St. Maximos' Hut

An intriguing paper from Jonathan Gruber (MIT, Econ) and Daniel Hungerman (Duke, Econ).

The abstract

Recently economists have begun to consider the causes and consequences of religious participation. An unanswered question in this literature is the effect upon individuals of changes in the opportunity cost of religious participation. In this paper we identify a policy-driven change in the opportunity cost of religious participation based on state laws that prohibit retail activity on Sunday, known as “blue laws.” Many states have repealed these laws in recent years, raising the opportunity cost of religious participation. We construct a model which predicts, under fairly general conditions, that allowing retail activity on Sundays will lower attendance levels but may increase or decrease religious donations. We then use a variety of datasets to show that when a state repeals its blue laws religious attendance falls, and that church donations and spending fall as well. These results do not seem to be driven by declines in religiosity prior to the law change, nor do we see comparable declines in membership or giving to nonreligious organizations after a state repeals its laws. We then assess the effects of changes in these laws on drinking and drug use behavior in the NLSY. We find that repealing blue laws leads to an increase in drinking and drug use, and that this increase is found only among the initially religious individuals who were affected by the blue laws. The effect is economically significant; for example, the gap in heavy drinking between religious and non religious individuals falls by about half after the laws are repealed.

I'm off to Mongolia (a statement that one doesn't get to make every day) for an extended trip, mixing business and pleasure. My posts will therefore be light for a bit, since I suspect internet connections will be sparse as well.

In preparation for my trip, I've been reading Morris Rossabi's Modern Mongolia: From Khans to Commissars to Capitalists (2005). It's a well-written and well-researched book, with lots of fascinating details about a fascinating country, about which I was woefully ignorant before this trip was scheduled. It is also an incredibly frustrating book, as Rossabi, a history professor at City University of New York, has only a loose grasp of economics. He portrays much of the post-Communist era in Mongolia (since 1990) as a struggle between "democratic reformers" and "pure market" advocates, as if those are natural polar opposites.

To take but one example, Rossabi devotes a chapter to the nomadic herder economy and criticizes the privatization of the herds and introduction of markets as having been done corruptly and poorly. He also criticizes the introduction of privatization, even if done well, noting that the 'market economy model'

had been developed and applied to sedentary agricultural or industrial economies but had not been tested in a society in which about one-third of the population sustained itself by pastoral nomadism. Several economists and officials questioned its validty, declaring that 'such tenets of economic theory as wealth accumulation, [and] the innate desire of individuals to acquire material goods' were not necessarily true of Mongolia. (p. 120)

Really? Has he not heard of the American west, where the enormous "Cattle Kingdom" of the late 19th century was not a government enterprise, was built around private organizations, and was most successful in Texas, where private property rights prevailed, and least successful in Wyoming, where federal land law prevented privatization of land. (See Helen Huntington Smith's excellent War on Powder River for a thorough account of the Wyoming experience. My own Hayek and Cowboys, in the NYU Journal of Law and Liberty, compares the two briefly.) Moreover, the extensive work on property rights among Native Americans, including Plains tribes, done in part by Terry Anderson and others at PERC and in part inspired by their work and by the pathbreaking article by Harold Demsetz on property rights among Native Americans, shows that property rights and markets have a long history among North American civilizations, even those that were nomadic.

Rossabi makes two crucial errors. First, he thinks economics is just a point of view, using quote marks around economic terms to emphasize that they aren't really definitional. Second, he buys an excessively romantic notion of primitive communism among nomads, without asking (at least through this chapter) whether the pre-Communist nomadic civilization included institutions that were destroyed by the Communists and which take time to recreate. It's a lovely world in which the herders get low or no interest loans, free well digging, free hay, free medical care, free boarding schools for their kids, etc. and pay only the price of a little political oppression (which he acknowledges) and a fair amount of slacking by "lazy herders," who his sources criticize.

No where is it acknowledged, however, that this economy was funded by transfers from the Soviet Union (which used Mongolia as a buffer between it and China). Moreover, the early chapters' brief account of the incredible repression of the Stalinist regime in Mongolia is seen as simply an aberration and not tied to the state system, whose demise he mourns.

Lastly (and I know this is not a particularly well edited entry, but, it is a blog not a paper and I'm writing it in an airport lounge), he relies heavily on a herder named Namkhainyambuu for support for his critique of the market system in herding. Namkhainyambuu "achieved remarkable reknown for his expertise in herding" under the Communists. (Namkhainyambuu's book, Bounty from the Sheep, sounds worth reading.) Could it just be possible that someone who "told [the author] that he worked very hard to be awarded the titles of 'Champion' or 'Hero of Labor' and to receive the 'Star of Sukhbaatar' and the 'Golden Soyombo' medals," whose wife received the "Best Herder" gold medal and "Champion Youth" silver medal under the communists and who "himself became possibly the most reknown herdsman, partly for fulfilling his pledges to raise 10,000 white sheep in twenty years and for his advice to herders in newspapers, and partly because of his appearances in films and at important public events." Could it be that such a person might (just maybe) not be an entirely unbiased observer of the post-Communist system? There's no hint of that in the book.

In any event, I look forward to seeing Mongolia. I'll post something about it when I return.

Mark Steyn has a fascinating column today, in which he draws an analogy between the behavior of characters in Sir Arthur Conan Doyle's novel, The Tragedy of the Korosko, and the Fox journalists recently kidnapped in Gaza. Set in Egypt, the novel describes a party of Anglo-American-French tourists taken hostage by the Mahdists, who Steyn calls the "jihadi of the day" and offered the choice of conversion to Islam or death. The tourists are described as follows by Doyle:

"None of them, except perhaps Miss Adams and Mrs. Belmont, had any deep religious convictions. All of them were children of this world, and some of them disagreed with everything which that symbol upon the earth represented."

Steyn then says:

"That symbol" is the cross. Yet in the end, even as men with no religious convictions, they cannot bring themselves to submit to Islam, for they understand it to be not just a denial of Christ but in some sense a denial of themselves, too. So they stall and delay and bog down the imam in a lot of technical questions until eventually he wises up and they're condemned to death.

After drawing a further analogy to Faust, Steyn concludes

In the Muslim world, they watch the Centanni/Wiig video and see men so in love with the present, the now, that they will do or say anything to live in the moment. And they draw their own conclusions -- that these men are easier to force into the car than that 16-year-old girl in Sydney was. It doesn't matter how "understandable" Centanni and Wiig's actions are to us, what the target audience understands is quite different: that there is nothing we're willing to die for. And, to the Islamist mind, a society with nothing to die for is already dead.

I hadn't heard of the novel before, but it sounds like one to read and reflect upon.