Art Carden  

Economics and The Rapture

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Economists are fond of calling environmental doomsayers' bluffs by challenging them to invest in oil futures if they're really afraid we're going to run out of oil within the next few years. I've done this before (here, for example, is a Forbes article in which I discuss the challenges faced by Harold Camping's declaration that the world would end at 6:00 PM Eastern on May 21, 2011). That more people don't rush out and buy oil futures suggests to me not only that the end of oil isn't nigh but that many of the doomsday prophets don't even believe themselves deep down.

I got to thinking about this again while listening to the radio during my drive to lunch. I heard parts of a sermon about the end times, and during the fairly confident pronouncements about what would happen after the second coming of Christ, I started wondering whether we can get a solid understanding of the degree to which people hold to a strong version of (say) pre-tribulational dispensationalism by looking at how they approach asset markets.

Suppose you're convinced that you have a better understanding of the End Times than most people. How can you profit from it? To take just one example, the rapture will lead to a sharp reduction in population (or not-so-sharp, depending on your convictions about who is truly saved) and, therefore, a reduction in demand for real estate of different kinds, like housing and houses of worship. Wikipedia claims that there are 2.1 billion adherents to Christianity in the world; assuming we're all saved that means a rapture tomorrow will lead to a sudden 2.1 billion person drop in the population and, therefore, a big post-rapture reduction in housing prices.

We would see a similar reduction in prices for houses of worship. Should we see churches and individuals hustling to write up contracts that will give someone the right to their houses or houses of worship in the event of the rapture? Might those who are agnostic but perhaps holding that the probability of the rapture isn't zero want to buy and sell options on different kinds of assets in order to ease the otherwise-rough life they can expect during the Tribulation?

If I care about my unbelieving friends and neighbors, would it not testify to the strength of my convictions if I short-sold sovereign debt on which default is more likely after the rapture with a stipulation that they enjoy the post-rapture windfall profits? There are churches and other organizations that are preparing rapture kids and Rapture Letters. What would Rapture Financial Instruments look like?



COMMENTS (13 to date)
Michael writes:

I can't think of a single religious person (myself included) who worries about providing materially for the afterlife. Your entire premise is absurd, even from a religious context, which doesn't always cow to reason.


Since you're getting all biblical, maybe check out:

Luke 12:20-21 “But God said to him, ‘You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself? “This is how it will be with whoever stores up things for themselves but is not rich toward God.”
James 4:13-14 "Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.” Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes."
Jeremey Arnold writes:

Well if the second coming is like a thief in the night, don't we have a problem where we can't be sure when it would be appropriate to off-load our holdings?

I think any fair reading of a premillenialist approach would say that while we may believe in the Rapture, we do not know the times and dates the father has set and even if we believe it is 'soon', there is an understandable problem about what 'soon' means to a being of infinite lifespan who took thousands of years to provide the promised Messiah to the Jews.

So, I think any well-meaning Christian who would take you up on this would say (myself included) that the risk premium of being wrong and having invested all these resources with an unknowable timeframe for return on investments outweighs the possibility of being insanely wealthy. Also, there is the very real possibility that eschatological approach was flawed and that I misunderstood how the end was going to happen.

And, this assumes Christians place the same value on wealth as others (which I would argue is true of American Christianity but not necessarily of Christianity in many parts of the world)

Finally and most importantly, I don't plan on being here post rapture to live in the chaos that would make these markets inefficient at best.

Finch writes:

If you think the world is going to end at some specific future date, you could sell options that expire after that date and use the proceeds now. That works if you believe the apocalypse will result in a general nullification of contracts. I have the impression Christians generally believe that, but I might be wrong.

If Paul owes Peter money and both die, is the debt still owed in the afterlife?

Art Carden writes:

@Michael: Please note that this isn't about providing for oneself in the afterlife. It's about two things.

First, assets will still, presumably, have some value post-rapture even if Christians aren't here to enjoy them. We should be able to shift that value forward using financial markets.

Second, suppose you're taken up on the rapture while your neighbor isn't. In addition to Rapture Letters and the kinds of other things people are leaving behind, would it also be a show of compassion to leave behind options on (say) crude oil? This would be like those "In the Event of the Rapture, You Can Have This Car" bumper stickers, but in the form of a contract specifying a beneficiary.

paulanz writes:

You made me laugh out loud with this post!
The way your brain works is great. Please carry on...

Chops writes:

Art -

The problem with this idea is that those of us who believe in the rapture believe we'll be taken up, and that we can't predict it. That makes us pretty useless for futures markets. I'd be glad to sell the post-rapture rights to my property to an atheist! Can you find one who will buy?

A better group to pick on is global warmists. They have specific dates and specific types of property in mind. Will they sell you options on Florida real estate in 2063 or 2113?

Incidentally, the Bible provides a cool historical examples of this sort of thing. In a besieged Jerusalem, Jeremiah is told by God to buy a field in Anathoth (present-day Anata). This prophetic act (=costly signal) is intended to show that Israel will be restored - so much so that property will revert to its old owners.

That points to a major problem with making markets over catastrophic events: in the event of the rapture or a 100-foot rise in ocean levels, what are the odds that contracts will be honored?

Motoko writes:

... If you're a Christian and expect to get raptured, it still makes sense to try and maximize your wealth. You can put your profits into a post-rapture charity fund.

Helping people is pretty Christian, I think.

Tobias writes:

Not exactly what you're asking, but there's a recent experimental paper that's on belief in the rapture: http://faculty.haas.berkeley.edu/dalbo/WaitingForTheEnd.pdf

Floccina writes:

And why aren't AGW alarmists bidding up land in Maine close to coast but 20 feet above sea level? Betting that homes between them and the ocean below 20 above sea level will be wiped out and the harsh Maine weather will be warmer giving them some of best ocean front property in the world.

Floccina writes:

Oh and BTW:

Poeple should notice that in Thessalonians before it talks about the rapture is a reminder to work and after talking about the rapture is more about work, indicating to me to work and save as if there would be no rapture

Arthur_500 writes:

I love this post. Get by the religious convictions and get to the root question, "Are you willing to put your convictions on the line?"

There was an economist who decided to put his economics to work in his home. He learned his child figured out how to game the system.

If one really believes oil and coal are bad then they should not participate in their use. How many would give up their computers, plastics, energy and most forms of transportation?

I love the idea of selling futures in those things we deem important. One who smokes could sell their future to the runner (Jim Fixx). These could be traded as we want to trade bitcoins or carbon.

In fact, I'll start today! Anyone want to purchase clothing with a 36" waistline? I won't be needing them in 2014.

Adam writes:

It's not all that clear how to gain from the Rapture. It's clear that Jerusalem and Israel go through the post-Rapture Tribulation, but come out the other side in a blessed state. Accordingly, consistent with that, people are investing in Israel and property values are rising, especially in Jerusalem:

http://www.haaretz.com/business/real-estate/next-year-in-jerusalem-if-you-can-pay-1.451314

Other areas of the Mediterranean--Egypt, Greece, Syria--haven't been so fortunate.

Outside the Mediterranean, the effects of the Rapture and Tribulation aren't so clear. Some say the Trib is focused on the Biblical world, the area of the Roman Empire. In that case, the Western Hemisphere and perhaps east Asia would offer refuges from the Trib destruction. In that case, we'd expect rising property values and prosperity in these areas relative to the area of the old Roman Empire.

The economic and investment picture therefore seems roughly consistent with the Rapture and post-Rapture Tribulation. That is, economic activity and investment flees the area of the Roman Empire, excepting Israel, and gravitates to the Western Hemisphere and east Asia.

Here is what I do (something I learned from Pastor Bob Enyart): tell the Christian that you will pay them half of the value of their house today and take possession in 10 years. If they really believed they would be raptured or the end was nigh, they should gladly accept free money today with no future risk.

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