The Invisible Hand of God
Adam Smith thought competition among religions was a good thing. Does Hanukkah prove him wrong?
Although Hanukkah is a fairly minor religious holiday for most Jews around the world, in North America it has become the "Jewish Christmas." Researchers have found that American Jews concerned with assimilation are the most likely to go all out for Hanukkah to entice their kids to keep the faith. Last December, Ray Fisman explored this theory. The original article is reprinted below.
In a classic Saturday Night Live skit from the late 1980s, a bedridden Santa Claus makes an emergency call to his Jewish counterpart, Hanukkah Harry, for some help on Christmas Eve. Harry gallantly hops into a rickety cart pulled by three donkeys (Moische, Herschel, and Shlomo) to deliver presents. But his goodies turn out to be a letdown for a couple of kids who surprise him on his way down the chimney. For Christine, Harry offers up eight pairs of socks (one for each night of Hanukkah), and for Scott, a pair of men's slacks ("They're a little big, but you'll grow into them"). Fortunately for Scott, Christine, and all the other gentile boys and girls, Santa's stomach flu miraculously disappears. At the end of the sketch, he swoops in to save Christmas with Barbie dolls and pellet guns.
But by the time the skit aired, Hanukkah had already become considerably more than a sock-and-slacks affair. As a religious matter, it's a minor holiday, barely observed by Jews in most of the world. Yet in North America it has come to be known as the "Jewish Christmas" and is celebrated with extravagance—in particular, extravagant consumerism. In a recent study, Stanford economists Ran Abramitzky, Liran Einav, and Oren Rigbi argue that this is a natural response by Jews living in America's fiercely competitive religious marketplace. Using survey data on religious observance, the Israeli-American researchers find that it is Jews who are most concerned with assimilation who are most likely to go all out for Hanukkah, as a means of enticing their kids to keep the faith.
The idea of applying economic analysis to spiritual life isn't new. Adam Smith, the great-granddaddy of modern economics, described churches as though they were profit-maximizing firms, and congregants as their customers. Just as competition between Samsung and Sony pushes each company to make better flat-screen monitors at ever-lower prices, Smith felt that clergy in a competitive religious marketplace would provide services with greater "zeal and industry" than religious leaders in places where one faith had a monopoly.
After a lapse of some centuries, economists have rediscovered their religion, and Smith's hypotheses on the benefits of religious competition have been borne out by modern statistical analysis. One recent study compares countries where a single religion has a lock on the market—like France or Italy—with more pluralistic societies like the United States. Almost all Italians identify themselves as Catholic, yet in one survey only half reported attending church at least once a month and the same fraction reported believing in God. The bishops and vicars, the thinking goes, have grown complacent, offering the same tired sermons and Sunday school lessons year after year because they have no competition from rival faiths. By contrast, America is full of megachurches built by marketing-savvy pastors and featuring customer-friendly amenities like day care, cafes, and large-screen TVs, which simulcast electrifying orations to overflow crowds. Apparently, they're more effective at attracting audiences of believers than their Italian counterparts. Nearly 60 percent of Americans attend church monthly, and almost 90 percent report believing in God.
At no time of year do Jews feel more assaulted by other religions than at Christmas. Smith would say that to prevent a loss of market share Judaism should counter with its own holiday merriment. The authors of the study begin with a survey comparing the holiday observances of students in Israel—a country where Jews are largely insulated from outside religious pressures—with students at Stanford University. Only 30 percent of Israelis ranked Hanukkah as a "top three" festival celebrated by their Jewish classmates; at Stanford the figure was more than 95 percent.