The Problem of Natural Religion in Smith’s Moral Thought

COLIN HEYDT

JOURNAL OF THE HISTORY OF IDEAS

Abstract: Adam Smith is one of the philosophers whose views on the relation of morality to religion have been very actively debated. It is accepted that Smith had unorthodox personal religious beliefs. The crux of the debate, however, is whether or not the God of natural religion is essential, in one or more ways, to Smith’s moral theory. A number of recent interpretations defend the description of Adam Smith as “a strong supporter of natural theology.”2 This paper argues [End Page 73] against that claim, using both novel evidence and familiar evidence applied in novel ways. I demonstrate here that Smith took positions at odds with a commitment to natural religion’s importance for morality. In particular, I show that it is hard to square Smith’s alleged support of natural religion with his account of conscience, his natural-rights theory, and his omission of piety from his catalogue of virtues.

Cognitive rules, institutions, and economic growth: Douglass North and beyond

AVNER GREIF &  JOEL MOKYR

JOURNAL OF INSTITUTIONAL ECONOMICS, Volume 13, Issue 1

Abstract:  Douglass North’s writing on institutional change recognized from the very start that such change depends on cognition and beliefs. Yet, although he focused on individual beliefs, we argue in this paper that such beliefs are social constructs. We suggest that institutions – rules, expectations, and norms – are based on shared cognitive rules. Cognitive rules are social constructs that convey information that distills and summarizes society’s beliefs and experience. These rules have to be self-enforcing and self-confirming, but they do not have to be ‘correct’. We describe the characteristics of such rules in the context of a market for ideas, and illustrate their importance in two developments central to the growth of modern economies: the rise of the modern state with its legitimacy based on consent, and the rise of modern science-based technology that was the product of the scientific revolution and the Enlightenment.

The rise and fall of income inequality in Chile

FRANCISCO PARRO & LORETO REYES

LATIN AMERICAN ECONOMIC REVIEW

Abstract: This paper presents evidence on a rise and fall in income inequality in Chile during the past two decades. We show that income inequality rises from 1990 to 2000 and then falls from 2000 to 2011. We perform simple but informative decompositions to figure out the contributing factors behind that dissimilarity in the behavior of inequality across those two subperiods. Our results are consistent with a story in which economic growth increases the demand for more educated workers, initially increasing inequality. However, those higher returns to education encourage agents to invest in higher education, producing a subsequent human capital deepening that reduces inequality at later stages of the development process.

Micro foundations in the Great Divergence debate: opening up a new perspective

LUCA ZAN

HISTORY AND PHILOSOPHY OF ECONOMICS

Abstract: Prevailing approaches in historical studies adopt a macro view and place an overwhelming emphasis on the Industrial Revolution as a major discontinuity in Western development. On the contrary, recent research in accounting, management and business history has suggested a different direction. When opting for a micro-level focus, crucial discontinuities in management and accounting in the West can be traced back to the Renaissance Period. The paper thus searches for ‘micro foundations’ in managing and accounting practices to address the on-going debate on the East-West divergence. Despite the obvious problems with source availability, we outline a new research agenda for the debate.

The Economics of Property Rights in Early and Medieval Christianity

BENEDIKT KOEHLER

ECONOMIC AFFAIRS

Abstract: Early and medieval Christianity pioneered an economics of property rights that had no precedent in antiquity. The early Church Fathers Tertullian, Ambrose, and John Chrysostomos successively evolved conceptions of the right to own property as a prerequisite for poor relief, and the basis of the right to own property was later formulated by Pope John XXII to settle a dispute on this issue instigated by Francis of Assisi. This article challenges assessments advanced by Joseph Schumpeter, Jacob Viner, and Frank Knight, who argued that the doctrines of Christianity were devoid of economics, and draws attention to the work of Georg Ratzinger (1844–1899), who first expounded how in early Christianity property rights and poor relief were linked.

Conditional Privacy Rights

MUNGAN, MURAT C.

JOURNAL OF INSTITUTIONAL AND THEORETICAL ECONOMICS JITE, Volume 173, Issue 1

Abstract: People have subjective valuations of privacy. Thus, absent further considerations, efficiency requires that a person be afforded privacy if, and only if, his subjective valuation of privacy exceeds the social value of the information that would be disclosed through a violation of that person’s privacy. Absolute regimes that either always allow privacy, or never allow privacy, cannot achieve this result. This article shows that a conditional privacy regime can lead to efficient separation among people based on their subjective valuations of privacy. Moreover, this regime need not inefficiently distort information collection incentives or incentives to refrain from various acts that may generate collectible information.

Determinants of banks’ capital structure in the Pre-Regulation Era

KIM ABILDGREN

EUROPEAN REVIEW OF ECONOMIC HISTORY, Volume 21, Issue 1

Abstract: The article explores the determinants of banks’ capital ratio in the Pre-Regulation Era where capital structure decisions were not influenced by deposit-insurance schemes, capital requirements, or high tax shields. The analysis builds on partial-adjustment capital-structure models estimated on the basis of panel data for all Danish commercial banks 1847–1919. The results suggest that banks with low levels of liquidity had a higher capital ratio in periods with financial instability. This enabled them to suffer larger losses and thereby reduce the risk of facing costs of financial distress. The article is the first bank-level study on capital structure in the Pre-Regulation Era.