Not many comments, so my task is much easier than Posner's. However, the comments are of high quality even though I disagree with most of them.
I am surprised by the claim-especially given who wrote it- that competition among religions might lead to a "race to the bottom". Why should that be any truer for religion than for competition among cars or telecommunication companies? What is known is that competition among religions increases the degree of religiosity (measured in various ways), and that more religious persons are more law-abiding, more honest, and so forth. However, it has been difficult to determine whether religions improve behavior rather than that more law-abiding and honest families are more likely to be religious. The little good evidence on this suggests some causation from religion to better behavior.
Several persons misunderstood me on one major point, and I apologize if I did not make myself clear. When I speak about free competition and a level playing field among religions, I was not simply referring to government monetary subsidies. To take the example provided in one comment, it would violate the concept of free competition if the government only allowed Catholics to vote. Free competition and level playing field should apply to all areas of government involvement, such as who votes, who can run newspapers, who can set up denominational schools, who can open churches, etc.
A closely related misunderstanding is that I have never advocated competition among religions, newspapers, or anything else, solely on a mechanical notion of "efficiency". The case for competition is that it better satisfies and influences people’s preferences-in effect, that it gives them greater choice. This case for competition applies just as strongly to religions, political parties, and other non-material activities as to the markets for clothing or computers.
Someone questioned whether the Constitution prevents the establishment of an official church because of the desire to allow competition among religions. I do believe that was a crucial consideration. For support, one only need read Thomas Jefferson's Bill for Establishing Religious Freedom in the State of Virginia. Much of what he says there in making the case for religious freedom is best interpreted as showing the advantages of allowing different religions to compete for members on a level playing field. The Constitution also outlaws monopoly in a few other areas as well. The first of the Bill of Rights states that "Congress shall make no law respecting an establishment of religion…or abridging the freedom of speech, or of the press". These are all arguments against monopoly and for free entry into the print world and the world of ideas as well as religion. Free entry is really all that competition means. One would not expect a blanket condemnation of monopoly because the founders might well have expected cases of "natural" monopoly;that is, cases where competition would not be efficient or feasible.
I accept the criticism that several of the Ten Commandments might not now be accepted by everyone. Still, my main point is surely right, that allowing a display of these Commandments on public property is minor compared so many other activities that governments engage in.
I definitely agree that property owned by religious institutions should not be tax-exempt. My reason is not that this discriminates against atheistic groups since they can have non-profit organizations that would also be tax-exempt. My main reason is that I am generally doubtful about the tax-exempt status for all non-profits, including, but not confined, to religious groups.
This is a bit off the topic, but I cannot let pass the claim that vouchers would drain the good students from public schools, and would leave the students who remain there much worse off. The true situation illustrates how competition works. Schools that lose students to better schools would be under great pressure from parents and others to improve themselves. They would tend to get new principals, change their teaching, etc. This is not just theory, for it is backed up in the studies by Carolyn Hoxby of Harvard and others.
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