Market Morality

The divine underpinnings of Western prosperity

Anthony Robinson (Flickr/anthonyrobinsonphotography)
Anthony Robinson (Flickr/anthonyrobinsonphotography)

Religion and the Rise of Capitalism by Benjamin M. Friedman; Knopf, 560 pp., $35

Over the years, some religious conservatives have strained to attenuate Christianity’s doctrinal role in some of history’s darker moments—the Crusades, the Inquisition, the European witch hunts, pogroms against Jews, and the slave trade. Some have gone so far as to credit Christianity for the core institutions of modern industrialized democracies, including and especially capitalism.

But Harvard political economist Benjamin M. Friedman rejects such Whiggish triumphalism. In his new book, Religion and the Rise of Capitalism, he resurrects a thesis proffered a century ago by English historian R. H. Tawney (in his book of the same title) that linked modern market capitalism to certain aspects of religious thought and behavior.

It was human potential in this world, not predestinarian beliefs about the next world, that drove capitalism, Friedman contends.

Tawney undertook an analysis of German sociologist Max Weber’s highly influential work, The Protestant Ethic and the Spirit of Capitalism (1905), which argued that Calvinism’s doctrine of predestination, in which salvation comes through grace alone, leads believers to search for signs that they are among the elect. Worldly success through work, industry, and the accumulation of wealth was believed to be one such sign, and this, Weber contended, helped fuel the secular institution of capitalism. Tawney countered that it was the spirit of individualism and the ethic of self-help and frugality that drove early capitalism, not Calvinist theology.

A century on, Friedman develops this thesis to its fullest, arguing “that what opened the way for the early economists’ insight into the beneficial consequences of individually motivated initiative carried out in competitive markets was the expanded vision of the human character and its possibilities that the movement away from predestinarian Calvinism fostered.” It was human potential in this world, not predestinarian beliefs about the next world, that drove capitalism, Friedman contends. And it is the ideas from religion, not the personages per se, that Friedman believes “operate over the heads of the participants, guiding both their thinking and their choices in ways they cannot foresee and that we cannot otherwise explain.” Adam Smith and David Hume, for example, were both foundational giants in the genesis of the modern economic theory underlying capitalism, yet Smith was, at best, a deist, and Hume an atheist. Religious doctrines, promulgated by preachers from the pulpit, from which the faithful derived ideas that undergird capitalism, fueled its eventual development. For example, emphasis on human agency that allows for volition and personal responsibility, individual striving for self-improvement, economic self-enhancement as an expression of political liberty, a commitment to economic development nationally and internationally, an equation of economic progress with moral progress, and belief in the efficacy of markets to bring about personal and social goods—all of these bent the arc of the moral universe not only to justice but to freedom and prosperity as well.

Those assumptions, Friedman argues, so drove the behaviors of economic actors that, by 1936, John Maynard Keynes noted in his The General Theory of Employment, Interest and Money:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.

The hypothesis that certain religious beliefs and doctrines formed the spirit of the age that birthed modern capitalism is intriguing, and Friedman, in shaping this compelling narrative, has marshaled considerable historical evidence in its favor. But why, to consider counterexamples, did not all societies in which Christianity is or was the dominant religion show Western forms of capitalism and democracy? The Byzantine Empire, for example, was predominantly Eastern Orthodox Christian from the early 300s CE, and yet for centuries it produced nothing remotely like democracy and capitalism as practiced in Europe and America. Even in Western and Central Europe, which was not only Christian but Western Christian, throughout the late Middle Ages and well into the early modern period (and as late as the 19th century), the only quasi-capitalist, democratic republics were England, Holland, and Switzerland. Obviously other factors were at work, such as geography and chance, that allowed capitalism to develop where and when it did in Europe.

Nevertheless, Friedman’s thesis is much more nuanced than the too-general assertions in other works attempting to credit religion for modern institutions. Clearly, different peoples inculcated different forms of Christian beliefs, even within one denomination. Consider the current divide between “prosperity gospel” Protestants, who believe that financial blessings come from God and hard work, and for whom conspicuous wealth is acceptable, and “social gospel” Protestants, who emphasize their obligation to reduce poverty, income inequality, crime, racism, and child labor, and for whom great wealth, if earned, should not be on public display.

Either way, the link between religious belief in individual agency and resultant economic success is what energizes most American Protestants today. As Friedman notes, whereas 30 percent of Americans believe that luck plays a substantial role in determining one’s income, 54 percent of comparatively nonreligious Europeans hold that view. Although comparing all Americans with nonreligious Europeans is not ideal, given that the United States is by far the most religious industrialized democracy in the Western world, the numbers are worth considering—as is the statistic that only 26 percent of Europeans agree that poor people are poor because they are lazy, compared with 60 percent of Americans. Finally, and to Friedman’s point about agency and prosperity, 71 percent of Americans think that the poor can lift themselves out of poverty through hard work, compared with only 40 percent of Europeans.

Those numbers reflect what is called the “just world” theory of how lives turn out: if you are rich and successful, it is because you are hardworking, intelligent, creative, and willing to take risks, and you have been justly rewarded for your discipline and self-control; if you are poor and unsuccessful, it is because you are lazy, unintelligent, unimaginative, and risk averse, and you have been duly punished for your lack of willpower and self-persuasion. Thanks to Friedman, I can now see that this belief has its origin in the 18th century, when the faithful replaced the fatalism of predestinarianism with the can-do optimism that emerged out of belief in personal autonomy, individual agency, and economic empowerment through human choice and action. Of the many factors that went into the construction of the modern economic worldview undergirding capitalism, Friedman has successfully added religion back into the causal equation.

Permission required for reprinting, reproducing, or other uses.

Michael Shermer is the publisher of Skeptic magazine, a presidential fellow at Chapman University, and the author of Giving the Devil His Due, Heavens on Earth, The Moral Arc, and The Mind of the Market, among other books.


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