Religion and Entrepreneurship

March 10, 2005 | 21 comments
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I spend most of my waking hours studying some aspect of business law. I have a special interest in entrepreneurship. Does this have anything to do with Mormonism?

Consider the following from a blog post by Rob at BusinessPundit:

Kentucky’s past was one of coal mining and tobacco farming, so education wasn’t a priority until recently. We are definitely in the Bible Belt, with one of the largest churches in the country here in Louisville. That seems to breed a community more focused on family than anything else. There aren’t many devoutly religious people insistent on introducing new technologies to the world, or on making a billion dollars.

Hmm. That doesn’t sound like Mormons, does it? Reading this prompted me to unearth a paper I had read several years ago entitled, People’s Opium? Religion and Economic Attitudes. The published version is now available here. In the abstract, the authors summarize their findings as follows:

We find that on average, religious beliefs are associated with “good” economic attitudes, where “good” is defined as conducive to higher per capita income and growth…. Overall, we find that Christian religions are more positively associated with attitudes conducive to economic growth.

This paper follows of long tradition of connecting religious belief and economic attitudes. Most of us are at least passingly familiar with the work of Max Weber and the Protestant Ethic. Many recent studies offer empirical evidence of a connection between Catholicism and the lack of development of institutions conducive to economic development. Unfortunately, according to the authors of the Opium paper, most of these studies are not able to distinguish between two competing hypotheses:

One possible interpretation is that there is something intrinsic to certain religions … that makes them inimical to the development of talents and institutions that foster economic growth. An alternative interpretation, which is equally consistent with the results, is that there was something in the past (correlated with religion, but not necessarily religion) that trapped a country in a bad equilibrium. According to this interpretation, there is nothing fundamental, but it is hysteresis that keeps a country trapped in this equilibrium.

Approaching this topic with reference to Mormonism probably requires a shift back to the Weberian perspective. Rather than asking whether there is something intrinsic to Mormonism that makes it inimical to economic development, we might ask whether Mormonism is hard-wired for entrepreneurship (or economic development). In our case, it may be impossible to separate the intrinsic nature of the religion from its historical roots. Rather than prolong this post with some of my own half-baked ideas, however, I will open this up for discussion.

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21 Responses to Religion and Entrepreneurship

  1. David Rodger on March 10, 2005 at 6:10 am

    I don’t know whether you can make a direct connection that says: “hard wired”. However, there are certain tendencies which religion or quasi-religious philosophies can have which can push people in the direction of economic development. Among these are a respect for law, a strong community sense of honesty (which includes the duty to fulfill a contract), self discipline, hard work, a desire for more education, and a pursuit of achievement. Some of those same values are found in Confucianism, which could be something that contributes to the success of places like Singapore and Taiwan.

    As a generality, 19th Century Protestantism was far more in accord with those values than traditional Catholicism, which tended to place more emphasis on the “sacraments” than on personal conduct. Traditional mainstream Protestantism in the 20th Century tended to move away from those values. Going back in history, however, it was clear that for the Puritans there was a direct connection between economic advancement and finding favor in the sight of God.

    To the extent that many of those favorable characteristics are present in the LDS culture, I think they tend to favor economic advancement. There is, however, a subcurrent of Puritan opinion among many LDS people, that an entrepeneurial venture will be blessed by the Lord, and therefore, a tendency to fall for get rich quick schemes.
    But to the extent that LDS people are honest, hard working, seek education and personal achievement, those are definite plusses.

  2. Rob on March 10, 2005 at 7:24 am

    I certainly don’t believe that religion in and of itself can’t promote entrepreneurship. I know that many believe that Protestant beliefs laid the foundations for capitalism. But it does seem that the Kentucky Southern Baptist brand of religion that is most popular here focuses on marriage and children as ultimate goals. It might be a limited perspective based on the people I know personally, but it does have some explanatory power so I think it must be true at some level.

  3. Minerva on March 10, 2005 at 9:22 am

    I wrote a paper once about Mormonism and Weber’s Protestant Ethic. I came away from it thinking that Mormons are industrious because they are encouraged to be perfect in so many ways, why would they drop the ball in the economic arena? I also decided that I didn’t have to play that game anymore myself, and I quit my fulltime job to focus more on school (I was working fulltime because I was deathly afraid of student loan debt and probably of being thought unindustrious).

  4. Mathew on March 10, 2005 at 9:39 am

    I blogged on a similar topic entitled “Faith Without Economic Growth is Dead” a few months back at BCC. If I am breaching some protocol by posting the url here, apologies and feel free to delete this comment: http://rameumptom.blogspot.com/2004/09/faith-without-economic-growth-is-dead.html We discussed Weber a little in the comments.

  5. Gordon Smith on March 10, 2005 at 11:10 am

    David, Maybe Rob misjudges the entrepreneurial spirit of Christians in Louisville, but wouldn’t they have the same sort of values: “respect for law, a strong community sense of honesty (which includes the duty to fulfill a contract), self discipline, hard work, a desire for more education, and a pursuit of achievement.” Well, I guess Rob would say that the last two are lacking, but how did Mormons get those while Baptists missed out?

    Hi Rob, thanks for stopping by. I think this is an interesting starting point for a discussion because I would guess that most people here would also characterize Mormonism as a religion that “focuses on marriage and children as ultimate goals,” but I also suspect that most of us would think of Mormons as fairly driven to succeed. Perhaps we just have inconsistent desires?

    Minerva, no doubt that we are encouraged to be hard working. Sometimes I worry that the message of industriousness is too strong.

    Mathew, no problem. (Just don’t make it a habit!) Lots of interesting things in your post, including this: “belief in hell appears to motivate more than belief in heaven.” The main thrust of the study you cite seems to be in accord with David’s comment, that religion helps develop attributes that have market value. I agree with that, but still wonder why some religions seem to be better at it than others (if that premise is true).

  6. lyle on March 10, 2005 at 2:26 pm

    David: Is the subcurrent the cause of high get rich quick schemes in Utah, or the trust given between members?

    I think Minerva has a point, and it points directly to a “Mormon” belief as a cause of a work ethic, i.e. we are continually told to stay out of debt, except for a few small exceptions. While “avoid debt” may not be a Mormon “doctrine,” it does make LDS folks “hard wired” towards attempts to earn enough to avoid debt.

    Gordon, I don’t think the desires are inconsisten. Personally, I’m terrified of “denying my faith,” because I’ve failed to provide for my family (Paul said something to that effect). Thus, economic success is a means to the end of family life for many LDS men I suspect.

    Perhaps more importantly, there is the (false) doctrine of “if you keep my commandments, you will prosper.” Given that this idea is paraphrased about 20 odd times in the Book of Mormon, it probably has some subconscious effect on most LDS folks.

  7. Minerva on March 10, 2005 at 2:59 pm

    I think a lot of things in our doctrine lead to a tunnel-vision drive to earn. The industry thing, the be good and you will prosper thing, the proclamation on the family (man as sole breadwinner in a world where a sole breadwinner has really got to make a lot): all of these things and more contribute. But I think a lot of people interpret these things very rigidly and with little thought of how this rigidity can harm families and the soul. The caveats in the Proclamation go unnoticed; Christ’s taking time to fast for 40 days in the wilderness is not emulated to same degree as his willingness to go without sleep in order to bless and serve; “work out your salvation with fear and trembling” takes precedence over “be still and know that I am God.”

    All that said, I think that the stereotypical rich, industrious Mormon, is not as prevalant as we might think. I think these people are visible because often in this world rich people are more just plain visible. There are lots of us who come from families who financially struggle, obviously. Basically what I’m trying to say is there are incredible Latter-day Saints out there who have made the choice to focus more on family than on money, but they tend not to be in major leadership positions and thus may seem to others to be somehow unrighteous because of their less financially exalted position.

    Ramblings…

  8. Aimee Roo on March 10, 2005 at 3:13 pm

    I second the idea that is must have something to do with living wisely. We believe that we are given stewardship over all we have, and that would make us more careful to take care of what we have and even increase it for the good of our families and those around us.

    I think that we also know that in the story of increasing your talents, that talent was a measure of money (like dollar, nickle, ect…). Even looking at it as talents such as art, math, or the like, you would see a teaching to improve on them and increase their use.

    Maybe it also has to do with a deep desire to have the wife be able to stay in the home, and so a homebased biz is born. It could very well be a big focus on family that causes people to find employment that allows for more time with the family, namely being in biz for yourself.

    However, I wonder if it just doesn’t come from something deeper inside a person that is unrelated to religion all together. A lot of these things (pertaining to debt and finances) are not often spoken of in church, as many consider talking about money to be taboo. After all, Utah, even with it’s high precentage of LDS, also has a high rate of bankruptcy. It seems that maybe some people are just better stewards of what they have been given than others, and that other people are content and happy just as they are.

  9. Christy on March 10, 2005 at 3:41 pm

    —-

  10. Ana on March 10, 2005 at 3:44 pm

    It also seems to me that many leaders in the church have been their own bosses, either practicing as attorneys or medical professionals, or on the local level, working as contractors, tradesmen, etc. It seems like their professional success has enabled them to devote the needed time for leadership callings in the Church. Those individuals become role models due to the high visibility of their callings, and youth follow in their footsteps.

    I’m not saying that’s the only reason. But I think it contributes.

  11. greenfrog on March 10, 2005 at 5:10 pm

    In the context of this discussion, should I understand “entrepreneurial” to be synonymous with “commercially industrious”?

    If so, I wonder whether there might not be an alternative explanation for the anecdotal connections identified between mormonism and entrepreneurship — rather than mormonism causing or promoting entrepreneurship, in a Darwinian sense, perhaps mormonism selects for it. This might be a function of doctrine or of community standards or something else, but correspondence alone doesn’t demonstrate causation.

  12. Brian G on March 10, 2005 at 7:46 pm

    Gordon,

    I’m not sure if I can answer whether Mormonism is hard-wired for entreprenuership, but my father is definitely a man hard-wired to be an entrepreneur. He has always had an entreprenuerial spirit and I think it is directly related to his feelings about what the Gospel means to him. After he sold his business about 12 years ago my father started teaching at BYU at the Marriott School of Management. He even has the groovy title of “Entrepreneur in Residence.” It gave him the chance to review and critique a lot of student business plans and help students start small businesses.

    It didn’t take long for him to get restless and he decided to start a non-profit school in the Philippines to teach returned missionaries the principles of running a small business. He’s learned a lot about micro-enterprises and micro-credit and it’s his way of giving back and helping to fight poverty. Although the school he started isn’t offiicially sanctioned or connected to the Church, my father definitely considered it a “mission” and my parents were out of the country for nearly a year and a half starting the school, which has now trained a huge amount of students, 80% of whom run their own businesses after graduation.

    Here’s a link to the school’s website if you’re interested in learning more:

    http://www.the-academy.org/about_ace.php

    I mention my dad only because I feel that if Christianity in general, and Mormonism in particular, are responsible for positive economic conditions it is primarily due to business leaders who feel a personal need to give back by helping others learn fundamental business skills and start businesses of their own.

  13. Mark N. on March 11, 2005 at 5:29 am

    Brian: … helping others learn fundamental business skills and start businesses of their own.

    This, to me, is the dilemma: Does Christ really want us to spend our time selling stuff to each other? The economic system we live under is the best possible evidence of our unwillingness to trust each other. I think often of Nibley’s statement in “Approaching Zion”…

    “Aristotle’s famous dictum in the Nichomachean Ethics I, that our proper function on earth is not just to live but to live well, to live as we can and should, reminds us that there should be no serious economic problems at the human level: after all, mice, cockroaches, elephants, butterflies, and dolphins have all solved the economic problem—their mere existence on earth after thousands of years of vicissitudes is adequate proof that they have found the secret of survival. Can we do no better than to dedicate all our time and energy to solving just that one problem, as if our whole object in life were simply lunch?”

    … and wonder why it is we choose to make selling anything and everything to each other our basic means of survival. None of the animals mentioned in the above snippet feel the need of an economic system of some type, and they go right on surviving. We humans are supposed to be the smart ones, the divine offspring, on this planet, and yet our survival and progress depends on money. It’s so darn sad when you really think about it.

  14. lyle on March 11, 2005 at 7:38 am

    Mark: What is so darn sad about being a child of God with agency & capacity to grow instead of a dolphin? Granted, flipper is cute, but I’ll take dealing with the problem of evil/agency any day over an all tuna diet.

  15. greenfrog on March 11, 2005 at 9:59 am

    …after all, mice, cockroaches, elephants, butterflies, and dolphins have all solved the economic problem—their mere existence on earth after thousands of years of vicissitudes is adequate proof that they have found the secret of survival. Can we do no better than to dedicate all our time and energy to solving just that one problem, as if our whole object in life were simply lunch?

    Much though I respect his efforts and the fruits he brought forth, this statement highlights the core of my dissatisfaction with Hugh Nibley’s writings — it is based upon a presupposed fantasy — that all is sweetness and light in the world of non-human life. You don’t see street-person dolphins because if they don’t swim fast enough, they get eaten by sharks. Cockroaches die by the billions from starvation. I don’t insist by any means that there is any biological necessity for us to incorporate competition for scarce resources into the social and productivity arrangements we craft as humans, but to pretend that the pressures of competition are unique to humans is folly.

    Perhaps I should have posted this to the discussion about tenure.

  16. Brian G on March 11, 2005 at 11:08 am

    Mark N: “Does Christ really want us to spend our time selling stuff to each other? ”

    That’s an interesting question, but the sad reality is that in much of the world people don’t even have time to ponder it because they’re busy looking for their next meal. A better question might be does Christ really want us to go hungry? The obvious answer to that is no. Does Christ really want us to provide for our familes? The answer there is a definite yes.

    Like it or not we live in a fallen state where we have to earn our bread by the sweat of our face. In other words, all the happy cockroaches and dolphins in the world aren’t going to pay my rent.

    Exchanging goods and services, or selling stuff to each other, does not necessarily mean competition, it more often than not means cooperation. Whether God has spoken clearly about selling stuff to each other may be in question, but to me at least, it’s clear that he does want us to provide for each other, and creating businesses, and by extension jobs, is a great way to do that.

    Plus, I don’t know if I agree that our economic system shows an unwillingness to trust one another. Clearly, it gives people an opportunity at times to take advantage of others, but on the whole If you consider all the exchanges, deals, and purchases occuring every day, everywhere than it seems we’re actually trusting each other quite a bit.

  17. annegb on March 11, 2005 at 11:28 am

    Gordon, I had to take your last sentence one word at a time, and figure out what the big ones meant and figure out where you’re going with your premise.
    Wasn’t easy.

    I think Mormonism attracts people of a certain nature, for instance, I’m convinced we attract the nutjobs who do things like kidnap heiresses and believe we have psychic powers (I do, myself, but they are not consistent, hence I’m not getting rich off it). I also think we attract task oriented, work addicts, ambitious types, because there is a certain measurable progress aspect of our religion. Hence, the comparison stuff that evolves within our wards.

    Mormons are hard-working, obedient, committed souls. Take that a few steps further and you have a nutjob, or a workaholic, or idiots who buy stuff that the person selling it doesn’t really own. I am for moderation more and more as I age.

  18. David Rodger on March 11, 2005 at 5:25 pm

    I don’t think there is any doubt that a consumer driven society is not necessarily Christlike; in fact, in many ways it is antithetical. However, to be wise steward, and to be more efficient and productive, would seem to be implied in the parable of the talents. To develop our talents, I believe is part of the gospel; and the discipline necessary to achieve (within reasonable bounds), teaches us much that we need to know in this world.

    Art and literature and music and dance, and yes, even universities, Brother Nibley, arise out of a surplus in production. In 1776, 83% of the working population of the United States was engaged in food production. Today, less than 1% can feed the rest of us. That improvement in productivity is what makes it possible to have a population where a majority goes on to university, and can develop talents which could not be developed when the sole aim of existence was to get enough to eat.

    Does that make us better than previous generations? No. They had their challenges, we have ours. But you cannot feed the poor unless you have the rich to provide the surplus.

    There is so much I love about Hugh Nibley that I hate to take this shot at him. I can only think that he was exaggerating in order to make a very valid point.

  19. Mark N. on March 12, 2005 at 12:24 am

    Brian: the sad reality is that in much of the world people don’t even have time to ponder it because they’re busy looking for their next meal.

    Yes, and if any beings in the universe ought to be capable of seeing to it that those who are currently forced to spend most every waking moment in search of that next meal have their needs supplied, it would (hopefully) be those offspring of our Heavenly Father. But, instead, we’re too busy using our economic systems as weapons against each other to make sure that those whom we judge as being unworthy of our assistance only gain that assistance as they earn it from us.

    You may take issue with Nibley’s political/economic view, but in many cases, he simply quotes Brigham Young:

    “The Latter-day Saints, in their conduct and acts with regard to financial matters, are like the rest of the world. The course pursued by men of business in the world has a tendency to make a few rich, and to sink the masses of the people in poverty and degradation. Too many of the Elders of Israel take this course. No matter what comes they are for gain—for gathering around them riches; and when they get rich, how are those riches used? Spent on the lusts of the flesh.”

    “I have seen many cases . . .,” says Brigham, “when the young lady would have to take her clothing on a Saturday night and wash it, in order that she might go to meeting on the Sunday with a clean dress on. Who is she laboring for? For those who, many of them, are living in luxury. And, to serve the classes that are living on them, the poor, laboring men and women are toiling, working their lives out to earn that which will keep a little life within them. Is this equality? No! What is going to be done? The Latter-day Saints will never accomplish their mission until this inequality shall cease on the earth.”

    “The earth is here, and the fullness thereof is here. It was made for man; and one man was not made to trample his fellowman under his feet, and enjoy all his hearts desires, while the thousands suffer.”

    Most of us seem entirely content with such a state of affairs. God is not preoccupied with allowing us eventual access to the Celestial Kingdom because we will have earned it — no one is capable of earning it. He will give it to those who demonstrate that they would prefer the Celestial Kingdom over the Telestial and Terrestrial Kingdoms, and I have to wonder, given our apparent state of complacency with things as they are, just how few the number is that really want something different from that which we already have.

  20. Gordon Smith on March 14, 2005 at 8:58 pm

    I apologize for dropping out of this thread for several days, but life has been a bit hectic here. Trying to make a buck, y’know.

    Actually, I am enjoying the discussion of Nibley. Reading his Zion book was a formative experience for me. Brian places his finger on some big issues: the competition/cooperation dichotomy and trust. My brief take on this is that cooperation and trust are all around and not hard to find. By the same token, opportunism (“self-interest seeking with guile” for Williamsonians in the crowd) is prevalent, too. One of the tasks assigned to business lawyers like me is to structure relationships in which opportunism is discouraged, but regulating opportunism too vigorously can lead to distrust. This is tricky stuff.

    Of course, creating a cooperative society is even more difficult than creating a single cooperative relationship. Regulating your way to Zion is a silly notion, though I am not eager for anarchy. In other words, law has its place, but we should be modest about its reach. In the end, Zion comes from changed hearts, not changes statutes.

  21. cbegley on April 24, 2005 at 8:16 am

    First time posting on a blog…have patience with me.

    One possibility not yet touched upon to explain the industriousness of Mormons is our peculiar brand of peer pressure. I gave a talk recently in a ward filled with older missionary couples. They didn’t all seem to appreciate my theories in this area, but maybe you will find it interesting.

    I was asked to talk on the value of women in the Church. What a ridiculous topic for a man to talk on. Of course, the “safe” talk would focus on the wonderful work of the relief society and how much we men appreciate our wives etc. I’m not one for “safe” church talks so instead of talking about how valuable women are, I focused instead on how a soul is “valued” in the Church. “Value” being a verb and used in the same way you would “value” a company in due diligence. I talked about how we are taught that God views every soul as invaluable, with limitless potential. But then I pointed out that we are “in the world but not of the world” and that it does a decent job of describing our state of essentially living with one foot on earth and the other in heaven (this is all Readers Digest version for time’s sake). So one part of us is attempting to see as God does, but the other half is constrained by earth–the world we live in. We know that the world values a person in a different way than God does, namely GPA, degrees, looks, job titles, house size, and pay grades. I posed the question: “To what degree do we as Mormons value others by their accomplishments in these worldly areas?” I explained that most people, when asking another about a common friend to see how they are doing, usually ask 1. how are they doing in church, then 2. what are they doing? The second question is all about worldly stuff. I theorized that we Mormons tend to value those worldly things just like everyone else does. I then talked about how interconnected we are as a result of our church organization (think of how much we know about the lives of everyone in our ward/stake…very abnormal outside of small towns) and that my belief is that this degree of closeness with our congregation leads to quite a bit of peer pressure and competition. That we feel pressure to succeed in the eyes of this enormous peer group. Most people I know outside the Church worry about impressing their parents and a few close friends. We Mormons tend to think of our peer group being quite a bit more than that…It extends to our home ward (parent’s or one we grew up in), our current ward, mission president, fellow missionaries, classmates, wife and her family, her home ward, etc. etc. So there end up being a whole heck of a lot more people in the world wondering how we are doing. I explained that of the Mormons I know, many are just as, if not more obsessed with worldly successes than non-LDS. I went on to discuss how men have many more opportunities to have these kinds of successes than women do in the church. That women are therefore more focused on “being perfect” since they can’t be measured by the same objective standards that men are in the Church. That she sacrifices with their husband for three straight years and at the end he gets a ceremony, party, and big law school diploma to hang on the wall…she doesn’t. My point in the talk was that it’s a tough road for LDS women and that we need to do a better job of recognizing them and heaping on the accolades when possible. Men are to some extent complacent at church because they have “important” callings to feel accomplished along with all of the accomplishment they can feel at work.

    But the part that applies to this discussion, I think, is that we are so interconnected as a culture that when you throw in the emphasis on being educated, self-sufficient, and just like your stake/mission president (rich and holder of an important calling) you get an inordinate percentage of MBA’s, lawyers, and network marketers. Maybe it has less to do with a conscious desire to please God and more with a fear of man. I’m not sure that Mormon’s teach a greater emphasis on being industrious, honest, a provider for a large family, and educated. Perhaps to some small degree we are. But one way that we are quite different than Kentucky Baptists is that we are in each other’s business. We know there are a lot of eyes on us. And we have rich men as role models (see First Presidency and Quorum of the Twelve). Could this have something to do with it? Old sister missionary would say no. What say ye?