On October 9, 2006, Russ Roberts interviewed Larry Iannaccone, pictured above, on the economics of religion for EconTalk. All of the discussion is worthwhile, but I want to focus on the impact of state regulation on religion.
Beginning at 11:25 minutes, Iannccone explained that intellectuals at the time that English colonies were established believed that religion was important for society, creating positive externalities which are benefits that society receives from individual membership in a church. They also believed that people would not attend religious services if membership was not mandated. To order society so that individuals and society as a whole received the benefits of religion, colonial rulers established state religions. The state mandated that citizens be members of the state church, and set up barriers to entry, making it difficult to impossible to participate in a non-state sponsored religion.
The Constitution of the United States began the first experiment with free market religion and strengthened the Great Awakening. As people could choose their religion freely, state churches declined, and upstart religions like the Methodists and Baptists grew rapidly. As competition among churches increased, the overall proportion of people that attended increased.
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Wow it's amazing how economics has a way of working everywhere, even in the church. It seems to me that even though no prices are involved, supply and demand is still present. After the first amendment was established, people were open to a whole new idea. So many new religions (more prominently, new denominations) came into play. Essentially, the new religions and denominations act as a supply while there is a definite demand from people to attend church. As the supply curve shifts outward, miraculously so did the demand curve. Some may say it is just economics, but I like to think it's just God! =)
ReplyDeleteLorena Vargas
I think it is interesting that when people were not forced to attend the state-church, but were allowed to choose, churches became greater in number, of different religions/denominations, and that membership/attendance actually grew. Just as in economics, the theory of supply and demand was very evident. As the supply of new churches increased, so did the demand for churches to attend.
ReplyDeleteKaren Moore