Differences in race, religion and sexual orientation have erupted in violence around the world recently, making it all too clear that tolerance is an ideal that our societies haven’t fully achieved.
What isn’t well known is that economists have been studying tolerance and its preconditions for many years, discovering some fascinating yet also unsettling truths.
Since the Enlightenment of the 18th century, for example, it’s often been assumed that when you trade with other people you tend to become more tolerant of their differences because mutual understanding increases with greater contact. Furthermore, tolerance is in most people’s individual self-interest because the truly intolerant forgo economic benefits — losing the chance to hire the best workers and to sell to all available customers. For those reasons, as commerce increases and economies grow more sophisticated, discrimination and prejudice should diminish, or so it has been thought.
But is any of that true? Two economists from Sweden, who identify with the Enlightenment tradition, have been testing those claims against the data. They are Niclas Berggren at the Research Institute of Industrial Economics and Therese Nilsson of Lund University. The two scholars have produced a fascinating series of papers on these questions, sometimes writing singly, sometimes together or with the collaboration of a variety of co-authors. Their most notable study is perhaps a paper they wrote together, “Does Economic Freedom Foster Tolerance?”