------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (March 2007)
Robert B. Ekelund, Jr., Robert F. Hebert, and Robert D. Tollison,
_The Marketplace of Christianity_. Cambridge, MA: MIT Press, 2006. x
+ 355 pp. $30 (cloth), ISBN: 0-262-05082-1.
Reviewed for EH.NET by J. Daniel Hammond, Department of Economics,
Wake Forest University.
"I do not mean that I have observed, all through my narrative, the
impartiality of the perfect historian; such detachment is hardly
possible, where eternal issues are at stake." R.A. Knox, _Enthusiasm:
A Chapter in the History of Religion_
This book provides an economic analysis of the evolution of the
existential itch-scratching industry. The analysis used is industrial
organization and economic history. The period given most attention is
the century after the breakout of competition that started in Germany
in 1517 and spread across Europe. Also considered are the structure
of the industry in the United States and the effect of the industry
on economic growth. The authors use the commonplace term for the
existential itch-scratching industry, Christianity. Other industries
are in no meaningful sense different from Christianity -- Judaism,
Islam, Buddhism, Hinduism. All provide consumers with relief from
their itch, albeit in different ways. Ekelund, Hebert, and Tollison
follow convention in treating Christianity as an industry separate
from these others. This is sensible. Elasticities of substitution
between Christianity and Islam would seem to be on the low side. The
authors' choice of Christianity rather than, say, Islam is also
sensible given that much of their audience is American readers.
It is not known exactly when consumers contracted existential itch,
but the malady has persisted since we became human. The Enlightenment
gave us science and good government, thereby providing a degree of
immunization against the itch, but so far it has not been eradicated.
Indeed, the authors predict that scientific marvels such as
extra-uterine reproduction, though helpful, will not provide full
immunization. "Existential terror will not disappear no matter how
far science takes Homo sapiens" (p. 270). It seems that the itch,
like hunger but perhaps unlike procreative sex, will remain part of
the Homo sapiens condition. With the itch unlikely to disappear in
the foreseeable evolutionary future, so is the industry that deals
with it.
The Roman Catholic Church had an enviable monopoly for centuries, so
powerful that it was able to engage in first degree price
discrimination. Like all monopolists, though, it struggled with
technical inefficiency and potential entry. The former manifested
itself in excess capital investment in beautiful cathedrals and
paintings. To forestall entry it practiced usual monopolistic
techniques such as limit pricing, but also tortured and killed
competitors. By the end of the fifteenth century the Vatican's
pursuit of ever larger monopoly rents against the background of
technological progress (the printing press) set the stage for
successful entry by an entrepreneurial monk named Martin Luther. Once
Luther's firm got a foothold, all hell broke loose. Actually, it was
not all hell; it was all heaven. For as every student of economics
learns, when monopoly gives way to competition consumer surplus
expands. There were direct gains for consumers as the price fell from
the breakup of the Catholic monopoly and, in addition, the entrants
lowered real production costs.
The latter welfare gains warrant explanation. What happened is that
the entry of Protestant firms reduced the real cost of itch relief by
doing away with ornate churches, daily masses, pilgrimages,
sacraments, and middlemen confessors. This is a classic case of
efficiency gains from entrepreneurial innovation, not unlike the more
recent case of Wal-Mart.
In analyzing contemporary Christianity the authors use as a measure
of efficiency the degree of religious belief (relief from the itch)
relative to time, talent, and treasure spent in church (scratching
the itch). It seems to this reader that the way this plays out is
that forming and holding religious beliefs with less involvement in
churches increases the efficiency of religion. Sort of like the
paperless world that computer networks allow for publication of
EH.NET book reviews. Religion without Churches or churches is the
limit on efficiency gains in the industry. The Catholic marketing
department would no doubt argue that the sacraments and other items
done away with by the Protestants are part of the product, not
wasteful inputs. Protestant firms disagree. The beauty of the
competitive process is that in the end the consumer decides. If it
should turn out that there is a God, He may also have a preference
set. But investigation of that question is, as they say, beyond the
scope of this project.
J. Daniel Hammond is the editor, with Claire H. Hammond, of _Making
Chicago Price Theory: Friedman-Stigler Correspondence, 1945-1957_
(Routledge, 2006).
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Published by EH.Net (March 2007). All EH.Net reviews are archived at
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