Adam Smith's Authentic Views On Church and State

One of my favorite blogs is Adam Smith's Lost Legacy, written by economic historian Gavin Kennedy. He frequently finds mentions of Adam Smith's "invisible hand" from around the web and then goes to work debunking the abuse of Smith's views. The metaphor, mentioned only twice in passing in The Wealth of Nations, was appropriated by economists over the last half century in support of modern notions of free markets. He wrote an intriguing article on this topic Adam Smith and the Invisible Hand: From Metaphor to Myth.

But Kennedy also helps interpret other aspects of Smith's work. Some economists apply economic principles to the formation of religious organizations and Smith is indentified as having supported a competitive religious marketplace over state run monopolies, as a way to promote religion. Kennedy writes the following in Adam Smith's Authentic Views On Church and State.

... Laurence Iannaccone’s selective inference, upon which Tim Harford draws, that amount to saying that Smith’s asserted that “more competitive religious marketplaces lead to more dynamic churches”, deserves closer examination.

The key emphasis of Smith’s suggestion that a multiplicity of local religious sects which “allowed everyman to chuse his own priest and his own religion as he thought proper” was aimed at breaking to relationship between authorised established state religious churches and the state. ...

Kennedy gives a lengthy quote by Smith and then writes:

... I think these long quotations encapsulate what Smith was about in arguing for a multiplicity of sects, namely that the very competition of each would act as a balm on the otherwise violent, or at least the disturbing clamour of their zealots at the expense of public tranquility.  It was not aimed at causing larger congregations so much, perhaps, as allowing room for the tolerance of a third-sect  of potentially non-religious citizenry, living amidst a large number of religious sects at peace with each other. ...

Understanding Smith's comments in context adds a lot. Interesting stuff!