Risk and Religion Let us weigh the gain and loss in wagering that God is....If you gain, you gain all; if you lose, you lose nothing. Wager then, without hesitation that He is. .....Blaise Pascal, Pensees, 1660 Generations of students have studied Pascal's wager. To Pascal, choosing to believe in God was elementary logic, a no-brainer. If we choose not to believe, we risk eternal damnation. If we choose to believe, we risk nothing. If God does exist, believers will be rewarded. If God does not exist, believers end up in the same boat as non-believers. Belief creates no risk, no possible loss. Alas. If only it were so simple. In the sacred, just as the secular, the devil is in the details. Which God? Whose vision of God? Which religion? Shall we choose Islam? Judaism? Buddhism? Christianity? If Christianity, shall we choose to be Roman Catholic? Greek Orthodox? Protestant? If Protestant, shall we become Lutheran? Baptist? Mormon? Jehovah's Witness? Perhaps Seventh Day Adventist? The prerequisites for salvation vary markedly among religions. Different faiths demand different and often mutually exclusive beliefs and actions. The official dogmas of a Shiite Muslim and a Southern Baptist each condemns the other to an eternal hell. Pascal prods us to believe. But believe what? Every belief, every choice, every path paints the potential of both paradise and perdition. There is no safe belief. Diversified portfolios Wow. It's almost as bad as the stock market. Financial pundits prod us to buy. But buy what? Potential rewards are countervailed by risk. Should we pack our portfolios with shares of Amazon.com? If so, will internet sales soar and wing us to paradise, or plummet and plunge us to perdition? Don't ask me. I'll happily gamble $2 on a long-shot horse in a sixfurlong sprint, but I gave up selecting stocks long ago. After all, I'm a guy who bought into Union Carbide just before a 1984 disaster at its Bhopal, India facility killed thousands of people and flushed its stock price down the toilet. I learned my lesson; one that can be found in every principles of economics text. The lesson is diversify. I'm still in the market, but only in mutual funds, funds that track a broad-based market index. No more allmy-eggs-in-one-basket flyers for me. Hmmm. Diversify. If diversified portfolios can minimize financial risk, might they minimize religious risk as well? Might investing in a variety of religions bring the same benefits as investing in a variety of corporate stocks? Maybe. If we're not sure we've chosen the right faith, can we hedge our bets and throw a few nods at alternative credos as well? The Joy of Economics (x86) http://web.archive.org/web/20170131171821/htt... 1 of 4 es (x86) 9/20/2019, 9:19 AM It's not a new idea. Do you remember your Roman history? Ancient Rome offered a profusion of potential deities. Concerned about matters of the heart? Throw a few coins to Venus, the goddess of love. Wheat crop look a bit sickly? Give a few bows to Ceres, the goddess of agriculture. Trying to beat back the barbarians? Talk to Mars, the god of war. None of the above appeal to you? How about astrology? What about the mystical cults of Isis or Mithris? In the words of economist Laurence Iannaccone:1 All these existed, side by side, in an atmosphere of mutual toleration. Adherence to one did not preclude involvement in another. Citizens could, and many did, participate in multiple cults -- sacrificing to several gods, worshipping the Emperor, and undertaking a variety of different rites and initiations. Ancient Romans knew how to diversify, how to hedge their religious risks by patronizing multiple faiths. And they are not alone. Indians might worship a variety of Hindu gods, while Japanese families might claim both Buddhism and Shintoism, and yet rent a Catholic church for their daughters' wedding.2 Closer to home, travel to the Arizona desert and visit Sedona or some similar New Age Mecca. What do you want? Tarot readings? Meditation lessons? Astrological charts? Trips to a mystical energy vortex? Crystals? Pyramids? Witch's covens? They're all there. Take your pick. Or take several picks. Diversify. Exclusive religion Despite its potential, religious diversification remains the exception in the U.S. Most adherents choose a specific brand of faith and consume it exclusively. Methodists seldom read the Torah on the sly, and Unitarians are unlikely to frequent Holiness Revival Meetings. Why is religious diversification not more common? No firm wants its customers to diversify. Does Wal-Mart want us to shop at K-Mart? Does Pepsi want us to diversify with Coke? Of course not. Every supplier lusts after brand loyalty. But secular firms rarely command the fierce customer devotion enjoyed by churches. Why? What enables a particular religious faith to command the sole allegiance of its worshippers? Secular firms wanting exclusive consumer allegiance first must diversify themselves. They become full-line merchandisers and market themselves for one-stop shopping. If you do not want consumers to shop elsewhere, you had better offer products that cover all the bases. It works the same way in the sacred world. Because gods in the Roman panoply specialized, none could command exclusive devotion. Centurions who may have paid homage to Mars before battle still were likely to invoke Venus in their bedrooms. But the Judeo-Christian God is an all-encompassing, full-service deity. Faithful flocks in this tradition provide a full range of cradle-to-grave services; services that include a comprehensive theological system and a broad network of fellow travelers-in-the-faith to meet both social and emotional needs. Comprehensive services are a necessary but not sufficient condition. My favorite local supermarket offers comprehensive grocery services, yet I quickly will jump if a competitor runs a special on Breyer's ice cream. Consumers will grant exclusive allegiance only if they find it efficient to do so. Strategies for exclusivity Exclusive technology is one strategy. Do you want Sony's Play Station game platform? You had better buy Sony games as well; Nintendo's are not compatible. Similarly, Macintosh users cannot easily diversify into Windowsbased software; it is not compatible. Similar ploys succeed in religion. While the Greco-Roman gods tolerated multiple allegiance, the Judeo-Christian The Joy of Economics (x86) http://web.archive.org/web/20170131171821/htt... 2 of 4 es (x86) 9/20/2019, 9:19 AM tradition demands exclusivity. When Moses descended Mount Sinai, those stone tablets were quite explicit. You shall have no other gods before me, and You shall not make yourself a graven image...you shall not bow down to them or serve them; for I the Lord your God am a jealous God [Exodus 20: 3-4]. Polytheism and Christianity are far less compatible than Macintosh and Windows. The first two commandments forbid Christians to shop for alternative gods, but they place no restrictions on sampling different traditions within Christianity. They explain why Christians do not diversify into Hinduism, but not why Mormons do not diversify into Catholicism. Perhaps such diversification is costly. Perhaps strategies that reward allegiance and/or penalize defection might work. For years a local Giant Eagle grocery store won my allegiance each November by offering a free Thanksgiving turkey if I spent at least $250 in the preceding month. Although competitors ran similar offers, I was stuck. If I patronized one store exclusively, I could make the $250 level. But if I diversified and split my grocery purchases among several stores, I could not ring up enough sales in any one to qualify for the turkey. US Airways grabbed my allegiance the same way with its Dividend Miles program. If I patronized US Airways exclusively, I could run up enough frequent-flier miles to qualify for free trips. If I split my flights among carriers, I never could make it. Competing Christian groups pursue similar strategies. Christianity largely is a communal faith. Worship, sacred rites, and other services are produced and consumed collectively within a congregation of believers. Consumers not spliced into the intricate social networks within these congregations derive few benefits. But these network connections seldom arise naturally; they must be cultivated carefully over time. Those who split their shopping among several congregations are unlikely to be successful. To drive home the point, many Christian faiths forcibly evict members intent on comparison shopping. The Catholic who strays into Mormonism risks ex-communication, separation from the family of faith. Mormons who regularly seek absolution from Catholic priests risk an analogous sacred sacking. Credence goods If we cannot diversify, what next? If a specific choice must be made, a specific religion chosen or not, how can we choose wisely? How can we limit risk? The generic economic answer is "gather information." For search goods (those for which quality can be determined easily by inspection), the process is trivial. Selecting the correct-sized mailing envelope or the dress shirt of appropriate color requires little stress. The process for selecting experience goods is messier. Their value cannot be evaluated easily until after they have been consumed. Will the plumber we hire doa good job? We cannot be sure until after the job is complete. to evaluate experience goods we seek advice from others. We ask friends about which plumbers they have hired and consult Consumer Reports to assess which autos are likely to be most durable and which wrinkle-free slacks are truly wrinkle-free. Within limits, we do the same for religion. We seek testimonials, especially from our friends, and especially from those with no financial stake in our choice. But, ultimately, the information is inadequate. There are some goods -- credence goods -- whose quality we cannot objectively measure, even after use. We took the pill our doctor prescribed and then recovered. Was it the pill or would we have recovered, anyway? We never can be sure. What about that new cologne? She said "yes" when we wore it. Was it the cologne or might she have consented, anyway? We never can be sure. Credence goods. Religion is the consummate credence good. We may not, at least in this life, ever know if we picked a The Joy of Economics (x86) http://web.archive.org/web/20170131171821/htt... 3 of 4 es (x86) 9/20/2019, 9:19 AM winner. Pascal aside, there is no safe choice. In the end, we pays our money, and we takes our chance. Step right up. _________________________________________ Notes: 1. Iannaccone, Laurence R., "Risk, Rationality, and Religious Portfolios," Economic Inquiry, April 1995, volume 33, number 2, p. 285(11). Ideas presented in Iannaccone's article provide the basis for much of this section. 2. See Ono, Yokimo, "Here Comes the Bride All Dressed in a Kimono," Wall Street Journal, June 9, 1998, page A25. ________________________________________ Testing Yourself To test your understanding of the major concepts in this reading, try answering the following:

1. What is Pascal's wager? Explain.

2. People typically diversify to limit risk, why does this typically not happen in modern religions? Explain.

3. Differentiate among experience goods, search goods and credence goods and give examples of each. Which type of good is religion? Explain.