Free Market Religion

The free market is a wonderful thing.  Left alone without excessive regulatory prodding and social engineering it finds the most efficient way to deliver exactly the goods and services desired to those that need them at the value they are worth.  The old Soviet Union, the old eastern Europe, and today's North Korea learned that lesson the hard way after enduring years of shortages due to vast efforts at central planning.  Unfortunately some even in today's U.S. haven't learned that lesson and still believe the government can do a better job.

Free market reality goes beyond traditional goods and services... and even touches religion.  Those of you that get the Saturday issue of the Wall Street Journal were treated yesterday to a rather unique front-page article titled In Europe, God Is (Not) Dead.  This great piece described a new theory on why religion is rejuvenating in Europe.

Most scholars used to believe that modernization would extinguish religion in the long run. But that view always had trouble explaining why America, a nation in the vanguard of modernity, is so religious.  After decades of secularization, religion in Europe has slowed its slide toward what had seemed inevitable oblivion. There are even nascent signs of a modest comeback. Most church pews are still empty. But belief in heaven, hell and concepts such as the soul has risen in parts of Europe, especially among the young, according to surveys. Religion, once a dead issue, now figures prominently in public discourse.

What is this new theory on why religion is making a comeback?  Why, supply-side free markets of course!

God's tentative return to Europe has scholars and theologians debating a hot question: Why?  Some scholars and Christian activists are pushing a more controversial explanation: the laws of economics. As centuries-old churches long favored by the state lose their monopoly grip, Europe's highly regulated market for religion is opening up to leaner, more-aggressive religious "firms." The result, they say, is a supply-side stimulus to faith.

Just as grocery stores in the old Soviet Union were inefficient and just plain inadequate as a result of being shielded from the competitive pressures of the free market, so were the direct- or indirect- state-sponsored religious institutions in Europe.  There was no incentive to satisfy their customer.

"Monopoly churches get lazy," says Eva Hamberg, a professor at Lund University's Centre for Theology and Religious Studies and co-author of academic articles that, based on Swedish data, suggest a correlation between an increase in religious competition and a rise in church-going. Europeans are deserting established churches, she says, "but this does not mean they are not religious."

The enemy of faith, say the supply-siders, is not modernity but state-regulated markets that shield big, established churches from competition. In America, where church and state stand apart, more than 50% of the population worships at least once a month. In Europe, where the state has often supported -- but also controlled -- the church with money and favors, the rate in many countries is 20% or less.

A little competition can create rather startling results.

Consider the scene on a recent Sunday at Stockholm's Hedvig Eleonara Church, a parish of the Church of Sweden, a Lutheran institution that until 2000 was an official organ of the Swedish state. Fewer than 40 people, nearly all elderly, gathered in pews beneath a magnificent 18th-century dome. Seven were church employees. The church seats over 1,000.

Just a few blocks away, Passion Church, an eight-month-old evangelical outfit, fizzed with fervor. Nearly 100 young Swedes rocked to a high-decibel band: "It's like adrenaline running through my blood," they sang in English. "We're talking about Jesus, Jesus, Jesus."  Passion, set up by Andreas Nielsen, a 32-year-old Swede who found God in Florida, gets no money from the state. It holds its service in a small, low-ceilinged hall rented from Stockholm's Casino Theatre, a drama company. Church, says Mr. Nielson, should be "the most kick-ass place in the world." Jesus was "king of the party."

The theory behind this phenomenom is fairly well developed.

Rodney Stark, a pioneer of religious supply-side theory at Baylor University in Texas, first developed the notion of a "religious market" in the 1980s as a way to explain America's persistent faith. It posits that people are naturally religious but that their religiosity varies depending on the vigor of what he calls religious suppliers. "Wherever churches are a little more energetic and competitive, you've got more people going to church," he says.

And the countries that openly supported a state religion are beginning to embrace "religious competition."  Take predominantly Catholic Italy, for example.

In Italy, the state used to pay the salaries of Catholic priests, but in 1984 it began letting taxpayers choose which religious groups get financial support. The result is an annual beauty contest ahead of a June income-tax deadline, as churches try to lure taxpayer money with advertising campaigns. Catholics get the lion's share -- 87% of nearly $1.2 billion in 2004, the last year for which figures are available. But according to a 2005 study by Italian lawyer Massimo Introvigne and Mr. Stark, the system "reminds Italians every year that there is a religious economy."

Amazing how a little competition can give customers what they want.  Even in their search for a greater power... presumably even greater than the power of the free market.

Comments

[Jennifer Leon]

What a great post! I did read that article and it was fascinating. Recently I left a mainstream church where for two decades I chanted the same thing every Sunday and the routine was forgettable. Now I'm attend a much more vibrant church.

[Ron Holland]

Free Market Religion is a great article to read on Sunday morning. It does help explain the poor attendence I found at the established churches in Europe and in Switzerland where I lived for some time.

I will post this timely essay on FreedomFest News this morning. Yes, the free market is always superior to top down government actions.

Ron Holland, Editor
FreedomFest News
http://www.freedomfest.com/news.htm
Author of The Swiss Preserve Solution at
http://www.swissconfederationinstitute.org/swisspreserve1.htm

[Ron Pereira]

Interesting post Kevin. Here is Texas we definitely have our share of churches.

My parish (Roman Catholic) has an attendance of more than 8,000 people per weekend.

While we don't have fancy PowerPoint presentations or rock bands and light shows we love it and wouldn't leave for the world.

A few months ago I was in England and went to a Catholic Mass and was quite surprised at what I saw. The parish was packed with young families and the priest was excellent. I was very encouraged to see this.

[Tom Stafford]

Intriguing post for a Sunday morning. Thanks very much for this. I may daydream a bit in church later this morning!

I too have seen mainstream churches that are filled and so-called new age churches that fail, and I've seen the reverse. I think the point is that competition creates this dynamic and it is a good thing. The churn has always happened in the U.S. ever since the Church of England was no longer supported as a state church in the pre-colonial days. However in Europe the states continued to sponsor religion up until even today.

I predict the Italian example Kevin mentioned will radically change the religious landscape in that country within just a few years, as it is already doing in Sweden. That is the other lesson of free markets: they can create radical positive change very quickly, far quicker than central planning or regulated methods. That is then the beauty of free markets - they can react quicker to change to keep the right food on the shelves... or people in churches. A bunch of bureacrats can't think that fast, even if they can figure out how to think.

Or as Kevin would say, perhaps they need to replace SAP with visual methods. But we won't go there!

Tom

[Janet Overby]

Tom makes an excellent point about the SPEED of the free market. Speed coupled with agility leads to rapid change. Organizations, not just companies, that learn to operate at that "speed of change" will do well. Organizations and bureaucracies that don't will get bowled over.

One other point is that standing in the way of a free market is impossible. Like it or not, competition is embedded in human nature. States and bureaucracies may want to try to "manage" it, but any form of regulation leads to consequences, often unintended and unexpected, elsewhere. That is far more dangerous than the so-called concerns about the free market to begin with. Witness the increasing convolution of the U.S. tax system as a social engineering constraint on the free markets leads to loophole bandaid after loophole bandaid, eventually sucking tens of billions out of the market just to try to constrain freedom. Those billions could have paid for the original social engineering many times over.

[Alan de los Santos]

Kevin - one of the reasons I really enjoy your blog is that you don't narrowly focus on lean manufacturing. You also provide us other stories and analyses on relevant business topics. This post is a perfect example. Please also keep it to one or at most two stories a day, like now, as I've had to unsubscribe from some other blogs due to too many discrete stories. I like my daily dose of EE each morning, and not every hour during the day!

I was really intrigued by the guy that obliquely suggested major religions should use SAP. I wonder if there is such a "religion planning system".

I also couldn't help but draw an analogy between communist central planning and the disaster it was compared to the agile free market, to the "master control" central planning aspects of big ERP systems compared to agile lean manufacturing and visual systems that you often promote.

Does this mean SAP and Oracle are communist? Do we dare go there?

Alan (Bogota, Colombia)

[Ron]

SAP and Oracle communist because they promote central planning? Interesting concept!!! Does that make ERP consultants the brainwashing gestapo?

[david foster]

It strikes me that the Stark hypothesis is applicable to education as well as to religion--the public education system in the US, and probably some other countries, bears a resemblance to an established church.

[Kevin]

Good comment David. The U.S. education system does act like a state-sponsored church. Competition has been created in various niches, but is being vehemently opposed by the bishops... the NEA in this case. In effect it's an attack on their power, which is very similar to what happened when the state-paid Lutheran clergy in Sweden or the Catholic clergy in Italy had to begin dealing with competition.

Kevin
(No, I am not planning a blog post taking the "SAP is Communism" analogy any further! I don't have the legal resources!)

[Ron Holland]

The Free Market is always superior to top down government and political actions.

We are very pleased to announce the creation of The Free Market Hall of Fame where members of the Freedom Movement will have the opportunity to initially vote on individuals contributing most to the success and advancement of free markets and free people around the globe during 2007.

Nominations for the Free-Market Hall of Fame are open to the public and can be made by anyone by e-mailing ron@freedomfest.com Individuals can vote for or nominate individuals who they believe should be in the Free Market Hall of Fame. Write-ins are permitted.

The categories will include the following:

1. Academic economists
2. Journalists and writers
3. Business leaders
4. Legislators and government officials
5. Think tanks

A select group of economists and other free-market supporters will make the final decision and vote on upcoming Hall of Fame members.

For more information on the Free Market Hall of Fame go to http://www.freedomfest.com/hofhome.htm

“It’s time we honored all the great teachers, writers, business leaders, legislators, and think tanks that have advanced the cause of liberty," Mark Skousen

Ron Holland, Editor
FreedomFest News http://www.freedomfest.com/news.htm
Author of the online book: “The Swiss Preserve Solution”.