Tuesday, April 6, 2010

Further evidence on the profit motive of churches

The Catholic Church is facing quite a lot of heat lately, to a large extend because it put the welfare of the organization far ahead of the welfare of its constituents. The Church denies this, of course. It is of interest here whether its other actions corroborate its social welfare motives.

Carla Marchese and Giovanni Ramello find an intriguing fact: since 2005, the teachings of the Pope are copyrighted. Copyright is like a monopoly in that it reduces quantity and maximizes private profits. Why would the Church adopt this model if it were trying to save as many souls as possible? The authors are gentle here and claim that the Church just wants to tax other media outlets that would make money by diffusing the Pope's message. I would not be that lenient. Indeed, this motivation only works if there is imperfect competition across media outlets, and then only under specific conditions. It is true that proceeds can be used to subsidize the Church's own publications, but seeing the profit margin of the Vatican's publisher (16%), it does not look likely.


Kansan said...

What's with all the stuff about religion lately?

Graeme said...

The effect on the diffusion of the message is likely to be negligible:

1) Price elasticity of demand is likely to be low
2) Prices may not change much as the publishers may not pass on much of the price increase - i.e. it is a tax on publishers profits. This is all the more likely as some publishers said they were donating the profits on papal writing to charity: so now it goes as a royalty payment instead.
3) It can all be read free on the Vatican web site anyway. It also has archives of previous Pope's writings that go back a few decades (I went there looking for Pius XI's "Mit brennender sorge").