the foundations of prosperity and economic growth

8/9/2019 The Foundations of Prosperity and Economic Growth

1/24

The Foundations of Prosperity and Economic Growth

James A. Montanye

Consulting Economist

Falls Church, VA USA

Abstract - The structure of social institutions, the process of entrepreneurship, and the effects of

both on prosperity and economic growth are ineluctable consequences of Mankinds genetically-

inspired predispositions toward reason, cooperation, reciprocity, and trust. The cost of

prosperity and growth is gauged by the social burdens that individuals must incur, and to the

opportunities for private gain that must be foregone, all in order to optimize the level of trust and

cooperation within a given society. The next step in the development of growth theory is to

incorporate these influences more fully into formal economic models.

Theories of prosperity and economic growth presently fall under two descriptive headings.

One heading encompasses the old and new neoclassical theories that model growth

mathematically as production functions capturing the separate effects of capital, labor,

technology, and such other productive factors as education and natural endowments. These

models do a poor job of explaining and predicting prosperity and economic growth; the

economist Mancur Olson concluded that [i]n general, the [new] endogenous growth models do

not have anything in their structures that predicts that the most rapid growth will occur in a

subset of low-income countries, and the old growth theory is contradicted by the absence of

general convergence (Olson 1996, 31). Olson attributed these failures to the inability of

neoclassical models to account for the tendency of productive factors to migrate spontaneouslyacross national boarders in pursuit of the highest economic returns.

The second category of theories comprises efforts to understand the dynamic economic

processes that attract and allocate mobile productive factors. This literature analyzes economic

performance in terms ofpolicies, institutions, incentives, and entrepreneurship; to wit, How

well does a nation protect its entrepreneurs? In what countries do you get rich by inventing a new

product, and in what countries do you get rich be wresting control of government from your

rivals? (Powell 2008, 1). This new institutionalism focuses upon the formal and informal rules

that affect all economic interactions within a society, especially the definition and protection of

property rights, and the enforcement of contracts.The Institutions 6 Entrepreneurship 6 Growth (IEG) approach to analyzing economic

growth moves beyond the static, as ifassumptions of neoclassical economics, which posit no

useful role for institutions and entrepreneurship (Montanye 2006a, 549-58). The approach in fact

resembles the older Structure 6 Conduct 6 Performance (SCP) models of industrial organization

theory. Both paradigms imply directionality; the initial term in each case is assumed to be

exogenous and static, and each succeeding term is the consequence of its predecessor. However,


2/24

-2-

institutions, like market structures, are neither exogenous nor static. Rather, they are

consequences of the never-ending process of creative destruction and reformation wrought by

entrepreneurship.

The Nobelist Douglass North aptly has argued that [t]he agent of [institutional] change is

the individual entrepreneur responding to the incentives embodied in the institutional framework.... the immediate instruments of institutional change are political or economic entrepreneurs who

attempt to maximize at those margins that appear to offer the most profitable (short-run)

alternatives. ... it is the existing constraints and changes in incentives at the margin that determine

opportunities (1990, 83;100). North concludes in brief, however, that [t]he sources of

[institutional] change are changing relative prices or preferences (83). North sees changes at the

margins as destabilizing existing contractual agreements, thereby causing adversely effected

parties to seek renegotiation. Failing a satisfactory resolution, the parties then seek to change the

institutional rules binding them to the old prices that is, the parties promote change either by

fashioning new rules, or else by simply ignoring the old ones.Neoclassical arguments imply that institutional change is the last line of defense when, in

fact, it is often the entrepreneurs first line of offense (Montanye 2006a). Preemptive

entrepreneurial change, as opposed to Norths neoclassical description of changing prices and

preferences, is driven by the articulated interests of those [entrepreneurial individuals] who

stand to gain or lose from politicization of the allocation of resources (Petlzman 1980, 287). The

effective articulation of private interests that is, rent seeking causes institutions to evolve in

unpredictable and seemingly irrational ways, making long-range macroeconomic forecasting a

fools errand. Rent seeking, which is the entrepreneurial pursuit of windfall economic gains

through political action (Tullock 1989 and 1991), is a pejorative description of economic behaviorthat is intended to generate asymmetrical benefits by altering institutional structures and rules.

Opportunities for promoting institutional change through rent seeking have increased in recent

years, so much so in fact that [t]he state itself is becoming the chief weapon in a political war of

all against all (Yeager 2001, 249).

The historian Caroll Quigley provided a particularly useful description of institutional

change from this perspective. His view is in tune with modern theories of entrepreneurship,

public choice, and industrial organization theory, and also with the emerging science ofcomplex

adaptive systems (see, for example, Gell-Mann 1994):

An instrumentis a social organization that is fulfilling effectively the purpose for

which it arose. An institution is an instrument that has taken on activities and

purposes of its own, separate from and different from the purposes for which it

was intended. As a consequence, an institution achieves its original purposes with


3/24

-3-

decreasing effectiveness. Every instrument consists of people organized in

relationships to one another. As the instrument becomes an institution, these

relationships become ends in themselves to the detriment of the ends of the whole

organization. ... The purpose of the organization ... becomes no more than a

secondary aim for everyone in the organization. ... [E]veryone in such anorganization is only human and has human weaknesses and ambitions, or at least

has the human proclivity to see things from an egocentric point of view. Thus, in

every organization, persons begin to seek their own advancements or to act for

their own advantages: seeking promotions, decorations, increases in pay, better or

easier assignments; these begin to absorb more and more of the time and energies

of the members of an organization. All of this reduces the time and energy

devoted to the real goal of the organization and injures the general effectiveness

with which an organization achieves its purposes. Finally ... the social conditions

surrounding any such organization change in the course of time. When thishappens the organization must be changed to adapt itself to the changed

conditions or it will function with decreased effectiveness. But the members of

any organization generally resist such change; they have become vested

interests. Having spent long periods learning to do things in a certain way or with

certain equipment, they find it difficult to persuade themselves that different ways

of doing things with different equipment have become necessary; and even if they

do succeed in persuading themselves, they have considerable difficulty in training

themselves to do things in a different way or to use different equipment. (Quigley

[1961] 1979, 101-103)

Quigleys description of institutional dynamics, increasing entropy, and eventual sclerosis that

is, of the process by which good ideas and sharp instruments are dulled and deformed by

internal, entrepreneurial self interest is itself compelling. It gains further explanatory power

when the similarly detrimental effects of entrepreneurial rent seeking by external factions are

incorporated (see, for example, Baumol 1993). Institutions that degenerate past the point of self-

reform require extirpation, as often occurs through putsch, revolution, and war (Olson 1982).

The IEG paradigm represents a substantial improvement over purely neoclassical growth

theory. Obstacles to understanding nevertheless remain. Economic performance itself is a

multidimensional measure that resists easy definition, quantification, and analysis. Above all,

growth theory stands to benefit from a deeper understanding of the relationship between

aggregate economic performance and innate human behavior. The Nobelist Ronald Coase shares

with other economists the suspicion that ultimately the work of sociobiologists (and their critics)


4/24

-4-

will enable [economists] to construct a picture of human nature in such detail that we can derive

the set of preferences with which economists start (Coase 1988, 4). The distinguished biologist

E.O. Wilson, who coined the termsociobiology, defines the field as an interdisciplinary approach

to human behavior operating at the conjunction of biology and the various social sciences

(Wilson 1978, 7). Sociobiologys cornerstone is consilience; that is, a jumping together ofknowledge across disciplines to create a common groundwork for explanation that obviates

[t]he ongoing fragmentation of knowledge and resulting chaos in philosophy [that] are not

reflections of the real world but artifacts of scholarship (Wilson 1998, 8). Economists have

begun developing testable, behavioral theories of economic man using sociobiological constructs

(see, for example, Frank 1985 and 1988; Rubin 2002). Economists also look to the developing

program in neuroeconomics, which uses brain imaging to discover links between genetic

programming and economic behavior (see, for example, Zak forthcoming).

I shall argue along sociobiological lines that the foundations of economic prosperity and

growth are the direct consequences of Darwinian evolution and behavioral biology (see also,Montanye 2009). I begin by relating institutions and entrepreneurship to Mankinds genetic

predispositions toward reason, cooperation, reciprocity, trust, and discrimination, all of which are

evolved biological mechanisms for promoting survival and reproduction. I link these foundations

to three overarching determinates of economic prosperity and growth: (i) common virtues; (ii)

religion; and (iii) government. I argue that developmental differences among nations reflect, in

large measure, the differing costs of advancing Mankinds biological imperatives.

Biological Foundations

The idea that social institutions are products of Mankinds genetic endowment is

suggested by the distinguished evolutionary biologist Richard Dawkins. Dawkins (1999) argues

that genetic manifestations extend far beyond physical attributes like eye color. He offers the

example of lakes that form behind beaver dams, both of which are as much a product of the

beavers genetic programming as the animals outsized incisors, flat tail, and webbed feet.

Dawkins labels this long reach of genetic consequences extended phenotypes. Similarly, I

argue that institutions are the extended phenotypes of Mankind. Environmental circumstances

also play a role in determining institutional structure, but the underlying drivers are genetically

predisposed.

Economists have drawn copiously from Dawkins legacy over four decades. His influence

now extends to theories of economic competition, and to the spontaneous organization and

subsequent evolution of economic systems (Rosen 1997). By contrast, about half of all

Americans including three of ten Republican presidential primary candidates in 2007 reject


5/24

-5-

Darwinisms scientific underpinnings. Mankind is remarkably reluctant to accept its own

biological nature (Dawkins 1995; Pinker 2002; Dennett 2006), choosing instead to regard nature

pejoratively as a feral Hobbesian state, red in tooth in claw. Dawkins tempers this view by noting

that nature is not cruel, only indifferent. This is one of the hardest lessons for humans to learn.

We cannot admit that things might be neither good nor evil, neither cruel nor kind, but simplycallous indifferent to all suffering, lacking all purpose (1995, 96).

Aristotle aptly characterized Mankind as a collection of intrinsically virtuous social

animals that cooperate for mutual advantage. Modern observers employ institutional terms, like

civilization (Quigley 1979), capitalism (Rothschild 1990), andfreedom (Friedman 1962; Rubin

2002; Dennet 2003) to characterize Mankinds cooperative nature. Biologists, by contrast, argue

that Darwinian evolution predisposes and conditions Mankind to cooperate in ostensibly virtuous

ways. Evolution is not the consequence of a rational, directional, intelligent, or normatively

judgmental process. Rather, it results from Mankinds most beneficial and fruitful genes (alleles)

passing from one generation to the next through individual vehicles called human beings(Dawkins [1976] 1989 and 1999). The process is likened to an arms race, with the best genes

surviving and reproducing, and the rest disappearing from the river of life. Biological evolution

has not made Mankinds struggle against scarcity kinder and gentler over time, merely more

efficient.

Evolution has endowed Mankind with two refined qualities of particular relevance to

understanding prosperity and economic growth. The first of these is reason (rationality), which

John Locke famously (and somewhat mistakenly) described as the capacity which God hath

given to be the Rule betwixt Man and Man, and the common bond whereby humane kind is

united into one fellowship and society ([1690] 1988, II:172). The corresponding scientific viewis that [t]he human mind is a device for survival and reproduction, and reason is just one of its

various techniques (Wilson 1978, 2). Reason is the capacity for calculation and adaptation. It is

closely linked with the capacity for language, making it a conscious (cortical) process and

distinguishing it from the brains subconscious (limbic) functions. Reason is touted as a force for

good, but its essential purpose is entrepreneurial self interest, entailing payoffs that are both

pecuniary and non-pecuniary, tangible and intangible. It is one evolved means by which

individuals compete for survival and reproductive advantage in an environment characterized by

indifference and scarcity. As such, it an exogenous driver of prosperity and economic growth.

The second evolved quality of interest here is Mankinds capacity for cooperation,

reciprocity, and trust. Biologists now recognize that these behaviors are genetically predisposed,

and that they are conditioned by neurotransmitter hormones that reward the brain chemically

for compliant decision-making, punish its sinful deviations, and encourage interpersonal trust.

This amends the earlier opinion, once held by Dawkins and other biologists, that evolution did


6/24

-6-

not equip individuals to cooperate generously and unselfishly towards a common good

(Dawkins [1976] 1989, 3). Behavioral biologists now recognize four good reasons for individuals

to be altruistic, generous or moral towards each other: (i) kinship; (ii) reciprocation; (iii) a

biological predisposition toward acquiring a reputation for generosity; and (iv) the acquired tactic

of developing a reputation for generosity (Dawkins 2006, 219). The evolved capacity for ad hocrationality carries a portion of this load. The balance is borne by Mankinds genetic

predisposition for rationally selfish cooperation, the external effects of which often deceptively

mimic altruistic behavior directed toward some common good.

The biologist Matt Ridley argues that Mankind is psychologically primed for virtuous

behavior by a brain module that he labels the social-exchange organ. We dont know for sure

where the social-exchange organ is, or how it works, writes Ridley, but we can tell that it is

there as surely as we can tell anything about our brains (1997, 131). The module, which owes its

existence to Mankinds competitive struggle for life amidst scarcity, works by artfully signaling

and managing cooperation, reciprocity, and trust. The result is a form of undeniablyselfishpredispositions that biologists term reciprocal altruism (Trivers 1985); what earlier generations

of thinkers termed enlightened self interest. The propensity for reciprocal altruism underlies all

of Mankinds innate civilizing virtues, including concepts of brotherhood and non-sexual love

(agape), golden and silver rules of conduct, categorical imperatives of ethical behavior, the

proscription of usurious interest, and the innate preference (at least among non-economists) for

bartered exchange over money and markets. Reciprocal altruism is the ultimate source of social

unity and moral order, which commonly, and mistakenly, are described as being external to

human existence. It is the essence of Aquinas natural law: There is in people an appetite for the

good of their nature as rational, and this is proper to them, that they should know the truths aboutGod and about living in society. ... whatever this involves is a matter of natural law (Summa

theologica, trans. in Freeman 2003, 331). It is also the essence of Adam Smiths invisible hand

and his moral sentiments of approbation and esteem, of Lockes Rule betwixt Man and

Man, and of the biblical assurance of things hoped for, the conviction of things not seen

(Hebrews 11:1). The predisposition for reciprocal altruism also gives rise to the human God-sense

(about which more below), thereby raising a credible claim to being the universal god of

monotheism, with cooperation, reciprocity, and trust reigning as a holy trinity. Most relevant for

purposes of this essay, reciprocal altruism, like reason, is an exogenous driver of prosperity and

economic growth.

The instinct for reciprocal altruism predisposes Mankind to coalesce into cooperative

groups that discriminate in favor of its members (us) and against strangers (them) (Dawkins 2006,

179). Individuals who can be trusted a priori to cooperate reciprocally constitute the us group; all

others are regarded as them. Trust lowers the transaction costs of cooperation by reducing the


7/24

-7-

suspicion that individuals will renege on reciprocal obligations. It facilitates wealth creation and

capital formation (as when neighbors cooperate to raise a barn), and wealth distribution (as

through markets, politics, and war). It allows Mankind to overcome the collective action

problem that logically impairs the provision of public goods (Olson 1965), and it creates

productive opportunities for division of labor and exchange. Economists use the wordcatalactics to describe the exchange process, a term rooted in the ancient Greek verb

(Anglicized to katalattein and katalassein) meaning not only to exchange but also to receive

into the community and to turn from an enemy into a friend (Hayek 1988, 112). The

correlation between trust and economic development is easily observed (see, for example,

Easterly 2006; Harrison and Huntington 2000). Societies lacking in trust and cooperation are

inefficient and generally unpleasant environments in which to live and work (see Fukuyama

1995).

Discrimination between us and them also generates conflict. Once cooperators segregate

themselves off from the rest of society, notes the biologist Ridley, a wholly new force ofevolution can come into play: one that pits groups against each other, rather than individuals

(1997, 147). The consequences of this are often destructive and dehumanizing. The sociologist

Max Weber noted, for example, that Cavaliers and Roundheads did not appeal to each other as

two parties, but as radically distinct species of men ([1930] 1992, 88-89). Similar sentiments are

evident today between races, religions, nationalities, and civilizations.

The predisposition for cooperation ironically gives rise to a collateral predisposition that

engenders a sense of entitlement entailing envy, free-riding, and predatory rent seeking. Ridley

labels this phenomenon parasitism of reciprocity, which he describes as

a human invention to exploit our pre-existing natures, our innate respect for

generosity and disrespect for those who would not share. And why would we

have such an instinct? Because to be known as intolerant of and punitive towards

stinginess is an effective way to police a system of reciprocity, to extort your

share of others good fortune. (1997, 123-124, italics added)

In sum, evolution has conditioned individuals to behave cooperatively and reciprocally when

they must, but also to behave parasitically and opportunistically when and where they can. The

rational choice between cooperation and parasitism is driven by the structure of economic

payoffs. Nature and institutions together shape these payoffs, both through the potential for

reciprocal non-cooperation and violence, and through rational rules of productive conduct.

Evolution has endowed Mankind with an innate sense of private property (Pipes 1999,

chap. 2) and fairness (Frank 1988), which often engender predatory and defensive violence.


8/24

-8-

Mankinds willingness to defend property is unsurprising, as is the willingness to fight for

survival, reproductive opportunities, and a share of essential resources. What is surprising is the

willingness to fight for trifles, as a word, a smile, a different opinion, and any other sign of

undervalue (Hobbes [1651] 1994, chap.13). The precursor of this behavior is an internal sense of

fairness that links to Ridleys parasitism of reciprocity. Evolution has endowed Mankind witha predisposition to cooperate with others, and to punish (even at personal cost if necessary)

those who violate the norms of cooperation, even when it is implausible to expect these costs will

be recovered at a later date (Ginitis and others 2005, 3). The rationality that underlies this

evolved behavior has been discovered experimentally through computer simulation (Axelrod

1984). The behavioral economist Robert Frank notes that [t]he emotions that lead people to

behave in [such] seemingly irrational ways can ... indirectly lead to greater material well-being

(1988, 258). The sociologists Richard Nisbett and Dov Cohen, who study cultural violence,

conclude that sensitivity to insult is secondary: its purpose is to preserve the individuals

reputation for being willing and able to carry out violence if needed (1996, 89). Violence, and thethreat of it, are genetically primed complements to cooperation that stimulate reciprocal altruism

by raising the cost consequences of non-cooperation and parasitism.

Instrumental rules, by contrast, are rational and nuanced means for controlling parasitic

and opportunistic behavior within the us group, including fraud, theft, free-riding, and reneging

(see generally, Posner 2000). Proper rules emerge, as with the common law of old, from the

efficient natural law of reciprocal altruism. Rules operate both by institutionalizing punitive

threats and actions against life, liberty, and property, and by proscribing and punishing private

acts of coercion and retaliation.

The beneficial nature and effects of institutionalized rules become reversed wheninstitutions are corrupted by entrepreneurial influence. Instead of proscribing and punishing

parasitic acts, corrupted institutions selectively confer property rights in them. Corruption retards

aggregate prosperity and economic growth by restricting the play of positive-sum cooperation

and exchange opportunities.

The Fabric of Institutions

Cooperative groups coalesce around unifying beliefs. This is equally true at the level of

nations (Day 2008; Hosking and Schpflin 1997), small towns (Vidich and Bensman [1958]

2000), and private associations. The historian Michael Burleigh describes such beliefs as objects

of devotion and refocused religiosity (Burleigh 2007, xii). His list of objects includes science,

progress, morality, money, culture, humanity and even sport (xii), and also the arts

in the sense of giving higher meaning to a world that was increasingly disenchanted (Burleigh


9/24


10/24

-10-

The late jurist Oliver Wendell Holmes Jr., whose near-death wartime experiences drew

him to the naturalistic ideas of Herbert Spencer and Charles Darwin, explained legislation, law,

and institutions in similar terms. Holmes despaired of attempts to categorize the law logically,

ultimately attributing its compulsions to the success of entrepreneurial factions that are best able

to fight for particular outcomes (Gordon 1992, passim).

Institutional Foundations of Prosperity and Economic Growth

Institutions are manifestations of biological predispositions. They are transfigured over

time by the forces of creative destruction and reformation wrought by entrepreneurship. Three

institutions of particular importance to prosperity and economic growth are (i) common social

virtues, (ii) religion, and (iii) government. These institutions have direct links to human biology,

and also to each other.

Common Social Virtues

Holmes believed that society prospers from the virtuous affectations of genteel

individuals, like himself, who perform civil obligations cheerfully (paying taxes, for example)

rather than grudgingly (Gordon 1992, 150-51). Holmes guileless virtue marked him as both a

Kantian moralist and a trustworthy cooperator, behavioral characteristics whose significance I

address in the sections that follow.

The economist Deirdre McCloskey (2006) considers a range of virtues, spanning the

gamut between the solitary virtue of prudence (rational self-interest), by which economistscharacterize the ethos of economic man, and the 613 commandments of Moses identified by

Rabbi Hillel. McCloskey concentrates upon seven bourgeois virtues, which she argues

characterize civilizations that are structured around commerce and the market process: viz., four

pagan virtues, including prudence plus courage, temperance, and justice; and the three Christian

virtues of faith, hope, and love. Comparable lists have been assembled by social thinkers since

antiquity. More recently, Mahatma Gandhi located happiness and prosperity with reference to

seven institutional sins whose virtuous opposites must be fought for: politics without principal;

wealth without work; commerce without morality; pleasure without conscience; education

without character; science without humanity; and worship without sacrifice (Gomes 2007, 122).

Litanies of this sort are descriptive and always evocative, but they are inherently arbitrary

generalizations derived from the objective, universal, and exogenous biological virtues of

cooperation, reciprocity, and trust.


11/24

-11-

Religion

Economists appropriately regard religion as an institution that affects prosperity and

growth. Mankinds innate God-sense is an artifact of the perpetual search for beneficial exchange

opportunities, which explains why [m]ost of the worlds religious scriptures abound in thelanguage of exchange (Stark and Finke 2000, 40).

In the absence of bona fide exchange partners, Ridleys social-exchange organ projects

exchange scenarios into deities and other powerful figures. Willing cooperators without

appropriate exchange partners frightened soldiers in foxholes are the classic example

desperately signal their willingness and desire to cooperate through prayer, worship,

commitment, and sacrifice. Behavioral biologists term behavior of this sort in vacuo because it

occurs in the absence of appropriate external stimuli. Individuals who are distressed, lonely,

disaffected, and despairing are especially prone to such behavior. Their condition renders them

vulnerable to religious indoctrination and fleecing by manipulative evangelists (Hedges 2006),and to fanciful interactions with alien spacemen (Sagan 2006).

Previous generations of scholars attributed religious belief to compulsive neuroses, the

need for father figures, a taste for opiates, and the apprehension of death. Modern biology views

religion differently. Dawkins classifies himself as

one of an increasing number of biologists who see religion as a by-productof

something else. ... Religious behavior may be a misfiring, an unfortunate by-

product of an underlying psychological propensity which in other circumstances

is, or once was useful. On this view, the propensity that was naturally selected inour ancestors was not religionper se; it had some other benefit, and it only

incidentally manifests itself as religious behaviour. (2006, 172-74)

Biologists regard religion as a misfiring, rather than a direct consequence of biological evolution,

because

[f]rom an evolutionary standpoint, the reasons why religion shouldnt exist are

patent: religion is materially expensive and unrelentingly counterfactual and even

counterintuitive. Religious practice is costly in terms of material sacrifice (at least

ones prayer time), emotional expenditure (including fears and hopes), and

cognitive effort (maintaining both factual and counterintuitive networks of beliefs).

(Atran 2002, 4)


12/24

-12-

Despite its unusual pedigree, religion is both a cornerstone of civilization and a costly driver of

prosperity and economic growth.

The word religion, like the word law, is a cognate of the Latin word ligere, meaning

literally to bind and to unify. Unification for the sake of prosperity is the essence of all

institutions. In antiquity, notes the historian Charles Freeman with reference to ancient Rome,[r]eligious practice was closely tied to the public order of the state and with the psychological

well-being that comes from the following of ancient rituals. Religious devotion was

indistinguishable from ones loyalties to the state, ones city and ones family (2003, 68). This

description aptly characterizes many societies today. By contrast, the theologian Helmut Richard

Niebuhr viewed modern Western religion as the ultimate bulwark against the gangrenous

corruption [i.e., theparasitism] of a social life in which every promise, contract, treaty, and

word of honor is given and accepted in deception and distrust (1989, 1).

Religious practice, like the predisposition for reciprocal altruism that inspires it, has an

instrumental aspect. All cooperative relationships require trust, and religion excels at generating itat low cost. Niebuhr recognized that [t]he massive law books and the great machinery of justice

give evidence of the vast extent of fraud, deceit and disloyalty among men (81). The philosopher

Adam Seligman similarly notes that in the current [market] situation we are more dependent on

trust (and less on familiarity) to supplement those interstitial points where system confidence is

not sufficient (1997, 160). The sociologist Robert Putnam, who studies the ebb and flow of

social capital which he defines as the connections among individuals: social networks and the

norms of reciprocity and trustworthiness that arise from them concludes that [f]aith

communities in which people worship together are arguably the single most important repository

of social capital in America. ... nearly half of all associational memberships in America are churchrelated, half of all personal philanthropy is religious in character, and half of all volunteering

occurs in a religious context (2000, 19; 66). Britains Astronomer Royal, the atheist Martin Rees,

epitomizes the duality of religious practice by attending church regularly as an unbelieving

Anglican ... out of loyalty to the tribe (qtd. In Dawkins 2006, 14).

New York Citys diamond trade provides a compact example of trust and economic

cooperation fostered through religion. The trade was dominated for decades by Orthodox Jews,

who did business on a pledge and a handshake, relying upon trade custom and usage, a little

common sense, some Jewish law, and, last, common-law legal principles while their less

successful business rivals were driven to contracts and litigation (see Bernstein 1992, 127; 140-42;

Williamson 1993, 465; 472-73). Religious association can be counterproductive when taken to

extremes, however, because orthodoxy restricts the number of potential cooperating partners

(Wilder and Walters 1998), and so limits productive opportunities for division of labor and

exchange.


13/24

-13-

God is the perfection of cooperation, reciprocity, and trust, and so represents the ultimate

exchange partner. Second-best institutions for cooperation and exchange arise, in Niebuhrs

view, from disillusionment with Gods apparent indifference, lack of systematic and predictable

benevolence, and inability or unwillingness (except by coincidence) to deliver prosperity directly

(1989, 99). Niebuhrs view implies that interpersonal trust and cooperation cannot develop fullyin civilizations whose core unifying belief is the omnipotence of Gods will. The implication is

supported by data gathered subsequently by the political theorist Ronald Inglehart (2000, 90),

whose scatter diagrams show that Western nations generate more interpersonal trust, prosperity,

and economic growth than do those Islamic societies that impose strict behavioral codes to

minimize popular disillusionment with God. A collateral proposition is that civil societies which

suppress popular disillusionment with government similarly retard the formation of interpersonal

trust and cooperation. Myths regarding powerful, personal, and wish-granting institutions

obviously have unifying power, but they diminish reciprocal altruism, prosperity, and economic

growth.The economic growth literature contains frequent, albeit passing references to Max

Webers ([1922] 1960 and [1930] 1992) views about religion, particularly the economic

consequences of Protestantism. The economists Robert Barro and Rachael McCleary, by

contrast, study religions effects empirically. They find that growth responds positively to the

extent of religious beliefs, notably those in hell and [to a lesser extent] heaven, but negatively to

church attendance (2003, abstract). The authors model religious beliefs

as the principal output of the religion sector, and we view church attendance as

one of the inputs to this sector. Thus, if we hold fixed the beliefsas we do in theregressions that we highlightan increase in church attendance signifies that the

religion sector is less productive. That is, more resources, in terms of time and

goods, are being consumed for given outputs (beliefs). Hence, our anticipation is

that, for given religious beliefs, higher church attendance would show up as a

negative influence on economic performance. ... We think that higher church

attendance depresses growth because it signifies a larger use of resources by the

religion sector, and the main output of this sector (the religious beliefs) has already

been held constant. The results do not mean that greater church attendance has a

net negative influence on growththis net effect depends on the extent to which a

rise in attendance leads to greater beliefs, which encourage growth. (2003, 24,

footnote omitted; 38)


14/24

-14-

The argument of this essay suggests an alternative to this neoclassical interpretation: viz.,

attitudes regarding heaven and hell reflect the chemically-conditioned sense of rewards and

penalties associated with the natural law of reciprocal altruism; and church attendance proxies

both the cost of building social trust and the burden of parasitic rent seeking conducted through

religious institutions.

Government

The line of political theory running through Hobbes, Locke, and Jefferson places the

impetus for Western-style government in the rational desire to protect and extend life, liberty,

property, and the pursuit of happiness. The institutions examined by modern growth theory

comprise the complex web of laws and social norms that serve these ends.

The Bible records that the age before kings was a state of anarchy in which every man

did what was right in his own eyes (Judges 21:25). Hobbes characterized life in this natural stateas a war of every man against every man, and following biblical precedent, located salvation in

sovereign authority. That sovereign, according to Locke, puts Men out of a State of Nature into

that of a Commonwealth, by setting up a Judge on Earth, with Authority to determine all

Controversies, and redress the Injuries ... And where-ever there are any number of Men, however

associated, that have no such decisive power to appeal to, there they are still in the state of

Nature ([1690] 1988, II:89). Civilization to Locke meant an earthly cooperator of last resort; a

point of presence and locus of prayer operating one level below the supreme sovereign of heaven

and earth.

Sovereign government unfortunately falls short of being the panacea of classicalimagination; as noted previously, it is instead the weapon of choice for Hobbesian warfare.

Public Choice, which is to government what skepticism and doubt are to religion, implicitly

grounds government upon Ridleys biologically-driven parasitism of reciprocity; that is, upon

the instinct for extracting ones fair share of wealth from other, more successful individuals.

Entrepreneurial individuals and factions, operating in both the public and private sphere, seek to

better the normal economic returns from reciprocal altruism by capturing and redistributing the

wealth and property rights of others, while simultaneously defending themselves against similar

predatory attacks. Behavior of this sort is aggressive and coercive rather than reciprocally

altruistic. It is wasteful and directly unproductive (Bhagwati 1982), and fosters the sort of

economic decline that Western nations presently fear (Olson 1982).

A more useful view of the sovereigns role is as a residual claimant, an entrepreneur (or

cluster of entrepreneurial individuals) whose implicit claim on a nations prosperity is equivalent

to a private individuals claim on his business. The sovereign, acting within an institutionalized


15/24

-15-

scope of authority, defines societys maximand and shapes public institutions in his own image

and interest. That maximand is pursued through a blend of persuasion and force that compels

public compliance and punishes contrary behavior. Modern sovereigns seek, within the scope of

their authority and consistent with their desire to retain the power and perquisites of office, to

assert control over all resources that lie within reach (see generally, Brennan and Buchanan 1980).This arrangement enlarges the pecuniary and non-pecuniary wealth of those individuals who are

best suited to compete within the prevailing institutional structure.

Sovereignty promotes peace, prosperity, and economic growth so long as the sovereigns

social design complements both the local resource environment and Mankinds underlying

biology. Coercion increases perforce as the social design diverges from these constraints, as past

experience with Communism amply demonstrated. The biologist E.O. Wilson deftly described

Communisms inherent flaw: Wonderful theory. Wrong species (qtd. in Pinker 2002, 296).

Individuals, in other words, are predisposed to behave both cooperatively and parasitically, but

not to behave collectively and altruistically outside of the family. Consequently, a single inchoateeffort to humanize communisms institutions (perestroika) was sufficient to collapse the entire

system.

Within theocratic societies, by contrast, sovereign power flows from the presumed will of

God, as revealed through the interpretation of ancient scriptures, and reified through acclimation,

repetition, imitation, and faith. Theocratic societies have no implicit residual claimants (apart,

perhaps, from Gods ostensible prophets and interpreters) and, consequently, are less likely than

otherwise to prosper. A theocracy nevertheless can embody the best of all possible tradeoffs

under certain circumstances; T.E. Lawrences description of the biting social discipline of the

Arabian Peninsula, where sterile experience robbed [the individual] of compassion andperverted his human kindness to the image of the waste in which he hid ([1926] 1966, 15) speaks

to the ascetic origins of Islamic civilization. A reasonable assumption, which is founded on the

economists presumption that all durable institutions are efficient, is that every civilization over

the long run tends toward institutional structures that maximize the aggregate value which can be

extracted from the local environment. A correlative proposition is that attempts to change local

institutions by force is likely to worsen exiting conditions.

The Convergence of Sovereignty and Religion

The distinction between God and State turns upon the difference between reified spiritual

truths on one hand, and reified civil truths plus the deification of civil power (Burleigh 2005,

199) on the other hand. Civil religions (as they are called, following Rousseau) replace a

transcendent God the perfect cooperating partner with second-best charismatic social


16/24

-16-

prophets and numinous personalities that are at once powerful and all too human. Scholars

quibble about whether deified civil power constitutes a substitute religion or a substitutefor

religion (Burleigh 2007, 197). Either way, the argument correctly characterizes the two systems

as substitutes. Burleigh (2005 and 2007) provides vivid examples of the substitutions that have

occurred since the French Revolution, documenting in particular how nationalism became themost potent church to emerge [in Europe] during the nineteenth century (2005, 199). The

economist Joseph Schumpeter similarly characterized Marxism as a religion, observing that it is

first, a system of ultimate ends that embody the meaning of life and are absolute standards by

which to judge events and actions; and, secondly, a guide to those ends which implies a plan of

salvation and the indication of the evil from which Mankind, or a chosen section of Mankind, is

to be saved. ... [It] belongs to that subgroup [of isms] which promises paradise this side of the

grave (1942, 5). As much can be said of other modern civil religions Fascism, National

Socialism, and Liberal Democracy in the twentieth century, and American Democratic

Fundamentalism in the early twenty-first century (Montanye 2006b; Buchanan 2008). The literaryand social critic Harold Bloom notes that [the Wests first] war against Iraq ... was a true

religious war, but not one in which Islam was involved spiritually, on either side. Rather, it was

the war of an American Religion (and of the American Religion abroad, even among our Arab

allies) against whatever denies the self's status and function as the true standard of being and

value (1992, 15-16). The biologist E.O. Wilson nails the overarching point:

Religions, like other human institutions, evolve so as to enhance the persistence

and influence of their practitioners. Marxism and other secular religions offer little

more than promises of material welfare and a legislated escape from theconsequences of human nature. They, too, are energized by the goal of collective

self-aggrandizement. (1978, 3)

Modern Western civilization has drawn a conspicuous line between civil and religious power by

building a metaphorical spite fence between state and church without ever acknowledging that

the two institutions have more intrinsic similarities than differences.

By ostensibly exchanging spiritual faith for civil reason, Western civilization has moved

away from Mankinds primal, albeit essentially virtuous, genetic predispositions. The rise of civil

religions manifests Mankinds overt desire to promote prosperity and economic growth, and to

realize the economic rents flowing therefrom, by replacing voluntary cooperation with

compulsion. Twentieth century history is the bloody consequence of this process, and twenty-

first century history is developing along similar lines. Societies clash inwardly and outwardly as

they find themselves compelled to choose between irreconcilable opposites God or Man, Soul


17/24

-17-

or Mind, Freedom or Communism (Chambers [1952] 2002, 16). For Communism here, read

Reason. Attempts to engineer economic growth and to perfect Mankind against its inherent

nature, in order ostensibly to promote prosperity while simultaneously ridding the world of

Hobbesian conflict, ironically have produced serial episodes of super-Hobbesian nastiness and

brutality (Rummel 1997).

The Cost of Prosperity and Economic Growth

Prosperity and economic growth are not free goods. Every cooperative group, from

nations down to private associations, obliges its members to incur burdens that further a

prescribed maximand, and to forego conflicting entrepreneurial activities that are privately

beneficial, but publically detrimental. The extent of these obligations determines whether a

society is characterized as being inherently high-cost (conservative) or low-cost (liberal or

progressive).Cost characteristics ultimately reflect a nations optimal level of trust. Individuals assess

each others trustworthiness by the same means that markets interpret price as a proxy for

qualities that cannot be observed directly. Behavioral biology and economics alike teach that such

proxy signals must be costly to fake (mimic) in order to be credible. Individuals routinely signal

their willingness and desire to behave cooperatively, but they often signal falsely in order to share

parasitically in the success of others. Fraudulent signaling is so prevalent in nature that biologists

now reason that communication behaviors evolved as means for deception rather than

cooperation (Dawkins 1999, 57). Hence the need to signal trustworthiness through such costly

commitments as religious practices and initiation rights; adult circumcision and gang beat-downsare painful examples of commitment signals that are difficult to fake. High-cost civilizations, like

high cost religions, facilitate reciprocal altruism by allowing individuals to identify themselves,

both to their peers and to God, as trustworthy cooperators through the Holmesian virtue of

cheerful compliance. Suicide bombers personify signaling of this sort, as do individuals who rise

to sing hymns in church and national anthems at public events. Signaling group solidarity in this

manner is not always a matter of discretion; upwards of 175,000 American were arrested and

jailed during World War I, and many others were beaten and murdered, for failing to signal

patriotic solidarity in often trivial ways (Goldberg 2007, 116-17). Similar treatment has befallen

insular individuals and sects through history.

High-cost alone doesnt compel cooperation and prosperity, as advocates of conservative

social policies often imply (see, for example, DSousa 2007). It does facilitate trust, however,

thereby reducing the need for synthetic social institutions to stimulate prosperity and economic

growth by dictating cooperation and compelling reciprocity.


18/24

-18-

Societies spontaneously discover the social cost structure that efficiently maximizes the

net benefit that can be extracted from the local environment. Within pluralistic societies,

however, differences of opinion regarding the optimal cost structure often form a distribution that

is both multi-peaked and fat-tailed. These differences give rise to conflicts and hostilities that fuel

violent clashes, both internally and with other nations and civilizations. These encounters reflectdisagreements about whether one groups cost structure complements the others optimal level

of trustworthiness, and vice versa.

As between Islam and the West, for example, casual observation reveals that the two

measures do not equate. The low-cost structure of liberal Western civilization is insufficient in

Islamic eyes to engender the overall level of trust that is necessary to the maintenance of Islamic

societies. Conversely, the high-cost of Islamic civilization, like that of old time Calvinism and

New England Puritanism, is too high to benefit modern Western market societies. Such cost

differences pose a credible answer to the question, Why do they hate us. They (Islam) hate the

West, not because of conflicting interpretations of ancient scripture, or because of the Westsfreedoms, wealth, and power, as often alleged, but because the Wests loosely fettered exercise

of wealth and power produces external effects that are inimical to the relative prosperity of

necessarily high-cost Islamic societies.

The political theorist Samuel Huntington and the neo-conservative scholar Dinesh

DSouza argue along this line, albeit without specific reference to cost. Huntington argued that

the worldwide revival of Islamic religion is a rejection of the West and of the secular, relativistic,

degenerate culture associated with the West (1996, 101). DSouza characterizes Huntingtons

clash-of-civilizations thesis as a war between the Muslim-led forces of monotheism and morality

against the America-led forces of atheism and immorality (2007, 180). DSouza accusesAmericas cultural left of promoting socially disruptive moral values at home and abroad. He

relates the international war on terror to the domestic war on modern liberal culture, and argues

that American conservatives are allied with ... Muslims in their opposition to American social

and cultural depravity (25), and so should join with the Muslims and others in condemning the

global moral degeneracy that is produced by liberal values (26). His argument is cast in terms of

raising moral standards rather than raising the internal cost of Western Civilization to more

conservative levels by constraining certain valued cultural activities, but the nexus is clear.

Conclusion

Insights from sociobiology militate the conclusion that evolved behavioral biology, as

manifested both in the structure of institutions and through the cooperative and parasitic

processes of entrepreneurship, drives prosperity and economic growth. This conclusion will be


19/24

-19-

resisted by neoclassical economists, who are committed (more or less) to the methodology of

positive economics. Research in neuroeconomics ultimately will confirm or reject the

conclusions implied by sociobiology.

References

Atran, Scott. 2002.In Gods We Trust: The Evolutionary Landscape of Religion . New York:

Oxford University Press.

Axelrod, Robert. 1984. The Evolution of Cooperation. New York: Basic Books.

Barro, Robert, and Rachael McCleary. 2003. Religion and Economic Growth.Harvard

University Working Paper(April 8). Available at

http://www.economics.harvard.edu/faculty/barro/papers/Religion_and_Economic_Growth.pdf

Baumol, William. 1993.Entrepreneurship, Management, and the Structure of Payoffs.

Cambridge, Mass.: MIT Press.

Balkin, J.M. 1998. Cultural Software: A Theory of Ideology. New Haven: Yale University Press.

Berger, Peter, and Thomas Luckmann. 1966. The Social Construction of Reality: A Treatise in

the Sociology of Knowledge. New York: Doubleday

Bernstein, Lisa. 1992. Opting Out of the Legal System: Extralegal Contractual Relations in the

Diamond Industry.Journal of Legal Studies 21:1 (January): 115-57.

Bhagwati, Jagdish. 1982. Directly Unproductive, Profit-Seeking (DUP) Activities.Journal of

Political Economy 90:5 (August): 988-1002.

Bloom, Harold. 1992. The American Religion: The Emergence of a Post-Christian Nation. New

York: Simon & Schuster.

Brennan, Geoffrey, and James Buchanan. 1980. The Power to Tax: Analytical Foundations of a

Fiscal Constitution. New York: Cambridge University Press.

Buchanan, Patrick. 2008. Churchill, Hitler, and The Unnecessary War: How Britain Lost I ts

Empire and the West Lost the World. New York: Crown.

Burleigh, Michael. 2007. Sacred Causes: The Clash of Religion and Politics, from the Great

War to the War on Terror. New York: HarperCollins.
http://www.economics.harvard.edu/faculty/barro/papers/Religion_and_Economic_Growth.pdfhttp://www.economics.harvard.edu/faculty/barro/papers/Religion_and_Economic_Growth.pdf


20/24

-20-

. 2005.Earthly Powers: The Clash of Religion and Politics in Europe from the French

Revolution to the Great War. New York: HarperCollins.

Chambers, Whittaker. [1952] 2002. Witness: 50 Anniversary Edition. Washington: Regneryth

Publishing.

Coase, Ronald. 1988. The Firm, the Market, and the Law. Chicago: University of Chicago Press.

Dawkins, Richard. 2006. The God Delusion. Boston: Houghton Mifflin.

. 1999. The Extended Phenotype: The Long Reach of the Gene, rev. ed. New York: Oxford

University Press.

. 1995.River Out of Eden: A Darwinian View of Life. New York: BasicBooks.

. [1976] 1989. The Selfish Gene, new ed. New York: Oxford University Press.

Day, David. 2008. Conquest: How Societies Overwhelm Others. New York: Oxford University

Press.

Dennett, Daniel. 2006.Breaking the Spell: Religion as a Natural Phenomenon . New York:

Viking.

. 2003.Freedom Evolves. New York: Viking.

DSouza, Dinesh. 2007. The Enemy at Home: The Cultural Left and Its Responsibility for 9/11.

New York: Doubleday.

Easterly, William. 2006. The White Mans Burden: Why the Wests Efforts to Aid the Rest Have

Done So Much Ill and So Little Good. New York: Penguin Press.

Frank, Robert. 1988.Passion within Reason: The Strategic Role of the Emotions. New York:

W.W. Norton.

. 1985. Choosing the Right Pond: Human Behavior and the Quest for Status. New York:

Oxford University Press.

Freeman, Charles. 2003. The Closing of the Western Mind: The Rise of Faith and the Fall ofReason. New York: Alfred A. Knopf.

Friedman, Milton. 1962. Capitalism and Freedom. Chicago: University of Chicago Press.


21/24

-21-

Fukuyama, Francis. 1995. Trust: The Social Virtues and the Creation of Prosperity. New York:

Free Press.

Gell-Mann, Murray. 1994. The Quark and the Jaguar: Adventures in the Simple and the

Complex. New York: W.H. Freeman and Company.

Ginitis, Herbert, Samuel Bowles, Robert Boyd, and Ernst Fuhr. 2005.Moral Sentiments and

Material Interests. Cambridge, Mass.: MIT Press.

Goldberg, Jonah. 2007.Liberal Fascism: The Secret History of the American Left from

Mussolini to the Politics of Meaning. New York: Doubleday.

Gomes, Peter. 2007. The Scandalous Gospel of Jesus: Whats So Good About the Good News?

New York: HaprerOne.

Gordon, Robert, ed. 2002. The Legacy of Oliver Wendell Holmes, Jr. Stanford: Stanford

University Press.

Harrison, Lawrence, and Samuel Huntington, eds. 2000. Culture Matters: How Values Shape

Human Progress. New York: Basic Books.

Hayek, F.A. 1988. The Fatal Conceit: The Errors of Socialism. Chicago: University of Chicago

Press.

Hedges, Chris. 2006.American Fascists: The Christian Right and the War on America. New

York: Free Press.

Hobbes, Thomas. [1651] 1994.Leviathan. London: Everyman.

Hosking, Geoffrey, and George Schpflin. 1997.Myths and Nationhood. New York: Routledge.

Huntington, Samuel. 1996. The Clash of Civilizations and the Remaking of World Order. New

York: Touchstone.

Inglehart, Ronald. 2000. Culture and Democracy. In Culture Matters: How Values Shape Human

Progress, edited by L. Harrison and S. Huntington, pp. 81-97. New York: Basic Books.

Lawrence, T.E. [1926] 1966. Seven Pillars of Wisdom: A Triumph. New York: Doubleday.

Locke, John. [1690] 1988. Two Treatises of Government. New York: Cambridge University

Press.


22/24

-22-

McCloskey, Deirdre. 2006. The Bourgeois Virtues: Ethics For an Age of Commerce. Chicago:

University of Chicago Press.

Montanye, James A. 2009. Civilization Without Romance.Essays in the Philosophy of

Humanism 17:2 (Fall/Winter): 103-28. Available at

http://www.scribd.com/doc/26313747/Civilization-Without-Romance

. 2006a. Entrepreneurship. The Independent Review 10:4 (Spring): 547-69. Available at

http://www.independent.org/publications/tir/article.asp?issueID=45&articleID=574

. 2006b. The Apotheosis of American Democracy. The Independent Review 11:1 (Summer):

5-17. Available at

http://www.independent.org/publications/tir/article.asp?issueID=46&articleID=582

Niebuhr, Helmut Richard. 1989.Faith on Earth: An Inquiry into the Structure of Human Faith.

Edited by R. Niebuhr. New Haven: Yale University Press.

Nisbett, Richard, and Dov Cohen. 1996. Culture of Honor: The Psychology of Violence in the

South. Boulder, Colorado: Westview Press.

North, Douglass. 1990.Institutions, Institutional Change and Economic Performance. New

York: Cambridge University Press.

Olson, Mancur. 1996. Big Bills Left on the Sidewalk: Why Some Nations are Rich, and Others

Poor.Journal of Economic Perspectives, 10:2 (Spring): 3-24.

. 1982. The Rise and Decline of Nations: Economic Growth, Stagflation, and SocialRigidities. New Haven: Yale University Press.

. 1965. The Logic of Collective Action: Public Goods and the Theory of Groups. Cambridge,

Mass. Harvard University Press.

Peltzman, Sam. 1980. The Growth of Government.Journal of Law and Economics 23:2

(October): 209-287.

Pinker, Steven. 2002. The Blank Slate: The Modern Denial of Human Nature. New York: Viking.

Pipes, Richard. 1999.Property and Freedom . New York: Vintage Books.

Posner, Eric. 2000.Law and Social Norms. Cambridge, Mass.: Harvard University Press.

Powell, Benjamin, ed. 2008.Making Poor Nations Rich: Entrepreneurship and the Process of

Economic Development. Stanford: Stanford University Press.
http://www.scribd.com/doc/26313747/Civilization-Without-Romancehttp://www.independent.org/publications/tir/article.asp?issueID=45&articleID=574http://www.independent.org/publications/tir/article.asp?issueID=46&articleID=582http://www.independent.org/publications/tir/article.asp?issueID=46&articleID=582http://www.independent.org/publications/tir/article.asp?issueID=45&articleID=574http://www.scribd.com/doc/26313747/Civilization-Without-Romance


23/24

-23-

Putnam, Robert. 2000.Bowling Alone: The Collapse and Revival of American Community . New

York: Simon & Schuster.

Quigley, Carroll. [1961] 1979. The Evolution of Civilizations: An Introduction to Historical

Analysis, 2d ed. Indianapolis: Liberty Fund.

Ridley, Matt. 1997. The Origins of Virtue: Human Instincts and the Evolution of Cooperation .

New York: Viking.

Rorty, Richard. 1989. Contingency, Irony, and Solidarity. New York: Cambridge University

Press.

Rosen, Sherwin.1997. Austrian and Neoclassical Economics: Any Gains from Trade?Journal of

Economic Perspectives 11:4 (Fall): 139-52.

Rothschild, Michael. 1990.Bionomics: The Inevitability of Capitalism. New York: Henry Holt

and Company.

Rubin, Paul. 2002.Darwinian Politics: The Evolutionary Origin of Freedom. New Brunswick:

Rutgers University Press.

Rummel, Rupert J. 1997.Death by Government. New Brunswick, New Jersey: Transaction

Publishers.

Sagan, Carl. 2006. The Varieties of Scientific Experience: A Personal View of the Search for

God, edited by A. Druyan. New York: Penguin.

Schumpeter, Joseph. 1942. Capitalism, Socialism, and Democracy. New York: Harper and

Brothers.

Seligman, Adam. 1997. The Problem of Trust. Princeton: Princeton University Press.

Spengler, Oswald. 1926. The Decline of the West. 2 vols. New York: Alfred A. Knopf.

Stark, Rodney, and Roger Finke. 2000.Acts of Faith: Explaining the Human Side of Religion.

Oakland: University of California Press.

Trivers, Robert. 1985. Social Evolution. Menlo Park, Calif.: Benjamin/Cumminigs.

Tullock, Gordon. 1989. The Economics of Special Privilege and Rent Seeking. Boston: Klewer

Academic Publishers.


24/24

-24-

. 1991. Rent Seeking. In The New Palgrave: The World of Economics, edited by J. Eatwell,

M. Milgate, and P. Newman, 604-609. New York: W.W. Norton.

Vidich, Arthur, and Joseph Bensman. [1958] 2000. Small Town in Mass Society: Class, Power,

and Religion in a Rural Community, rev. ed. Urbana, Ill.: University of Illinois Press.

Weber, Max. [1930] 1992. The Protestant Ethic and the Spirit of Capitalism. London:

Routledge.

. [1922] 1963. The Sociology of Religion. Boston: Beacon Press.

Wilder, Esther, and William Walters. 1998. Ethnic and Religious Components of the Jewish

Income Advantage, 1969 and 1989. Sociological Inquiry 68:3 (June): 426-36.

Williamson, Oliver. 1993. Calculativeness, Trust, and Economic Organization.Journal of Law

and Economics 36:1 (Pt. 2) (April): 453-86.

Wilson, Edward O. 1998. Consilience: The Unity of Knowledge. New York: Vantage Books.

. 1978. On Human Nature. Cambridge, Mass.: Harvard University Press.

Yeager, Leland. 2001.Ethics as Social Science: The Moral Philosophy of Social Cooperation.

Cheltenham, U.K.: Edward Elgar.

Zak, Paul, ed. forthcoming.Neuroeconomics. Cheltenham, U.K.: Edward Elgar.

the foundations of prosperity and economic growth

Documents