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

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606