A letter in this morning's Tulsa World illustrates perfectly what a free market looks like:
The reason there are so many churches is because not every one can agree on doctrine and definitions.The First Amendment's guarantee of religious freedom - which means: freedom from government interference in religion - enables people who follow different religions and even those who disagree about the interpretation of a single religion to go their own way and even start their own churches if they so choose. And the Amendment's prohibition against government interference forces them to stand or fall on their own two feet and by their own effort. This also leaves believers free to pick and choose which interpretation they will accept and which church they will go to.
Make no mistake: this is a market and there is competition. I can't help but wonder if it's this competition between religions and denominations that's kept this country from being more religious than it already is - in concert with the freedom to choose not to be religious, of course.
And no, I haven't forgotten that government support for religious charities is muddying the waters, and, increasingly, more than that. Religion is not immune to cronyism, protectionism, socialism and worse: which is why the Founders wrote the First Amendment.