On April 14, in Freedom from Religion Foundation v. Obama a three-judge panel from the U.S. Seventh Circuit overturned a lower court ruling that a 1998 statute designating the first Thursday in May as the National Day of Prayer is unconstitutional. Meanwhile, earlier this month, in Arizona Christian School Tuition Organization v. Winn, the Supreme Court handed down an important decision allowing an Arizona tax policy that ends up providing financial help to private schools, including religious ones, to continue.

The decisions turn on the notion of legal standing, which requires plaintiffs to show a specific harm or injury. But in both cases the technical issue of standing overlaps with the basic constitutional question of what counts as the establishment of religion, because the injuries claimed amount to being compelled to suffer the consequences of religious establishment.

What’s important is that the courts seem to be shifting direction. In the past any governmentally sponsored expression of religion was held as suspect. Now a way of reasoning is emerging that distinguishes legitimate state encouragement of religion from an illegitimate use of state power to compel consciences.

The Freedom from Religion Foundation v. Obama case provides the clearest example. The circuit court judges make a basic observation: the entirely symbolic federal statute designating a day of prayer imposes no burdens on anyone other than the President, who is required to declare the first Thursday in May a national day of prayer. Therefore, the court tossed out the case, voiding the earlier, lower court decision that determined the statute to be an instance of the establishment of religion.

The Arizona case is more complicated. The plaintiffs in that case made the argument that a tax scheme to provide financial incentives for citizens to contribute to private school tuition funds, including ones limited to students attending religious schools, amounts to a state subsidy of religion—the establishment of religion. The majority decided that the indirect mode of subsidy—tax credits rather than direct appropriations—means that individual Arizona tax payers are not being forced to finance religious schools.

Both of these decisions bring the whole question of religious establishment into useful focus. On matters of religion, the First Amendment of the Constitution reads: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” The two dimensions, labeled the Establishment and Free Exercise clauses by legal scholars, cohere around a basic insight into the distinctive relation between religion and freedom of conscience. It’s an insight articulated in Dignitatis Humanae, the Declaration on Religious Freedom adopted at the Second Vatican Council: “In matters religious no one is to be forced to act in a manner contrary to his own beliefs.”

By prohibiting the establishment of religion, the Constitution protects the consciences of those who do not believe. We cannot be compelled to join or support religious groups. By affirming a right to free exercise, the Constitution protects the consciences of those who do believe. We cannot be restrained from following through on our religious convictions. In neither case can a legislative majority intrude upon the freedom of conscience, either by way of either forcing or prohibiting various forms of religion.

If we are clear that our Constitutional law about religion revolves around freedom of conscience, then we can better understand the reasoning behind the recent court decisions, reasoning that makes an implicit distinction between encouragement and compulsion.

In the Freedom from Religion case, the judges who reversed the lower court are saying, in effect, that we do not have a right to live in a society in which there are no governmentally sponsored endorsements of religion. The establishment clause has a narrower meaning: we have a right of non-participation without penalties or injuries. In the case of something so trivial as a national day of prayer—something I did not even know existed—it’s absurd to imagine that an American citizen’s conscience is being burdened by a compulsory religious observance.

The Arizona case follows the same pattern. The majority opinion relies on a distinction between direct subsidy by appropriation and indirect subsidy by tax credit. When the legislature makes an appropriation, each taxpayer is in a real sense compelled to pay his share. A tax credit works differently, providing an incentive but not compelling participation. One taxpayer might chose to make a donation to a tuition program for religious schools, but another may not. Thus, the most fundamental purpose of the Establishment clause is met: the consciences of unbelievers are not being compelled.

Justice Kagan wrote a forceful dissent that provides helpful clarification of the reasoning of the majority. She points out that tax credits function as acts of government that favor certain kinds of behavior, encouraging them by creating a financial inducement. If we give a tax credit for restoring historical buildings, then we’ll get more restored historical buildings. The same holds for ethanol production, solar energy—and presumably religious schools. Thus Kagan is baffled by the majority. What difference does it make if government encourages religion by way of direct appropriation or tax policy? “The distinction,” she writes, “is one in search of a difference.” In both cases religious schools receive enhanced funding due to state action—and that’s precisely what she sees as prohibited by the establishment clause.

As her focus on the effects of policies throughout her dissenting opinion, suggests that Kagan refuses to countenance a distinction between legitimate encouragement and illegitimate compulsion. By her way of thinking, it’s simply wrong for the state to encourage religious education. Although she does not spell out her reasons, I’m willing to bet that they have their source in a modern liberal mentality that I associate with John Stuart Mill’s influential distinction between political and social liberty.

In On Liberty, Mill observes that a social consensus—what a society encourages—can be more constraining than the laws by which a government compels us. Therefore, if we truly care about freedom of conscience we need to break down the social consensus and create more space for what he called “experiments in living.”

Kagan’s mind seems to run along these lines. Her constant return to the observation that the effects of direct appropriate differ little from indirect tax subsidy—both encourage religion—suggests that Kagan sees any government encouragement of religion as a threat to freedom of conscience. There can be no distinction between governmental encouragement and compulsion, because both reinforce a social consensus in favor of religious observance.

For a long time Kagan’s way of thinking has been the standard way to interpret the establishment clause, leading the courts to rule out many public endorsements of religion. The argument given: symbolism invariably has a coercive effect, and the establishment clause means that we should be free from religious coercion.

It’s fascinating, therefore, to see that in deciding to deny standing to the plaintiffs in the Arizona case the majority opinion tacitly rejects this standard interpretation of the establishment clause, one clearly indebted to Mill’s anxious worries about the coercive power of social norms. No wonder Justice Kagan was flabbergasted. The majority allows that a democratic society may provide inducements that encourage religion, as long as they do not compel the consciences of citizens.

I’m not a constitutional lawyer, but in view of modern Catholic social teaching the Supreme Court’s decision strikes me as just right. As Vatican II recognized, religion is supremely fulfilling for the human person precisely because it engages us at the deepest level—and therefore must be approached with special care, not only to protect the integrity of religious institutions, but also to protect the integrity of our consciences. Our society should encourage religion—but we should do so with careful protections to ensure that our participation remains free and without coercion.

R.R. Reno is Editor of First Things. He is the general editor of the Brazos Theological Commentary on the Bible and author of the volume on Genesis. His previous “On the Square” articles can be found here.