Since You Asked

How Adam Smith could help the Church

‘David Cameron has welcomed Justin Welby, the former oil executive, as the next archbishop of Canterbury and spiritual leader of the world’s 77m Anglicans … Bishop Welby’s appointment had been an open secret for days.’

Financial Times, November 9

Are you still upset that you haven’t been made Archbishop of Canterbury? Or just ruing the fact that you didn’t put some money on him to get the job?

Ladbrokes had stopped taking bets by the time I got there. But yes, it’s frustrating: they give the job to this guy and everyone is going on about how useful his business experience is going to be. I just think they should have given it to an economist.

But you don’t have any experience in the church.

Neither does Justin Welby, really – he’s only been a bishop for a year.

Yes, but you haven’t been a bishop at all. You’re an atheist.

Fair enough. I still think economics has a few things to contribute to the debate.

You think economics has a few things to contribute to quantum physics, boxing and seduction. Still, go on, if you must.

I think we’ve fallen for the myth of the brilliant businessman. Not just here, but in general, the idea is that if you want a difficult job to be done, what you really need is business experience. But we’re vague about what business experience really is or what it means. Bishop Welby has business experience; Bill Gates has business experience; Bernard Madoff has business experience. It helps to dig a little deeper.

Bishop Welby was corporate treasurer at Enterprise Oil and nobody has a bad word to say about how he did the job.

Fair enough. Corporate treasurers are in charge of managing a business’s cash and investments, and that will probably come in very handy at the Church of England, but he will have to draw on other talents if he’s to reinvigorate the Church and manage the acute disagreements at the heart of the Anglican Communion.

He also has a fair bit of experience dealing with angry Nigerians.

OK, I’ll admit, he does seem very well qualified. But I still think we overestimate how much business success is down to the brilliance of business leaders, and we underestimate how much is down to chance. There’s a similar tendency at the BBC at the moment – George Entwistle obviously had to go for the sake of the organisation, but is it really coherent to blame him for not knowing that somewhere in the BBC, a story was about to emerge that hadn’t been properly checked? And do we really think his successor’s experience in selling snack food will be enormously helpful?

You think business success is down to luck.

I think there’s a lot more luck involved than we like to think. In a well-functioning market new ideas are always bubbling up to the surface. Lots of them are bad, some of them are good. When the good ideas turn into profitable businesses, we assume we’ve seen entrepreneurial genius at work, but we might just have seen a lucky spin of the roulette wheel.

I don’t see what this has to do with the Church of England.

Nothing, and that’s the problem. The Church of England doesn’t operate in a suitably competitive market.

Are you calling for the privatisation of the Church of England? You’re crazy.

I never realised that you leaned towards antidisestablishmentarianism. You should keep an open mind. A bit more competitive pressure might be good for the Church. Laurence Iannaccone, an economist who has specialised in the economics of religion, developed an idea he drew from the writings of Adam Smith: that more competitive religious marketplaces lead to more dynamic churches.

Is there any evidence?

On the face of it, yes. Protestantism in the US is extremely fragmented – there are lots and lots of small denominations – and regular church attendance is common. Canada, the Netherlands, Switzerland and Australia show similar tendencies. Denmark, Finland, Norway and Sweden have near-monopolistic churches and very low churchgoing rates. The UK is somewhere in the middle.

So you’re saying that smaller denominations try harder?

Yes, or that one way or another, compelling ideas emerge. Secularists who want the Church of England disestablished have logic on their side – but they should be careful what they wish for.

Also published at ft.com.