Smith-Why-Socialism-Does-Not-Work-ASREC09

The model developed here does not deal explicitly with transactions costs, but the concept of “shareable goods,” crucial to the model, assumes that transactions costs sometimes make it i

The Economics of MonasticismNathan Smith, George Mason University, March 15, 2009

The Hermitage of the Holy Cross began in 1986, when, as the story was told to the author, an Orthodox priest’s wife left him, and, finding himself alone, he decided to start a hermitage, and see whether anyone would join him He died in 1992, but the hermitage, still small, continued Seven years later, several monks joined, doubling the monastery’s size Short of space, and crowded by the city, the monks moved

to a new site in West Virginia, where they received a grant of land The monastery is now over twenty years old, and with a membership of 16 converts, many of them young, it is likely to last a long time Holy Cross has already lasted longer than New Harmony, Brook Farm, Modern Times, Utopia, and many other secular utopian communities Holy Cross, one of about fifty Orthodox monasteries in the United States, is a recent example of a historical pattern that has been repeating itself for eighteen centuries or so

Meanwhile in Israel, history’s most successful secular socialist experiment, that of the Israeli kibbutzim, was in decline The heyday of the kibbutzim lasted for about two generations, from their first flowering in

the 1930s until they began transitioning away from a collective lifestyle in the 1980s They practiced agriculture at first, later manufacturing as well Property was held in common to the extent that, at first, even clothes were shared Children slept in “children’s houses,” rather than with their parents, in an attempt to undermine the parent-child link and the private life Early on, when Israeli politics was

dominated by Labor, the kibbutzim had a special place in the nation’s identity and supplied a

disproportionate share of the civil and military leadership of the country The kibbutzniks numbered as

many as 130,000 By the late 1990s, skill differentials in pay, private budgets for food and electricity, guest workers to work in the fields, home sleeping for children, and other innovations were steadily

changing the socialist lifestyle into something more like capitalism, as the kibbutzim struggled to achieve economic efficiency and stop the loss of members Many kibbutzim still exist, but the socialist way of life

has largely been abandoned Most experiments with voluntary secular socialism have been much briefer

than the kibbutzim None has lasted longer.

Holy Cross and the kibbutzim are examples of two social phenomena which are in some ways quite

similar, yet have had quite different fortunes Many attempts have been made to establish utopian

socialist communes in the past two centuries, generally in deliberate, self-conscious efforts to realize a

collectivist ideal and show the world a new way to live These experiments generally fail The kibbutzim

are the exception that proves the rule, for they, almost uniquely, overcame the challenge of establishing a new way of life and carrying it on for more than a generation, yet they still went into decline for many of

the same reasons that other socialist experiments ultimately dissolved Moreover, while the kibbutzim are generally not explicitly religious, the shared Jewish identity of the kibbutzniks arguably gives the

communities some religious flavor, as compared to purely secular communes like Brooks Farm or New Harmony Monasteries, though religious, are socialistic in their economic and governing principles In particular, monks are forbidden to own private property Yet monasticism has been far more successful than socialism, with many monasteries lasting for generations, and some well over a thousand years More subtly, monasticism was an organic development, an example, like markets, of Hayekian

spontaneous order It was a social order which emerged from the actions, in a sense self-interested, of

individuals who were not intentionally trying to create order It was a practice first, and only later was it conceived of as an idea and codified or modified into monastic ‘rules.’ Later monks naturally tried to learn from the successes and failures of earlier monks, just as happens in markets But the almost

accidental origins of the Hermitage of the Holy Cross are typical Socialism, by contrast, began as an

idea which the kibbutzim and other experimental communities tried to realize Monasticism and socialism

share the rejection of property and the communal way of life, but monasticism is an emergent order which

is highly robust, while socialism is a utopian ideal of which attempted realizations repeatedly fail or fall short This pattern seems persistent enough to constitute something like a social law

The proximate explanation of the law is surely celibacy Whereas the kibbutzim and other socialist

communes try to breed new generations of themselves from within, monks are celibate and recruit from the outside This results in a persistent favorable selection effect, sharply raising the average commitment

of the members But this only pushes the question deeper, for if celibacy makes socialism work, why do not secular communes adopt it as a rule? The explanation developed here for why monasticism works is that monasteries create environments conducive to a ‘specialized consumption activity,’ namely worship, the enjoyment of which depends on individual stocks of ‘spiritual capital,’ which is accumulated through

‘learning-by-doing,’ thus increasing the attachments of monks to the community Socialism fails because

it lacks this peculiar self-reinforcing incentive for membership, making socialist communes vulnerable to dissolution through high turnover However, other specialized consumption activities could in principle play the same role as worship in providing a basis for a socialistic commune, and the fact that only worship seems to have done so historically suggests that no other human activity has the peculiar

properties of worship, in particular the tendency to become alphabetically preferred to other goods as spiritual capital increases In particular, worship seems to be the only motive strong enough to trump the reproductive drive for large numbers of people

While the model emphasizes utility theory, it has important institutional and constitutional ramifications Second, since monks have no property, and protection of property is a crucial function of most legal systems, the viable communal arrangements suggested by the model—and, it is argued, historically embodied in Christian monasteries for two thousand years—represent a fundamental alternative, perhaps even in some sense a moral challenge, to the capitalist state First, monastic vows represent an intriguing special case of contract theory Economists often take for granted the fulfillment of contractual

obligations, without stating explicitly whether law or conscience accounts for the practice, or what legal institutions and/or moral habits must underlie the assumption Economists tend to regard contracts as

typically monetary on one side, e.g., customer pays $X for good Y, and thus presuppose the existence of

money Political theorists, by contrast, have sometimes built their theories of the state and of state

legitimacy on notions of a ‘social contract,’ albeit one the typical citizen has never seen or consciously assented to The monastic vow is open-ended like the ‘social contract’ of political theory, but it is

(typically) made voluntarily and consciously like a contract in the market Finally, it is suggested that monasteries represent consensual, open-access orders in a way that today’s liberal-democratic polities do not, even though liberal ideology pretends to “consensual” government

The strange viability of monasticism is of great historical importance, because the capacity of the

monastic social order to sustain and extend itself in the medieval West and elsewhere, even or especially

in chaotic times when few stable institutions existed, has been of tremendous service to civilization Medieval Western monks preserved learning and education, evangelized Europe, preserved, developed, and taught agricultural and industrial technologies, settled new lands, built churches, and supplied

leadership for the church and sometimes for the state, and monks played a similar role in Russia No less importantly, monasticism, and the Church whose institutional integrity the monasteries undergirded, was arival power center that provided a crucial check on Europe’s fledgling states, arguably making possible the emergence of limited government

I Background and Literature

The economics of monasticism, in the sense of the phrase here intended, has received, as far as this author

is able to discover, virtually no scholarly attention to date This is not to say that no one has studied the ways in which monasteries satisfied the material wants of their members or dealt with money, property and production Many historians have done that But the methods of the discipline of economics have scarcely at all been applied to the phenomenon of monasticism (A dissertation by Richard Roehl in 1968

on the Cistercian movement is one of the few exceptions.) I believe an economics of monasticism is worthwhile for three reasons First, the individual monk seems, at least superficially, as near a case as

history offers to a counter-example to homo economicus, and accounting for his behavior represents a

institution, with its socialist principles, is a puzzle Third, monasteries are a sufficiently important part of economic and especially institutional history that it is desirable not to leave them a “black box.”

Despite a lack of attention by economists to monasticism specifically, there are several literatures in economics that are relevant First, Gary Becker’s economics of the family and of “household production”

is relevant, since a monastery is a special kind of household Becker was an early “economic imperialist,”that is, a scholar who applied core assumptions of economics, in particular rationality and maximizing behavior, to subject matter that had traditionally been the province of other fields Becker and Stigler (1977) made the controversial argument that, at a deep level, people’s tastes are, or can be regarded as, roughly the same, and observed differences in realized tastes reflect differences in “consumption capital.” The claim is little more than semantics unless we can go further and account for the dynamics of

consumption capital accumulation and depreciation, but if we can, an empirical challenge that is far from impossible, we may be able to explain much that otherwise would have to be regarded as exogenous This idea was applied to religion by Iannaccone (yr?), who advocated “a human capital approach to religion,” treating beliefs, values, familiarity with rituals, etc., as forms of human capital that determine people’s “productivity” in practicing different forms of religion This idea, here labeled ‘spiritual capital,’plays an important role in the model developed in this paper

Second, Becker (yr?) was also the source of the concept of “household production” as a means of

explaining individual choices The theoretical move was to assume that people maximize utility subject

to a “full income” constraint of goods/money and time, where time is used both for earning money in the

market and, in combination with goods, for “production” of “commodities” which enter directly into the utility function For example, for a couple to watch a movie at home requires goods—a TV, a DVD player, a rented or purchased DVD, a supply of electricity, etc.—and time—about two hours on, say, a Saturday night Since a monastery is a type of household, the household production approach to utility theory is used in this model

Third, in addition to arguing for the “human capital approach to religion,” Iannaccone developed two other subtle and surprising arguments First, Iannaccone (1986?) developed a model of church and sect which shows how a typology of church and sect can emerge from an individual maximization problem in which people choose conduct to maximize the sum of ‘secular’ and ‘religious’ rewards Iannaccone showed how, given the assumptions that ‘secular’ and ‘religious’ rewards functions are single-peaked and bounded from below, the ‘production possibilities frontier,’ in religious-secular rewards space, can take two importantly different shapes If the religious and secular ‘poles,’ or behavioral norms, are close enough together, and not too ‘steep,’ i.e., if the religion and/or the secular society are sufficiently

‘tolerant,’ the frontier bends outwards In this case, slight changes in the shape of indifference curves, for

an individual or between individuals, cause slight shifts along the curve, and there is a moderate

equilibrium where people choose conduct somewhere between the religious and secular norms But if thepoles are farther apart and/or the slopes of the curves are steeper, the middle of the frontier may ‘cave in,’ giving the curve an inward-bending shape In this case, the moderate strategy loses its appeal, and slight changes in indifference curves will cause conduct to jump from the secular to the religious norm or vice versa People are either in or out It turns out that the typology arising from this model matches closely with a well-established typology in sociology that distinguishes churches (which exist in low tension withthe surrounding society) and sects (which exist in high tension with society) Iannaccone’s church-sect model, as an explanation of deviant religious behavior, may be applicable to monasticism, with the laity playing the role of the ‘church’ while the monastery plays that of a ‘sect.’ One intriguing implication of

the model is that the sect must offer higher rewards than the church, in order to motivate deviant behavior.

Another paper by Iannaccone (1992) on “sacrifice and stigma” would seem to be even more applicable to monasticism In this paper, Iannaccone tries to explain the higher sectarian rewards implied by his church-sect model by arguing that religion is a “club good” subject to “participatory crowding”—the

rewards an individual derives from participating in religion are an increasing function of the average

sect) can raise utility by imposing on members observable costs that are purely wasteful, destroying resources (sacrifice) or damaging members’ social status (stigma), and thereby reducing “free-riding.” Obviously monks make great sacrifices and in some social contexts face substantial stigma, which undoubtedly increases the seriousness of the average monk Iannaccone’s “sacrifice and stigma” model isimplicit in the assumption, used throughout this model, that individuals must choose between the

commune or monastery, and the world

A fourth relevant literature is the theory of the firm Coase (1936) observed that firms, a feature of capitalism so easily taken for granted, actually represented striking exceptions to the generalized market organization of capitalist economies They are islands of planning in a market sea, and the fact that they exist at all suggests pervasive market failure Coase argued that firms form in order to minimize

transactions costs, and the new institutional economics of Oliver Williamson and others builds on this insight A monastery is like a firm, only more so It is hierarchical like a firm, but a monastery’s control over its monks, unlike a firm’s control over its employees, is not bounded by a 40-hour work week and their right of exit The model developed here does not deal explicitly with transactions costs, but the concept of “shareable goods,” crucial to the model, assumes that transactions costs sometimes make it inefficient, or infeasible, to assign property rights and allocate goods through exchange

A fifth relevant literature is the debates about the feasibility and/or desirability of socialism Since monasteries have essentially socialist economies, with central planning, egalitarian distribution, and no property rights, the question of how and why monasteries work is related to the issue of whether socialismworks Indeed, the failure of socialism makes it newly puzzling that monasteries succeeded as well as they did

Finally, the literature on ‘constitutional economics’ is relevant to monasticism This literature is perhaps more a strand of political science, or even of political philosophy, than of economics, but economists of the ‘public choice’ school, pioneered by James Buchanan, have made important contributions The point

of contact here is the idea of a ‘social contract,’ which was a convenient fiction of political philosophy forcenturies, but a fact of life in the monasteries.

II Monastic Socialism

Modern socialist ideas emerged in the late 18th and 19th centuries Socialists advocated a radically

different economic organization of society There would be no private property Instead, the slogan was:

“from each according to his ability, to each according to his need.” Productive resources would be owned, and economic activity would be planned and directed, by “the people,” or the state This was the utopian dream which the socialists hoped the future would see realized

Yet an economic order of this kind—an order based on common property and central planning—had been

laid out long before in The Rule of St Benedict, 1 and practiced in the monasteries for centuries Here is

St Benedict on private property:

The vice of personal ownership must by all means be cut out in the monastery by the very root, so that no one may presume to give or receive anything without the command of the Abbot; nor to have anything

whatever as his own, neither a book, nor a writing tablet, nor a pen, nor anything else whatsoever, since monks are allowed to have neither their bodies nor their wills in their own power Everything that is

necessary, however, they must look for from the Father of the monastery; and let it not be allowed for

anyone to have anything which the Abbot did not give or permit him to have Let all things be common to all, as it is written And let no one call or take to himself anything as his own (cf Acts 4:32) But if anyone should be found to indulge this most baneful vice, and, having been admonished once and again, doth not amend, let him be subjected to punishment

Here is Benedict on “whether all should receive in equal measure what is necessary”:

It is written, "Distribution was made to everyone according as he had need" (Acts 4:35) We do not say by this that respect should be had for persons (God forbid), but regard for infirmities Let him who hath need

of less thank God and not give way to sadness, but let him who hath need of more, humble himself for his infirmity, and not be elated for the indulgence shown him; and thus all the members will be at peace.

St Benedict thus anticipates the kibbutzniks, who sought to “go beyond mathematical equality to ‘human

equality,’ taking into account discrepancies in biological, familial, and other circumstances” (Muravchik, 322) Finally, here is Benedict on the strict obedience required of all subordinates in the hierarchical organization of the monastery:

The first degree of humility is obedience without delay As soon as anything hath been commanded by theSuperior they permit no delay in the execution, as if the matter had been commanded by God Himself without hesitation, delay, lukewarmness, grumbling or complaint

Since the fall of the Soviet Union, it has become a truism that socialism does not work How is it, then, that monastic socialism has lasted nearly two thousand years?

III Viable Voluntary Socialism: A Formal Model

Among economists, the two most influential arguments why socialism does not work are: (a) a lack of incentive-compatibility, and (b) von Mises’ “calculation problem.” First, a socialist system lacks the

proper incentives: individuals who will, in any case, receive “each according to his need” and no more,

have no incentive to labor “each according to his ability.” At most, if harsh discipline is used, they have

an incentive to pretend to do so Second, under socialism economic decisions are supposed to be made by

a central planner, but no central planner can have all the information needed to plan an efficient and/or

just direction of efforts and allocation of resources Information is inevitably decentralized, and often only the man on the spot is able to make efficient decisions Only market economies with property rights and an efficient and pervasive price mechanism, runs this line of argument, can create incentives to effort while leaving decisions in the hands of those with the information to make them

But this argument against socialism is vulnerable to a reductio ad absurdum that was pioneered by Coase

(1936) As Coase observed, real capitalist economies are full of islands of planning and hierarchy, namely, firms If markets are so efficient, why do firms exist at all? Why do the bosses, workers, etc who comprise firms not operate as free agents, trading with each other good by good and service by service? Coase attributed the existence of firms to transactions costs, which pure free-market theory does not take into account, and reduction of transactions costs could just as easily motivate the creation of small, voluntary communes, or perhaps even of full-fledged socialism This is not to say that incentives

and calculation are not problems for socialism The Soviet system fell short of socialism, for money

continued to be used, and small private property existed, and these shortcomings from the point of view

of socialist ideology were critical even to the system’s limited economic success The Soviet Union did

not claim, strictly speaking, to be socialism; rather, the Soviets saw themselves as trying to build

socialism, an attempt which ultimately failed At the national level, the incentive and calculation

problems seem to be fatal But socialism on a smaller scale, and on a voluntary basis, might be viable

The experience of the kibbutzim and other voluntary socialist experiments shows that

incentive-compatibility and calculation problems are serious, but not necessarily decisive The retreat of the

kibbutzim from the socialist way of life after 1980 did reflect, in part, the need to align incentives

properly To give households budgets instead of providing electricity and food for free encouraged people

to economize, and differential pay scales helped to encourage overtime work and skill acquisition Yet

the kibbutzim enjoyed many years of economic success prior to the 1970s Even in their declining years

they were not unable merely to provide for their members; the difficulty was in providing a life that was

attractive relative to the increasingly prosperous mainstream Israeli society which kibbutzniks were free to

join The theory of repeated games, and experimental evidence that fairness and “other-regarding

behavior” are important parts of behavior may shed light on why humans seem to be able to solve the collective action problems involved in a socialist way of life better than abstract “rational agents” could

And economies of scale in household production might enable a commune to out-perform a system of free agents even if shirking and mismanagement are serious problems.

In a study of utopian communities in the United States, Rosabeth Kanter does not find incentive and calculation problems to be the major problems that these experimental societies encountered On the contrary:

The successful nineteenth century [utopian communes]… tended, on the whole, to become financially

prosperous Whereas in their early years they had suffered through periods of struggle and hardship, by thetime they dissolved they were often wealthy, or if they had many outstanding debts, these had followed a period of prosperity (Kanter, 157)

Instead, the biggest problem was commitment:

For communes, the problem of commitment is crucial Since the community represents an attempt to

establish an ideal social order within the larger society, it must vie with the outside for the members’

loyalties… The problem of securing total and complete commitment is essential… A person is committed

to a group or a relationship when he is fully invested in it, so that the maintenance of his own internal beingrequires behavior that supports the social order… he is committed to the degree that he can no longer meet his needs elsewhere (Kanter, 1973, 65- 66)

Kanter finds that the degree of commitment is the key determinant of the success of nineteenth-century communes:

In long-lived communities of the nineteenth century, group life was organized in such a way as to support six commitment-building processes The nine successful groups tended to have, at some point in their

histories, a large number of concrete social practices that helped generate and sustain the commitment of their members… The twenty-one unsuccessful communes, by contrast, tended to have fewer such

commitment mechanisms and in weakened forms (Kanter, 75)

It turns out to be fairly easy to construct a formal model of how, on the one hand, voluntary socialist communes might be viable even if they are internally inefficient First, we will introduce the concept of

“shareable goods,” which are a bit like club goods or local public goods Within a household or

commune, some goods are non-rival and non-excludable Examples may include lawns and gardens, books or libraries, and in some cases furniture and interior decoration, and odors and sounds or the absence thereof Next, we propose a household production model in which household members’ utility is

a function of two kinds of goods, “shareable” goods (C) and “non-shareable goods” (X):

(1) U U C X   ,  ;  U /   C 0;  U /   X 0; 2U /    X C 0

Assume further that the Inada conditions apply

Utility, as shown in equation (1), is increasing in both goods, but with diminishing marginal utility from each good Household members have a time constraint, and divide their time between producing

shareable and non-shareable goods:

(2) X  TX; C T  C; TX  TC  1

where T X is the time devoted to producing X and T C is the time devoted to producing C.

We are interested in the individual’s choice between living in a commune (monastic or secular) and living

in what monks call “the world,” that is, ordinary life, whatever that may consist of at any particular time

in history Either of these choices involves interaction with others in ways that may enhance utility It is instructive, however, to look first at the simplest case, a “Robinson Crusoe” case in which the individual

does not interact with others at all In this case, the individual chooses X and C such that U U

values for C and X that satisfies this condition as well as the time constraint, and that it involves Robinson

Crusoe producing and consuming some of both goods

How does a member of a commune (or miniature socialist republic) differ from Robinson Crusoe? For the moment we will assume there is no coercion or planning in the commune The individual is free to

produce as much or as little X and C as he likes, and the commune make does not take his X to give to others, or others’ X to give to him (All C produced in the commune is available to all, by the nature of the good.) At this point, the C contributed by other agents begins to matter, so we need to introduce notational conventions that can handle this distinction Let C i represent the shareable goods produced by individual i Individual utility is then:

The individual chooses X and C i to maximize utility, with the constraint (previously irrelevant because

never binding) that C i ≥ 0 If C i > 0, the solution will satisfy the condition:

(4)

j i i

Given the functional form of U, we know from equation (4) that the person will produce less C i, and more

X, than in the Robinson Crusoe case He will also produce less C i than would be socially optimal, since

any C i he makes benefits the whole community, but he does not take this external benefit into account

This is “shirking.” Some individuals may shirk still more, choosing C i = 0 However, people will not

shirk to the point where the total C in the community is less than the C i in the Robinson Crusoe case,

because in that case their marginal utility from producing C would be greater than their marginal utility from producing X Individuals in the community will therefore consume more of both X and C, and will

enjoy higher utility than Robinson Crusoe Utility rises continuously with community size This result is shown in Figure 1 Note that the rate of increase in utility as a function of community size slows, but this

is not due to “crowding”—no crowding effects have been assumed—but to shirking

Finally, we consider utility

in “the world,” that is, neither in Robinson Crusoe isolation nor in a commune,but in the general society, which may be anarchical, feudal, a slave economy, a market economy, or whatever The world typically offers greater opportunities for specialization and trade, thus raising productivity Utility is then:

(5) U U X C   ,   U AT T  X, C

where A is a factor that expresses a person’s productivity in making non-shareable goods in the world, with the benefit of specialization and trade, as compared to Robinson Crusoe isolation Typically, A > 1, but importantly, in an anarchic situation, or for a slave, or under a kleptocratic regime, A < 1 is possible,

signifying that a society is so dysfunctional or an individual’s position in it is so disadvantaged that the individual would be better off withdrawing altogether as a voluntary Robinson Crusoe

In “the world,” we assume that people’s opportunities vary Alternatively, we may assume that tastes for worldly living, as opposed to solitary or communal living, differ This variation in “worldly

opportunities” (tastes) is shown in Figure 2:

Utility

N, population

Utility in commune

Figure 1: Utility rises as the commune gets bigger

All members of the society in Figure 2 are arrayed along the horizontal axis, from the least favored to the

most favored, while the height of the curve represents worldly opportunities

The next step is to superimpose the curves in Figure 1 and Figure 2 Before doing so, we must explain in what sense the axes are commensurable Utility is ordinal and means little more than that individuals are able to make choices We assume the relevant population from which the commune draws its

membership is not infinite The horizontal location of any point on the curve in Figure 2 may be

interpreted as the rank of an individual in the distribution of opportunities, or as the number of people whose utility is equal to or less than the height of the utility curve at that point

Figure 3 shows the choice between the commune and

“the world.” Curve A in Figure 3 represents the distribution of “worldly” utility, Curve C, utility in thecommune In this example, individuals to the left of N1 are “voluntary Robinson Crusoes” or “hermits”: their worldly opportunities are so bleak that they would

Figure 3: Comparing utilities in the commune and “the world”

exit “the world” even if there is no commune in existence for them to join In terms of equation (5), these are individuals for whom A < 1

These “hermits” are important Note that we have not assumed that the hermits are opposed to living with other people, per se Rather, their opportunities in “the world,” whatever that may be (it depends on the

place and the historical period) are so unattractive—or they find the character of “the world” so repugnantfor moral or aesthetic reasons—that they would prefer solitude But they would welcome companions or followers in retreating from the world When these N1 individuals withdraw, they will form a commune

of size N1, but it will not stay that size, because a commune of that size can attract more members The commune will therefore grow to size N2, which is an equilibrium, since all commune members prefer the commune to the world, while all those still in the world prefer the world to the commune A large

commune, for example of size N3, is not sustainable, because some members will wish to exit

The single equilibrium result in Figure 3 depends on the existence of “hermits.” If there are no hermits, competition between the world and the commune may take the form shown in Figure 4

In this case, there are three equilibria: zero, N4, and N5 The equilibrium at N4 is unstable, and thus

unlikely to be observed, but it marks the boundary between the region that converges to (stable) zero and

Utility

N, population

C A

Figure 4: World / commune competition with multiple equilibria

the region that converges to (stable) N5 What this means is that the commune must achieve some

“critical mass” to survive If it does, it grows to size N5 If not, it will dissolve

In general, our priors about the shapes of curves A and C are that A is, by definition, monotonically increasing, and we have strong reason to believe C is increasing at least over some range There might be

several equilibria with positive commune size, but since we are interested mainly in whether or not

communes exist at all, this case is, for our purposes, not importantly different from the basic equilibria case in Figure 4 Another possibility is that the A curve is above the C curve at every point, so that no commune is viable

multiple-So far, our model makes two predictions that seem to be consistent with reality First, the important role played by “hermits” in catalyzing monasticism fits the history of early Christian monasticism, and

suggests one reason for the tendency of communes to have a religious basis As historian C H Lawrencereports:

In its primitive form [monasticism] was a way of life developed by solitaries, or anchorites, living in the

desert The world ‘monk’ itself derives from the Greek word monos, meaning alone… Writers on the

subject [of early monasticism]… have suggested two alternative explanations for the movement [of hermitsinto the desert] Some… have claimed that the first Christian anchorites were refugees who sought safety

in the desert from the persecution launched against the Church by the imperial government under Decius and Diocletian Others have argued that the movement resulted from the softening of the moral fibre of the Christian community after Constantine had given peace to the Church in 313 (Lawrence, 1)

By these accounts, religion motivated the flight of hermits into the desert because it made either

persecution or compromise and hypocrisy so distasteful that participation in the ordinary life of the secular empire had negative value Second, the model suggests an explanation why monasticism has declined in the past two centuries As worldly opportunities have become more and more attractive, the Acurve has risen above the C curve in many populations, making monasteries unsustainable

But our main result, that multiple equilibria are possible, only poses new questions Since “hermits” are presumably rare, multiple equilibria is likely to be the usual situation But if there are multiple equilibria, what determines which of the equilibria will occur, in general or at any particular time? And how does this relate to Rosabeth Kanter’s problem of ‘commitment?’

IV Path-Dependency, Turnover, and Transience

A simple answer to the question of which equilibrium will occur is path-dependency At time t+1, if the

A and C curves are such as to imply multiple potential equilibria, the equilibrium that will occur will be

whatever occurred in t If there was a commune at time t, it will persist If not, none will emerge

Probably this is too simple, since it rules out both (a) the possibility that a commune might disband due to

a shock or to excessive turnover, and (b) the possibility that a group of non-hermits who would be better off, collectively, in a commune than in “the world,” might solve the coordination involved in setting one

up So we may frame the question: Given that a commune exists in time t, under what conditions will period t+1 “inherit” that commune? (We assume discrete time for simplicity of analysis.) Is it enough that a commune existed in period t? Or does there need to be some continuity of membership?

Two extreme assumptions that may be adopted here seem implausible First, it seems unlikely that all

commune members must stay in the commune for it to persist But, second, it seems unlikely that a

commune can maintain continuity if all its members exit and are replaced by new ones A salient,

moderate assumption is that each period t+1 inherits from period t a commune equal in size to the

previous period’s commune minus those who choose to exit If this is above the critical mass for

commune survival—in Figure 4, if it is more than N4—then the commune persists

How likely are commune members to stay? Since willingness to be a commune member depends on

“worldly opportunities,” the stability of commune membership depends on the autocorrelation of worldly