purge out . . . impure elements” not just from the larger Mormon community but also from the bodies of individual church members. This could be done, Young said, “through the Holy Ghost,” which could act upon individual Saints tainted with impure “Gentile blood.” These impurities would actually be purged “out of their veins” and replaced with the pure blood of Abraham. This process would remove impure “blood out” of the bodies of Mormons of varied ethnic backgrounds, including those who had the “blood of Judah”” (pg. 124).
I was admittedly hesitant when I was asked to reviewSaints, Slaves, & Blacks. Having read a good amount of the recent scholarship on the topic and knowing the book was a largely unchanged 2nd edition, I was worried that I wouldn’t have much to say about it. Fortunately, my worries were put to rest in the first chapter. Despite originally being published nearly 40 years ago, the scholarship still feels fresh and relevant. Bringhurst’s book simultaneously plays the role of both the foundation of and a contributor to modern scholarship on Mormonism and race. And we should be thankful to Greg Kofford Books for making it available once more.
I’m once again behind on my book reviews, so here’s a list of the books I’ve read recently, their descriptions, and accompanying videos.
Lawrence M. Krauss, A Universe From Nothing: Why There Is Something Rather Than Nothing (Free Press, 2012): “Bestselling author and acclaimed physicist Lawrence Krauss offers a paradigm-shifting view of how everything that exists came to be in the first place. “Where did the universe come from? What was there before it? What will the future bring? And finally, why is there something rather than nothing?” One of the few prominent scientists today to have crossed the chasm between science and popular culture, Krauss describes the staggeringly beautiful experimental observations and mind-bending new theories that demonstrate not only can something arise from nothing, something will always arise from nothing. With a new preface about the significance of the discovery of the Higgs particle, A Universe from Nothing uses Krauss’s characteristic wry humor and wonderfully clear explanations to take us back to the beginning of the beginning, presenting the most recent evidence for how our universe evolved—and the implications for how it’s going to end. Provocative, challenging, and delightfully readable, this is a game-changing look at the most basic underpinning of existence and a powerful antidote to outmoded philosophical, religious, and scientific thinking” (Amazon).
Daniel M. Cable, Alive at Work: The Neuroscience of Helping Your People Love What They Do (Harvard Business Review Press, 2018): “In this bold, enlightening book, social psychologist and professor Daniel M. Cable takes leaders into the minds of workers and reveals the surprising secret to restoring their zest for work. Disengagement isn’t a motivational problem, it’s a biological one. Humans aren’t built for routine and repetition. We’re designed to crave exploration, experimentation, and learning–in fact, there’s a part of our brains, which scientists have coined “the seeking system,” that rewards us for taking part in these activities. But the way organizations are run prevents many of us from following our innate impulses. As a result, we shut down. Things need to change. More than ever before, employee creativity and engagement are needed to win. Fortunately, it won’t take an extensive overhaul of your organizational culture to get started. With small nudges, you can personally help people reach their fullest potential. Alive at Work reveals:
How to encourage people to bring their best selves to work and use their greatest strengths to help your organization flourish
How to build creative environments that motivate people to share ideas, work smarter, and embrace change
How to enhance people’s connection to their work and your customers
How to create personalized experiences that help people feel a deeper sense of purpose
Filled with fascinating stories from the author’s extensive research, Alive at Work is the inspirational guide that you need to tap into the passion, creativity, and purpose fizzing beneath the surface of every person who falls under your leadership” (Amazon).
Newell G. Bringhurst, Saints, Slaves, & Blacks: The Changing Place of Black People Within Mormonism, 2nd ed. (Greg Kofford Books, 2018): “Originally published shortly after the LDS Church lifted its priesthood and temple restriction on black Latter-day Saints, Newell G. Bringhurst’s landmark work remains ever-relevant as both the first comprehensive study on race within the Mormon religion and the basis by which contemporary discussions on race and Mormonism have since been framed. Approaching the topic from a social history perspective, with a keen understanding of antebellum and post-bellum religious shifts, Saints, Slaves, and Blacks examines both early Mormonism in the context of early American attitudes towards slavery and race, and the inherited racial traditions it maintained for over a century. While Mormons may have drawn from a distinct theology to support and defend racial views, their attitudes towards blacks were deeply-embedded in the national contestation over slavery and anticipation of the last days. This second edition of Saints, Slaves, and Blacks offers an updated edit, as well as an additional foreword and postscripts by Edward J. Blum, W. Paul Reeve, and Darron T. Smith. Bringhurst further adds a new preface and appendix detailing his experience publishing Saints, Slaves, and Blacks at a time when many Mormons felt the rescinded ban was best left ignored, and reflecting on the wealth of research done on this topic since its publication” (Greg Kofford).
Benjamin Powell, Out of Poverty: Sweatshops in the Global Economy (Cambridge University Press, 2014): “This book provides a comprehensive defense of third-world sweatshops. It explains how these sweatshops provide the best available opportunity to workers and how they play an important role in the process of development that eventually leads to better wages and working conditions. Using economic theory, the author argues that much of what the anti-sweatshop movement has agitated for would actually harm the very workers they intend to help by creating less desirable alternatives and undermining the process of development. Nowhere does this book put ‘profits’ or ‘economic efficiency’ above people. Improving the welfare of poorer citizens of third world countries is the goal, and the book explores which methods best achieve that goal. Out of Poverty will help readers understand how activists and policy makers can help third world workers” (Amazon).
“Profit and profitability are…crucial–for society even more than for the individual business,” wrote the late Peter Drucker.
Yet profitability is not the purpose of, but a limiting factor on business enterprise and business activity. Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity. If archangels instead of businessmen sat in directors’ chairs, they would still have to be concerned with profitability, despite their total lack of personal interest in making profits. The root of the confusion is the mistaken belief that the motive of a person–the so-called profit motive of businessmen–is an explanation of his behavior or his guide to right action. Whether there is such a thing as a profit motive at all is highly doubtful…In fact, the concept is worse than irrelevant: it does harm. It is a major cause of the misunderstanding of the nature of profit in our society and of the deep-seated hostility to profit, which are among the most dangerous diseases of an industrial society…And it is in large part responsible for the prevailing belief that there is an inherent contradiction between profit and a company’s ability to make a social contribution. Actually, a company can make a social contribution only if it is highly profitable.
Drucker goes a little too far (his dismissal of economic explanations is a bit, well, wrong), but I was nonetheless reminded of this with the passing of science fiction authior Ursula Le Guin. In her speech at the 2014 National Book Awards, she said, “Books aren’t just commodities; the profit motive is often in conflict with the aims of art.” This is because “we live in capitalism” and “its power seems inescapable.” I suppose that could be true of profit to an extent, but the best evidence we have suggests the opposite. Economist Federico Etro’s work has shown that profitability helped drive artistic innovation over the centuries. For example, in Renaissance Italy, Etro found
a slow decline in real prices up to the 1420s, when the real price of paintings starts a rapid increase that continued for all the rest of the century. This process is more spectacular for the expected profitability of painting (the index based on the baseline regression), which suggests that the artistic profession was becoming more profitable. The expected compensations of a young apprentice (unaware of his future talent) were increasing during the XV century. But a similar increase in profitability applies also conditioning on the talent of the painter: the index of the expected compensation of a given painter (the one based on the full regression with artists’ fixed effects) reaches levels in the 1480s that are about three times as those of the 1420s. This suggests that the quality of the active painters was increasing over time, but even the most talented artists during the mid 1400s could expect an increase in their compensations along their career. Finally, notice that in the first half of the XVI century the real price of paintings finally stabilized at a relatively high level, which, as I argued, was not differentiated between regions.
This evolution suggests a Schumpeterian pattern. Part of the artistic creativity associated with Renaissance, and the artistic innovations of this period, such as the introduction of exact perspective (since the 1420s), oil colors (around the 1470s), the sfumato (with Leonardo), the colorito (with Titian) and an impressive differentiation of styles, may be due to increasing profitability of the profession made possible by the increasing demand for artistic goods. My data do not allow me to test directly for causality, but show for the first time that the expected profitability of the artistic profession was increasing rapidly during the XV century compared to the profitability of other professions (since we adjust prices for the purchasing power in terms of unskilled work). We should not underestimate the opinion of a privileged contemporary, Vasari, who repeatedly cited competition as a main driver of the achievements of the Florentine painters[.]
…An economic perspective suggests that it was the unprecedented increase in relative demand for artistic goods by wealthy patrons ready to compete for (and able to judge) quality in an interregional market that attracted large enough groups of painters in towns such as Florence, Venice and Rome. Competition incentivized these painters to differentiate styles and compete in quality, where higher quality was interpreted as the ability to solve a series of new technical problems in the realistic reproduction of the world in painted images. Under these rules of the game, positive externalities from the close interaction of painters in these towns strengthened their innovative ability (pgs. 25-28).
We have studied the Italian market for oil paintings of historical subject during the Baroque era through econometric analysis of a unique data set containing the prices derived from the original contracts. Our main purpose was to show that looking at the market for paintings as a fully fledged market could shed light on the determination of the prices of some of the most valuable handmade objects of humankind. The market for oil paintings was extremely competitive and populated by players very similar to what we may now define as representatives of the homo economicus.
…In a celebrated historical account of the demand for art in the Renaissance period, Richard A. Goldthwaite has pointed out that Italian cities have generated the first modern markets for durable luxury goods, which have been at the origins of modern capitalism based on consumerism. “Today the consumer instinct is taken for granted: the challenge to producers is to introduce new products, reduce prices, and change fashion… If, on the one hand, we decry what this consumerism has developed into in our own times, with its commodity culture of planned obsolescence, throwaway goods, and fashion-ridden boutiques, on the other hand, we have enshrined its very spirit in our great museums. These veritable temples to the consumption habits of the past, where we worship as art one of the dynamics that gives life to the economic system of the West, mark the supreme achievement of capitalism.” The market for paintings in the sixteenth-seventeenth century is not only one of the first markets for durable luxury goods of the modern capitalistic society. Its surviving documentary evidence and even its surviving products are witnesses that it was also one of the first markets to follow the main laws of economics and rational market behavior (pg. 437).
It’s been one of the most contentious debates in anthropology, and now scientists are saying it’s pretty much over. A group of prominent anthropologists have done an overview of the scientific literature and declare in Science magazine that the “Clovis first” hypothesis of the peopling of the Americas is dead.
For decades, students were taught that the first people in the Americas were a group called the Clovis who walked over the Bering land bridge about 13,500 years ago. They arrived (so the narrative goes) via an ice-free corridor between glaciers in North America. But evidence has been piling up since the 1980s of human campsites in North and South America that date back much earlier than 13,500 years. At sites ranging from Oregon in the US to Monte Verde in Chile, evidence of human habitation goes back as far as 18,000 years.
In the 2000s, overwhelming evidence suggested that a pre-Clovis group had come to the Americans before there was an ice-free passage connecting Beringia to the Americas. As Smithsonian anthropologist Torben C. Rick and his colleagues put it, “In a dramatic intellectual turnabout, most archaeologists and other scholars now believe that the earliest Americans followed Pacific Rim shorelines from northeast Asia to Beringia and the Americas.”
Now scholars are supporting the “kelp highway hypothesis,” which holds that people reached the Americas when glaciers withdrew from the coasts of the Pacific Northwest 17,000 years ago, creating “a possible dispersal corridor rich in aquatic and terrestrial resources.” Humans were able to boat and hike into the Americas along the coast due to the food-rich ecosystem provided by coastal kelp forests, which attracted fish, crustaceans, and more.
No one disputes that the Clovis peoples came through Beringia and the ice free corridor. But the Clovis would have formed a second wave of immigrants to the continent.
If the communism of the apostolic church is a secret, it is a startlingly open one. Vaguer terms like “communalist” or “communitarian” might make the facts sound more palatable but cannot change them. The New Testament’s Book of Acts tells us that in Jerusalem the first converts to the proclamation of the risen Christ affirmed their new faith by living in a single dwelling, selling their fixed holdings, redistributing wealth “as each needed” and owning all possessions communally. This was, after all, a pattern Jesus himself had established: “Each of you who does not give up all he possesses is incapable of being my disciple” (Luke 14:33).
This was always something of a scandal for the Christians of later ages, at least those who bothered to notice it. And today in America, with its bizarre piety of free enterprise and private wealth, it is almost unimaginable that anyone would adopt so seditious an attitude.
While Christianity “was not a political movement in the modern sense,” it “was a kind of polity, and the form of life it assumed was not merely a practical strategy for survival, but rather the embodiment of its highest spiritual ideals. Its “communism” was hardly incidental to the faith.” He points out that “the New Testament’s condemnations of personal wealth are fairly unremitting and remarkably stark,” going on to cite Matt. 6:19-20, Luke 6:24-25, and James 5:1-6. “While there are always clergy members and theologians swift to assure us that the New Testament condemns not wealth but its abuse, not a single verse (unless subjected to absurdly forced readings) confirm the claim.”
The early Christians saw “themselves as transient tenants of a rapidly vanishing world, refugees passing lightly through a history not their own.” Many fourth and fifth-century theologians “felt free to denounce private wealth as a form of theft and stored riches as plunder seized from the poor. The great John Chrysostom frequently issued pronouncements on wealth and poverty that make Karl Marx and Mikhail Bakunin sound like timid conservatives.”
No society as a whole will ever found itself upon the rejection of society’s chief mechanism: property. And all great religions achieve historical success by gradually moderating their most extreme demands. So it is not possible to extract a simple moral from the early church’s radicalism.
But for those of us for whom the New Testament is not merely a record of the past but a challenge to the present, it is occasionally worth asking ourselves whether the distance separating the Christianity of the apostolic age from the far more comfortable Christianities of later centuries–and especially those of the developed world today–is more than one merely of time and circumstance.
While I think Hart is correct about the radicalism of the early Christian church, he only briefly mentions a major driving force behind their radicalism: they saw “themselves as transient tenants of a rapidly vanishing world.” The early Church was more-or-less a Jewish apocalyptic movement. Believing the world is going to end soon tends to produce radical practices. And while the Book of Mormon may be a little more nuanced in regards to wealth, it’s not by much. So what does our economic world look like today compared to that of 1st-century Palestine? Harvard historian Niall Ferguson writes,
Despite our deeply rooted prejudices against ‘filthy lucre’…money is the root of most progress…[T]he ascent of money has been essential to the ascent of man. Far from being the work of mere leeches intent on sucking the life’s blood out of indebted families or gambling with the savings of widows and orphans, financial innovation has been an indispensable factor in man’s advance from wretched subsistence to the giddy heights of material prosperity that so many people know today. The evolution of credit and debt was as important as any technological innovation in the rise of civilization, from ancient Babylon to present-day Hong Kong. Banks and the bond market provided the material basis for the splendours of the Italian Renaissance. Corporate finance was the indispensable foundation of both the Dutch and British empires, just as the triumph of the United States in the twentieth century was inseparable from advances in insurance, mortgage finance and consumer credit.
First, the ancient economy of Palestine was an underdeveloped, agrarian economy based primarily on the production of food through subsistence-level farming by the peasantry. The peasantry, through taxation and rents, supported the continuance of a social-economic structure characterized by asymmetrical distribution of wealth in favor of the elite, a small fraction of the population. Peasants made up the vast majority of the population (over 90 percent…)…[W}ealth in the form of rents, taxes, and tithes flowed toward urban centers, especially Jerusalem (and the Temple), and was redistributed for ends other than meeting the needs of the peasantry, the main producers. The city’s relation to the countryside in such an economy, then, would be parasitic, according to this view (pg. 515).
Bruce Longenecker of Baylor University provides the following estimates about Greco-Roman urban life (pg. 264):
3% of the population was wealthy (e.g., imperial to municipal elites).
17% had a moderate surplus (something like a middle class).
80% were just above, just at, or just below the subsistence level.
The direction of income to particular favored groups shaped attitudes toward wealth accumulation in first-century Palestine. Indeed, in the New Testament era, it can be argued that the rich or wealthy “as a rule meant [those who were] ‘avaricious, greedy’” (Malina 1987, 355), rather than those who held a specific level of net worth. The wealthy obtained their standing by extractive or redistributive actions; resentment was generated toward these individuals who “impose tributes, extract agricultural goods, and remove them for ends other than peasants want” (Hanson and Oakman 1998, 113). This notion dovetailed with the notion that participation in the economy was a zero-sum game. Schneider asserts that in Palestine “the rich were very often (though not always) people who had made a bargain with the devil Rome”; the gouging of the typical farmer through overpayment of taxes and other means suggests that “we will comprehend the New Testament better if we understand that financial advantage in Israel often implied direct involvement with political evil and injustice” (2002, 121). Hanson and Oakman add that “rich and powerful people could be looked upon as robbers and thieves as much as benefactors” (1998, 111) (pgs. 100-101).
Inclusive institutions empower people across society, and thus tend to benefit all. Extractive institutions empower only some, and thus tend to benefit only small groups of people…On the economic side, inclusive institutions secure people’s rights to private property, including private property rights over productive resources, and allow these to be held broadly across society. These allow societies to experience the kinds of specialization, exchange, investment, and innovation that increase productivity…Extractive economic institutions, by contrast, are those that limit or altogether prevent the ability of people across society to individually own private and productive property, engage in commercial and profit-seeking activities, and enjoy the fruits of their investments and innovations. Such institutions stifle productivity.
…It is important to stress here that Acemoglu and Robinson do not deny that economic growth can occur under extractive institutions. Such ‘extractive growth’ can happen either because of strong policies of state investment in highly productive sectors of the economy (as in Caribbean slave-economies from the sixteenth until the eighteenth century, or the Soviet Union until the 1970s), or because pockets of inclusive economic institutions exist in a larger extractive setting (as in South Korea in the 1960s and 70s).
But such growth never lasts. Extractive economies sooner or later stop growing, or collapse altogether, due to a lack of innovation, state incompetence, conflict and corruption, or the withering away of whatever small inclusive parts may have existed. Only inclusive economic institutions, protected by inclusive political institutions, can offer the kinds of sustained investment, innovation, flexibility, and creative destruction that create a continued path of growth and prosperity (pgs. 68-69).
But here’s the clincher:
The philosophical literature on global justice and ethics contains disturbingly many theories that proceed in ways that are strangely disconnected from the best empirical studies about poverty and prosperity. Sometimes the empirical insights are simply set aside or even ignored. And even those who do engage with them or focus on the role of institutions frequently fail to see the forest for the trees. Hence, we read proposals for new global institutions (ignoring that the quality of domestic institutions is at least as important), we see arguments for extensive redistribution (ignoring that such policies will be counter-productive if not accompanied by institutional changes in developing countries), and so on.
The most important lesson that Why Nations Fail (and other works like it) contains for philosophers working on global justice is this: getting our economic institutions right is just as important as getting our political institutions right. And the evidence strongly indicates that this means endorsing market societies, with strong property rights over private and productive resources and economic freedom for all.
It is hard to say why these facts have been ignored or denied by philosophers for so long. Perhaps the hostility toward inclusive economic institutions is that they are seen as contestable parts of neoliberal, libertarian, or other free market perspectives. But this is to miss the point. Among the most exemplary inclusive countries are European welfare states like Denmark, Sweden, and Germany. Strong property rights and robust economic freedom are compatible with a variety of redistributive policies. Why Nations Fail is far from a libertarian manifesto. And if even those countries are too much market-oriented for our taste, well, I propose we get over it. There is simply too much at stake (pg. 74).
Now what’s my point? Do I think Hart is wrong? No. Far from it. I think he’s absolutely right about the text and the early Christians. However, the text has a specific historical, economic, and socioreligious context. And this context explains the condemnations of wealth and the lack of concern for material prosperity. But in a world that hasn’t ended, how are modern Christians supposed to apply these alien and radical teachings? What about the Bible’s concern for the poor? Does it matter that the poor in developed nations are richer than the rich in Jesus’ time and even today are some of the wealthiest people on the planet? Does it matter that global markets and inclusive economic institutions have reduced extreme poverty to its lowest levels in human history?
Surely it matters. It has to. I can’t fathom that it wouldn’t. But this makes me ask a question that–as a committed Christian–bothers me a great deal: how relevant is the New Testament for today regarding practical matters? If the world hasn’t and isn’t ending any time soon, does it make much sense to “not worry, saying, ‘What will we eat?’ or ‘What will we drink?’ or ‘What will we wear?’” (Matt. 6:31, NRSV)? If the Kingdom of God is at hand, then financial concerns and the like are certainly trivial. But since the Kingdom is about 2,000 years late, what are we supposed to do? Concerns for and alleviation of the poor among early Christians must have been thought of as a relatively short-term deal, seeing that social and economic justice would be fully achieved in the soon-to-come Kingdom of God. But since we appear to be in for the long haul, do Jesus’ teachings need to be recontextualized? Do they need to be–to borrow Nephi’s words–“liken[ed]…unto us, that it might be for our profit and learning” (1 Ne. 19:23)? Or have we, as Hart suggests, truly strayed from the real intent of Christ’s words?
A recent working paper looks at the effects of India’s 1986 anti-child labor law. Once again, good intentions and actual outcomes are at odds with one another:
The estimated effect of the ban is to increase relative employment among children under the age of 14. Having an underage sibling leads to a 0.3 percentage point increase in the likelihood of engaging in work after the ban for the very young. While this point estimate is small, it is both statistically and economically significant; the pre-ban proportion of children employed in that age range is only 2 percent so the effect of the ban is to increase employment by 15% over the mean for this group. The ban increases the probability of employment by 0.8 percentage points (5.6% over the mean) for young children ages 10-13. However, older children ages 14-17 overall are unaffected by the ban. The effect for this group is both small relative to the mean and statistically insignificant. Again, the largest increase in child labor is in agriculture…which is consistent with the partial mobility case of the two-sector model where there is restricted entry into manufacturing (pg. 22).
The authors then look at five measures of household welfare:
Per capita expenditure.
Per capita food expenditure.
Caloric intake per capita.
Staple share of calories; i.e., “a measure of household nutritional adequacy in the presence of caloric needs that are unknown or variable across households. [The] logic is that if households attach a high disutility to having caloric intake below caloric needs, they will substitute towards the cheapest sources of calories (staples)” (pg. 25).
Household index asset; i.e., “a set of variables that capture the quality and quantity of housing, the type of energy used for cooking and lighting, and the quantity of electricity used (which is likely to be correlated with the number of appliances and durables used by the household” (pg. 25).
We find a negative and statistically significant point estimate of the ban’s effect on four out of five welfare measures. The one exception is caloric intake per capita which has a positive but not statistically significant coefficient. This is consistent with households near-subsistence – the ones likely to be most affected by the ban – being unable to cut back on calories and instead reducing other aspects of household welfare (consuming more less tasty staples or selling assets) as well as the idea that increased child labor for these households may increase household caloric requirements and thereby constrain households from adjustment on this margin. However the changes for all of the welfare measures are quantitatively small – about 0.01 standard deviations of the pre-ban cross-section – and the standard errors are small enough to rule out large positive or negative effects of the ban (pg. 26).
Nonetheless, “we take this as evidence that the ban makes these households unambiguously worse off” (pg. 5). They conclude,
This paper is the first empirical investigation of the impact of India’s most important legal action against child labor. While the Child Labor (Prohibition and Regulation) Act of 1986 prevented employers from employing children in certain sectors and increased regulation of child labor in non-family run businesses, the net result of this ban appears to be an increase in child labor in some families. We find that child wages decrease in response to such laws and poor families send out more children into the workforce. Due to increased employment, affected children are less likely to be in school. These results are consistent with a two sector model with some frictions on mobility across sectors where the ban is more stringently enforced in one sector than the other. Importantly, we also examine the overall welfare effects of the ban on households. Along various measures of household consumption and expenditure, we find that the ban leads to small decreases in household welfare.
This paper does not intend to suggest that all child labor bans are useless. In fact, well formulated and implemented bans could absolutely help in eliminating child labor; but as we do in this case, research would have to examine how a decrease in child labor affects child and household welfare (Baland and Robinson (2000); Beegle, Dehejia and Gatti (2009)). To echo the reasoning in Basu (2004): “Legal interventions, on the other hand, even when they are properly enforced so that they do diminish child labor, may or may not increase child welfare. This is one of the most important lessons that modern economics has taught us and is something that often eludes the policy maker” (pg. 30).
In 1993, child workers in Bangladesh were found to be producing clothing for Wal-Mart, and Senator Tom Harkin proposed legislation banning imports from countries employing underage workers. The direct result was that Bangladeshi textile factories stopped employing children. But did the children go back to school? Did they return to happy homes? Not according to Oxfam, which found that the displaced child workers ended up in even worse jobs, or on the streets–and that a significant number were forced into prostitution.
The consequences for the dismissed children and their parents were not anticipated. The children may have been freed, but at the same time they were trapped in a harsh environment with no skills, little or no education, and precious few alternatives. Schools were either inaccessible, useless or costly. A series of follow-up visits by UNICEF, local non-governmental organizations (NGOs) and the International Labour Organization (ILO) discovered that children went looking for new sources of income, and found them in work such as stone-crushing, street hustling and prostitution — all of them more hazardous and exploitative than garment production. In several cases, the mothers of dismissed children had to leave their jobs in order to look after their children.
Most economic historians conclude that…legislation was not the primary reason for the reduction and virtual elimination of child labor between 1880 and 1940 [in the United States]. Instead they point out that industrialization and economic growth brought rising incomes, which allowed parents the luxury of keeping their children out of the work force. In addition, child labor rates have been linked to the expansion of schooling, high rates of return from education, and a decrease in the demand for child labor due to technological changes which increased the skills required in some jobs and allowed machines to take jobs previously filled by children. Moehling (1999) finds that the employment rate of 13-year olds around the beginning of the twentieth century did decline in states that enacted age minimums of 14, but so did the rates for 13-year olds not covered by the restrictions. Overall she finds that state laws are linked to only a small fraction – if any – of the decline in child labor. It may be that states experiencing declines were therefore more likely to pass legislation, which was largely symbolic.