Organizations and Markets

Transaction Costs and the Church

2 January 2007 at 11:04 am Peter G. Klein 3 comments

| Peter Klein |

James Emery White, president of the highly regarded Gordon-Conwell Theological Seminary, is thinking about Ronald Coase. In a year-end reflection he writes that the most important phenomena of 2006, for religious organizations, may be the wiki, the blog, and the virtual firm.

[W]hat began with eBay, MySpace, Wikipedia and YouTube may not stop with revolutionizing how companies such as Goldcorp or Proctor and Gamble operate (or are even identified). The heart of the change involves the ever-widening rejection of professional/intellectual elites, and the diminution of those organizations which exist as either the gathering of such elites, or serve as the repositories of their supposedly exclusive knowledge. Further, those organizations that were once thought necessary for basic transactions of other natures — such as communal transactions — may also face a rude awakening.

Such as the church.

As posed by [an article in] USA Today, “So if a core reason companies exist is to lower transaction costs, what happens if that reason goes away?” Do we have reasons for such institutions as a school, newspaper, court of law, or church beyond “transaction costs?” And my great fear is for the church, particularly in light of the woefully inadequate and often heretical ecclesiology present within the Christian faith at large which is already reducing both the value and definition of the church to utilitarian forms.

The economics of religion is a growing field (see Larry Iannaccone’s resource page), but I’m not aware of much work by economists or sociologists on the impact of technology on the existence, boundaries, an internal structure of religious organizations. Any suggestions?

Entry filed under: - Klein -, Cultural Conservatism, Theory of the Firm.