Moral codes can be produced and enforced through markets or through organizations. In particular, Catholic theology can be interpreted as a paradigm of the organizational production of morality. In contrast, the dominant moral codes are now produced in something resembling more a market.
The organizational character of Catholicism comes from its centralized production and enforcement of the moral code by theologians and priests and the mediation role played by the Church between God and believers. (…)
Instead of centralized decisions by popes, councils, and theologians, the moral code is now written by millions of human decentralized interactions of all sorts. Now that there are thousands of gods, including the environment, mediation has also been transformed or disappeared. These market features make for lesser specialization. Most morality producers also play many other functions, from teaching to advertising.
Thinking about the production of moral norms in these terms certainly seems like a useful way to approach the problem, but I’m not so sure production is really so decentralized today.
My historical knowledge is weak, but I doubt that the moral authority of the Church was anywhere near complete in even the most ardently Catholic societies. The Church claimed a monopoly on morality, and many people went along with it to a greater or lesser degree. This seems pretty close to what government does today. The state doesn’t simply create laws aimed at resolving the inevitable conflicts among people, but attempts to influence public opinion through various types of propaganda – telling people not to smoke or get drunk and dance, for example.
Of course, government is the emergent (and I would say dysfunctional) product of the decentralized interaction of many individuals, rather than a unitary decision-making entity. I would suggest, though, that this is also true of the Catholic Church. The church claims to derive its authority from God, but the economics of religion teaches us that churches do not survive unless they meet the needs of practitioners. The Catholic Church would not have become so dominant in so many places if it weren’t attuned to the preferences of many people, even if its later market power increased the slack available to the clergy.
Church and state both claim a monopoly over legitimate morality, and have often done so quite successfully. Catholics in Ireland and Italy will almost universally pay lip-service the religious diktat against birth control, for example, and it will affect their behaviour somewhat. The same seems to be true of contemporary government diktats against smoking or getting drunk. The moral scope of the government in Western democracies is probably less than that of the Catholic Church at various times and places, but that scope is endogenous and increasing.