Mormon Law, Mormon Markets, and Mormon Thought

May 11, 2007 | 21 comments
By

Markets are a big deal in my intellectual life. For a living, I teach and think about the law that makes markets possible. By and large, I think that markets are really cool. I think that they are probably the single greatest engine for the material betterment of the human race. Poverty causes a great deal of misery. Economic development strikes me as the single greatest way of alleviating poverty. Markets are what make economic growth possible. I also think that markets serve important political purposes by facilitating peaceful cooperation between those with violently opposed political and religious beliefs. Markets, however, pose something of a problem for Mormon thought.

It seems to me that there are basically two approaches that a Mormon can take in thinking about markets. By and large the dominant approach is to note that the modern church functions comfortably within market economies, note that there are lots of positive statements about capitalism by post-World War II GAs and leave it at that. (This approach was taken a number of years ago in a BYU Studies article on the topic, that seemed to mainly a prolonged exercise in proof-texting from recent conference reports.) There are two problems with this approach. First, it serves at best to withdraw the question of Mormonism from the question of how one thinks about markets. Hence, it is not really a particularly fruitful place from which to carry on a peculiarly Mormon conversation about markets. The second problem is that it does not adequately deal with the history of Mormon economic practices and teachings. The nineteenth-century economic experience of building Zion gets placed on the far side of some great divide (1890?) and has little if anything to tell us today.

The other approach is to use nineteenth-century economic communitarianism as a basis for attacking modern markets. This critique centers on the various iterations of the United Order. One can interpret these endeavors as a rejection of modern market economies in favor of localized institutions based around hierarchical economic organization, the rejection of the pursuit of profit, and the decentralized coordination of the market. Thinkers like Hugh Nibley (or T&S’s Russell Arben Fox) can then use this history as a basis for constructing a Mormon stance towards markets that is essentially hostile. The approach has two advantages. First, it provides greater continuity and integrity to Mormon experience. Second, it provides a rich vein of material from which a peculiarly Mormon discussion of markets can proceed. In my mind, however, it is marred by the fact that its basic valuation of markets is mistaken and in its details its effects can be pernicious.

I actually think that a greater appreciation for the role of church courts in Mormon history provides a way out of this unfortunate state of affairs. The fact of the matter is that the United Orders and other collective economic experiments that garner the lion’s share of attention by those interested in using Mormon history to think about markets are in many ways a rather minor part of Mormon economic experience. For example, the United Orders pushed by Brigham Young in the 1870s by and large were extremely short lived and unsuccessful. Most of them rapidly folded or else transformed themselves into essentially corporate enterprises with controlling church ownership. In other words, the United Orders were the exception rather than the rule in the economic experience of building Zion in the nineteenth century. The same was true of other centralized Mormon economic institutions such as Zion’s Central Board of Trade or the later School of the Prophets.

This does not mean, of course, that the economic experience of nineteenth century Mormons was without religious content, simply mirroring developments in the Gentile world. Far from it. Economic experience was at the center of much of Mormonism in the nineteenth century. What is striking to me, however, is that the most successful Mormon economic institutions in the nineteenth century facilitated markets rather than rejecting them. The system of tithing is an excellent example of this. Members of the church made in-kind donations to the bishop’s storehouse. Those working on church projects then received “tithing scrip” that gave them the right to get merchandise from the bishop’s storehouse. This scrip then circulated as currency. The presence of a relatively stable currency (something generally not present in the cash-starved economies of frontier America) facilitates the development of market exchanges by dramatically lowering transaction costs. It is easier to purchase something with scrip than with a wagon load of grain. Currency thus encourages exchanges. Furthermore, in contrast to the system of United Orders tithing scrip (which often times had no tangible form other than entries in the ledgers of the storehouse) was an economic institution that endured for decades.

Another example of a market facilitating Mormon institution was the church court system. Nineteenth-century Latter-day Saints were expected to resolve their civil disputes in the church judiciary. Not surprisingly, most of these disputes involved issues of property and contract. Markets are made possible by legal entitlements. There are few exchanges of property without property rights. There are few long term contract without contract rights. By pushing disputes over such things into church courts, however, the church arrogated to itself the task of defining these central institutions. Again, in contrast to the United Order system, the civil jurisdiction of the ecclesiastical courts was extremely long lived. In doing research in this area the earliest contract case I have found decided by a Mormon court was in December, 1831 and as late as 1918 James E. Talmage was urging the Saints in the pages of the Improvement Era to foreswear secular courts for church tribunals. In other words, we are talking about between 70 and 90 years of continuous experience.

The church court system strikes me as a particularly rich place from which to start thinking about Mormonism and markets because the resolution of contract and property disputes is ultimately about conduct within markets. Rather than some largely useless Nibley-esque screed against bankers and merchants, the records of the church courts show much more nuanced picture of people struggling to make sense of how a merchant or banker in Zion should act. There are, of course, some real problems with looking to church courts. The first is the availability of sources, although the church archives have released far more church court documents than one might think. A bigger obstacle, however, is interest. Most of those that I have met who are interested in mining Mormon history for thinking on markets are themselves hostile to markets and hence uninterested in thinking about nineteenth century Zion building with a market paradigm. Mormons who are enthusiastic about markets, on the other hand, tend to be uninterested in nineteenth century Mormon experience, in part I suspect because they see it either irrelevant or hostile. Finally, most people — including those who think deeply about markets and economics — have a tendency to think of property and contract as static and simple institutions, and hence are unlikely to see the ways in which Mormon adjudication tracks and departs from secular regimes. The reality, of course, is that what we mean by property and contract changes from place to place and epoch to epoch. Hence, for example, it make sense to think about Anglo-American ideas of contract versus Civil or Roman ideas of contract. Likewise, it makes sense to think about Mormon concepts of property and contract. Therein lies, I think, a better way of thinking about Mormonism and the market.

Tags: , ,

21 Responses to Mormon Law, Mormon Markets, and Mormon Thought

  1. Adam Greenwood on May 11, 2007 at 12:15 pm

    Nate,
    It sounds like you want to know what Mormonism has to say about markets, not just what Mormons have to say about markets. To do this, unless there were robust appellate authority from SLC, we would have to treat trends in local unit church courts as somewhat normative.

    I think we can do this, theologically, but its outside our usual normative sources. I suspect this is actually a third reason why scholars haven’t been looking at church courts more extensively. We are accustomed to seeing revelation in prophetic pronouncements (B. Young’s anti-capitalist statements, modern pro-capitalist statements) and in group history like the United Orders, but we are not used to seeing it in the aggregation of numerous individual decisions.

  2. Peter LLC on May 11, 2007 at 12:19 pm

    “I teach and think about the law that makes markets possible.”

    “Markets are made possible by legal entitlements.”

    Assuming you are talking about “free markets,” isn’t this kind of a tautology? The free market is distinguished by individual ownership of all resources, which as you mention requires some notion of the rule of law and property rights.

    Maybe I’m being dense, but it seems just as likely to me that the negative externalities of unregulated markets created a demand for property rights.

    Anyway, a thought-provoking post. I’ve been inspired to revisit Brigham Young’s tithing buffalos on Antelope Island.

  3. roland on May 11, 2007 at 12:33 pm

    I would think that the marketplace economy would be very beneficial to Mormonism which emphasizes a strong work ethic. Those businesses that work harder to produce more product and thru their own careful diligence will have a leading edge in a common marketplace.

  4. Nate Oman on May 11, 2007 at 1:44 pm

    Adam: I don’t disagree with finding current practices normative. I think, however, that to the extent possible we want to make sense of current practice as having at least some continuity with prior practice. Neither of the two approaches that I sketched out initially in my post do this particularlly well. Your point about the theology of disagregated revelation is a good one.

    Peter LLC: You will notice that no where in my post did I use the term “free market.” I find the term somewhat misleading as it suggests some sort of dicotomy between law and market, which I think is mistaken. Markets depend on law of some sort or another, and the shape that the markets take will be decisively impacted by the sorts of legal regimes that we adopt. Of course, I still think that a lot of regulation is wrong-headed, but not necessarily because I think that there is some sort of “free market” upon which law is an excrecence. I just think that the regulations are dumb.

    “The free market is distinguished by individual ownership of all resources”

    I think that this is somewhat promblematic. What exactly do we mean here by “ownership” or “individual ownership”? Under American law, for example, ownership of land means something quite different from ownership of chattels from ownership of intangible personal property like rights to payment from ownership of IP. Furthermore, the nature of ownership changes from legal regime to legal regime. For example, under American law it is quite simple to securitize personal property including intangible property while under much of Latin American law it is impossible. (Asset securitization, in a nutshell, consists of credit extended that is secured by some collateral, except that the right to repayment of the debt is chopped into little pieces and sold as a security much like a share of stock or a government bond. Most of the financing for home mortgages, etc. in the United States takes this form.) Both regimes see the ability to securitize assets (or not) as flowing from the “nature” of ownership. The differences, however, are important. In the US the credit market in securitized assets is actually larger than the entire traditional commercial banking market. The same source of credit simply doesn’t exist in many parts of the world because of differing concepts of ownership. I think that these are some of the most important issues facing the healthy functioning of markets, but they aren’t nessarily captured very well by terms like “free markets” vs. “regulation” or “private property” vs. “public ownership.”

  5. Adam Greenwood on May 11, 2007 at 1:58 pm

    ” I don’t disagree with finding current practices normative. I think, however, that to the extent possible we want to make sense of current practice as having at least some continuity with prior practice. Neither of the two approaches that I sketched out initially in my post do this particularlly well. Your point about the theology of disagregated revelation is a good one.”

    Nate,

    I wasn’t thinking about whether current practice should trump past practice. I was just making a point about whether trends among Mormons can be taken as at least somewhat revelatory for Mormonism. When you bring up current practice, though, the interesting point is whether we can try and give some weight to the property and contract views of church courts in the 19th Century without giving the same weight to the economic beliefs and practices of modern Mormons. Personally I think we can. Ideally those church courts were counselling and recieving inspiration about what property and contract law should be, whereas modern Mormon practice is shaped by secular law. My views on the legality of asset securitization are shaped not by prayer and study but by case law.

    Your point that the two prevailing views in the church can’t make sense of both the 19th Cen. and the 20th Cen. is a good one.

  6. Nate Oman on May 11, 2007 at 2:03 pm

    “My views on the legality of asset securitization are shaped not by prayer and study but by case law.”

    You mean you haven’t prayed about asset securitization? How is one to decide if a SPV is really bankruptcy remote without divine revelation? (Commercial law geek joke over.)

  7. Nate Oman on May 11, 2007 at 2:05 pm

    There does seem to have been some appellate control from SLC with regard to church courts. There were also attempts to impose some sort of uniformity in some areas by policy letters, articles, and public sermons. For example, the FP seems to have tried to develop uniform rules governing the relationship between settlers claiming title to land by virtue of an ecclesiastical grant and settlers claiming title to land by virtue of federal law.

  8. Rosalynde Welch on May 11, 2007 at 2:21 pm

    Nate, I have a few beginner’s questions, if you have the time.

    “The United Orders were the exception rather than the rule in the economic experience of building Zion in the nineteenth century.”

    But what about the economic vision of building Zion—apart from the economic experience of the same? Is it your view that the United Orders were also comparatively unimportant in 19th-century Mormon thought on Zion as city and people (insofar as anything like a body of Mormon thought on that topic can be extracted from Joseph’s revelations and plans)? If there’s a disparity between Mromon thought and Mormon experience on markets, how does one account for that?

    Also, it seems like there’s something odd about pointing to church courts as evidence that the 19th-century Mormon economic experience was pro-market (if indeed that is was you’re arguing; maybe your point is more subtle and I’ve missed it). Weren’t there other, more compelling theological and institutional reasons for establishing church courts? Even if patterns of market exchange benefited as well as a secondary effect, it seems to me that those grounds aren’t the strongest, if one is arguing about Mormon concepts (rather than practices) of market exchange.

  9. Nate Oman on May 11, 2007 at 2:35 pm

    RW: My argument isn’t that 19th century Mormonism was “pro-market.” Rather, my point is that it is a mistake to read the 19th century Mormon experience as market rejectionism. The reasons that church courts claimed such expansive jurisdiction are complicated (and understudied) but they existed at least in part because the church was trying to tweak the substantive content of private law. (They of course didn’t say — or probably think — anything like this explicitly, but they were nevertheless concerned about the substantive application of the law.)

    As for aspirations, I don’t want to suggest that communal economic institutions weren’t central to them at some level. On the other hand, even in the sermons one sees a fair amount of discussion about justice and righteousness within transactions. The point is that there was a lot of decentralized market activity in Mormon communities, and this activity was neither conceptualized nor treated as though it were some sort of religion free zone to be escaped as soon as possible in favor of religious communism. Rather, markets were one of the places in which people built Zion, and this fact was assumed to have implications for how one was supposed to behave in markets.

    My point is that Mormon history has something to say about the functioning of markets other than “Bad; join a United Order.”

  10. Dave on May 11, 2007 at 5:55 pm

    Nice commentary, Nate. It’s worth noting that most economic analysis of markets abstracts out any institutional features of a particular real-world market, including messy details like contracts. But any historical investigation of real-world markets necessarily deals with those institutional details, which often play a key role in explaining how a given market functions (or doesn’t). If, as you claim, Mormon ecclesiastical courts allowed certain markets dependent on long-term contracts or well-defined property rights to function in Utah that did not function elsewhere in the West, that seems like a nice economic history paper or two just waiting to be written.

    It’s worth reading Nathan Rosenberg’s How the West Grew Rich if you haven’t already.

  11. John Williams on May 11, 2007 at 6:09 pm

    It would be good to do more research in this area; I am uncomfortable with the whole United Order thing. I am against centralized planning.

  12. David Brosnahan on May 11, 2007 at 11:55 pm

    The Book of Mormon is pro-market in a way. Market forces were intergal in the conversion of the Lamanites. Remember the Book of Mormon begins by describing the Lamanites as blood-thirsty, idolotrous, lazy people (Enos 1: 20). The first step in their conversion process was Literacy. Amulon and the wiked priests of Noah were set up as teachers among the Lamanites who taught them to read and write and the first concepts of market (Mosiah 24: 1, 4).

    The second important factors were that of economy and industry. Because of the literacy and industry of the Lamanites, their hearts were prepared to hear the words of Alma and the sons of Mosiah. The Book of Mormon even speaks of the concept of free trade (Hel. 6: 8). The forces of education, literacy, market, economy, and industry together with the preaching of the word of God so transformed the Lamanites that later descriptions of the Lamanites referred to them as firm, steadfast, diligent and immovable (3 Ne. 6: 14).

    However, this capitalistic economy served to be only a neccessary but preparatory law. At the coming of Jesus Christ, a United Order was instituted wherein all people had all things in common(4 Ne. 1: 3,10,15-17). A sign that the civilization was headed toward collapse was when certain persons rejected Jesus Christ and went on to rejected his higher economic law. There then began to be inequality again in the land (4 Ne. 1: 25) and the Nephited again reverted to a capitalistic economy (4 Ne. 1: 46).

  13. David Brosnahan on May 12, 2007 at 12:07 am

    And then when the European explorers arrived in the New World, they found many native Americans that fit Enos description:

    “they became wild, and ferocious, and a blood-thirsty people, full of idolatry and filthiness; feeding upon beasts of prey; dwelling in gtents, and wandering about in the wilderness with a short skin girdle about their loins and their heads shaven; and their skill was in the hbow, and in the cimeter, and the ax. And many of them did eat nothing save it was raw meat” (Enos 1:20).

    So, it seems that capitalism and free-trade can be a necessary, transition or preparatory conversion step toward the Lord’s economy, or it can mark a descent of a civilization into ruin and distruction.

  14. Ardis Parshall on May 12, 2007 at 12:26 am

    I don’t follow, David B — capitalism and free trade are required for cleanliness, modesty, and cooking one’s food?

  15. Ugly Mahana on May 12, 2007 at 12:57 am

    I think it is wrong to think that markets are necessarily the polar opposite of the United Order or that the United Order is in some sense a command economy. God’s economy does not incorporate coercion, but rather invites cooperation.

  16. Geoff B on May 12, 2007 at 8:23 am

    I agree with #15 — there is room for both a market-based cooperative society. This is how I see the Millennium, personally.

  17. Ann on May 13, 2007 at 2:47 pm

    Nothing to add, Nate. Just fan mail. Awesome post. Worthy of Marginal Revolution, the world’s greatest blog. The whole thing just made my heart go pitter-pat.

  18. mlu on May 14, 2007 at 12:35 pm

    Good post.

    The tendency to think in either/or choices–either markets or central planning–is hard to overcome. The world lies mostly in between.

    I’ve spent time with both Amish and Hutterites, both of whom operate successfully within markets but who cooperate in varying degrees to organize work and create products.

    The Hutterites are very competitive in a global marketplace with such communal endeavors as chicken farms and carrot factories (growing carrots then lathing them down to those minicarrots that are such a consumer hit). Their first question is not “what will be most profitable” but “what will best preserve our community?”

    The Amish are less communal and more family-centered, but they still preserve a much greater sense that market activities need to undertaken within communal constraints to prevent economic activity from breaking bonds best unbroken.

    Both are communal orders one is free to leave, so their central planning isn’t as problematic as it would be if done by a state or federal government. Indian tribes today are sometimes modeling regional planning to preserve communal values while leaving a fair amount of individual liberty.

    How do we preserve the intelligence of markets while allowing like-minded folks to miantain constraints so that all morality doesn’t degrade to simple measures of profitability?

  19. DKL on May 15, 2007 at 9:26 am

    Interesting post. My best friend in college was a Marxist. If I recall correctly, I eventually got him to admit that Marxism wasn’t likely to improve the quality of anybody’s life, but he still insisted that we have a moral obligation to act (individually and as a society) on Marxist presuppositions. At least he wasn’t a utilitarian.

    It’s worth noting that Nibley’s view of the gospel that’s hostile to markets is pretty soft-headed.

    For my part, I don’t think that there will be collectivism in heaven any more than there will be polygamy.

  20. mlu on May 15, 2007 at 3:20 pm

    I suspect that in heaven the domains that exist outside the market (the public domain, where votes and honors and duties among many things are not for sale) or the private domain (where most things are not for sale) will be huge.

  21. Matt Evans on May 22, 2007 at 12:16 am

    A principle stumbling block in the moral analysis of markets is the assumption that transactions are profit-driven. There are other motivators besides profit, as the success of competing American charities makes clear.

    The key benefit of markets is individualized stewardship (specialized knowledge of holdings). I imagine Zion to be a market where individuals aren’t motivated by profit, pride or consumption, but every man working for the benefit of their neighbor. I know of no moral criticism of markets that is foundationally structural. All moral criticisms of markets are ultimately criticisms of what motivates people to engage the market — criticisms of the desires of our hearts.

WELCOME

Times and Seasons is a place to gather and discuss ideas of interest to faithful Latter-day Saints.