by Niall Ferguson
If you were a wealthy industrialist living in Europe in the late nineteenth century, there was disproportionate chance that you were a Protestant. Since the Reformation, which had led many northern European states to break away from the Roman Catholic Church, there had been a shift of economic power away from Catholic countries like Austria, France, Italy, Portugal and Spain and towards Protestant countries such as England, Holland, Prussia, Saxony and Scotland. It seemed as if the forms of faith and ways of worship were in some way correlated with people’s economic fortunes. The question was: What was different about Protestantism? What was it about the teaching of Luther and his successors that encouraged people not just to work hard but also to accumulate capital? The man who came up with the most influential answer to these questions was a depressive German professor named Max Weber – the father of modern sociology and the man who coined the phrase ‘the Protestant ethic’.
Weber was a precocious youth. Growing up in Erfurt, one of the great strongholds of the German Reformation, the thirteen-year old Weber gave his parents as a Christmas present an essay entitled: ‘About the Course of German History, with Special Reference to the Positions of the Emperor and the Pope.’ At the age of fourteen, he was writing letters studded with references to classical authors like Homer, Virgil, Cicero and Livy and already had an extensive knowledge of philosophers like Spinoza, Kant and Schopenhauer. His early academic career was one triumph after another: At the age of 22 he was already a qualified barrister. Within three years he had a doctorate for a thesis on ‘The History of Medieval Business Organizations’ and at 27 his Habilitation on ‘Roman Agrarian History and its Significance for Private Law’ secured him a lectureship at the University of Berlin. He was appointed Professor of Economics at Freiburg at the age of 30, winning fame and notoriety for his inaugural lecture, a call for a more ambitious German imperialism.This arc of academic ascent was painfully interrupted in 1897, when Weber suffered a paralyzing nervous breakdown, precipitated by the death of his father following a bitter row between them. In 1899 he felt obliged to resign his academic post. He spent three years recuperating, in the course of which he became increasingly preoccupied with religion and its relationship to economic life. His parents had both been Protestants; indeed, his maternal grandfather was a devout Calvinist, while his other grandfather was a successful linen merchant. His mother was a true Calvinist in her asceticism; his father, by contrast, was a bon vivant, living life to the full thanks to an inherited fortune. The link between religious and economic life was the puzzle at the heart of Weber’s own existence. Which of his parents had the right attitude to worldly wealth?
Until the Reformation, Christian religious devotion had been seen as something distinct from the material affairs of the world. Lending money at interest was a sin. Rich men were less likely than the poor to enter the Kingdom of Heaven. Rewards for a pious life lay in the after-life. All that had changed after the 1520s, at least in the countries that embraced the Reformation. Reflecting on his own experience, Weber began to wonder what it was about the Reformation that had made the north of Europe more friendly towards capitalism than the South. It took a transatlantic trip to provide the answer.
In 1904 Weber travelled to St Louis, Missouri, to attend the Congress of Arts and Sciences at the World Fair. The park where the World Fair was held covered more than 200 acres and yet still seemed to overflow with everything that American capitalism had to offer. Weber was dazzled by the shining lights of the Palace of Electricity. The Alternating Current King, Thomas Edison himself, was on hand, the personification of American entrepreneurship. St Louis was brimming with marvels of modern technology, from telephones to motion pictures. What could possibly explain the dynamism of this society, which made even industrial Germany seem staid and slow moving? Almost manically restless, Weber rushed around the United States in search of an answer. A caricature of the absent-minded German professor, he made a distinct impression on his American cousins Lola and Maggie Fallenstein, who were especially struck by his rather bizarre outfit: a checked brown suit with plus-fours and brown knee-socks. But that was nothing compared with the impression America made on Weber. Travelling by train from St Louis to Oklahoma, passing through small Missouri towns like Bourbon and Cuba, Weber finally got it:
This kind of place is really an incredible thing: tent camps of the workers, especially section hands for the numerous railroads under construction; ‘streets’ in a natural state, usually doused with petroleum twice each summer to prevent dust, and smelling accordingly; wooden churches of at least 4-5 denominations. … Add to this the usual tangle of telegraph and telephone wires, and electrical trainlines under construction, for the ‘town’ extends into the unbounded distance.
The little town of St James, about 100 miles west of St Louis, is typical of the thousands of new settlements that sprang up along the railroads as they spread westwards across America. When Weber passed through there a hundred years ago, he was amazed at the town’s huge number of churches of almost every denomination. With the industrial extravaganza of the World Fair still fresh in his memory, Weber began to discern a kind of holy alliance between America’s material success and its vibrant religious life.
When Weber returned to his study in Heidelberg he wrote the second part of his seminal two-part essay, ‘The Protestant Ethic and the Spirit of Capitalism’. It contains one of the most influential of all arguments about Western civilization: That its economic dynamism was an unintended consequence of the Protestant Reformation. Whereas other religions associated holiness with the renunciation of worldly things – monks in cloisters, hermits in caves – the Protestant sects saw industry and thrift as expressions of a new kind of hard-working godliness. The capitalist ‘calling’ was, in other words, religious in origin:
‘To attain … self-confidence [in one’s membership of the Elect] ‘intense worldly activity is recommended … Christian asceticism … strode into the market-place of life’. ‘Tireless labour’, as Weber called it, was the surest sign that you belonged to the Elect, that elite minority of people predestined by God for salvation. Protestantism, he argued, ‘has the effect of liberating the acquisition of wealth from the inhibitions of traditionalist ethics; it breaks the fetters on the striving for gain not only by legalizing it, but … by seeing it as directly willed by God’. The Protestant ethic, moreover, provided the capitalist with ‘sober, conscientious, and unusually capable workers, who were devoted to work as the divinely willed purpose of life’.
For most of history, men had worked to live. But the Protestants lived to work. It was this work ethic, Weber argued, that gave birth to modern capitalism, which he defined as ‘sober, bourgeois capitalism with its rational organisation of free labour’.
Weber’s thesis is not without its problems. He saw ‘rational conduct on the basis of the idea of the calling’ as ‘one of the fundamental elements of the spirit of modern capitalism’. But elsewhere he acknowledged the irrational character of ‘Christian asceticism’: ‘The ideal type of the capitalistic entrepreneur … gets nothing out of his wealth for himself, except the irrational sense of having done his job well’; he ‘exists for the sake of his business, instead of the reverse’, which ‘from the view-point of personal happiness’ was once again ‘irrational’. Even more problematic was Weber’s scathing sideswipe at the Jews, who posed the most obvious exception to his argument. ‘The Jews’, according to Weber, ‘stood on the side of the politically and speculatively oriented adventurous capitalism; their ethos was … that of pariah-capitalism. Only Puritanism carried the ethos of the rational organisation of capital and labour.’ Weber was also mysteriously blind to the success of Catholic entrepreneurs in France, Belgium and elsewhere. Indeed, Weber’s handling of evidence is one of the more glaring defects of his essay. The words of Martin Luther and the Westminster Confession sit uneasily alongside quotations from Benjamin Franklin and some distinctly unsatisfactory data from Baden about Protestant and Catholic educational attainment and income. Later scholars, notably the British economic historian R.H. Tawney, have tended to cast doubt on Weber’s underlying argument that the direction of causation ran from religious doctrine to economic behaviour. On the contrary, much of the first steps towards a spirit of capitalism occurred before the Reformation, in the Catholic regions like Northern Italy; while both Luther and Calvin expressed distinctly anti-capitalist views. At least one major empirical study of 276 German cities between 1300 and 1900 found ‘no effects of Protestantism on economic growth’, at least as measured by the growth of city size. Cross-country studies have arrived at similar conclusions.
Nevertheless, there are reasons to think that Weber was on to something, even if he was right for the wrong reasons. Because of the central importance in Luther’s thought of individual reading of the Bible, Protestantism encouraged literacy, not to mention printing, and these two things unquestionably encouraged economic development (the accumulation of ‘human capital’) as well as scientific study. This proposition holds good not only in Prussia but also all over the world. Wherever Protestant missionaries went, they promoted literacy, with measurable long-term benefits to the societies they sought to educate; the same cannot be said of Catholic missionaries prior to Vatican II. It was the Protestant missionaries who were responsible for the fact that school enrollments in British colonies were, on average, four to five times higher than in other countries’ colonies. In 1941 over 55 per cent of people in what is now Kerala were literate, a higher proportion than in any other region of India, four times higher than the Indian average and comparable with the rates in poorer European countries like Portugal. This was because Protestant missionaries were more active in Kerala than in other parts of India. Where Protestant missionaries were not present (e.g. in Muslim regions or protectorates like Bhutan, Nepal and Sikkim), British colonies were not measurably better educated. (The level of Protestant missionary activity also proves to be a very good predictor of post-independence economic performance and political stability.) Recent surveys of attitudes also show that Protestants have unusually levels of mutual trust, an important precondition for the development of efficient credit networks. More generally, religious belief (as opposed to formal observance) of any sort appears to be associated with economic growth, particularly where concepts of heaven and hell provide incentives for good behaviour in this world. This tends to mean not only hard work but also thrift, honesty, trust and openness to strangers, all economically beneficial traits.
Religions matter. In earlier chapters, we saw how the ‘stability ethic’ of Confucianism played a part in imperial China’s failure to develop the kind of competitive institutional framework that promoted innovation in Western Europe – even if China was far from the static, unchanging society described by Weber in The Religion of China, Confucianism and Taoism (1916). We saw how the power of the imams and mullahs snuffed out any chance of a scientific revolution in the Islamic world. And we saw how the Roman Catholic Church acted as a brake on economic development in South America. But perhaps the biggest contribution of religion to the history of Western civilization was this. Protestantism made the West not only work, but also save and read. The Industrial Revolution was indeed a product of technological innovation and consumption. But it also required an increase in the intensity and duration of work, combined with the accumulation of capital through saving and investment. Above all, it depended on the accumulation of human capital. The literacy that Protestantism promoted was vital to all of this. On reflection, we would do better to talk about the Protestant word ethic.
The question is: Has the West today – or at least a significant part of it – lost both its religion and the ethic that went with it?
Excerpted from the book Civilization: The West and the Rest by Niall Ferguson