Religious liberty and economic prosperity: four lessons from the past

Many political scientists and economists have argued that expanded civil liberties and general political freedom are conducive to economic growth (e.g., Smith [1776] 1976; North, Wallis, and Weingast 2009). One subset of these civil liberties-religious freedom-is frequently neglected in such discussions, with scholars tending to focus on the rights of private property ownership, contracting, assembly, and access to political decisionmaking. Religious liberty is often seen as an isolated freedom that directly impacts parishioners and clerics but has little spillover effects on the general economy or society. But can the right to worship freely also have positive consequences for economic growth? A casual glance suggests nations that have developed strong legal guarantees of religious freedom (and a concomitant culture of religious toleration) are also ones that have had long-term sustained economic growth (Grim and Finke 2011).Within the modern world, the Netherlands, Britain, and the United States were the first adopters of toleration and liberties for religious minorities, and these countries also became the loci of rapid growth in entrepreneurial activity in the 17th century and beyond, not to mention some of the first societies to set the modern standards for constitutional democracies.Might there be a causal connection between religious freedom, on the one hand, and societal prosperity, on the other? If so, what are the precise mechanisms linking the two? We take a historical approach to this puzzle and a set of related questions. Namely, if religious freedom has remained historically elusive, how did it ever originate? Can the experience of the past inform us about the process to achieve expanded civil liberties in the area of religious belief and practice today? Answers to these questions will enable us to fill out our understanding of civil and economic liberties and the complex relationship between general freedom and economic prosperity.Our examination of these issues takes us back to the 17th and 18th century, with the first emergence of religious freedom in the modern era in the Netherlands, Britain, and British American colonies, eventually culminating in the First Amendment of the United States Constitution-not a be-all-and-end-all of religious freedom but certainly an important historical marker. We assert that history is a salutary teacher and that current struggles for enhanced democratic freedoms can learn from the processes of the past. F