costlyre
30Nov/100

Is education overtaking spiritualism? $15.5 billion says yes.

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So we expend $220 billion annually to soothe our spirits, a little more than $70 billion of which is in direct contributions to religious organizations; these seem like large numbers, but they’ve been presented within a limited context. It’s worth investigating how our spiritual spending is put to use.

In part it flows into the physical infrastructure of spirituality: the temples, the cathedrals, the apses and spires, that Wizard of Oz- looking-thing that looms over the interstate as you drive into DC.1 For quite some time we (and by we I mean humanity) have been happy to devote significant dollar-volumes (or ducat-volumes) towards constructing structures that might concentrate the attentions of the pious (and perhaps the attentions of the higher powers towards which they're sending their prayers): the ancient Greeks spent the equivalent of $1.5 billion to erect the Parthenon; a whole series of popes dished out $2.2 billion in building St. Peter’s.2

To fast forward to the present day, while Houston’s Lakewood Church, which caters to the largest congregation in America, is certainly no St. Peter’s Basilica (and Joel Osteen is certainly no Pope Innocent X), the congregants have invested a fair amount of money in the place (just north of $80 million between renovations and purchasing the property). And that's just one church (albeit a large one.3 ) But how much money has gone into these facilities in aggregate? Is it possible (or even moral) to put a monetary value on an entire nation's housing stock of worship?

Well, luckily enough for us, the US Bureau of Economic Affairs believes that it is and has been kind enough to aggregate the investment dollars devoted to this spiritual infrastructure and, further, to provide estimates for the replacement value of the religious structures currently in place.4 It turns out that the religious facilities strewn throughout the United States are worth a little less than $300 billion.5 Put another way, for every $60 invested in our domiciles we have a little more than $1 invested in our spiritual centers. To provide another point of comparison, one could imagine that each of the 45 million church-attending households in the US instead owned a $6,000 private chapel.

But is this a lot?

Perhaps it would be helpful to compare to another sort of institution that we have relied upon for our uplift and betterment: the school.

As Bush II ascended to power some believed that it signaled a return to the spiritual in our country, that a Christian nation would again rise and that science and education were being prepped for sacrifice at the altar of religious conviction. And that may well have occurred. But if it did, the sacrificial altar was perhaps located inside a new schoolhouse rather than in a church proper:

The dollar value of the educational buildings in the United States had never exceeded the dollar value of the religious structures until the first year of W’s presidency.

To put some meat on that statement: From the end of World War II until 1967, there was between $1.50 and $1.60 of fixed capital in churches, chapels and cathedrals (and synagogues and temples &c &c) for every dollar in educational facilities. The ratio declined and then stabilized again remaining at 1.4 for much of the ‘70s. Beginning in 1980 fixed investment growth in education began to outpace religious fixed investment and by 1995 for every $1 in educational structures there existed only $1.20 worth of religious cathedrals. By 2001 educational buildings were more valuable than spiritual buildings. And in 2009 for every $0.74 of churches there is a dollar's worth of classrooms.

We are heathens.

Or are we?

It’s not as if church spending has fallen off a cliff; to borrow a statistic from a few paragraphs supra, if every church-attending household has the equivalent of a $6,000 private chapel, then each of the US’s 76 million students only enjoys a $4,900 private classroom.

Moreover, an investigation of the data (pictured) suggests that, rather than any notable decline in religious investment (which averaged $5.9 billion in the 80s, $6.6 billion in the ‘90s and $8.7 billion in the aughts),6 there has simply been faster acceleration in educational investment (which went from $5.2 billion in the ‘80s, to $9.2 billion in the nineties, to $15.5 billion in the naughties).

Only in the past two decades has investment in educational facilities consistently outpaced investment in religious facilities.

There are presumably a number of factors driving these trends, but a few notable possibilities come to mind: baby boomers are giving back to their almae matres (with some anticipated quid pro quo as their teenage sons’ and daughters’ applications come sliding across the admissions officer’s desk); the income gap between those that have been privately educated and/or have graduated from institutions of higher learning and those that have not has widened, and so educational institutions simply have a larger pool of incomes to slurp from than their religious counterparts; the trend toward mega-churches has led to capital efficiencies on the religious side (per parishioner it’s cheaper to build a 50,000 person chapel than a 50 person chapel); new investment in churches has increasingly taken place in exurbs whereas educational investment has concentrated in denser and higher cost areas; &c.

I’m relatively confident that all of the above are contributing factors to this (relatively new) share shift; however, they are also all endemic of a larger and more fundamental driver impacting economic flow: educational facilities increasingly spur more economic productivity than their religious counterparts.7 And the global economy tends to recursively shift resources towards those institutions that will enhance economic productivity (and, conversely, shift marginally fewer resources towards those institutions with diminishing prospects of providing a return) even when the entities involved are not profit-generating institutions; (it’s no coincidence that the best schools also have the largest endowments.)  In short, educational institutions exhibit all of the hallmarks of a growth industry: compounding investment dollars, strong pricing power, and still lots of inefficiencies to attack. While religious institutions -- a sector in consolidation, with recent declines in investment flows, beset by scandal and infighting -- they look to me like the incumbent, perhaps being displaced.

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  1. The DC Chapel []
  2. Prices converted to 2010 USD from Talents and Ducats respectively. []
  3. See pic []
  4. See the fixed asset tables at their site. []
  5. This figure has dropped to $275 billion in 2009 from $299 billion in 2008 not because the buildings wore out very quickly (there was only $5ish billion in depreciation) but because of construction cost deflation (which is to say if you set out to rebuild all of the religious structures in the United States it would only cost you $275 billion to do so in 2009 versus a little under $300 billion in ’08 and a little over $300 billion in ’07). []
  6. Dollar figures, as always, are inflation adjusted. []
  7. I know that this may sound incredibly uncontroversial and so is probably worth exploring on its own merit because it’s actually more knotty than it at first appears; I’ll offer only this as a teaser: consider for a moment the quantity of business deals that have probably been struck, the number of jobs that have been offered, the sheer dollar volume of economic activity that must have and still does occur as spurred by relationships developed in the shared space of organized spirituality; is that volume declining, and why? Separately, one could even argue that business school itself is little more than a sort of church service organized around a wholly separate God. []
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