W e attempt to interpret Frank Knight by taking him on his own terns. Among our conclusions are the following. (1) Knight's distinction between risk and uncertainty is not solely a distinction between insurable and uninsurable risk. (2) Knight's explanation for the existence of firms does not reduce to a moral-hWd theory, except perhaps in the broadest and least-interesting sense. And (3) Knight's treatment of the problem of the separation of ownership from control is not as obviously wrong as commentators have made it out to be.

Consumption choices assist in solving the problem of how to convey and recognize religious identities. In the communication of an identity, individuals use the knowledge embedded in consumption norms, which restrict the range of choices to a smaller set and abbreviate the required knowledge for encoding and decoding messages. Using this knowledge as a shared framework for understanding, individuals with religious beliefs can choose consumption items that would not only strengthen their beliefs but also help them express the intensity of their commitments to these beliefs. Because individuals and societies have different beliefs, norms, commitments, and expressive needs, consumption choice can help to express these differences. Our explanation contrasts with incentive-based approaches that view religious consumption norms as solutions to free-rider problem inherent in clubs. 1 Religious Identity and Consumption LANSE MINKLER AND METIN M. CO! ! ! !GEL * The University of ConnecticutAbstract: Consumption choices assist in solving the problem of how to convey and recognize religious identities. In the communication of an identity, individuals use the knowledge embedded in consumption norms, which restrict the range of choices to a smaller set and abbreviate the required knowledge for encoding and decoding messages. Using this knowledge as a shared framework for understanding, individuals with religious beliefs can choose consumption items that would not only strengthen their beliefs but also help them express the intensity of their commitments to these beliefs. Because individuals and societies have different beliefs, norms, commitments, and expressive needs, consumption choice can help to express these differences. Our explanation contrasts with incentive-based approaches that view religious consumption norms as solutions to free-rider problem inherent in clubs.

JEL classification:a b s t r a c t Cos ßgel, Metin M., Miceli, Thomas J., and Rubin, Jared-The political economy of mass printing: Legitimacy and technological change in the Ottoman Empire New technologies have not always been greeted with full enthusiasm. Although the Ottomans were quick to adopt advancements in military technology, they waited almost three centuries to sanction printing in Ottoman Turkish (in Arabic characters). Printing spread relatively rapidly throughout Europe following the invention of the printing press in 1450 despite resistance by interest groups and temporary restrictions in some countries. We explain differential reaction to technology through a political economy approach centered on the legitimizing relationships between rulers and their agents (e.g., military, religious, or secular authorities). The Ottomans regulated the printing press heavily to prevent the loss it would have caused to the ruler's net revenue by undermining the legitimacy provided by religious authorities. On the other hand, the legitimizing relationship between European religious and political authorities was undermined over a century prior to the invention of the press. European rulers thus had little reason to stop the spread of printing as public policy, nor could the Church have stopped it had it wanted to. The Ottomans eventually sanctioned printing in Arabic script in the 18th century after alternative sources of legitimacy emerged.

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Why do states become theocracies? Johnson and Koyama (2019) analyzed the transition from a conditional-toleration equilibrium, in which feeble state capacity allows distinct religious groups to co-exist under a system of religion-based identity rules, to a religious-toleration equilibrium, in which a strong state applies secular general rules without the need for religion as a legitimizing force. This implies that religious legitimacy and high state capacity are substitutes. We explore the alternative possibility that religious legitimacy and a strong state can be complements; that is, religion and high state capacity work together to extract resources from the citizenry. The result is an equilibrium of religious rather than secular general rules in which high state capacity and religion reinforce each other-a theocracy. An empirical analysis of the transition from premodern to modern theocracy, based on a unique dataset of religion and politics in world history, indicates that the adoption of general rules in the modern era differed systematically between societies in which strong state capacity was a complement rather than a substitute for religion.