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  • Mathieu Provencher

Making profits religiously

Hi Guys! I will bring another uncomfortable subject (Economics is full of them): Religious Economics!!!!

I heard a few days ago that Muslims in India are now given the opportunity to use "halal" makeup. For those who don't know, halal is a set of rules that describes what is "good" and what is "bad" to consume from a religious perspective. One of these rules for example is to avoid using products that are derived from pigs (one of the big no-no of Muslims).

Also, the Jews have the concept of "kosher" for their food, which has the same basic idea of "good" and "bad" types of foods. For them, certain types of animals are also forbidden in addition to having to perform a certain ritual to make it "ready" for consumption.

SO, what does it have to do with Economics? These practices have the effect of reducing potential competition for people serving their religious clients. That can create "niche markets", which tend to be very profitable for the few producers (or suppliers) of such products. By enforcing or encouraging these religious "laws", religious institutions can make quite a lot of money.

In the case of halal makeup, the great majority of producers will not be certified for these clients (because they don't follow these religious rules), giving the halal ones high market power and low risk of loosing their market shares. This can lead to, as we saw in class, higher prices and lower quality... which is more profitable for the producers. In turn, these producers have to be certified by religious institutions, which will ask for a "compensation" for their time at observing and confirming these facts... an nice income for them as well (extra cost that will be passed down to consumers of course).

In the case of kosher, I interviewed a company owner when I was working for the Canadian Economic Development agency from the federal government of Canada. He told us that he was offering kosher products before but he had lost his certification a year ago. When we asked him why, he said it was very expensive to pay a Rabbi just to come say a few words in front of his products... an even more obvious example of profits from these religious practices.

Don't you think that Catholicism is exempt from these types of money-making schemes. For example, the "Sisters of Mercy" (quite an ironic name given the circumstances) from Ireland are under investigation regarding what seems to be plain slavery. They have kept women against their will and forced them to work for them, free of charge. They then sold back these products at high profits and apparently made quite a lot of money for themselves. Also, a few years ago you could go to the Vatican as a religious trip to see the "holy" city where the pope is. In the streets around, I was told you could find a wide variety of kiosks selling things that had been "blessed" by the pope or even "certificates" signed by the pope... all of this to the benefit of the Catholic church of course. One person (a Catholic if you must know) reported to me that they had dozens of such kiosks selling these certificates, which means that the pope would have had to sit down all day signing these papers if they were all originals... very unlikely of course. As a side note, I do hope that the new pope will be able to clean up the Catholic institutions.

We also have huge processions in Peru related to the Catholic Church (called the Lord of Miracles). I learnt recently that at least some of these events are not actually organized by the Catholic church but by a separate body that is not directly linked to them. It is apparently a wonderful example of social enterprise (non profit I would hope) where people self-organised to make this work. The church has no real choice to accept it the way it is since it has gained so much popularity. A good lady I know is strongly involved in the management of their finances for example (there seems to be a high number of smaller events of the Lord of Miracles all around the place, she's from one of those). She told me they do everything themselves, with no help from the church. She even told me that the Catholic institution offered to manage their money once and they refused... afraid that money would "disappear"... poor Catholics, they lost some money there.

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