Barak has single-handedly provoked a national dialogue over an interesting and important issue about the relationship between antitrust law and religious organizations.  This is scholarly entrepreneurship at its best, so kudos to Barak.  Alas, I’ll have to part company with his position.  Not having the benefit of his expertise on the specifics of  rabbinical hiring, I’ll make more general comments about antitrust and the regulation of religious enterprises.

Modern antitrust law is justified on the assumption that rivalry between firms for the design, manufacture, and distribution of goods and services promotes efficiency by stimulating innovation and lowering prices.  This assumption is true enough as to commercial undertakings that it serves as a useful market ordering principle.  I’m far less confident that the rivalry assumption holds as a general matter as to religious organizations.

On the one hand, competition clearly can be a spur to the performance of religious organizations.  The best empirical evidence for this is the widely different paths of the state-established churches of Europe and the disestablished churches in the United States.  In Europe, the Lutheran, Anglican, Orthodox, and Catholic churches have held near-monopoly positions for hundreds of years.  Funded by the state and granted all manner of valuable privileges and subsidies, they are economically protected—and in north Europe at least almost completely irrelevant.  Secure in its position and unmotivated by competition, the established church had little reason to sharpen its message, adapt to new social realities, or reach new audiences.  By contrast, religion has flourished in America precisely because of its disestablishment.   America has been the most fertile land for development of new religious sects, doctrines, and expressions, in large part because no group could succeed unless it presented an appealing message and worked hard to attract and retain members.  Europeans who often look with a mixture of contempt, amusement, horror, and incredulity at the deep religiosity of the United States would do well to consult economic principles to understand the differences.

On the other hand, it’s far from clear that rivalry between religions is as fundamental to the well-being of society as is rivalry between commercial firms.  I was recently at a conference where someone asked whether the antitrust laws should apply to the Balamand agreement between the Roman Catholic and Eastern Orthodox Church, which ended official Roman Catholic proselytization of the Eastern Orthodox.  The audience laughed.  Given that much of history’s nastiest episodes have come about because of religious rivalry, gestures toward religious conciliation and ecumenicalism are a relief—even if they happen to take the form of market division.

And that’s as to what the antitrust crowd would call “interbrand competition,” rivalry between different religious sects.  If the value of overt rivalry between religious sects is questionable, so much more so for rivalry within religious sects—what the antitrust crowd would call “intrabrand competition.”  Speaking from within just my own tradition—the Christian one—a good bit of the Apostle Paul’s letters to the churches scattered across the Roman world was about the need for unity, the need to avoid internecine strife, the need to stop competing and to be “unified in Christ.”  Since the church was said to be “one body,” the Apostle would likely have found it surprising that social welfare would be maximized if the churches at Ephesus and Corinth competed with each other to attract Timothy as their next pastor.  To put the point rather awkwardly in the language of modern antitrust, in Christian theology the church is a single firm, and a single firm is juridically incapable of conspiring with itself (as the Supreme Court held in Copperweld).  I can’t speak universally, but my sense is that most religions have a similar commitment to internal unity and harmony.

The fundamental problem with applying antitrust law to the non-commercial activities of churches, synagogues, or other religious organizations is that it forces them to adhere to a set of normative commitments that may not be their own.  An ecclesiastical organization may think it’s far more important to ensure order, theological continuity, adherence to tradition, or harmony in allocating its clergy than to secure the optimal short-run deployment of its human capital resources (i.e., its clergy) given the preferences of local congregations.  I don’t know whether or not it is.  But if I were a judge making the decision in an antitrust case, I would be pretty sure that the question wasn’t my call.  Congregational style organizations exist precisely because their members want control over these kinds of decisions; synodic or hierarchical organizations exist precisely because they value order, theological continuity, adherence to tradition, and harmony over local autonomy.

Thus far, my arguments have been purely normative.  Whether modern U.S. antitrust law applies in the rabbinical case Barak has raised is a different question.  I seriously doubt that the framers of the Sherman Act would have contemplated the statute’s application to churches and synagogues.  To be clear, I’m not suggesting that religious organizations are immune from the antitrust laws when they sell goods or services.  If kosher slaughterhouses collude to raise prices for meat, they surely don’t get antitrust immunity just because the collusion is sanctioned by a rabbinical council.  The Supreme Court has held that the antitrust laws apply when “proximate relation to lucre” appears.  Producing and selling food is a commercial transaction; hiring rabbis or pastors is not.  We hope that the core motivation of the transaction has no approximation to lucre whatsoever—that each party to the transaction is maximizing things other than money.  To force the parties to follow the normative goals of the antitrust laws when it comes to ordering their religious activities fails to  respect to the very reasons that churches and synagogues exist.

First, I thank the CLR for offering its space for an extended discussion of what I think is a critically important issue to many synagogues in America: the freedom to select and hire the rabbi they want.  I confess, however, that this is not a terribly complicated or difficult legal issue. America’s rabbis implement rules that are squarely illegal and are well outside any reasonable First Amendment protection.

Let me briefly describe the organization of America’s Jewish denominations.  Synagogues are independent congregations, governed like any independent nonprofit and like Baptist, Quaker, or other congregational churches.  synagogues hire rabbis just as they hire secretaries, and they pay a voluntary dues to national associations in affiliating with particular movements.  When a synagogue wants to hire a rabbi, however, it confronts a tightly organized labor market.  Individual rabbis are prohibited from seeking employment independently, and instead are required to apply only for jobs through their professional associations.  If they act independently, they are expelled from their associations. Meanwhile, congregations seeking to hire a rabbi must enlist exclusively through the hiring processes sponsored by the rabbinical associations and can only interview the individuals the association sends their way.  I have written about this system in greater detail here and here.

By organizing their individual members, the rabbinic associations are able to leverage their collective power against individual congregations.  This strategy among professionals is nothing new.  The American Medical Association has a very checkered past of instituting similar practices, and until federal antitrust officials intervened had expelled any individual member who accepted employment or payment from early HMOs. Several Bar Associations considered it “unethical” to charge low prices for certain rudimentary services.  Associations of professional engineers prohibited negotiations on price, associations of dentists prohibited its members from working constructive,y with insurers and mother professionals, and the list goes on.  Three similarities persist throughout this history: first, that the professionals expelled members who misbehaved, thereby enabling the association to leverage the entire market of its professional members; second, the association used thus leverage to exploit patients, purchasers of legal services, and other consumers; and third, courts and antitrust enforcers concluded that these practices violated the Sherman Act.

The rabbis are no different.  Their collective dominance allows them to pursue full-employment policies, extract higher wages than other clergy, and stifle innovation and entry from would-be entrants.  America’s synagogues suffer as a result.  Synagogues are contracting, unable to gather the financial resources necessary to sustain themselves; and American Judaism remains ossified in organizational structures that may have made sense in the 1950s but currently are unable to address contemporary needs.  These are the classic harms from a cartel.

So, the practices are familiar and the consequences are predictable.  This is precisely the conduct the Sherman Act is designed to prohibit.  That also means the solution is easy too.