God's Economy: Faith-Based Initiatives and the Caring State by Lew Daly | Hardcover | Barnes & Noble
God's Economy: Faith-Based Initiatives and the Caring State

God's Economy: Faith-Based Initiatives and the Caring State

by Lew Daly

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President Obama has signaled a sharp break from many Bush Administration policies, but he remains committed to federal support for religious social service providers. Like George W. Bush’s faith-based initiative, though, Obama’s version of the policy has generated loud criticism—from both sides of the aisle—even as the communities that stand


President Obama has signaled a sharp break from many Bush Administration policies, but he remains committed to federal support for religious social service providers. Like George W. Bush’s faith-based initiative, though, Obama’s version of the policy has generated loud criticism—from both sides of the aisle—even as the communities that stand to benefit suffer through an ailing economy. God’s Economy reveals that virtually all of the critics, as well as many supporters, have long misunderstood both the true implications of faith-based partnerships and their unique potential for advancing social justice.

Unearthing the intellectual history of the faith-based initiative, Lew Daly locates its roots in the pluralist tradition of Europe’s Christian democracies, in which the state shares sovereignty with social institutions. He argues that Catholic and Dutch Calvinist ideas played a crucial role in the evolution of this tradition, as churches across nineteenth-century Europe developed philosophical and legal defenses to protect their education and social programs against ascendant governments. Tracing the influence of this heritageon the past three decades of American social policy and church-state law, Daly finally untangles the radical beginnings of the faith-based initiative. In the process, he frees it from the narrow culture-war framework that has limited debate on the subject since Bush opened the White House Office for Faith-Based and Community Initiatives in 2001.

A major contribution from an important new voice at the intersection of religion and politics, God’s Economy points the way toward policymaking that combines strong social support with a new moral focus on the protection of families and communities.

Editorial Reviews

Patrick McKinley Brennan

“Bold yet balanced, God’s Economy will confound liberals and conservatives alike. By harnessing neglected insights from Catholic, Calvinist, and other overlapping traditions of reflection on authentic social pluralism, Daly’s book offers to put both the market and the state back where they belong—in the service of the plural communities in which people learn to love, serve, and even worship. Incisive, informed, and inspiring, this is public philosophy that packs a practical punch. Much needed in places high and low, God’s Economy takes the vital discussion of mediating institutions and faith-based initiatives three long steps forward. Daly is an exemplary guide."

William A. Galston

God’s Economy is a remarkable effort to rethink the nature of state power, markets, and social life. Daly makes long-neglected conceptions of plural sovereignty relevant to a wide range of contemporary debates. The result is a bold, unique contribution to social thought."

Stephen V. Monsma

“Balanced, thoughtful, and loaded with practical policy implications, Daly’s God’s Economy lifts the debates surrounding charitable choice and Bush’s—and now Obama’s—faith-based initiatives above the cultural wars of the left and the right by documenting their roots in Catholic and Calvinist social pluralist thinking. It thereby makes a powerful case for protecting communities—especially families and religious communities—from both the market and the state. In doing so, Daly persuasively argues that faith-based initiatives, if fully implemented, will lead to public policies more, not less, committed to helping those who are poor and on the margins of society."

Publishers Weekly
Eight years after President George W. Bush began federal support for faith-based social services, the program is still contested by both the right and the left. Daly, a senior fellow at Demos, a nonpartisan public policy think tank, offers the current economic crisis as a good reason why President Obama should redouble efforts to more fully embrace it. His dense, scholarly review of the history of faith-based initiatives, which he traces to 19th-century German and Dutch welfare systems, may be the most comprehensive and evenhanded to date. Daly charts the evolution of the First Amendment’s establishment clause from strict institutional separation of church and state to one that emphasizes equal treatment for religious and secular service providers. Daly is convinced that faith-based social service providers offer the best moral standards for protecting families and communities, though it is clear he is referring mainly to Christian providers. In pluralistic 21st-century America, where people of no particular faith are the fastest-growing segment of the religious landscape, it’s not clear that the public is ready to trust religious institutions more than secular ones. (Dec.)
Library Journal
Analyzing the "quiet revolution" of U.S. faith-based social service initiatives, Daly (senior fellow, Demos; Unjust Deserts) examines the theological roots and potential future of this government program. Daly argues that although the overall initiative was introduced early in President George W. Bush's term, the true effect has yet to be realized and may transform American social services into something closer to the Christian democracies of Europe. This in-depth policy review delves into the impact of the Catholic concept of subsidiarity and the Dutch Calvinist idea of sphere sovereignty on the U.S. government's faith-based initiative. He concludes that the U.S. initiative, which has been continued by President Obama, may still usher in a new era of social justice for those impacted by poverty. The author's left-leaning political perspective is very evident. VERDICT Diehard political and social theorists may appreciate this volume, but the voluminous detail and the author's use of the first person detract from the flow and readability. With extensive endnotes.—Ray Arnett, Fremont Area Dist. Lib., MI

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God's Economy

Faith-Based Initiatives and the Caring State

The University of Chicago Press

Copyright © 2009 The University of Chicago
All right reserved.

ISBN: 978-0-226-13483-3

Chapter One

A New Era of Church-State Cooperation

In 1996, the United States Congress passed a set of provisions known as "charitable choice," part of the landmark welfare reform bill signed by President Clinton on August 26 of that year. At the heart of these provisions (Section 104 of Public Law 104-193), Congress gave religious social-service providers a statutory right to contract with the government without compromising their religious identity. The Bush-era Faith-Based and Community Initiative (FBCI) was an effort to do two fundamental things, in turn, based on the core legal principles of charitable choice: first, to increase the share of federal social-welfare resources going to religious groups; and second, to protect the organizational autonomy and religious identity of these groups so enlisted by the government. This fundamental "re-design" of government contracting, as one official termed it, was considered necessary to correct a bureaucratic environment that not only restricted the participation of faith-based groups, but also, in doing so, greatly hindered the struggle against poverty. As candidate Bush put it on the presidential campaign trail in 1999,

In the past, presidents have declared wars on poverty and promised to create a great society. But these grand gestures and honorable aims were frustrated. They have become a warning, not an example. We found that government can spend money, but it can't put hope in our hearts or a sense of purpose in our lives. This is done by churches and synagogues and mosques and charities that warm the cold of life. A quiet river of goodness and kindness that cuts through stone. Real change in our culture comes from the bottom up, not the top down. It gathers the momentum of a million committed hearts. So today I want to propose a different role for government. A fresh start. A bold new approach.

Drawing groups from well outside the arena of welfare policy into the fray, the extraordinary controversy surrounding Bush's efforts gave the impression that these concerns and the changes devised to address them were radically new, if not dangerous. In fact, there is a long history behind these ideas, and fully understanding Bush's efforts requires a historical perspective reaching back to the late nineteenth century. Later in the book I explore why it also requires a comparative, transatlantic perspective in this same basic timeframe.

Before World War I, the United States had a mixed economy of social welfare, drawing on local churches, missionary societies, larger relief associations such as the St. Vincent de Paul Society, and ethnic and vocational mutual-aid fellowships. In larger towns and cities, there were public institutions for the poor, funds for emergency needs, indigent hospitals, mental wards, and orphanages. Catholics also organized their own hospitals, asylums, and orphanages to protect their poor and vulnerable from Protestant bigotry and proselytization. These combined efforts—certainly a large part of the associational genius Alexis de Tocqueville perceived in Democracy in America—reached only a small fraction of those in need. Although public social assistance was far from negligible when he journeyed through America, in Tocqueville's eyes churches and religious associations of the Jacksonian era operated in a largely private realm devoid of political interaction or significance. He celebrated this as a necessity of self-preservation amidst the volatile factionalism and ever-changing leadership of democratic government:

If the Americans, who have abandoned the political world to the attempts of innovators, had not placed religion beyond their reach, where it could abide in the ebb and flow of human opinions, ... where would that respect which belongs to it be paid, amidst the struggles of faction? And what would become of its immortality, in the midst of perpetual decay? The American clergy were the first to perceive this truth, and to act in conformity with it. They saw that they must renounce their religious influence, if they were to strive for political power; and they chose to give up the support of the State, rather than to share its vicissitudes.

With the consolidation of national markets, large enterprise, and the first outcroppings of the regulatory state during the Gilded Age, this concept of religion as an essentially private good was increasingly difficult to reconcile with the growing magnitude of social need and also the sheer impact of political and economic structures on social conditions and behavior. Thus, a second phase of the mixed welfare economy sought to "scale up" and rationalize aid in response to the more structured poverty of urban industrial settings. So-called "scientific charity," embodied in the proliferation of Charity Organization Societies in many larger cities beginning in the 1870s, introduced the centralized, disciplinary casework model, attaching aid to education and behavioral control. In this period, the economy of social welfare generally (and temporarily) shifted from one based on "outdoor relief" (aid given directly to households) to one based on "indoor relief" (aid attached to institutional control in workhouses and almshouses). The evidence is clear that scientific charity on its own—in cities where outdoor relief was abolished or reduced—led to increased pauperism and hardship and "lost its remaining credibility" in the depression of the 1890s.

H. K. Carroll, who was in charge of gathering religious data for the 1890 census, depicted the churches of the time as, effectively, a large private welfare state built from the resources of society. Although private social assistance was but a tiny fraction of national income at the time (approximately the same as government poor relief), the churches' panoply of mission efforts, leveraged by huge inputs of voluntary labor time, was highly visible in the social field—almost a private mirror image of what government looks like today:

It is to be remembered that all the houses of worship have been built by voluntary contributions. They have been provided by private gifts, but are offered to the public for free use. The government has not given a dollar to provide them, nor does it appropriate a dollar for their support. And yet the church is the mightiest, most pervasive, most persistent, and most beneficent force in our civilization. It affects, directly or indirectly, all human activities and interests. It is a large property-holder, and influences the market for real estate. It is a corporation, and administers large trusts.

It is a public institution, and is therefore the subject of protective legislation. It is a capitalist, and gathers and distributes large wealth. It is an employer, and furnishes means of support to ministers, organists, singers, janitors, and others. It is a relief organization feeding the hungry, clothing the naked, and assisting the destitute. It is a university, training children and instructing old and young, by public lectures on religion, morals, industry, thrift, and the duties of citizenship. It is a reformatory influence, recovering the vicious, immoral, and dangerous elements of society and making them exemplary citizens. It is a philanthropic association, sending missionaries to the remotest countries to Christianize savage and degraded races. It is organized beneficence, founding hospitals for the sick, asylums for orphans, refuges for the homeless, and schools, colleges, and universities for the ignorant. ... Who that considers these moral and material aspects of the church can deny that it is beneficent in its aims, unselfish in its plans, and impartial in the distribution of its blessings? It is devoted to the temporal and eternal interests of mankind. Every cornerstone it lays, it lays for humanity; every temple it opens, it opens to the world; every altar it establishes, it establishes for the salvation of souls. Its spires are fingers pointing heavenward; its ministers are messengers of good tidings, ambassadors of hope, and angels of mercy. What is there among men to compare with the church in its power to educate, elevate, and civilize mankind?

Rising destitution at the doorstep of the private religious economy compelled a new deployment of the moral resources accumulated by the church. It was acknowledged that the great "social question" and the moral anarchy of "poverty amid plenty" had no answer or remedy in the churches' efforts alone in the private economy. A new generation of leaders became more receptive to the idea of legislative reforms of the capitalist system, following in the footsteps of trade unionism. Catholic Archbishop John Ireland of Minnesota helped to inspire them amid the wrenching contradictions of the Gilded Age when he asked, in 1889, "What has come over us that we shun the work which is essentially ours to do? These are days of action, days of warfare.... Into the arena, priest and layman! Seek out social evils, and lead in movements that tend to rectify them." Such a concept of warfare against social evils is perhaps, to us, more redolent of the Great Society, with its War on Poverty; but in 1889, social evils were still considered the unique province of religion. By the turn of the century, however, the visible inadequacy of voluntary religious assistance threatened the Christian faith with popular—and sometimes populist—disaffection as never before. When Pope Leo XIII issued Rerum novarum in 1891, American Catholics experienced a profound political awakening in the form of "solidarist" and "social justice" teaching, as did their Protestant counterparts in the form of the Social Gospel.

In the years before and immediately after World War I, the churches formed national welfare councils to advise and better coordinate charitable missions as well as advocate for certain kinds of government intervention, such as workplace safety rules. By this time it was increasingly acknowledged that the forces of industrial capitalism had far outstripped not simply the churches' capacity for charitable assistance, but the capacity of charity itself, as a model of welfare, to give sufficient protection to the amassing workers and families of urban-industrial America. The 1908 Social Creed adopted by the Federal Council of Churches (at the time representing seventeen million Protestants) and the 1919 Catholic Bishops' Program of Social Reconstruction show that, despite a nineteenth-century reputation for excessive spiritual pietism, the churches' embrace of government ran well ahead of the government's own social spending and also, clearly, helped to generate the national will for significant increases in government spending and intervention when the economy collapsed in the 1930s (a point we return to in chapter 4). Total government spending on welfare or "poor relief" amounted to only one sixth of 1 percent of national income in the 1920s, roughly equal to the share of national income dedicated to private charitable relief. In the 1930s, however, the government's welfare spending grew significantly.

The share of national income dedicated to private poor relief did not rise with the Great Depression; in fact, it essentially remained flat, at well under 1 percent, from the mid-nineteenth century across much of the twentieth century. This surprising fact does not account for the value of voluntary labor, however, always a large fraction of the total value of charity. Nevertheless, with little discussion at the time, the rise of the New Deal, with its many aid programs and significant public spending, was a watershed in the structure of poor relief and social services, putting religious providers in a legally and politically subordinate position. This problem of the legal, fiscal, and administrative impact of the emerging welfare state—and what economists call the "crowd out" effects of these structural changes—had been a long-standing concern and a subject of systematic theological reflection in Europe over the previous fifty years. Owing in part to the earlier development of public welfare and education programs in countries such as Germany, Italy, and the Netherlands, but also in part to the strong confessional identity and cultural worldviews of the churches thus embattled by these encroachments, church-state "domain conflict" in social policy was arguably the central political problem in late nineteenth-century Europe. While today's American "culture war" focuses mainly on restricting individual behaviors such as abortion and homosexuality, it is important to recognize that the first self-declared culture war—known in German as Kulturkampf or, literally, "conflict of cultures"—was actually waged between liberal governments and religious bodies (not individual believers), and this created precisely the kinds of structural conflict over welfare provision (as well as education) that we now see at work in such developments as charitable choice and the faith-based initiative.

These political parallels are more than coincidental, as will become clearer in our later discussion of the theological influences that shaped our own institutional Kulturkampf over welfare reform during the last fifteen years. As indicated, its origins lie in the Great Depression. For the concerted effort that was needed in those times, public agencies and commissions were established to launch and manage the New Deal's many relief and employment programs. Among Roosevelt's brain trust there was a strong assumption that, especially in the delivery of federal funds or other kinds of material assistance, it was necessary for the government to do its own administration and not be dependent on private groups; in most programs the law stipulated that federal aid could only be distributed by federal agencies.

In general, religious leaders, particularly Catholic clergy, were moderately to strongly supportive of New Deal efforts. But one New Deal policy area in which church-state conflicts clearly emerged was education, which remains the most difficult of such constitutional domain conflicts to this day. A number of New Deal relief programs gave emergency aid to schools, including private and religious schools, and during Roosevelt's second term these universal but temporary measures helped to foster the idea of establishing permanent federal programs for education assistance on a pluralistic, religion-inclusive basis. In the Supreme Court, the "child benefit" principle was established as early as 1930 (in Cochran v. Louisiana Board of Education) to justify public provision of materials and services (in this case textbooks) to private schools.

In 1938, Roosevelt's Advisory Committee on Education recommended the establishment of a federal education grant program in support of primary and secondary schools, for which private schools would be eligible, as well as a program providing materials, transportation, and other services directly to students, regardless of the school setting. These proposals became part of legislation introduced in 1939, with the eligibility of private schools left to the determination of the states. Catholic leaders sought a federal provision requiring equal treatment of public and private schools by the states administering these programs. This reflected a significant evolution of the Catholic position on federal education policy; previously, the push for federal education policy was generally oriented toward establishing de facto Protestant "common schools," and some states (like Oregon) had already passed or proposed laws effecting the closure of Catholic schools and forcing all children into the common schools. The pluralistic design of New Deal education proposals and related bills opened the door for Catholics to embrace a federal role. The key to understanding such a change of position is the Church's social teaching known as subsidiarity, a principle of governance requiring public support for, but opposing control or usurpation of, traditional religious functions. We will discuss this in more detail later, but it is worth noting here Pope Pius XI's most important encyclical of the 1920s, Divini illius magistri ("On Christian Education"). Here he argued these points as applied to the European context (particularly in Germany and Italy), declaring "unjust and unlawful" any education policy that creates a monopoly forcing families "to make use of government schools contrary to the dictates of their Christian conscience" (sec. 48).

With the New Deal education proposals of 1938 and 1939 came a barrage of Protestant protest tempered only by the view of the Federal Council of Churches, which emphasized the role of state discretion in classifying eligible schools and the fact that the aid in question was for auxiliary purposes and not core operations. Some Protestant opponents sought to strip the bill of state discretion over eligibility and establish clear federal language excluding private and parochial schools from any benefits. Baptists in particular decried it as a "dangerous violation of the principle of separation of church and state," or simply opposed any federal education policy at all. The Methodist Episcopal Church in the southern states announced official opposition on both church-state and federalist grounds. No further progress was made on these federal proposals at the time, although a number of states continued to pass measures for disbursing materials and services to both public and private schoolchildren, which later brought forth the landmark Supreme Court decision Everson v. Board of Education of Ewing Township in 1947, discussed in more detail in the next section.


Excerpted from God's Economy by LEW DALY Copyright © 2009 by The University of Chicago. Excerpted by permission of The University of Chicago Press. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

Lew Daly is a senior fellow at Demos, a nonpartisan public policy research and advocacy organization. He is the author, most recently, of Unjust Deserts.

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