Religion, Occupation, and Cooperation: The Case of the Craft Guild. Gary Richardson  Department of Economics University of California, Irvine Michael McBride Department of Economics University of California, Irvine This version: 14 September 2006. y Preliminary draft. Comments welcome. Please notify authors of citations. Abstract When the mortality rate is high, repeated interaction alone may not sustain co- operation, and religion may play an important role in shaping economic institutions. This insight explains why during the fourteenth century, when plagues decimated pop- ulations and the church promoted the doctrine of purgatory, craft guilds that bundled together religious and occupational activities dominated manufacturing and commerce. During the sixteenth century, the disease environment eased, and the Reformation dis- pelled the doctrine of purgatory, necessitating the development of new methods of or- ganizing industry. The logic underlying this conclusion has implications for the study of institutions, economics, and religion during the era of European ascendance and in the developing world today. JEL Classications: C70, D23, D43, D71, L10, N83, N93. Keywords: craft guilds, Christianity, purgatory, Reformation, rational-choice, free rider.  Corresponding author: Gary Richardson, Department of Economics, University of California, Irvine, 3151 Social Science Plaza, Irvine, CA 92697-5100, garyr@uci.edu. y We thank participants in workshops UC Irvine, Stanford University, and George Mason University as well as participants in the Spiritual Capital, German Cliometrics, ASREC, and Western Economics Association conferences for comments, advice, and encouragement. 1