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The Economics of Patrick Henry’s Proposal for Tax-Supported Clergy

Mark L. Movesian’s post on the Virginia Statute for Religious Freedom of 1786 brought to mind Patrick Henry’s failed 1784 proposal, A Bill Establishing A Provision for Teachers of the Christian Religion.

Henry styled the bill as serving practical, even worldly, purposes. Nothing about the duties of persons to God or about the truth of Christianity. Instead Henry asserted that civil benefits flow from Christian teaching. He argued “the general diffusion of Christian knowledge hath a natural tendency to correct the morals of men, restrain their vices, and preserve the peace of society.”

While a part of the morals corrected and vices restrained likely would for Henry inure to the benefit of the person who is corrected or restrained, the bill did not aim merely to promote personal self-improvement. Rather, for Henry, corrected morals and restrained vices confer a broader social benefit, to wit, advancing “the peace of society.”

To be sure, while a person might flourish personally by accepting the ethical demands of the deity, society would also benefit from a person learning not to steal, or learning not to hurt others, or refraining from defrauding others even when one might get away with it.

In Henry’s preambulatory theory, Christian teaching supplies public goods to society. He does not of course formulate his argument using modern economic terminology. Few modern politicians use the terminology either. Nonetheless, Henry motivates the purpose of his proposal in recognition that voluntary provision of public goods tends to undersupply those goods relative to the social optimum.

In response, Henry proposes a traditionally-recognized means to correct the suboptimal provision of that public good (although by no means the only way to overcome the problem): have the government subsidize those who supply the good.

Henry writes that the social benefit of Christian teaching will not be realized “without a competent provision for learned teachers.” By “competent provision” Henry pay for clergy sufficient to sustain good ministers in effective ministry.

Without sufficient financial support for clergy, Henry’s argument suggests, individuals who would otherwise be effective Christian pastors might not have the resources to become pastors at all. And even if they still became pastors, because of their “want of education” due to the lack of sufficient financial support, those pastors might not have “such knowledge” as to be able to provide as effective a ministry to their flock as they would have had they received better training. And even if they received fully adequate training, without sufficient pay for their work in the church, they might not be able to devote themselves fully to ministry because of the need to work outside the church simply to supply their daily needs.

For Henry, paying pastors through the voluntary contributions of their congregations implied fewer pastors overall, and a greater proportion of poorly trained and distracted pastors, relative to the social optimum. And poorly trained and distracted pastors resulted in flocks that behaved with less moral restraint than when led by better-trained, better-focused pastors. And more people with less moral restraint impose costs on society at large.

Henry does not, however, propose a flat transfer to churches. His proposal allows taxed individuals to choose which church receive their taxes. Also of note is that his proposal includes an “opt-out” provision for folks who do not want their money going to any church. (In that case the money goes to the Virginia state government’s general fund to be used for schools.)

Because taxpayers designate which church receives their taxes, Henry’s proposal preserves competition among the different churches. The more congregants a minister attracts to his church the more congregants designate their taxes for the church, and the church’s revenues increase.

Henry’s bill nonetheless avoids price competition among churches. It thus avoids the resulting underprovision of the public good that would result from ecclesiastical price competition. Because everyone must pay the same tax no matter which church they designate for their tax, putative congregants cannot save money by joining a low-cost/ineffectively-pastored church relative to joining a high-cost/effectively-pastored church.

This is a crucial aspect of Henry’s proposal given the nature of public goods: Because churches generate public goods in Henry’s theory, the socially-optimal supply of Christian teaching must be greater than what would be supplied if left up to the voluntary contributions of a congregation. Congregations would naturally tend to ignore the positive externalities generated by increasing the amount or quality of teaching in their own church. (And we’re ignoring that ecclesiastical services are subject to the distorting effects of being a club good within a church itself.)

So by imposing a religious tax that congregants must pay no matter which church they attend, but at the same time allowing people to select which church they support financially, Henry’s proposal preserves the value of theological competition among the churches while producing a greater supply of the public good relative to what would be supplied if clergy were paid solely by voluntary contributions.

To be sure, there is a lot in Henry’s theory that can be contested. Not least James Madison’s objection in his Memorial and Remonstrance that government provision for clergy would induce “indolence” and “ignorance” among the clergy rather than increase the supply of effective pastoral teaching as Henry claimed. There is also the issue of the distorting effect on Christian self-understanding when churches are culturally valued for the worldly benefits they provide rather than for the truth they preach.

Nonetheless, what is fascinating about Henry’s argument is that it draws on a familiar modern framework – arguments that today motivate demands for government subsidies in numerous policy areas – but Henry applies it to a policy domain distinctly unfamiliar to modern Americans, the domain of ecclesiastically-supplied public goods.

Reader Discussion

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on February 01, 2017 at 10:09:44 am

Interesting post! This essay calls to mind the discussions about universities, especially public universities, financing the adult leaders of the Christian campus group Intervarsity.

Universities regularly raise funds from student activity fees, and then dole the funds out to favored student groups. Why? Presumably to advance some social benefit for the student body generally, much like Henry’s argument for subsidizing clergy.

Of course, today an outright transfer of cash/assets from government to clergy to advance a religious mission would violate the Establishment Clause. So when a public university gives money to explicitly religious groups, this skates up to the line. And when those groups are not really controlled by students—as, say, when students pick leaders by voting—but are controlled by some outside religious authorities, some argued that this practice boldly crossed the line.

In response, I suggested a variety of remedies to separate the government from the religious groups. In particular, I noted that courts have upheld the use of publicly financed vouchers for education, even when people might use the vouchers at religious schools. So I suggested the option of having the university give each student a voucher for funds to be given to an student group designated by the student. This is analogous to Henry’s proposal for people designating the church they wish to subsidize.

If any given student chooses to give the voucher to Intervarsity, that’s the student’s choice, not the university’s. And conversely, if a student prefers to give money to a different group that lets students elect their own leaders, that’s the student’s choice, too.

Admittedly, we still confront the problem of government control when the university limits the list of groups eligible to receive vouchers. Without a limit, each student would be tempted to designate his own bank account as an appropriate recipient. But conversely, if universities limit the groups that are eligible, universities begin exercising power that entangles them with the groups receiving the funds. After all, Iran has democracy, in that it lets people vote for candidates—but only the candidates that meet the approval of the religious authorities. That’s not exactly a free choice.

But presumably Henry confronted the same challenge: When he proposed that people be able to designate the “teachers of the Christian Religion” of their choosing, did he limit who might qualify to receive the funds? I surmise this dynamic has not changed much over the centuries.

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nobody.really
on February 01, 2017 at 10:55:48 am

"Not least James Madison’s objection in his Memorial and Remonstrance that government provision for clergy [Teachers] would induce “indolence” and “ignorance” among the clergy rather than increase the supply of effective pastoral teaching as Henry claimed."

Boy, that James Madison - what a visionary!!! Here he apparently foresaw the rise of teachers unions and the effects upon the subsidized provision of *Public Goods.*

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gabe
on February 01, 2017 at 11:01:28 am

OK - fair enough and eminently sensible.

If I may be permitted one small edit:

"Of course, today an outright transfer of cash/assets from government to clergy to advance a religious mission would violate [*today's understanding of* ] the Establishment Clause.

A fair edit, I would argue as the facts of the essay would seem to indicate that the *original* understanding of the Establishment Clause, as well as the behavior / practices of the States themselves, was quite different than our current understanding.

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gabe
on February 01, 2017 at 14:28:47 pm

I think we have to be careful here. Madison's thinking was inflected through a dissenting religious tradition that was suspicious of the Church of England in the colonies. As should be obvious, the Revolution also represented a significant challenge to a Church whose ministers swore an oath accepting the King of England as the religious head of their church. So there was considerable dislocation within the Church after 1776.

Nonetheless, the evidence for the vitality of the colonial Church in Virginia in the 18th century is considerable. The relevant scholars here include Ed Bond, John Nelson, and Lauren Winner, all of whom document a thriving and vigorous institution. (Some guy named Hardwick has published in this arena as well :P )

James Madison was a wise man. But he was just a man, and like all of us, he saw through a glass darkly. We should not assume that just because he said something, he got it right, or that his perspective was uniformly objective!

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Kevin R. Hardwick
on February 01, 2017 at 15:22:38 pm

Kevin:

Thanks for the info on 18th century Church in Virginia, in particular the "loyalty oaths" required of Ministers at the time. That certainly provides an interesting / informative perspective on Madison's comments.

BTW: You know, of course, my *edit* of Mr. Madison was done in a semi-jocular manner.

BTW2: What is the name of your book?

seeya
gabe

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gabe
on February 01, 2017 at 21:32:35 pm

Thank you for this essay James. Very interesting and informative.

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William Francis Brown
on February 05, 2017 at 22:59:39 pm

[…] The Economics of Patrick Henry’s Proposal for Tax-Supported Clergy http://www.libertylawsite.org/2017/02/01/the-economics-of-patrick-henrys-proposal-for-tax-supported-… […]

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Image of The Economics of Patrick Henry’s Proposal for Tax-Supported Clergy via /r/economy | Chet Wang
The Economics of Patrick Henry’s Proposal for Tax-Supported Clergy via /r/economy | Chet Wang

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.