On the Economic Constitution of Religion: A Critique of Buchanan’s Understanding of Religious Moral Precepts

When discussing social contract, James Buchanan distinguished two approaches for generating order and cooperation in society: A religiously inspired moral precepts approach, which he dismissed; and constitutional economics, which he favored. He associated the former with the irrational: spiritual, non-secular, pre-modern – theological – concept; whereas the latter set out in his understanding enlightened, modern and rational social contract, which he followed up in institutional economic terms. The paper casts doubt on this strict separation of religion from economics. It argues the thesis that biblical religion portrays, in addition to a spiritual dimension, a rational economic one also. The paper proposes a concept of ‘rational religion’ that traces, in substance and nature, institutional economics into biblical religion. This contests the boundaries between economics and religion. Further implications result regarding the philosophical foundations of Buchanan: i.e. the Enlightenment’s agenda of separating the ancient/pre-modern from the modern; or indeed, traditional religion from rational ethics and science. The paper challenges such dualistic opposites that have separated religion from economics for so long.