The Political Economy of the Free Exercise Clause

The Supreme Court has recently heard arguments in Espinoza v. Montana Department of Revenue, a potentially monumental case concerning the Free Exercise Clause. The case concerns the constitutionality of a program in Montana that allows citizens to provide state-funded scholarships to private schools, including religious schools. The Montana Supreme Court held the program unconstitutional under a state version of the so-called Blaine amendment, which prevents any state money from flowing to religious institutions. While there are some thorny procedural issues in the case, most observers believe that, should the Court reach the merits, it will hold that the Blaine Amendment’s discrimination against religious schools is unconstitutional under the Free Exercise Clause. While the state has no obligation to provide scholarships or vouchers to private schools, it cannot exclude religious schools from participating on an equal basis in school choice programs. My friend and fellow Law & Liberty contributor Mark Movsesian has an incisive analysis of why the oral argument in the case suggests this outcome.

 The Political Economy of Religious Inclusion

The likely outcome of the Montana case advances a classical liberal political economy. Requiring religious institutions to be included in programs that compete with purely public provisions of services, like the public schools, makes competition against such services more likely. Religious institutions also create more effective competition since religious institutions can deliver lower-cost services because of their religious affiliations. And finally, religious institutions widen the kinds of services delivered because they are less likely to be influenced by the fads of the secular world.

Religious inclusion in school choice programs highlights all three of these advantages. First, school choice is much more likely to exist in the first place if religious schools can participate because it will gain support from more interest groups—both the religious schools themselves and the parents who want to send children there—pushing for school choice. Indeed, because private religious schools substantially outnumber private secular ones, Blaine amendments are a barrier to any school choice program getting off the ground.

Second, school choice programs have many more lower-cost options when religious schools are included. Religious institutions can call on religious commitments to support their schools, both through donations from their congregations and from religious adherents who have a vocation to work for less than they would in the secular sector. They can also use the existing infrastructure of the religious institution to cut costs. For instance, an urban Catholic archdiocese has existing staff and the local knowledge to monitor city-wide schools. As someone who is searching for a private school in Chicago for my daughter, I have been amazed at the difference in average cost between the secular and religious private schools. The prices range from under $8,000 a year for a Catholic school to close to $40,000 a year for a high-end private secular school.

Third, religious schools are likely to provide a greater variety of education than secular schools alone. Religious schools are much more likely to make the precepts of their religion animate the teaching, curriculum, and general atmosphere. Most religions, in part, center on the transmission of enduring moral truths. They are thus much less likely than private secular schools to be caught up in the latest fads, such as political correctness.

For all these reasons, requiring the state to permit religious institutions to participate in school choice, or indeed in any other government-funded program, advances liberalism of the classical form. In particular, it advances the vision of Alexis De Tocqueville, who saw free association and not individualism per se as the essence of well-ordered liberty. This interpretation of the Free Exercise Clause promotes competition and genuine diversity of views.

John Stuart Mill made the point long ago that just because government funds a program, it does not follow that government should operate it. And operation solely by the government is particularly unwarranted where religious institutions are available. Their interest in running schools and certain kinds of welfare programs reminds us that these are necessarily morally-infused activities. It is dangerous for the state to possess a monopoly or even near-monopoly over such services, not only because its services will be worse without the spur of competition, but even more importantly because those services may be likely to impart whatever faddish uniformity appeals to the bureaucrats of the day. Of course, many progressives want a government market power over such morally-infused services for just that reason. Because of its likely rebuff to this progressive vision, Espinoza is potentially the most significant Supreme Court case this term.

It might be objected that permitting religious institutions to receive government funds permits yet another interest group to lobby for higher levels of state spending. But under current conditions, this concern has little foundation. Religious institutions want to be able to participate in areas, like education, where government already operates. It is not as if religious groups, for example, are at the forefront of pushing for big new infrastructure projects.

The Political Economy of Religious Exemptions

It is interesting to contrast this political economy of religious inclusion with the political economy that arises from another key Free Exercise Clause issue—providing religious adherents with constitutional exemptions from generally applicable regulations. Whether the Free Exercise Clause requires such exemptions is a matter of debate even among originalists. In Employment Division v. Smith, Justice Antonin Scalia held for the Court that the state was not required to provide exemptions from generally and neutrally applicable laws even if the effect of the law were to place burdens on religious exercise. Last fall, the Federalist Society held a superb debate between Michael McConnell and Philip Hamburger on whether this position is correct as an original matter.

But whatever its merits as constitutional interpretation, the exemption position is ambiguous when it comes to its impact on political economy. To be sure, ex post, it permits some groups with serious objections from being burdened by government regulation. But, ex ante, by providing an opt-out to certain religious groups from regulation, it makes the passage of the regulatory law more likely in the first place by reducing the likelihood that the group will lobby against the expansion of the burdensome government regulation. If the neutral inclusion requirement of the Free Exercise Clause operates to make private operation of government programs more likely, a constitutional exemption requirement of the Free Exercise Clause might well facilitate the expansion of the state regulation on those who are not religious.

To be sure, Smith‘s tolerance for legislative exemptions from neutrally applicable rules substantially tempers this constitutional effect. If the legislature cannot beat down the joint resistance of religious and non-religious groups to some expansion of regulation, it can always exempt the religious groups by law and impose the burdens on the rest. But the transfer of exemption from the constitutional to the statutory sphere just shows that statutes that institutionalize such exemptions for religious groups, such as the Religious Freedom Restoration Act (RFRA), also have some ambiguous effects as a matter of political economy.

Moreover, it may explain why progressives supported RFRA in 1993, recognizing that it would grease the passage of some new regulations because religious groups would be less likely to fight against them. As the United States has become more secular, however, progressives have abandoned RFRA because they do not believe that they need to worry as much about the power of religious groups in opposing the expansion of the state.

In any event, comparing these different possible strands of Free Exercise doctrine confirms that, at least as a matter of classical liberal political economy, winning Espinoza is more important than overturning Smith.