A Dearth of Cults?


Today’s New York Times includes a column by Ross Douthat bemoaning the disappearance of cults in the U.S. Mr. Douthat’s hypothesis is that cults are what keep mainstream organizations honest. One example he presents is the Catholic Church. From Mr. Douthat’s column:

The first writer is Philip Jenkins, a prolific religious historian, who argues that the decline in “the number and scale of controversial fringe sects” is both “genuine and epochal,” and something that should worry more mainstream religious believers rather than comfort them. A wild fringe, he suggests, is often a sign of a healthy, vital center, and a religious culture that lacks for charismatic weirdos may lack “a solid core of spiritual activism and inquiry” as well.

The second writer is Peter Thiel, the PayPal co-founder, venture capitalist and controversialist, who includes an interesting aside about the decline of cults in his new book, Zero to One — officially a book of advice to would-be entrepreneurs, but really a treatise on escaping what he regards as the developed world’s 40-year economic, technological and cultural malaise.

Mr. Douthat is mistaken. There are plenty of cults in the U.S. As Mr. Thiel suggests, they are found in many startups and other small companies. My lovely wife pointed out this recruiting video for AtHoc, a security services company in San Mateo, CA.

I am not picking on AtHoc. As far as I can tell, they offer high-quality, useful services. But the video should make doubters pause. A common technique for motivating folks working in a startup environment is “team-building” which can come very close to being a cult.

Mr. Thiel attributes the decrease in Silicon Valley innovation to a decline in “the belief that there are major secrets left to be uncovered, insights that existing institutions have failed to unlock (or perhaps forgotten), better ways of living that a small group might successfully embrace.”

This means that every transformative business enterprise, every radical political movement, every truly innovative project contains some cultish elements and impulses — and the decline of those impulses may be a sign that the innovative spirit itself is on the wane. When “people were more open to the idea that not all knowledge was widely known,” Thiel writes, there was more interest in groups that claimed access to some secret knowledge, or offered some revolutionary vision. But today, many fewer Americans “take unorthodox ideas seriously,” and while this has clear upsides — “fewer crazy cults” — it may also be a sign that “we have given up our sense of wonder at secrets left to be discovered.”

Innovation may well be in decline, but attributing that diminution to a decrease in cult activity is a bit of a stretch. It’s far more likely that Mr. Thiel has causality reversed. Less innovation is the cause of fewer cults, not the effect. My colleague Casey Mulligan has presented models and empirical evidence suggesting that the decline in U.S. economic growth is a direct result of three main factors:

  1. The vast increase in the number and expanse of government regulations under the Obama administration.
  2. Paying people not to work, specifically removing the work requirement from welfare payments, expanding SNAP (food stamps), and extended unemployment benefits. Fully half the U.S. households in poverty have no one in the labor force.
  3. The high direct and indirect tax rates created by Obamacare.

I urge Mr. Thiel and Mr. Douthat to read Prof. Mulligan’s work. They may discover that his model works better than theirs.

Casey Mulligan
Casey Mulligan (Ken Fallin artwork shown at wsj.com)


Scientifically, of course, the arguments advanced by the Douthat – Jenkins – Thiel triumvirate are nothing more than a truism.  There are no testable hypotheses.  If the decline in cults has caused less innovation, what has caused the decline in cults?  What hypotheses can be tested against empirical data?  What evidence would be required to reject the model?  As far as I can tell, the answers are, respectively, “We don’t know,” “None,” and “There is no evidence that would reject the model.”  http://www.athoc.com

I’ve consulted for a few Silicon Valley startups over the years. A few were strikingly similar to cults. I suggest that folks trying to join cults today are finding them in various small and/or startup operations. Even today, some larger companies (Google anyone?) retain some cult-like characteristics.


Douthat, Ross, “The Cult Deficit” New York Times, September 28, 2014. http://www.nytimes.com/2014/09/28/opinion/sunday/ross-douthat-the-cult-deficit.html

Lima, Tony, “The Health Care Bill: Disaster for the Economy” March 23, 2010. http://gonzoecon.com/2010/03/the-health-care-bill-disaster-for-the-economy/

Lima, Tony, “Nine Point Eight! Are You Convinced Yet?” December 3, 2010. http://gonzoecon.com/2010/12/nine-point-eight-are-you-convinced-yet/

Lima, Tony, “Regulation Economics” September 12, 2013. http://gonzoecon.com/2013/09/regulation-economics/

Mulligan, Casey B., ” The Myth of ObamaCare’s Affordability” Wall Street Journal, September 8, 2014. http://online.wsj.com/articles/casey-b-mulligan-the-myth-of-obamacares-affordability-1410218437

Mulligan, Casey B., The Redistribution Recession: How Labor Market Distortions Contracted the Economy 2013. New York: Oxford University Press.

Mulligan, Casey B., Side Effects: The Economic Consequences of the Health Reform 2014. http://www.acasideeffects.com/index.html