Decline in religious faith has an impact on the economy

A popular saying brought forth during World War II stated that “There are no atheists in foxholes.” In 1960, presidential candidate John F. Kennedy met with Protestant church leaders to satisfy them that his being a Catholic would not conflict with his responsibilities if elected President. And when then-President Bill Clinton had been caught lying about his relationship with White House intern Monica Lewinsky, he carried around an oversized, photo-op-ready Bible to indicate his penitence.

From the Declaration of Independence to today’s coinage, God and religion have had an important part of our nation’s history and in shaping its character. Its impact on the economy was significant, not only in our economic goals but also in our behavior.

In today’s economy, for example, we pay a price for individuals’ loneliness and depression in both personal habits and workplace behavior. And it is difficult to believe that the decline in religious beliefs will make people less lonely and depressed. The opposite seems more likely.

The latest data from the Pew Research Center, though, indicates that membership in organized religious groups continues its rapid decline. Are these historical and current things related in some way? Possibly.

The Pew survey indicates that “65% of American adults describe themselves as Christians when asked about their religion, down 12 percentage points over the past decade.” The survey also indicates that “17% of Americans now describe their religion as ‘nothing in particular,’ up from 12% in 2009.”

We should keep in mind that many people consider their religious preferences to be no one else’s business. Despite Pew’s excellent reputation, then, when someone calls and wants to talk about religion, some respondents may be straying from what they really believe.

In the Pew survey affiliation with an organized religion is a factual question, not a matter of opinion. A problem still arises, though, when we look for the causes of organized religion’s declining membership: people may not know, exactly, why religion no longer appealed to them, or if they do know the reason, they might not want to share it with anyone.

America is changing, but questions about religion’s decline remain. We don’t know, for example, its cause. We also don’t know how important religion is to the fundamentals of American life. It’s not surprising then that we don’t know what the impact on our economy has already been and will be.

The decline in religion is not a new thing. Matthew Arnold wrote about it in 1851 in his famous poem, “Dover Beach,”

…The Sea of Faith was once, too, at the full,

and round earth’s shore

Lay like the folds of a bright girdle furled.

But now I only hear

Its melancholy, long, withdrawing roar, …

Arnold was writing mostly about England and Europe, but there are also references to religious ebbs and revivals dating back to Old Testament times.

And we in America have our own history of religious declines and revivals, sometimes referred to as “Awakenings,” that took place at various times from pre-Revolutionary days to the early 20th century.

All this history is important to us as we try to understand the religiosity data and assess its impact on our economy, and how we will live our lives.

Sometimes the data itself offers a clue about possible causes. One analyst, Derek Thompson, who writes for The Atlantic, believes that the key is in the timeline. Identifying what happened in the early 1990s to make so many people suddenly lose their faith in religion.

He narrows it down to three events: “the association of the Republican Party with the Christian right, the end of the Cold War, and 9/11.” Of the three, only the end of the Cold War seems at all plausible. By the time of the 9/11 terrorist attacks, the accelerated rate of religious withdrawals already had a decade of momentum behind it. And the Christian right’s influence on elections had been waning for some time.

There might be something to the connection between religion and the end of the Cold War, though. The Soviet Union and its half of the Mutual Assured Destruction (MAD) military strategy had been the source of the background fear that our world could end at any moment. When that fear was lifted perhaps some of us felt free to live our lives without the constraints that religion places on them. Nuclear proliferation, though, may put an end to our complacency and cause a rebirth in religious beliefs.

Economists have been mostly absent from the effort to understand issues that the decline in organized religion presents, and that is most unfortunate. One way or another, the shrinking of organized religion is reshaping our economy and we should be preparing for the change.