Religionomics

Here's a conversation topic you might not want to bring to the dinner table. (and I can't take credit for coining the term.)

On Tuesday, the Vatican published Caritas in Veritate (Charity in Truth), an encyclical of Pope Benedict XVI. Among other things, there is a need "To manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result...," proclaimed the Holy Father. "For all this, there is an urgent need of a true world political authority...regulated by law, to observe consistently the principles of susidiarity and solidarity..." et cetera. And only a month ago, we were arguing that President Obama's financial reform plan would give too much power to the Fed.

As I see it, in order to establish a "world political authority", you need world agreement, which is another way of saying world peace. At the very least, world peace is a long ways off.

The Pope isn't the only renown religious figure to dabble in economic commentary. Famed ultra-conservative televangelist, Pat Robertson, annually makes a set of predictions for the year. On January 2, 2008, he claimed God told him that oil would rise to $150/barrel, the stock market would crash, and the world would enter a recession. But before you run to your nearest church, you should know that he doesn't have stellar track record of annual forecasts: Robertson predicted there would be a major terrorist attack on U.S. soil in 2007.

Obviously, the Pope and Pat Robertson are very different indeed. But despite the Protestant Reformation, the two spiritual leaders share some similar beliefs. For one, they are both opponents of abortion and contraception. And here's where our conversation gets freaknomic (to borrow a term from Stephen Levitt and Stephen Dubner).

Set aside your stance on abortion and contraception for a moment. In Irrational Exuberance, Robert Shiller notes:

"Advances in birth control technology (the pill was invented in 1959 and became widely available by the mid-1960s in the United States and many other countries) and social changes that accepted the legality of contraception and abortion were instrumental in lowering the rate of population growth, as were growing urbanization and advances in education and economic aspiration levels. Now the Baby Boom and the subsequent Baby Bust have created a looming social security crisis in many countries of the world: when the Boomers grow old and finally retire, the number of young working people available to support the elderly population will decline worldwide."

In other words, contraception and abortion are taking taxable individuals out of our future workforce.

But Shiller's point may be an oversimplification. More people could mean more unemployed. Also, anyone who read Freakonomics could tell you that Stephen Levitt has long argued falling crime rates can be traced back to the legalization of abortion due to Roe v. Wade in 1973.

I won't try to get to the bottom of any of the issues mentioned above. The point I'm trying to make is that economics, religion, sociology, et cetera, are not mutually exclusive. Social and religious choices are not without economic consequences. It's popular for young people to claim that they are social liberals/economic conservatives. But even that distinction doesn't get rid of the highly contentious political gray area.