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Saturday, July 14, 2007

Church Attendance and Supply-Side Economics

When did supply-side economics come to mean breaking up monopolies to increase competition? I don't know whether increasing competition among churches increases membership or not, and the fact that religion is involved here is coincidental, but this is not supply-side economics as claimed in the article. This is nothing more than the standard result that increasing competition improves market outcomes:

In Europe, God Is (Not) Dead, by Andrew Higgins, WSJ (free): ...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...

God's tentative return to Europe has scholars and theologians debating a hot question: Why? Part of the reason, pretty much everyone agrees, is an influx of devout immigrants. ... At the same time, anxiety over immigration, globalization and cutbacks to social-welfare systems has eroded people's contentment in the here-and-now, prodding some to seek firmer ground in the spiritual.

Some scholars and Christian activists, however, 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.

"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..."

Upstarts are now plugging new spiritual services across Europe, from U.S.-influenced evangelical churches to a Christian sect that uses a hallucinogenic herbal brew as a stand-in for sacramental wine. Niklas Piensoho, chief preacher at Stockholm's biggest Pentecostal church, says even sometimes oddball, quasi-religious fads "tell me you can sell spirituality." His own career suggests that a free market in faith is taking root. ...

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.

"The state undermined the church from within," says Stefan Swärd, a leader of Sweden's small but growing evangelical movement. ...

Europe's upstart churches ... are shaking up and in some places reviving the market for religion, argues Rodney Stark, a pioneer of religious supply-side theory at Baylor University in Texas.

Mr. Stark 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.

The notion that Adam Smith's invisible hand reaches into the spiritual realm has many detractors. Steve Bruce, a professor of sociology at Aberdeen University in Scotland, says market theory "works for cars and soap powder but it does not work for religion." ... The Church of Sweden is also skeptical of the supply-side view. "We don't sell a product," says archbishop Anders Wejryd. ...

A big impetus to the return of faith is fear of the future, says Elisabeth Sandlund, editor of Sweden's main Christian newspaper, Dagen. In Sweden and across Europe, old moorings are coming loose as cradle-to-grave welfare systems buckle. "People want something solid to hold on to," says Ms Sandlund. ...

Whether competition for believers actually boosts belief stirs bitter academic discussion. Measuring religiosity is difficult and each side cites different statistics. The latest data from a major research project that tracks churchgoing and belief in concepts such as God and soul, the European Values Survey, were compiled between 1981 and 1999. (They show a decline in faith in the 1980s followed by a leveling off and, for some indicators, a slight bump in the 1990s.)...

It's the increase in competition that is at work here (if it does in fact increase church attendance), not the supply-side effect of a change in taxes on work effort. There is this:

One factor now spurring religious competition in Europe is the availability of state money that traditionally flowed almost entirely to established churches. It still does, but the process is more open.

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 proceeds of a new "religious tax" of 0.8% are now divided, according to taxpayer preference, among the Catholic Church, four non-Catholic churches, the Jewish community and a state religious and humanitarian fund.

The result is an annual beauty contest ahead of a June income-tax deadline, as churches try to lure taxpayer money with advertising campaigns. ...

Raising taxes and then distributing the money by a government formula is not what supply-side advocates have in mind, even if it does happen to spur competition among churches for membership. There are distortions associated with subsidies just as there are distortions associated with taxes.

Supply-siders as a group, for the most part, believe in both limited government and that tax changes can affect work effort, and it just so happens that reducing taxes satisfies both the taste for limited government and the taste for supply-side policies. However, only the effect of taxes on effort (or other economic behavior) is supply-side economics. Those who believe in limited government are a much larger group and reside on much broader and firmer ground than the smaller set who believe there are significant supply-side effects from changes in tax rates.

    Posted by on Saturday, July 14, 2007 at 11:43 AM in Economics, Regulation, Religion, Taxes | Permalink  TrackBack (1)  Comments (23)


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