SFeDu
of.211, Gorgoko St., 88 
Rostov-on-Don
Russia
344002
+7 (863) 250-59-54
This email address is being protected from spambots. You need JavaScript enabled to view it.
te@sfedu.ru

TERRA ECONOMICUS

Superstition as an economic institution: An evolutionary approach


TERRA ECONOMICUS, , Vol. 19 (no. 2),

The paper explores a hypothesis of evolution in superstitions. Using the framework of Peter Leeson onsuperstitions as productive socio-economic institutions and the historical case of the Orang Suku Laut(OSL) peoples of the Indonesian archipelago of Riau, we demonstrate that superstitions can adapt to theshifts in economic conditions surrounding them. The strained relations between the OSL and the Malaysof Riau created a collective action problem: individual economic interaction between these groups wasbeneficial, but collectively the OSL risked getting subjugated by the Malays. To incentivize avoidance, theOSL utilized a system of belief called ilmu, and its superstition of lethal poisoning through trade. Ilmuprevented most intercommunity trade but allowed the OSL to retain their freedom. The siutaiton changedwith the arrival of the Chinese middlemen to the archipelago, who introduced the institution of money tothe OSL and caused them to become more progressive in the eyes of the Malays. This lessened the potentialfor conflict with the Malays and reduced the costs of trade. OSL then modified their superstition to renderthe exchanges safe if they were performed with money. As a result, the OSL superstition reached a newequilibrium which substantially improved the community’s economic well-being. If our hypothesis is correct,then a spontaneous development of superstitions can enhance the material welfare in some socities, despitetheir objectively incorrect nature.
Citation: Maltsev, V.V., Dementyev, V.V. (2021). Superstition as an economic institution: An evolutionary approach. Terra Economicus 19(2): 28–38. DOI: 10.18522/2073-6606-2021-19-2-28-38


Keywords: anarchy; superstitions; evolution; Orang Suku Laut; ilmu; Indonesia; Malays; wealth maximization; game theory

JEL codes: B53, Z10, Z12, N35, N45

References:
  • Ananta A., Arifin E., Bakhtiar K. (2008). Chinese Indonesians in Indonesia and the province of Riau Archipelago: A demographic analysis. In: Suryadinata L. (ed.) Ethnic Chinese in Contemporary Indonesia. Institute of Southeast Asian Studies.
  • Andaya L.Y. (2010). Leaves of the Same Tree: Trade and Ethnicity in the Straits of Melaka. Singapore: NUS Press.
  • Chou C. (2004). The Orang Suku Laut: Owners of or strangers in the Riau Archipelago of Indonesia? pp. 309–328. In: Berland J.C., Rao A. (eds.) Customary Strangers: New Perspectives on Peripatetic Peoples in the Middle East, Africa, and Asia. Praeger.
  • Chou C. (2005). Indonesian Sea Nomads: Money, Magic and Fear of the Orang Suku Laut. Routledge.
  • Chou C. (2010). The Orang Suku Laut of Riau, Indonesia: the inalienable gift of territory. NY: Routledge.
  • Chou C. (2016). The water world of the Orang Suku Laut in Southeast Asia. TRaNS: Trans-Regional and-National Studies of Southeast Asia 4(2): 265–282.
  • Chou C., Wee V. (2002). Tribality and globalization: The Orang Suku Laut and the “growth triangle” in a contested environment, pp. 318–363. In: Benjamin G., Chou C. (eds.) Tribal communities in the Malay World. International Institute for Asian Studies and Institute of Southeast Asian Studies.
  • Chun N., Khor N. (2010). Minimum wages and changing wage inequality in Indonesia. Asian Development Bank Economics Working Paper Series, № 196.
  • Demsetz H. (1967). Toward a theory of property rights. American Economic Review 57(2): 347–359.
  • Faucher C. (2002). Magical discourse, moral boundaries, and the mapping of interrelations in the Riau Archipelago. Asian Journal of Social Science 30(1): 158–176.
  • Faucher C. (2005). Regional autonomy, Malayness and power hierarchy in the Riau Archipelago, pp. 125–140. In: Erb M., Sulistiyanto P., Faucher C. (eds.) Regionalism in Post-Suharto Indonesia. Routledge.
  • Friedman M. (1981). Capitalism and freedom. In: Raico R. (ed.) New Individualist Review. Indianapolis: Liberty Fund.
  • Greif A. (2006). Institutions and the Path to the Modern Economy: Lessons from Medieval Trade. Cambridge University Press.
  • Hayek F.A. (2014). The Road to Serfdom: Text and Documents: The Definitive Edition. Routledge.
  • Landa J. (1994). Trust, Ethnicity, and Identity. Ann Arbor: University of Michigan Press.
  • Landa J. (2016). Economic Success of Chinese Merchants in Southeast Asia: Identity, Ethnic Cooperation and Conflict. Springer.
  • Leeson P.T. (2007). Trading with Bandits. The Journal of Law and Economics 50(2): 303–321.
  • Leeson P.T. (2013a). Gypsy Law. Public Choice 155(3–4): 273–292.
  • Leeson P.T. (2017). Coase, Posner, and Austrian law and economics, pp. 46–62. In: Boettke P.J., Zywicki T.J. (eds.) Research Handbook on Austrian Law and Economics. Cheltenham: Edward Elgar Publishing.
  • Leeson P.T., Coyne C.J. (2012). Sassywood. Journal of Comparative Economics 40: 608–620.
  • Leeson, P.T. (2013b). Vermin Trials. The Journal of Law and Economics 56(3): 811–836.
  • Lenhart L. (2001). Orang Suku Laut communities at risk: Effects of modernisation on the resource base, livelihood and culture of the ‘Sea Tribe People’ of the Riau Islands (Indonesia). Nomadic Peoples 67–88.
  • Lenhart L. (2002). Orang Suku Laut identity: The construction of ethnic realities. In: Benjamin G., Chou C. (eds.) Tribal Communities in the Malay World: Historical, Cultural and Social Perspectives. Institute of Southeast Asian Studies.
  • Lyons L., Ford M. (2013). The Chinese of Karimun: Citizenship and belonging at Indonesia’s margins, pp. 121–137. In: Siew-Min Sai, Chang-Yau Hoon (eds.) Chinese Indonesians Reassessed: History, Religion and Belonging. London and New York: Routledge.
  • Mises L. von (1998). Human Action: A Treatise on Economics. Scholar’s Ed. Auburn, Ala.: Ludwig von Mises Institute.
  • Posner R. (1980). A Theory of Primitive Society, with Special Reference to Law. Journal of Law and Economics 23(1): 1–53.
  • Scott J.C. (2008). Weapons of the Weak: Everyday forms of Peasant Resistance. Yale University Press.
  • Trocki C.A. (1979). Prince of Pirates: The Temenggongs and the Development of Johore and Singapore, 1784–1885. Singapore: Singapore University Press.
  • Weber M. (1978). Economy and Society: An Outline of Interpretive Sociology. University of California Press.
Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606