Mergers and gay priests

24th September, 2005

Dear Economist,
Christians are called to support one another and to settle their differences. Further, churches cannot survive without money. What advice would you give to the Anglican Communion, as it attempts to address the issue of homosexual priests?
Anne Chaffey, by e-mail

Dear Ms Chaffey,

I am not sure why a church would worry about money. If God can raise the dead, I’m sure He can manage a non-inflationary monetary expansion. Yet leaving money to one side, the Anglican Communion retains great spiritual value. The question the churches need to ask is whether that value is greater if they stick together, or arrange a separation.

Such a separation needs to be amicable, and would surely be so only if the churches could agree to share out indivisible assets fairly, including church buildings, valuable brand names, and archbishops. Fortunately, Peter Cramton, Robert Gibbons and Paul Klemperer solved the problem of fairly and efficiently reallocating jointly owned assets in their Econometrica paper “Dissolving a partnership efficiently”. They use a kind of auction to determine who gets the asset and how much compensation is paid to the others.

The only concern is that some factions may prefer a schism even if spiritual value is maximised by a unified communion. This is what economists call “strategic refusal to interconnect”. As a parallel, consider two different standards for computer software. Social value is maximised if the software programs can talk to each other, but the owner of the more common one may figure that by refusing to recognise the alternative, he can wipe it out.

In corporate cases, the competition policy authorities typically get involved. In this case the Anglican Communion may decide to seek its own higher authority… whoever He may be.

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