How Religion Shapes Economics

Witham Larry

in Marketplace of the Gods

Published in print April 2010 | ISBN: 9780195394757
Published online May 2010 | e-ISBN: 9780199777372 | DOI:
How Religion Shapes Economics

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A hundred years ago the German sociologist Max Weber argued that religion influences economic behavior. Since then, the debate over Weber’s “Protestant ethic” and capitalism thesis has prompted many investigations into how religion shapes the economic lives of individuals and societies. This chapter looks at how religion and the market interact, using ideas from Adam Smith and Frederick von Hayek, and focusing on the history of Islam and economic development. Three other areas covered are: religion and income, entrepreneurship, and trade. On income, international studies show that a certain balance of beliefs and time at work produces more wealth. Religion is also related to production of “social capital,” which can have good and bad effects. Among the bad, religion can isolates individuals from broader social networks, or it can produce tribal strife, leading to poor economic environments and terrorism.

Keywords: capitalism; economic development; entrepreneur; Islam; poverty; social capital; wealth; Max Weber

Chapter.  9674 words. 

Subjects: Religious Studies

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