Religion and the Rise of Capitalism

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From The Wall Street Journal:

The biggest cheerleaders for the Enlightenment in our era—Steven Pinker, for example—often imagine it as having occurred in a religious vacuum. They forget, or appear to forget, that Isaac Newton was animated by his Christian belief that God had created an intelligible universe; and they sidestep the Christian foundations of political rights and other key Enlightenment principles.

The story of modern economics, told from this perspective, would point out that Adam Smith, whose treatise “The Wealth of Nations” was acclaimed from almost the moment it appeared in 1776, had little interest in religion and that his mentor and friend David Hume was a fierce skeptic. Smith, resisting the tides of his time, showed that specialization of labor and voluntary exchange are the keys to prosperity, providing benefits for all even if workers, employers and other market participants are motivated mainly by self-interest.

Harvard economist Benjamin Friedman tells a very different story in “Religion and the Rise of Capitalism.” In the decades before Smith’s masterwork, several French theologian-philosophers known as Jansenists (Catholics heavily influenced by St. Augustine) mused about the difficulty of distinguishing self-interested actions from genuine charity. Bernard Mandeville’s satire “The Fable of the Bees” showed vile behavior producing socially beneficial consequences. These ideas were in the “cultural soil,” Mr. Friedman argues. He even suggests that Smith’s benign view of human nature may have been influenced by meals he shared with enlightened clerics in his dining club, the Select Society.

The book’s title is misleading—Mr. Friedman’s narrative is about the evolution of economic thought, not capitalism. He alternates between theological debates and developments in economic thought. On economics he is compelling, on theology disappointingly tendentious. Mr. Friedman unselfconsciously presents as fact a host of skeptical—and highly debatable—claims about Christianity and biblical texts. More important, he relies on a caricatured version of Calvinism, especially the New Testament-based doctrine that God predestines some to be saved, to set up his central claim: The weakening of traditional Calvinism, he contends, spurred a more optimistic conception of human potential, which helped to inspire key innovations in economic thought. 

After Adam Smith, Mr. Friedman shifts his attention to America, where the links between theology and economic thought are more direct. Several of the best-selling treatises in the early 19th century were written by minister-scholars. Rev. John McVickar, professor of moral philosophy at Columbia, and Rev. Francis Wayland, president of Brown, both saw the magic of market pricing as a recipe for prosperity. Mr. Friedman attributes the optimism in American economic thought in this era—which stood in contrast to Thomas Robert Malthus’s gloomy predictions that population growth would cause terrible suffering—to the abundance of land and opportunity, and to the rejection of Calvinism. 

. . . .

As industrialization and urbanization increased, theologians wrestled with the issues of income inequality. Mr. Friedman characterizes one response as a Gospel of Wealth—exemplified by the famous preacher Henry Ward Beecher and by Andrew Carnegie, who defended the accumulation of wealth on religious grounds. He juxtaposes this with the Social Gospel movement that emerged late in the century. Social Gospelers like Washington Gladden and Walter Rauschenbusch called for public ownership of utilities and emphasized social rather than individual sin. Although the Social Gospelers sought social reform, they were optimistic about the nation’s future. Their optimism reflected a theological perspective called postmillennialism. Whereas premillennialists believe Jesus will return before the start of a thousand-year period described in the Book of Revelation and therefore tend to doubt we can cure society’s ills, postmillennials interpret the same book as predicting a thousand-year golden era prior to Jesus’ return and look forward to a new era of equity and security. 

. . . .

By the early 20th century, the story peters out. Economics “has become ever more mature as a discipline,” Mr. Friedman reflects, “and therefore progressively more insulated at the basic conceptual level from influences originating outside the field.” This is a very convenient end date for Mr. Friedman’s thesis, because theology took a much darker turn after the horrors of World War I. The leading theologian of the mid-20th century was Reinhold Niebuhr—unmentioned in this book—who dismissed the Social Gospel movement as an exercise in naiveté. Because sin is pervasive, Niebuhr argued, justice “is a balance of competing wills and interests, and must therefore worst anyone who does not participate in the balance.” Mr. Friedman succinctly and accurately describes the Keynesian revolution during the Depression—John Maynard Keynes’s contention that markets will not adjust effectively if there is inadequate demand for goods and services. “Introducing the concept of aggregate demand,” Mr. Friedman writes, “opened the way for an entirely new dimension of economics: macroeconomics, meaning analysis of the behavior of entire economies.” But religion plays no part, because economics is, in his word, mature.

Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)

PG doesn’t know of any regular commenters who may be tempted, but he’s not excited about receiving any ad hoc attacks on religion in general or particular religions in the comments. People have differing views on the subject.

One of PG’s longest and best discussions of religion in general was one he held some years ago with a fellow attorney and friend who was, and likely still is, an Orthodox Jew who was very serious about his beliefs and, in PG’s non-expert assessment, very knowledgeable about his religion.

PG had and has different religious views than his friend but found a great deal of personal benefit from hearing his friend talk about his religious beliefs and how he applied them in his daily life.

In PG’s observation, many who comment on the impact of religion on society in the United States tend to either overestimate or underestimate its impact.

Again, in his observation, lumping a variety of Christian religions together avoids addressing the difference between such religions and assumes some commonalty of influence between religious sects with differing beliefs.

Additionally, the impact of various religions on the daily behavior of their adherents also varies between Christian churches. Some churches teach doctrines that are easier or harder to follow. Members of some churches may view those co-religionists who do not adhere to major or minor church doctrines differently than members of other churches view adherence or non-adherence by individuals to doctrine.

In addition to lacking expertise on more than a few Christian religions, PG claims no expertise of any worth concerning non-Christian religions. PG also notes that, as a life-long American, he has only the sketchiest of knowledge of how religions, Christian or otherwise, are regarded by those living elsewhere.

PG will venture to opine that religions in their many and various forms have had and continue to have a significant collective impact on human thought and behavior throughout the world.

He also opines that strong systems of values and belief, whether they call themselves religions or not, can have and have had a significant impact on human thought and behavior in the past and present.

Mao, Lenin, Stalin were each crusaders for their own beliefs.