The Almighty and the Dollar

Economics is often portrayed as the most secular of the social sciences. However, this has never stopped scholars, including economists, from contributing to discussions about the relationship between religion and the economy. Nor has it stopped them from writing great books on the role of religion in the emergence of capitalism.

This question is without exception linked to Max Weber’s Protestant ethics and the spirit of capitalism. Publication in 1905 ushered in a new genre of science, as reflected in books such as RH Tawney’s Religion and the Rise of Capitalism (1926) and Amintore Fanfani’s Catholicism, Protestantism, and Capitalism (1935). What most of these texts have in common is their attempt to establish causality between certain religious beliefs and the emergence of the most transformative economic system in history.

I have long been skeptical of such endeavors. It is notoriously difficult to make links between certain theological positions (which often turn out to be misrepresentations, if not caricatures) and certain economic ideas, institutional forms, or expressions of economic culture. There are numerous counterexamples for any claim that a particular religious entity, ethic, or figure is the crucial ingredient or “decisive” impetus for the development of capitalism. The industrial revolution first took place in Great Britain, a predominantly Protestant nation. The second country to embark on the path of industrial capitalism was Belgium, closely followed by the Rhineland and Silesia in Germany and then northern France – all Catholic regions not particularly known for the influence of the Puritan ethic that Weber described as critical in the emergence of capitalism.

So far it has proven difficult to go beyond broad generalities in this area. There is one case that suggests that Judaism and Christianity’s conception of God as a creative and rational being, its de-divinization of the natural world, its linear view of history, the emphasis on free choice and confidence in the ability of the Reason to know the truth, ultimately changed people’s understanding of themselves and their relationship to the material world in a way that increases economic productivity. However, this is far from being able to say with confidence that the post-Enlightenment economy would have been very different without certain Christian or Jewish ideas or teaching positions.

Even establishing a solid link between an individual’s religious beliefs and economic views is not an easy matter. Numerous factors form our opinion on many topics. To say that a person’s religious belief or background explains why they prefer free markets over socialism, or vice versa, is a dangerous exercise in the face of all other dynamics (family environment, education, political beliefs, self-interest, work experience, philosophy), obligations, etc. ) that are likely at work. If the connection between certain religious beliefs and certain economic positions was so clear, why do people who closely adhere to the same doctrines often hold very different economic positions?

Then there are arguments that religious beliefs influence people’s economic ideas without them even knowing it. Maybe they do. But I have not yet seen anyone delve into these issues beyond cautious, highly educated guesses – or, more often, raw assertions.

Predestined and enlightened

This brings me to Benjamin M. Friedman’s Religion and the Rise of Capitalism (2021). The broad title is misleading as the Harvard political economist focuses primarily on various Protestant teachings and confessions and the ways he believes they are driving certain economic ideas in Britain, colonial America, and the United States have shaped.

Friedman begins with Adam Smith’s Wealth of Nations, which he presents in the context of the philosophical ideas of the late 17th and 18th centuries. He also places Smith’s intellectual revolution against the background of religious beliefs and debates that emerged from the Reformation and that continued to spark controversy across Europe in the centuries that followed. The doctrine of predestination occupies a central place here. After explaining his roots in Scripture and the theology of characters like Augustine, Friedman traces how predestination took shape in John Calvin’s work and how Calvinist treatments on the subject gradually moved through the religious landscape of the British Isles .

It has not necessarily been found that the stress of improving the Enlightenment contradicts the standard ideas of the Calvinists.

Friedman’s reflections on the genesis of Smith’s economic thought and its relationship to philosophical movements of the time are more solid than his account of the theological developments associated with it. Friedman argues, for example, that the main innovations in economic thinking developed by Smith are largely due to the fading of the more traditional Calvinist positions on predestination, which previously had reinforced (presumably) fatalistic and pessimistic views of reality. A weakening of such views opened the door to greater optimism about the potential of humanity to shape the world through the emerging social sciences.

Part of the fading Friedman has thought of reflected the religious atmosphere that enveloped highly educated 18th-century Scots like Smith. This was a world where the intellectually dominant faction of the moderate party of the Church of Scotland, led by Presbyterian clergy like Rev. Francis Hutcheson (Smith’s tutor at the University of Glasgow), Rev. William Robertson, and Rev. Hugh Blair, passed Friedman’s report from more orthodox reform reports on predestination. This meant that people were increasingly open to more hopeful possibilities for the future, as articulated in the wealth of nations.

A major difficulty with this report is that Reformed ideas of predestination (like the doctrines of predestination in all Christian churches) have had increasingly complex relationships with questions of human freedom, natural law, progress in this world, and free will than Friedman suggests. Hutcheson and Blair have certainly articulated an optimistic view of humanity and our capacity for virtue. This did not mean, however, that there was an enormous gap between their views on predestination and those that were relatively common among Presbyterian and Reformed clergy and theologians in northern eighteenth-century Europe.

Nor is it clear that many of those belonging to the more overtly Orthodox wing of the Church of Scotland (known as the People’s Party) and advocating stricter visions of predestination were necessarily closed, let alone hostile, to the new knowledge associated with the Scottish Enlightenment faced. For example, there is no evidence that Rev. John Witherspoon, the prominent leader of the People’s Party and later signatory to the Declaration of Independence, had difficulty absorbing or accepting the main economic messages of books such as the Wealth of Nations. Presbyterian clergymen such as Witherspoon, in his capacity as President of the College of New Jersey (later Princeton University), made a point of incorporating themes and texts from the Scottish Enlightenment into their reforms of college curricula throughout colonial America. At least in these cases it was not found that the stress of improving the Enlightenment contradicts the predestined standard attitudes of the Calvinists.

American religion, American economics, American politics

The second half of Friedman’s book discusses the American experience of Protestant beliefs, doctrines, and practices, and how they shaped the US attitude towards economic issues. Part of Friedman’s argument is that the fading of Orthodox Calvinist doctrines of predestination has left more room for the types of perspectives that have been amenable to economic creativity and growth.

Friedman notes that Protestant clergymen thought and wrote a lot about the economy of 19th century America. Of the 181 founding members of the American Economic Association, 23 were ministers from various Protestant churches. Friedman also notes that doctrines about predestination do not seem to have played an essential part in shaping their economic thinking. So much is true But, as Friedman contends, has this neglect of predestination contributed to more positive views about the ability of business to make the world a better place? If so, how exactly did that happen? Here, too, no meaningful causality has been established.

The final part of Friedman’s book examines why adherents of certain Protestant denominations supported economic policies that range from the social gospel movement to fiscal conservatism, which gained prominence on the American right in the 1960s. Friedman focuses on the political preferences of those Americans who belong to different faiths (at least nominally) and their views on the economic role of the state and whether people can become socially and economically mobile through their individual efforts.

Friedman argues, among other things, that evangelical traditions of preferring voluntary and associative solutions to social and economic problems help explain the views of the small government and the conservative voting patterns of this section of the American population. Again I would suggest that the best we can say is, “Well, maybe.”

Yes, such traditions exist. Perhaps they tended American evangelicals to prefer smaller government and less economic intervention by the state. But how do we judge that? What about the weight of other factors that may have been at work? Perhaps evangelicals, like many Americans of all faiths and none, were simply profoundly unaffected by the social and economic outcomes of the New Deal and the Great Society. Could it be that some evangelical leaders encouraged members of their churches to support fiscal conservative policies under an implicit agreement with other groups to build a political movement that also promotes goals that are close to their hearts, such as turning back Roe v. Defeat Wade and the protection of religious freedom or atheist communism?

The short answer to these and similar questions is maybe or maybe not. In short, despite Friedman’s best efforts, we do not seem to be getting any closer to the truth of such matters. Attempts to evaluate the role of religion versus economic ideas, preferences, and practices all too often confuse the correlation with causality or simply come up with hypotheses that are difficult to prove and easy to dispute. Our understanding of how religious beliefs, doctrines, institutions, and habits affect business life and ideas therefore remains fragile, tentative, and heavily driven by speculation and ideologies rather than compelling evidence. However, the topic remains a bestseller. Ergo, as any economist will tell you, we can expect more from this.

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