Does Wealth Require Bad Government and Religious Extremism?

Does Wealth Require Bad Government and Religious Extremism?

In a word, “Yes.”

Imagine a nation, any nation, that suddenly stumbles upon vast quantities of unearned wealth; what would happen?  Now, for our purposes, it doesn’t really matter what that unearned wealth might be – it could be a magic meteor or a new “world” of easily-conquered indigenous people or it could be gaining the status of global reserve currency; the point is that our hypothetical nation now has a tremendous capacity to attain real wealth at insignificant cost.  Why does this blessing always seem to become a curse?

Quite simply, politicians are entrepreneurs like everyone else, so they sell whatever the market will bear, and nations flooded with unearned wealth will tolerate an extraordinary amount of corruption and religious zealotry.

First, the incentives for awfulness are very large when there’s so much more to steal.

Indeed, quantitative differences are qualitative differences because many who would hesitate to steal a trifle will not be able to resist a trillion; we may only be haggling over the price, but price matters.

Second, the incentives to resist are greatly diminished.

First, you’re risking more.  Second, your opponents’ ability to enforce their demands are greater when they have access to the resources required to enforce their demands. Third, your opponents can afford to buy you off.  Fourth, it’s not like you can’t afford it, so – all in all – great wealth substantially impairs society’s ability to resist.

Third, unearned wealth is easier to steal.

Let’s face it, it’s pretty hard to steal JK Rowling’s brilliance; indeed, it’s hard to steal anything that people actually need to work to produce because their ability to shirk is too great.  You can force JK Rowling to write at gunpoint, but you can’t force her to write well.  Likewise, you can let anyone write with her IP, but you can’t empower them to write well.  Forced labor just isn’t very good labor, and the costs associated with forced labor are often prohibitive, but stealing minerals or the printing press is very easy.

Long and short, asking why California and New York are so wealthy despite their love of big government is like asking why bank robbers rob banks: thieves go where the money is.

But why religious extremism?

Again, it’s simply entrepreneurs responding to the market.  It’s much easier to justify stealing from people if they deserve it.  Because God told you so.  Or because they’re racist.  Or whatever other excuse you can invent.  It’s easier for you (no guilty conscience) and it’s easier for them (maybe I do deserve it?  Regardless, I shouldn’t resist.)  It makes it much more difficult to resist.  I mean who wants to combat God?  Or be a racist?  And even if you, for whatever reason, resist religion’s siren calls, can you trust that your potential co-conspirators will?  They may be mumbling about God or anti-racism, or they may really believe it, and trying to separate the believers from the non-believers is no easy task, certainly not one on which most people would risk everything for the limited and highly-contingent benefits of resisting.

Quite simply, if I wanted to use America’s control of the global reserve currency for my own purposes, I wouldn’t attempt to sell that abuse as good for me, nor would I attempt to sell that abuse as good for society as the former would be unpopular and the latter obviously erroneous.  Besides, even if I could sell people on self-enrichment, they’d tire of it, particularly as other entrepreneurs would emerge who would outbid me for my people’s loyalty.  (After all, they could share a portion of my ill-gotten wealth with my victims.)

Religion, however, solves that problem.  If God – or diversity – requires a particular solution, then it’s not like anybody can complain or offer an alternative.  The problem with unearned wealth is that whomever is at the top of the society’s pyramid has powerful incentives and capabilities to stay there, but the very things that make the top so desirable also make it unstable as there’s always somebody who can take the top position by sharing a little more or a little differently.  Religion is the only plausible mechanism to reduce that threat.  I might be tempted to offer a “better” life to my co-conspirators, but I can’t because religion acts as inalterable limitation on the efficiency frontier, which – society’s current leaders hope – can be reduced to a single point: the only possible distribution that God or climate change will tolerate.

For leaders, it may be better to rule in Hell than serve in Heaven, but better still to persuade us that Hell is Heaven (or soon will be).  If COVID or LGTBQ+ or God requires a particular outcome, then there’s no reason – or ability – to change the status quo, which is precisely what our social superiors want us to believe.

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Chris Paige is a former Olin Law & Economics Scholar at Yale Law School, and a former academic pollster.

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