Bob Subrick on Religion and Adam Smith, F.A. Hayek, and Vernon Smith
Date: December 1st, 2013

Can you study religion through the framework of economics?  Many philosophers think not, but Prof. Robert (Bob) Subrick, and associate professor of economics at James Madison University, says that you can.  We discuss a recent paper he wrote that looks at how some very well known economists — Adam Smith, F.A. Hayek, and Vernon Smith — have studied this topic either directly or indirectly.

Our conversation begins with some background on Prof. Subrick himself, as it is somewhat rare to find an economist studying something other than banking, trade, or unemployment levels.  While Bob does have an interest in long-term economic development the way we normally think of it (e.g., rising GDP), his interest in economic analysis was picqued by the likes of Gary Becker and Larry Iannaccone who have argued that economics can be applied to a broad swathe of social behavior.  We discuss how Bob responds to his skeptics, why economists have long neglected the role of religion, and Tony shares some of his own stories as well.

Prof. Subrick then explains that the nexus where religion can come into play when studying economics, namely the issue of social order.  He explains what “social order” means and why religion might play an important role in securing it, as well as being important to understanding long-term, historical growth.  We then turn to the most famous economist to come out of the Scottish Enlightenment, Adam Smith.  Surprisingly, and despite condensed versions of The Wealth of Nations that redact the material on religion, Adam Smith wrote extensively on this topic.  We review his views on this topic, including the origins of religion, the social use of religion, and what happens when governments control the religious marketplace.  While Smith is well-known for promoting the idea of laissez-faire economics, his strongest case for the benefits of the free market might actually in the passages that relate to religion.  We also examine the potential tension between Smith’s two major works – The Wealth of Nations and The Theory of Moral Sentiments.

Following our discussion of Adam Smith, we move into the intellectual musings of two lesser known economists, F.A. Hayek and Vernon Smith, both of whom won Nobel Prizes in the Economic Sciences.  We start with Hayek and Prof. Subrick explains who this guy is and what the Austrian School of Economics is, a perspective closely associated with Hayek.  Interestingly, Bob reveals that even though Hayek had an interest in Christianity early in his life, his parents tried to keep theology away from him by hiding The Bible.  We then find out that although Hayek did not write about religion very much, the last chapter in his last book – The Fatal Conceit – he argues how religion allows for a moral system that creates the basis for individual and long-distance trade.

Vernon Smith, no relation to Adam, becomes the intellectual we focus on last.  Like Hayek, Smith – an experimental economist – never looks at religion as a central theme, but he nonetheless in his acceptance lecture for the Nobel Prize, he connects five of The Ten Commandments to the reduction of transaction costs in society, which in turn leads to greater economic flourishing.  As usual, we end with Prof. Subrick’s personal reflections on what he has learned throughout his career in economics and how it relates to his understanding in religion, with a specific emphasis on what he has found on whether or not the “Protestant ethic” has led to greater economic growth.  Recorded: October 29, 2013.


Prof. Bob Subrick’s bio at James Madison University’s Gillam Center.

An Inquiry into theNature and Causes of the Wealth of Nations, by Adam Smith (two volumes).  Available at Liberty Fund.

The Fatal Conceit, by F.A. Hayek.

Vernon Smith’s Nobel Prize Lecture (in video, audio, and written format).


Theodore Malloch on Spiritual Capital and Virtuous Business.

Art Carden on Christian Ethics, Charity, and Economics.

Robert Sirico on Markets, Morality, Faith, and Freedom.

Robert Woodberry on Missionaries and Democracy.

Rebecca Shah on Religion and the Enterprising Poor in India.

Joel Fetzer on Confucianism and Democracy.

One Response to “Bob Subrick on Religion and Adam Smith, F.A. Hayek, and Vernon Smith”

  1. […] Bob Subrick on Religion and Adam Smith, F.A. Hayek, and Vernon Smith. […]

Leave a Reply

Listen or Download This Episode
Search The Podcast
To search the podcast, type a term and click the Search button.

Connect With Us