Protestantism and capitalism relationship trust

The Protestant Ethic and the Spirit of Capitalism

If any inner relationship between certain expressions of the old Protestant spirit and with the modem campaign against the trusts, and can no more justly be. Key words: Economic ethics; Reformation; spirit of capitalism; contributively justice; . concerning the causal relationship between Protestantism and Capitalism. "[U]ndermined fatalism and trust in magic and, in the long run, stimulated the spread of .. systematic study of the Protestantism-capitalism relationship.

Second, there are these complications in defining precisely what are regarded ascauses, and what are the effects. In terms of the Weber Thesis, we need to be clearer both on what was to be considered the nature of religion and religious beliefs, and also what exactly we are trying to explain when we discuss capitalism.

Third, is the manner by which the cause and effect can be linked, whether we believe they can be related by other than a pattern involving direct causation, and whether the same cause will yield a different effect or, alternatively, the same effects can be achieved with a broader range of causes. Variants of all these types of criticisms have been applied to The Protestant Ethic, and much more space than that available here would be needed to provide a complete examination of this debate.

Presumably those more sympathetic to modernism and capitalism would find a relationship more acceptable. Weber, himself, believed that capitalism generated important problems, and he did not believe that capitalist growth could continue indefinitely. The decline of capitalism was anticipated because of the development of rigid institutions and the rise of a bureaucratic state, posing a threat to political freedom as well as causing economic stagnation.

General Economic History is an overall survey of economic developments,from ancient times to the modern world.

protestantism and capitalism relationship trust

It provides summary statements insome cases, revisions of key arguments found in earlier writings, useful descriptions of the pattern of western economic development, and insightful brief views of major economic changes that are sometimes detailed in other writings. Its major contributions include the claim that forms of what could be considered capitalism had long existed, leading to earlier accumulations of wealth, but it was only with the development of capital accounting and rational commerce, and with the need for rules and trust that arise when there are continued transactions among individuals, that the modern form of capitalism emerged in Western Europe.

This development was unique to that particular geographic region. Weber gave some attention to the importance of non-pecuniary tastes in actions within the economy. Following a strand of argument raised by a member of the Older German Historical School, Karl Knies, he argued that people did not necessarily profit-maximize at all times. Non-economic factors play a role in human behavior. Weber believed that it was certainly possible that there may be less extensive attempts at the maximum degree of maximization within a market economy, at least as a short term goal, than in other forms of social organization.

To Weber, the market system was not an idealized means of solving social problems. He recognized the conflicts that existed within the market system, suggesting that price and market outcomes should be seen as the result of conflict, since people disagreed over the use of the economic surpluses that could exist. But to Weber the market, with its various difficulties, seemed to provide a reasonable way to resolve conflicts and to allocate resources with some limitations on destruction and loss of freedom.

Prolonged growth, rather, was the result of growth of the mass market which arose with capitalism, and which lowered prices permitting the broad masses to imitate the consumption patterns of the rich.

One of the major substantive legacies of Weber is his description of the characteristics of modern capitalism. Weber regarded capitalism as an evolving system, so that present-day capitalism has some features rather different from those at the onset of modern capitalism.

He did not, however, regard commercial and capitalist activity as something new in the modern era, since such behavior had existed in most societies in earliertimes, as well as in other societies considered non-capitalist at the present time. Under modern capitalism, however, activities of a somewhat different pattern and nature occurred from those in the other forms of capitalism. The principal characteristics of modern capitalism that Weber points to are the centrality of rationality and those measures that help to implementrational behavior.

The emergence of a rationally organized formally free labor market to replace the various forms of labor institutions that had characterized earlier forms of capitalism, the development of rational law and administration in large firms and governments, the evolution of forms of rational bookkeeping and capital accounting, and the growth of bureaucracies in the public and private sectors to order the behavior of the larger-scale units in economic society — all these represent those factors developed out of Protestantism which permit continued capitalist accounting procedures to separate business and household capital in the interests of determining growth.

Other accounting procedures of the modern capitalist economy include the use of interests of rational decisionmaking, and the increased number of business leaders whose leadership is based upon their personal charisma, not on either traditional or legal influences.

His general questions on the role of changing institutions and human behavior have again come into vogue, as has his interest in the law, legal rationality, and the process of historical development.

Thus, in a number of ways, Weber reads very much like a present-day economic historian, a development that has taken place after a long period in which Weber was relatively ignored by economic historians. There have been several publications of The Protestant Ethic and The Spirit of Capitalism since the first English-language translation in All use the original translation by Talcott Parsons, differing only in their introductions.

Scribner, and foreword by R. Routledge, introduction by Anthony Gidden - Los Angeles: Roxbury Publishing Company, introduction by Stephen Kalberg. A recent analysis of the work of Weber is in Stephen P. Turner, editor,Cambridge Companion to Weber Cambridge: Civilization and Capitalism, 15thth Century.

protestantism and capitalism relationship trust

Harper and Row French edition published in Europe in the Russian Mirror: Four Lecturesin Economic History. A Theory of Economic History. The Wealth and Poverty of Nations: The Lever of Riches: Technological Creativity and Economic Progress. Institutions, Institutional Change and Economic Performance. The Rise of the Western World: A sense of calling and an ascetic ethic applied to laborers as well as to entrepreneurs and businessmen.

Nascent capitalism required reliable, honest, and punctual laborwhich in traditional societies had not existed That free labor would voluntarily submit to the systematic discipline of work under capitalism required an internalized value system unlike any seen before Calvinism provided this value system Life was to be controlled the better to serve God.

protestantism and capitalism relationship trust

Impulse and those activities that encouraged impulse, such as sport or dance, were to be shunned. External finery and ornaments turned attention away from inner character and purpose; so the simpler life was better. Excess consumption and idleness were resources wasted that could otherwise glorify God.

In short, the Protestant ethic ordered life according to its own logic, but also according to the needs of modern capitalism as understood by Weber. An adequate summary requires several additional points. First, Weber virtually ignored the issue of usury or interest. Second, Weber magnified the extent of his Protestant ethic by claiming to find Calvinist economic traits in later, otherwise non-Calvinist Protestant movements.

Third, Weber thought that once established the spirit of modern capitalism could perpetuate its values without religion, citing Benjamin Franklin whose ethic already rested on utilitarian foundations. Critiques of Weber Critiques of Weber can be put into three categories. First, Weber might have been wrong about the facts: Second, Weber might have misinterpreted Calvinism or, more narrowly, Puritanism; if Reformed teachings were not what Weber supposed, then logically they might not have supported capitalism.

On the first count, Weber has been criticized by many. During the early twentieth century, historians studied the timing of the emergence of capitalism and Calvinism in Europe. However, he finds much reason to discredit a cause-and-effect relationship.

The Protestant Ethic and the Spirit of Capitalism - Wikipedia

Sometimes capitalism preceded Calvinism Netherlandsand sometimes lagged by too long a period to suggest causality Switzerland. Sometimes Catholic countries Belgium developed about the same time as the Protestant countries.

Even in America, capitalist New England was cancelled out by the South, which Samuelsson claims also shared a Puritan outlook.

protestantism and capitalism relationship trust

Weber himself, perhaps seeking to circumvent such evidence, created a distinction between traditional capitalism and modern capitalism. The view that traditional capitalism could have existed first, but that Calvinism in some meaningful sense created modern capitalism, depends on too fine a distinction according to critics such as Samuelsson. Nevertheless, because of the impossibility of controlled experiments to firmly resolve the question, the issue will never be completely closed.

The second type of critique is that Weber misinterpreted Calvinism or Puritanism. That is, God ordered all of life and society, and Puritans felt obliged to act on His will. Samuelsson, in a long sectionargued that Puritan leaders did not truly endorse capitalistic behavior. Rather, they were ambivalent. Given that Puritan congregations were composed of businessmen and their families who allied with Puritan churches because both wished for less royal control of societythe preachers could hardly condemn capitalism.

Protestantism and economic ethics: An example for the interaction of faith and fabric?

But this, Samuelsson makes clear, was hardly a ringing endorsement of capitalism. Criticisms that what Weber described as Puritanism was not true Puritanism, much less Calvinism, may be correct but beside the point. Thus, the Protestant ethic as described by Weber apparently would have been a deviation from pure doctrine. But such mistaken doctrine, if widespread enough, could still have contributed to the formation of the capitalist spirit.

Furthermore, any misinterpretation of Puritan orthodoxy was not entirely the fault of Puritan laypersons. Puritan theologians and preachers could place heavier emphasis on economic success and virtuous labor than critics such as Samuelsson would admit. Although these exhortations were usually balanced with admonitions to use wealth for the common good, and not to be motivated by greed, they are nevertheless clear endorsements of vigorous economic behavior.

Puritan leaders may have placed boundaries around economic activism, but they still preached activism. Frey has argued that orthodox Puritanism exhibited an inherent tension between approval of economic activity and emphasis upon the moral boundaries that define acceptable economic activity.

A calling was never meant for the service of self alone but for the service of God and the common good. That is, Puritan thinkers always viewed economic activity against the backdrop of social and moral obligation.

Perhaps what orthodox Puritanism contributed to capitalism was a sense of economic calling bounded by moral responsibility. Finally, whether Weber misinterpreted Puritanism is one issue. Whether he misinterpreted capitalism by exaggerating the importance of asceticism is another.