Mormons go Keynesian (?)

by on September 10, 2013 at 3:43 am in Economics, Religion, Uncategorized | Permalink

That is his title, not mine, I would instead refer to doubling down.  Matthew Crandall reports:

Despite high profile investments and for profit businesses owned by the LDS church, it is primarily dependent on member donations (tithing, or 10% of one’s income) for its operational budget. Tithing revenue has currently flat-lined due to demographic and geographical factors both inside and outside of the United States. As baby boomers retire, their incomes decrease significantly. Families are having fewer kids and younger people are taking longer to get going in their careers. This coupled with high unemployment for the last five years or so (and likely the next five years or more) all have a negative impact on tithing revenue.

Geographically more and more members are joining from poorer places in the world (Africa for example) and even in the rich parts of the world, like Western Europe, it is immigrants who are more likely to join who tend to be relatively poor. This also has negative consequences for tithing revenue.

Meanwhile demands on tithing revenue continue to increase. New missions need new mission homes and rapid church expansion in many remote areas means more chapels and temples that need to be built. Run-away costs in higher education make subsidies at BYU, BYU-Idaho, and BYU-Hawaii go up as well. The spreading of the gospel to every nation and tongue also means an increase in spending on translation and publishing. What strategy does the church have to combat this problem?

…Overall, the church has not engaged in harsh austerity measures. Rather, it has implemented Keynesian economic principles of targeted spending that it hopes will result in church growth and hence a growth in tithing revenue.

For example the resent “surge” in missionary force will likely increase the number of missionaries from around 58,000 to 90,000 by the end of the year. Currently there are already more than 75,000. This resulted in the creation of 58 new missions which will result in a significant increase in expenses for the church.

Presumably the view is that the “[non-animal] spirits” are on their side.  The article is interesting throughout, and for the pointer I thank Paul Edwards.

david September 10, 2013 at 3:53 am

The percentage of Mormons is low, even in the wealthy Eastern seaboard, so there is plausibly a lot of ‘spare capacity’ to mobilize!

Mark Thorson September 10, 2013 at 11:18 am

It didn’t work for the Church of Scientology.

Alexei Sadeski September 10, 2013 at 11:49 am

I like this theme wherein all private investment is referred to as “Keynesian”.

Luis Pedro Coelho September 10, 2013 at 4:30 am

Of course, for an individual household or company, expansion in times of crisis might make perfect sense; but the government is not a household. So Keynesianism does not work for government as well as it might for individual households.

Salem September 10, 2013 at 5:41 am

Bravo!

Rich Berger September 10, 2013 at 6:39 am

I agree. Describing a private organization’s strategy as Keynesian is tendentious.

mw September 10, 2013 at 8:56 am

More to the point, if they just cut the tithing rate from 10% to 1%, won’t that increase the tithing revenue 10-fold? What’s the problem here?

JMC September 10, 2013 at 11:00 am

I think the author’s use of terminology such as Keynsian and austerity are just there for dramatic effect.

dan1111 September 10, 2013 at 11:27 am

After reading the article I disagree. The Keynesian theme seems to be the basis of the article.

Brian Donohue September 10, 2013 at 12:15 pm

I didn’t read the article, but I also disagree. The Keynesian vision is all about financial leverage (doubling down, as TC says.) People understand the risks of leverage in their own lives- they just need to be inoculated against the idea that ‘governments aren’t households’ is some kind of fairy dust that takes risk out of this equation.

prior_approval September 10, 2013 at 6:39 am

Wait – I thought the family happy Mormons were one of the groups going to win the demographic race by outbreeding the non-believers.

But then, it seems as if the Mormons count differently than non-Mormons -

‘Official LDS Church statistics for 2011 count 6,144,582 Mormons in the United States in 2011, comprising about 2% of the nation’s population. Church statistics also show a 30% membership increase between 1990 and 2008—a rate double general US population growth.

But recent studies tell a different story—different because whereas LDS Church records count anyone who has ever been baptized, demographers and pollsters count only those who currently identify themselves as Mormon. Those are the parameters for the landmark Trinity College American Religious Identification Survey: a two-decade project that has produced the largest and most accurate database of self-reported religious identification ever compiled, with 100,000 randomly sampled participants. According to Rick Phillips and Ryan Cragun, the authors of a study of Mormons based on ARIS data, self-identified adult Mormons make up not 2% but rather 1.4% of the adult US population—that’s about 4.4 million LDS adults.

——————————————

In fact, additional studies by Cragun and Phillips show that retention rates of young people (young men especially) raised Mormon have dropped substantially in the last decade: from 92.6% in the 1970s–2000s to 64.4% from 2000–2010. Rising rates of disaffiliation go a long way towards explaining the gap between LDS Church records and the ARIS population estimates.’ http://www.religiondispatches.org/archive/culture/5611/mormon_numbers_not_adding_up/

The real problem for the Mormons seems to be a breakdown in keeping younger members. One would even venture to guess this just might have to do with the LDS perspective on marriage, and why the LDS has very recently begun to tentatively broach the idea that maybe it should possibly consider reevaluating its perspective in light of important new considerations.

The uncharitable might say somewhat along the lines of this process – ‘Beginning in the 1960s, however, the church was criticized by civil rights advocates and religious groups, and in 1969 several church leaders voted to rescind the policy, but the vote was not unanimous so the policy stood. In 1978, church leaders led by Spencer W. Kimball declared they had received a revelation instructing them to reverse the racial restriction policy. The change seems to have been prompted at least in part by problems facing mixed race converts in Brazil. The church opposes racism in any form and today has no racial policy.’ http://en.wikipedia.org/wiki/Black_people_and_Mormonism

Z September 10, 2013 at 10:06 am

It is a familiar pattern. David Goldman (Spengler) has written about it. Religiosity and fertility go hand in hand. In Poland, fertility rates plummeted along with church attendance after the fall of the Soviet Empire. Quebec has seen a similar dynamic as the separatist movement subsided. As church attendance in Utah declines, their fertility rate is declining.

Now, Utah still has a church attendance in the top five and the highest fertility rate in the nation. Vermont, the least religious state, has the lowest fertility rate. Vermont is an interesting study. They have lost a third of their school aged population in the last decade and 20% of their young adult population. That state is about to get very old very fast.

Anyway, Utah is not immune from the general trends in the west, Fertility rates and church attendance are holding hands, skipping down the road to oblivion. What is the ultimate cause of this is open for debate. But, the great Mark Steyn was right when he said the future belongs to those who show up. Right now, the Mormons still hold the lead in that race, even if their numbers are not multiplying at the same rate as in the past.

Andreas Baumann September 10, 2013 at 1:57 pm

Well, unbelieving countries can still be pretty adept at procreating. Case in point: Scandinavia.

Marian Kechlibar September 10, 2013 at 2:27 pm

The TFR of Scandinavian unbelievers is probably under 1.9. The fertility differential between the natives and the recent Muslim migrants is already becoming very visible, and even the docile Swedes are slowly getting a headache from the resulting ethnocultural tensions.

“Adept at procreating” would, for me, mean something like TFR 3 and more. Of all the developed countries, only Israel is anywhere near, and even there the fertility is pushed by the Haredim.

Andreas Baumann September 11, 2013 at 3:07 am

The fertility differential is decreasing, and recently fell to native levels for MENA immigrants in Denmark.

A TFR above 3 is clearly unsustainable in the long run. Furthermore, it is greater than the empirical TFR of Denmark at any time during the 20th century.

Marian Kechlibar September 11, 2013 at 3:36 am

Andreas, you’re correct about Denmark. Note though that Danish laws against bride import are the strictest in the EU. In nearby Sweden, the situation is very different.

In the very long run, TFR of 3 or more is unsustainable. But it is a very long run. Consider Sweden, having 9 million people per 440 000 sq km. Vast northern territories are basically empty of people, even though the current technology makes permanent settlement there possible. Swedes could tolerate TFR of 3 for at least a century.

As for the USA, a billion people would fit there without problems.

Gables September 10, 2013 at 10:12 am

So LDS counts all members to get to 2% and Trinity only counts adults to get 1.4% and you smell a conspiracy of some kind?

Careless September 10, 2013 at 1:14 pm

Trinity is counting adults as a percentage of the adult population.

Z September 10, 2013 at 1:54 pm

I seem to recall that the Mormons have maintained extremely detailed records on their people. Genealogists envy their work. I would take their numbers on faith, so to speak, when it comes to the number of people who were at one time members of the church. On the other hand, the Trinity numbers probably give a good accounting of the net after accounting for defections. Every religion has defections. The overt hostility from prior_approval blurs the distinction, but it is a worthy consideration. The health of a religion is a the difference between its new members (births and conversions) and its losses (death and defections). I’d be very curious if anyone has numbers like this on the Mormons.

Sam September 10, 2013 at 3:12 pm

Most ex-mormons dont go through the pains of getting officually removed from the church due to family reasons, how much work it is for something basically meaningless for a lot of people, and the social backlash it can cause in some communities. Thus they will stay on the rolls forever.

A better metric would be how many temple worthy people are in the church, but those numbers are probably secret.

dearieme September 10, 2013 at 7:06 am

Why do people write such painful English as “has negative consequences for”? To mix a metaphor, what a tin-eared arsehole.

C September 10, 2013 at 7:55 am

Key difference: The LDS church doesn’t rely on deficit spending. Since 1907, the Church hasn’t been in debt and finances all projects, even capital investments, out of current revenues. See the recent Times article on the City Creek Center mall for an example.

http://www.nytimes.com/2013/07/10/realestate/commercial/mormon-backed-mall-breathes-life-into-salt-lake-city.html?pagewanted=all&_r=0

Knowing that the programs aren’t funded by deficit spending flips the causation. If the Church is spending more money on projects, then it must already have higher revenues than trend today. Higher revenues today imply that either more people have already joined the church or that more people already in the church are donating more. Hence, the Church isn’t spending more to increase membership to cover costs, the Church is spending more because membership is stronger than before.

Ryan September 10, 2013 at 8:21 am

The LDS church had a serious hiring freeze at HQ throughout most of the recession and slow recovery, not to mention at the BYU institutions. They recently took advantage of new tech ventures in Salt Lake City (e.g., Adobe now has a presence there) by laying off a bunch of computer staff. Also note that most of the missionary program is not financed by tithing revenue. Missionaries pay their own way; those who are sent to low-cost areas (like South America) effectively subsidize those sent to high-cost areas (Japan, NZ, etc.). So it’s likely that the expansion of that program is costing considerably less than the article suggests.

But the dramatic expansion of the mission program has been interesting, for a lot of reasons. It included a reduction of the mission age for males from 19 to 18, inducing a lot of people to depart immediately after high school instead of completing a year of college first as many used to do. This has caused a major gender imbalance in the freshman class at BYU this year, with females far outnumbering males; there must be something economists can do with that natural experiment in a few years.

Dryly 41 September 10, 2013 at 8:24 am

Marriner Eccles was a Mormon banker who was appointed Chair of the Federal Reserve by FDR. In February 1933 he testified before the Senate arguing for stimulus in fiscal policy as the only way to revive the disastrous economy. This was 3 years before Keynes published the General Theory.

DougT September 10, 2013 at 8:34 am

A related nonsequitor: has anyone noticed BYU’s tuition? What do they put in the water! Can we bottle it and ship it out?

http://saas.byu.edu/tools/b4byu/sites/b4/?visiting-student/tuition-charges/

Finch September 10, 2013 at 9:32 am

I’m vaguely surprised that they appear to be charging different tuition for different religions. Am I interpreting that correctly? Is it something like scholarships reserved for people meeting some criteria? I don’t understand the rules…

Ryan September 10, 2013 at 9:44 am

The university is heavily subsidized by LDS tithepayer funds, so members of the church pay less to go there. This isn’t so different from the resident/non-resident distinction made by state schools. Even the non-LDS rate is inexpensive by the standards of private schools.

gab September 10, 2013 at 2:33 pm

I’m sure even devout Mormons would argue that “you get what you pay for.”

Ryan September 10, 2013 at 6:06 pm

The bang for buck is extraordinary. Few, if any, schools rank higher but cost less. Today US News released “best value” rankings, and BYU scores #10: http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/national-universities/best-value

Steve Sailer September 10, 2013 at 8:11 pm

My impression is that one reason BYU has low tuition is because it average large class sizes.

Another interesting thing about BYU is what a large SAT/ACT range of students it has. It takes in not so smart Mormon students, but also attracts highly intelligent Mormons as well.

BYU today is like a lot of colleges were like in 1960: affordable and less stratified by IQ. In other words, the Mormons remain much like the old egalitarian America of 1930-1970.

Paul Zrimsek September 10, 2013 at 8:41 am

Salvation is always and everywhere a monetary phenomenon.

Ricardo September 10, 2013 at 10:41 am

Brilliant!

Dangerman September 10, 2013 at 10:59 am

+1

dan1111 September 10, 2013 at 11:24 am

The article actually doesn’t provide any evidence that these policies are being pursued for monetary reasons.

The author chooses to view it in this light so that he can push his Keynesian story, but one could just as easily interpret the same facts in the opposite way and say these activities show they are not operating as a business and not primarily motivated by making money.

Dan September 10, 2013 at 9:02 am

Tyler,

The finances of the Mormon Church, or any church, could make for some fascinating analysis. Unfortunately, the post you linked to presents a very inadequate picture of the Mormon Church business model and to make matters worse the blogger’s association of church activities to macroeconomic policy is simply misguided. As an aside, if one was to visit a typical suburban Mormon congregation one would be struck by the austerity of the experience, as compared to the relative wealth of the members – High Mormon church officials are very good at reallocating funds to where THEY want to spend them, and usually this spending is not in the congregation where they are received.

I agree with the sentiments of Poster ‘C’. Tithing is just one revenue stream. What about all the other revenue of the church? The church’s investments (and common sense of the type of investments they have) indicate that this revenue must be appreciating rather smartly. What few know is by how much and without this information it is impossible to draw any smart conclusions.

Jameson Burt September 10, 2013 at 9:10 am

Ten percent Mormon tax makes them feel overtaxed, so conservative.
What conservatism? Mormons self tax themselves 10%.
Then they complain about government taxes.
If one can endure total taxes of 25%, the Mormon tax of 10% takes much of that.

dan1111 September 10, 2013 at 11:46 am

If people donate or otherwise voluntarily spend their money, they have no right to complain about the government taking their money? Come on, you can come up with a better silly attack on conservatives than that.

Marian Kechlibar September 10, 2013 at 2:28 pm

The difference between a voluntary and coerced activity is huge: in religion, money, sex etc.

MC September 10, 2013 at 4:35 pm

Tiny difference: my tithing money isn’t given to people who are actively trying to undermine my entire way of life.

Steve Sailer September 10, 2013 at 8:14 pm

The mainstream Mormon organization in Utah today seem more like a mutual self-help society, sort of a private enterprise Sweden. If you agree to play by their rules, follow their cultural norms, and pay a lot of taxes, excuse me, donations, they’ll round down some of the sharp, competitive corners of modern life for you. The intense and expensive efforts modern Americans make to “insulate, insulate, insulate” their families (as Sherman McCoy’s best friend tells him people who want to raise children in Manhattan must do) are sort of taken care of for you by the Mormon church.

Of course, that’s why Mormons are so Republican — they’ve built themselves a private welfare state, without most of the moral hazard that goes with government welfare states.

Mondfledermaus September 10, 2013 at 9:25 am

Mormons are obviously doing it wrong, haven’t they heard or Laffer curve? If they cut tithing by half to 5% then church members allowing church members to keep more of their hard earned dollars will motivate them to work harder and church revenue will increase.

Cliff September 10, 2013 at 11:29 am

This joke would work better if the rate was a little higher

Alexei Sadeski September 10, 2013 at 11:48 am

It would work even better if it were a tax instead of a voluntary donation.

dan1111 September 10, 2013 at 12:40 pm

It would work even better if it were funny.

Marian Kechlibar September 10, 2013 at 2:30 pm

So, how many thousands of pages do all the tithe exemptions and loopholes cover in the Mormon Tithing Code?

The Laffer curve in the real world isn’t so much about the tax bracket, but rather about the fact that higher tax brackets create enormous incentives to lobby for various special interests and exemptions.

AADL September 10, 2013 at 9:26 am

Keynesians believe in stealing. T is theft. Tithing is voluntary. There is nothing remotely Keynesoid about it.
G is also a criminal entity. The Mormon church is a voluntary organization.

KM September 11, 2013 at 8:46 am

Tithing isn’t voluntary, it’s coercive. The government can seize your assets and throw you in jail if you don’t pay your taxes. Mormons who don’t pay tithing will literally burn alive when Jesus returns.

D&C 64:23 “. . . for he that is tithed shall not be burned at his coming.”

AADL September 11, 2013 at 11:20 am

Who is this Jesus (freak)?

RPLong September 10, 2013 at 9:37 am

Have you ever been to Utah? The entire state is build on credit.

Paul September 10, 2013 at 11:48 am

The article is interesting but the link to Keynes is silly.

byomtov September 10, 2013 at 1:14 pm

It is not even possible for a private organization to “go Keynesian,” or “implement Keynesian principles.”

The church has reallocated its spending, it seems, which may or not be a good idea, but there is absolutely nothing “Keynesian” about it, whether financed by current income or borrowing.

Random Diplomat September 10, 2013 at 2:49 pm

In America, a number of Mormons work in the Federal government, likely more than their proportion of the population. Quite a few Foreign Service officers are Mormons. The Mormon church mimics the State Department in ways grand and small. Examples: the State Department has a Foreign Affairs Manual which instructions for consular and administrative officers in specific situations. The Mormons have a Church Handbook which does the same for church leaders (see https://www.lds.org/handbook/handbook-2-administering-the-church?lang=eng ). Of course, parts of the Foreign Affairs Manual are classified, and an entire volume of the LDS handbook is kept secret, as well. Church uses a “pouch mail” system to deliver mail to remote missions; the State Department also uses “pouch mail” to deliver mail to remote posts with poor mail systems. Both organizations have specialized institutions for language training.

As someone who has spent a career working with Mormons, I can say that a someone who finds a highly structured and hierarchical church appealing is also likely to find a career in a structured and hierarchical government agency to be appealing. The personal traits necessary for success are similar for both organizations.

Steve Sailer September 10, 2013 at 8:21 pm

“Geographically more and more members are joining from poorer places in the world (Africa for example) and even in the rich parts of the world, like Western Europe, it is immigrants who are more likely to join who tend to be relatively poor. This also has negative consequences for tithing revenue.”

We lose money on each one, but we make up for that with volume!

The Mormon church is a major proponent of more low-skilled immigration, since they have a problem these days converting and retaining the educated. But, like America, they are running into what should have been an obvious problem with low-end immigration: it’s hard to squeeze blood from a stone. Ten percent of an unskilled workers’ income isn’t a big number.

The Anti-Gnostic September 11, 2013 at 10:25 pm

The Mormons’ bigger problem might be their leadership no longer believe in their founding documents.

A logical response to this crisis of conscience would be to work feverishly to transform the church into another Protestant book club and cram in some gullible Third Worlders to burnish your universalist credentials.

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