The Protestant Ethic and the Spirit of Capitalism
Have you ever thought much about the economic system into which you were born? Would you say there was a ‘spirit’ that moves it?Sociologist Max Weber was fascinated by the influence of thoughts and beliefs in history, and particularly why religion seemed to be a significant factor in determining levels of wealth.
Weber noticed that in the Germany of his time, the business leaders and owners of capital, not to mention the bulk of higher skilled workers and managers, were Protestant as opposed to Catholic. Protestants also had higher levels of educational achievement. The conventional explanation was that, in the 16th and 17th centuries, particular towns and regions in Germany had thrown off the rule of the Catholic church, and in the sudden freedom from a repressive regime controlling every aspect of their lives they were able to pursue their economic interests and become prosperous.
In fact, Weber notes, it was the very laxness of the Church in terms of moral and societal rules that turned the bourgeois middle classes against it. These burghers actually welcomed a tyranny of Protestant control that would tightly regulate their attitudes and behavior. Weber’s question was, why did the richer classes in Germany, Netherlands, Geneva and Scotland, and also the groups that became the American Puritans, want to move in this direction? Surely freedom and prosperity comes with less, not more, religious control?
The capitalist spirit
At the outset of this famous but short book, Weber admits that discussing the ‘spirit’ of capitalism seems pretentious. Forms of capitalism had, after all, existed in China, India, Babylon and the classical world, and they had had no special ethos driving them aside from trade and exchange.
It was only with the emergence of modern capitalism, he suggests, that a certain ethic grew linking moral righteousness with making money. It was not just that Protestants sought wealth more purposefully than Catholics, but that Protestants showed “a special tendency to develop economic rationalism”, that is, a particular approach to creating wealth that was less focused on the gain of comfort than on the pursuit of profit itself. The particular satisfaction was not in the money extracted to buy things (which had always driven money-making in the past), but in ‘wealth creation’ based on increased productivity and better use of resources. Long after all needs had been met, the capitalist did not rest, forever seeking greater profit for its own sake and as the symbol of more profound ends.
Weber had studied non-Christian religions and their relationship to economics. He observed that Hinduism’s caste system, for instance, would always be a big obstacle to the development of capitalism because people were not free to be professionally or socially mobile. The Hindu spiritual ethic was to attempt to transcend the world, an outlook not dissimilar to Catholicism’s creation of monasteries and convents to remove the holy people from the sins and temptations of the world outside. The Protestant ethic, in contrast, involved living with your eyes on God but fully in the world.
The expression of spiritual energies through work and business obviously gave its believers tremendous economic advantage. Instead of being told that business was an inferior quest compared to the holy life, one could be holy through one’s work. Capitalistic enterprise was transformed from being simply a system of economic organization, to a domain of life infused with God.
The Protestant difference
Weber is careful not to say that there was anything intrinsically better about the theology of Protestantism. Rather, the general outlook on life and work that the early Protestant sects – Calvinists, Methodists, Pietists, Baptists, Quakers - drew from their beliefs made them singularly well adapted to modern capitalism. They brought to it:
Many Calvinist writers had the same contempt for wealth that the Catholic ascetics did, but when you looked more closely at their writings, Weber noted, their contempt was for the enjoyment of wealth and the physical temptations that came with it. Constant activity could drive out such temptations, therefore work could be made holy. If it was where your spiritual energies could be expressed, then work could be your salvation.
Thus, the peculiar nature of the early Protestant capitalists emerged: famously focused on their business, and as a result highly successful – yet going to great lengths not to enjoy its fruit. Catholicism had always had a degree of guilt about business and money making, but unrestricted by a bad conscience the Puritan sects became known as reliable, trustworthy and eager to please in their business dealings. This combination of “intense piety with business acumen”, as Weber describes it, became the cornerstone of many great fortunes.
Calling and capitalism
Weber argues that the idea of ‘calling’ only came in with the Protestant Reformation. Martin Luther had discussed it, but it took the Puritan sects to make it central to their way of life.
Calling was related to Protestant theologian Calvin’s idea of ‘predestination’ – that you did not know while you were alive whether you were one of God’s ‘elect’, that is, whether you would live in eternity or be eternally damned. Therefore, you had to appear to be one of the elect, and this meant leading a spotless, well-ordered life of extreme self-control. If you were successful in your work, it was a sign that you were one of the chosen.
This irrational, spiritual concept ironically gave rise to a very rational brand of economic activity. Two of its notable effects were the self-limiting of consumption and the “ascetic compulsion to save”. The outcome, Weber notes, was that capital was freed up for systematic investment, making the rich even richer.
Today we criticize ourselves from being too much a consumerist society, buying and using instead of saving and creating. Weber is worth reading to be reminded of the true spirit of capitalism – that it is not actually about a mad rush to spend and consume, but the creation of wealth through good use of resources. Weber describes this outlook thus:
“Man is only a trustee of the goods which have come to him through God’s grace. He must, like the servant in the parable, give an account of every penny entrusted to him, and it is at least hazardous to spend any of it for a purpose which does not serve the glory of God but only one’s enjoyment”.
Yet he also noted that the modern capitalistic system that Puritanism had helped to create eventually lost its religious impulse. If you had a ‘calling’, it was a meaningful system which could release all your wonderful potential. However, if you did not, it could seem soulless and even oppressive, an ‘iron cage’. There is always a gulf between people who are little concerned with the nature of the work they do as long as it brings in the money and gives them some social standing – and those who must feel that what their work must be fulfilling their potential. It is this group which continually breathes new life into economies and societies. If you have a calling or a sense of duty in the work you do then your performance naturally gains an extra, powerful dimension. With a calling, Weber told us, there was no problem at all in squaring up the spiritual and economic aspects of life.
The Protestant Ethic and the Spirit of Capitalism showed how character traits, strongly shaped by religion, could play a massive role in the creation of wealth. Yet these traits, as outlined in the dot points above, do not necessarily depend on a certain religion for their flowering, and can be witnessed the world over where economies have taken off. The Asian economies that have had such a spectacular economic rise over the last twenty years have only minor Protestant populations, but their industrious, conscientious citizens have much in common with the dutiful and self-denying burghers of 17th century Germany.
Source: 50 Prosperity Classics: Attract It, Create It, Manage It, Share It by Tom Butler-Bowdon (London & Boston: Nicholas Brealey).
“Unlimited greed for gain is not in the least identical with capitalism, and is still less its spirit…But capitalism is identical with the pursuit of profit, and forever renewed profit, by means of continuous, rational, capitalistic enterprise.”
“He avoids ostentation and unnecessary expenditure, as well as conscious enjoyment of his power, and is embarrassed by the outward signs of the social recognition which he receives…He gets nothing out of his wealth for himself, except the irrational sense of having done his job well.”
Born in 1864 in Erfurt (then Prussia), the oldest of seven children, Weber’s father was a liberal politician and bureaucrat whose family was wealthy from linen weaving. His mother was a devout Calvinist.
In 1882 he enrolled in the University of Heidelberg to study law, followed by a period of compulsory military service. Two years later he transferred to the University of Berlin, where in 1889 he obtained a doctorate in law, with a thesis on Roman agrarian history. He became an academic, and his wide-ranging interests in history, economics and philosophy, plus a willingness to comment on German politics, made him a leading intellectual.
However, in 1896 his father died and he entered a long period of depression. The Protestant Ethic and the Spirit of Capitalism was one of his first writings to emerge from this time, initially published as an article in a social science journal. Translated into English in 1930, it became one the most famous and controversial essays in the history field.
After World War One, Weber helped draft Germany’s new constitution and played a role in the founding of the German Democratic Party. He died in 1920, and in 1926 his wife Marianne Weber, a feminist and sociologist in her own right, published a celebrated biography of her husband.
Weber’s writings include The Theory of Social and Economic Organization, The Religion of China: Confucianism and Taoism, The Three Types of Legitimate Rule, On Charisma and Institution Building and Economy and Society.
50 CLASSICS SERIES
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