Why Max Weber Was Wrong

Max Weber is justly famous for many things, but especially for having developed a theory about the relationship between capitalism and religion. The influence of The Protestant Ethic and the Spirit of Capitalism remains considerable, not least because it has become a staple of sociological literature on the subject.

Based on lectures he gave during a visit to America in 1904, Weber’s Protestant Ethic maintained that capitalism’s nature had to be understood as more than just producing and exchanging goods in a particular way (e.g., free exchange) within a particular institutional setting (limited government, etc.). At its heart, Weber insisted, capitalism was a state of mind: an outlook that involved, among other things, the subordination of emotion, custom, tradition, folklore, and myth to the workings of instrumental reason.

The real controversy begins with Weber’s argument that the decisive linkage of this form of rationality with economic practices occurred primarily in Europe’s predominantly Protestant areas. He was particularly thinking of countries such as England and the Netherlands, which were home to large numbers of Puritans and Calvinists, many of whom migrated to North America in the seventeenth century. These forms of Protestantism, Weber posited, ingrained the belief among their adherents that they should avoid superficial hobbies, games, and entertainment. Instead, Christians should commit themselves totally to whatever calling to which God had summoned them. Weber believed that these forms of Protestantism, especially their central doctrine of predestination, helped to foster the type of focused minds and disciplined work habits that are essential for market economies.

According to Weber, these ascetic Protestants didn’t believe it was possible to do good works to attain heaven in the next world. Either you were among the elect, or you weren’t. Weber interpreted Calvin as suggesting that one indication of election was the acquisition of wealth. It followed—or so Weber’s theory went—that the accumulation of wealth encouraged people to see themselves as destined to be saved. This, in turn, fostered a spirit that encouraged believers to grow ever-greater amounts of wealth.

On the surface, Weber’s proposition makes considerable sense. After all, many culturally Catholic countries such as Portugal and Spain—not to mention almost all Latin American nations—have lagged behind other Western nations in terms of economic development. More careful analysis of Weber’s claims, however, soon reveals them as less-than-adequate.

The accuracy, for instance, of Weber’s interpretation of Calvinist theology is open to question. The Westminster Confession—the profession of faith that dominated Calvinist and Presbyterian theology from the sixteenth century onward, and on which Weber drew in developing his ideas—indicates that the notion of “calling” in Puritan and Calvinist thinking is difficult to reconcile with the meaning given to it by Weber. The Confession clearly distinguishes between each person’s worldly vocation and his ultimate calling. Moreover, the earthly calling of each individual is not considered to constitute a positive or negative contribution to that person’s salvation.

The Westminster Confession also stresses that believers must ensure that their earthly vocation does not distract them from pursuing their heavenly calling. Weber, by contrast, seems to conflate the two. And on the subject of vocation itself, the Confession insists that Christians follow that calling in which they would be most serviceable to God rather than that which brought them “the most honor” in the world. Nothing in the text suggests any particular emphasis on commerce, let alone the idea that acquiring material wealth was somehow a sign of being among the elect.

Second, the empirical evidence disproving Weber’s connection between Protestantism and the emergence of capitalism is considerable. Even Catholic critics of modern capitalism have had to concede that “the commercial spirit” preceded the Reformation by at least two hundred years. From the eleventh century onward, the words Deus enim et proficuum (“For God and Profit”) began to appear in the ledgers of Italian and Flemish merchants. This was not a medieval version of some type of prosperity gospel. Rather, it symbolized just how naturally intertwined were the realms of faith and commerce throughout the world of medieval Europe. The pursuit of profit, trade, and commercial success dominated the life of the city-states of medieval and Renaissance Northern Italy and the towns of Flanders, not to mention the Venetian republic that exerted tremendous influence on merchant activity throughout the Mediterranean long before 1517.

Since Weber’s time, much scholarly work has been done to illustrate the advanced state of market-driven economic development in the Middle Ages. Throughout the 1940s and 1950s, the Belgian scholar Raymond de Roover penned numerous articles illustrating that, during the Middle Ages, financial transactions and banking started to take on the degree of sophistication that is commonplace today. Likewise, The Commercial Revolution of the Middle Ages, by the Italian-American historian of medieval European economic history, the late Robert S. Lopez, shattered the historical claims that formed much of the background of Weber’s argument. Lopez demonstrated in great detail the way in which the Middle Ages “created the indispensable material and moral conditions for a thousand years of virtually uninterrupted growth.”

In recent decades, the historians Edwin Hunt and James Murray have illustrated just how much the medieval period was characterized by remarkable innovation in methods of business organization. They also suggest that the advent of modernity actually heralded the expansion of state economic intervention and regulation in an effort to constrain economic freedom. In a similar fashion, the sociologist Rodney Stark has gathered together disparate sources of historical and economic analysis to illustrate the origins of capitalism and major breakthroughs in the theory and practice of wealth creation in the medieval period. Central to Stark’s analysis is his highlighting of the way pre-Reformation Western Christianity saw the world as one in which humans were called upon to use their reason and innate creativity to develop its resources—including economically.

Here one could add that, before Adam Smith, some of the most elaborate thinking about the nature of contracts, free markets, interest, wages, and banking that developed after the Reformation was articulated in the writings of Spanish Catholic scholastic thinkers of the sixteenth and seventeenth centuries. Theologians such as Francisco de Vitoria OP, Martín de Azpilcueta, Juan de Mariana SJ, and Tomás de Mercado OP, anticipated many of the claims made by Smith two centuries later.

To be sure, much of this thinking occurred by way of side-effect rather than as a result of the systematic analysis undertaken by Smith. For as commercial relationships expanded throughout Europe in the centuries preceding and following the Reformation, there was a marked increase in the number of penitents asking their confessors for guidance about moral questions with a strong economic dimension. What was the just price? When was a person no longer obliged to adhere to a contract? When was charging interest legitimate? When did it become usurious? As a result, priests looked to theologians for guidance on how to respond to their penitents’ questions. Thus, as Jürg Niehans stressed in his History of Economic Theory:

The scholastics thus found it necessary to descend from theology into the everyday world of economic reality, of early capitalism, foreign trade, monopoly, banking, foreign exchange and public finance. What one knew about these things in the School of Salamanca was hardly less than Adam Smith knew two hundred years later, and more than most students know today.

Even when we consider modern capitalism’s emergence, a direct connection between this event and Protestantism is very open to question. The economic historian Jacques Delacroix, for instance, has highlighted many facts about this period that Weber’s theory simply cannot account for. “Amsterdam’s wealth,” Delacroix writes, “was centered on Catholic families; the economically advanced German Rhineland is more Catholic than Protestant; all-Catholic Belgium was the second country to industrialize, ahead of a good half-dozen Protestant entities.”

A better explanation for why some parts of Europe lagged behind others is to be found in the influence of absolutism and mercantilism. To our ears, “absolutism” is a word that contains echoes of despotic government. Yet the age of absolutism, which lasted throughout most of Europe from about 1600 until 1800, was a rather different phenomenon. Drawing heavily on the Divine Right of Kings (a theological doctrine always disputed by the Catholic Church) for legitimacy, absolutism was also associated with the rise of the nation-state that began before the Reformation, but which accelerated after 1517.

Absolutism’s underlying motif was the conviction that centralizing state power was the path to stronger and wealthier societies. In terms of commercial life, absolutism manifested itself in countries such as Lutheran Prussia, Catholic France, and Orthodox Russia in the form of ever-increasing restrictions on economic freedom. Governments began assuming more top-down direction of economic activity through subsidizing exports, imposing tariffs on imports, and mandating government monopolies of particular trade or products that were then sold or leased to groups of merchants. Adam Smith famously called this set of economic arrangements the mercantile system.

It is difficult to downplay mercantilism’s effect on modern economic development. From the Age of Discovery to the late nineteenth century (and in many cases beyond), Catholic Latin America was largely dominated by an absolutist, mercantilist economic culture. Therein, Stark contends, lie some of the fundamental causes of Latin America’s slower economic development as compared to the United States. Even the dominant eighteenth-century Protestant power, Britain, engaged in mercantilist economic practices despite having rejected a drift toward absolutism in the previous century. And as every student of the American Revolution knows, Britain’s mercantilist economic policies contributed mightily to the outbreak of the War of Independence.

Much more could be said about these historical observations. The point, however, is that the widespread association of one form of Protestantism with capitalism is theologically dubious, empirically disprovable, and largely incidental. To make these observations is not to propose that modern capitalism was somehow constructed upon a “Catholic ethic.” That would be equally false. It is simply to note that much of Weber’s particular analysis is very questionable and that this should be acknowledged by economists, historians, and above all, by Catholics. How ironic it would be if the last people to believe in Weber’s Protestant ethic thesis were Catholics!

Editor’s note: This essay is an abbreviated chapter from the author’s latest book Tea Party Catholic (2013). This edited version is reprinted from Public Discourse, the online journal of the Witherspoon Institute.

Samuel Gregg

By

Samuel Gregg is Research Director at the Acton Institute. He has authored many books including, most recently, For God and Profit: How Banking and Finance Can Serve the Common Good (2016).

  • I think you just gave me a reason to learn Spanish. Perhaps I can solve my distrust of economic liberalism by reading the writers in the School of Salamanca.

    • Tacitus

      Read Chafuen as a start.

      • Alejandro Chafuen? Born about 500 years too late, wasn’t he?

        Plus, he’s a modernist, influenced by atheists.

        • Ziemek

          Can you expand about Chaufen being a modernist? If it is a true that is a now reseaon other than fight heresy, to read him.

          I read Saint Pius X ,,Pascendi Dominici Gregis”, so I know fundamental things about modernists.

          • It is his connection to the Austrian school that prompted that comment.

            • Ziemek

              Von Mises was at lest agnostic, Hayek probably too, so with part ,,influenced by atheists” I had no problem. But I don’t seew why being influenced by Austrian school mean that you are modernist. Can you give some arguments about that?

              • The modernist comes from the fact that he’s clearly accepting of the modern market. My original comment about wanting to learn Spanish was a wish to learn about *premodern* markets- how markets worked for the 1000 years of Christendom, how markets worked in the pre-modern age, because our current markets are not working.

                The charge of modernist in this case merely means a professed belief that the modern age is somehow better than the way human beings lived before; that previous ages have nothing to teach us about morality or ethics or economics, and that we should ignore the world before the Enlightenment as if it never happened.

                With respect to economics, it means getting locked into the ideas of modern, often agnostic or atheistic, thinkers that because they imagine hierarchies are always bad, that the Catholic Church has no possible morality or ethics to offer, and that the best market, is a market where people are free to abuse others.

                I have a tendency to reject that thinking, but I’m unsure what to replace it with, given the censorship against the pre-modern age and the normal human tendency to regulate all history more than a few centuries old to myth.

                • Adam__Baum

                  “thinkers that because they imagine hierarchies are always bad, that the
                  Catholic Church has no possible morality or ethics to offer”.

                  No and no.

                  • This is a paraphrase of Thomas E. Wood’s attitude towards Papal teachings on economics:

                    http://takimag.com/article/truth_charity/#axzz2r3sTSPeH

                    He imagines economics to be a science, rather than an ethical or moral system, and thus, denies that the Catholic Church has anything to say about it at all.

                    That attitude reminds me of modern left-wing Catholic politicians, who claim that they are personally faithful Catholics, but they can’t let that influence the right to kill the unborn.

                    • Art Deco

                      Theodore, economists actually do make testable assertions about collective behavior which can be verified or refuted.

                    • Yes they do make testable assertions, but since what they are studying is entirely artificial and has no reality beyond what human beings say it has, what they are doing isn’t a science, it’s a theology. Theologians and sociologists make testable predictions all the time, that doesn’t mean that what they are doing is so divorced from morality and ethics that the Pope isn’t competent to weigh in.

                    • Adam__Baum

                      Conceiving of economics as a science would in itself be enough to disqualify one as an Austrian.

                      In 1974, Hayek delivered the following as part of his Nobel Prize acceptance speech.

                      “It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences – an attempt which in our field may lead to outright error. It is an approach which has come to be described as the “scientistic” attitude – an attitude which, as I defined it some thirty years ago, “is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed.”1 I want today to begin by explaining how some of the gravest errors of recent economic policy are a direct consequence of this scientistic error.”

                      http://www.nobelprize.org/nobel_prizes/econ

                • Ziemek

                  Thank you for the answer. About man about who Chaufen write did you try to find works of Francisco Suárez? They should be available in English.

  • Blah Blaah

    Then there’s the interesting research that indicates that cold makes people work harder and be more productive:

    “A mapping project devised by William Nordhaus, an economist at Yale, revealed more proof that heat wilts economies. Using a global grid system to escape the biases of national data, he identified an almost linear correlation between mean annual temperatures and productivity per head. People in the coolest climes, he found, generate 12 times the economic output of those in the hottest. Far fewer people live at those extremes than in middling climate zones, but even in the crowded temperate band of the globe, the difference in output between hotter and cooler places was big.” http://www.economist.com/news/international/21569017-artificial-cooling-makes-hot-places-bearablebut-worryingly-high-cost-no-sweat

    Maybe it has nothing to do with those cold places going Protestant (though presumably abolishing every or almost every holy day besides Sunday would boost productivity), and something to do with people finding it easier to work on a Swedish summer’s day than a Spanish summer’s day. Apparently productivity has skyrocketed in the Middle East along with air-conditioned skyscrapers. Worth adding to the equation…

    • ForChristAlone

      Your thesis computes with my living in the South (of the USA). Here you class people by the ingenuity they apply to avoiding having to work (even in air conditioned buildings). When it gets cold here (as it has over the past week), everything still shuts down since now they are incapacitated by frigid air.

      But, this might all be an anomaly for life these days in the USA where politicians in order to insure their re-election guarantee that no one EVER has to work., Those who lose their jobs get interminable unemployment benefits and the rest are always one step away from joining the former group due to government intrusion in the economic life of the country. This is Obama’s Amerika – now know as Greece of the West.

      • Things shut down… For a week, until a more pleasant weather rolls in the next week. Meanwhile, in the North, life is shut in.

      • Adam__Baum

        I used to travel to a home office (no longer there) located on Lover’s Lane, Culpeper Va. I was there one Friday, and was informed at 11AM that the matters I was being instructed upon would have an end about 2PM..

        I was then informed, to my great surprise that in this part of Virginia, it was rather common to go home early on Fridays during the summer, apparently it was a vestigial custom from the days before air conditioning.

      • “But, this might all be an anomaly for life these days in the USA where politicians in order to insure their re-election guarantee that no one EVER has to work.”

        I was going to say which politicians would those be, but I guess you’re leaving out the fact that the politicians who come closest, outright kill a large percentage of those they assume will not work before they are even born.

        And on the other side of the spectrum, all welfare comes with time and income limits that assure anybody taking welfare will be impoverished.

    • Nonsense. The temperate climate also have more land and more fertile land than warmer climates. This led to more wealth and capital accumulation, which came in handy with industrialization.

      • Blah Blaah

        You’re assuming that wealth is bound up in land and farming. Industrialization in the US, for example, wasn’t strong in areas that had large tracts of arable land (the cotton and tobacco-producing South) but in areas that had little and poor arable land – and incidentally, longer and harsher winters (the northeast). If an economy is based on ownership and cultivation of land, rather than on manufactures or services or mineral deposits or oil, then ‘more land and more fertile land’ in ‘temperate climates’ would have a huge influence on economics. But consider the Middle East, where because of the discovery of oil, economies boomed without having plenty of fertile land or a temperate climate (certainly a ‘warmer’ climate than the industrial northeastern US, though!). Land is not the only basis for an economy, obviously (Venice built its economy not on ‘more land and fertile land’ or even its ‘warmer climate’ but upon the sea and trade.) The availability of more and more fertile land is not necessarily a basis for industrial development, nor is industrial development the only basis for economic prosperity. Simply being located at the crossroads (or in a good place to build a railroad), not having more and more fertile land, was the basis for economic growth of many a community down the ages.

  • elarga

    Left unexplained is why some countries tended more to absolutism and mercantilism; and it just so happens that those countries (France, Spain) WERE Catholic, and the countries that shook off mercantilism and absolutism first were Protestant. Was Weber right but for the wrong reasons?

    • You forget the history of those countries. While Portugal and Spain were the richest and most powerful countries in the West, though absolutist, England and others were peripheral countries. A could of centuries later, when the limits of absolutism were reached and mercantilism failed to yield the same results, the former countries were slow to change their ways, while latter countries, aspiring to more, were eager to try new ways. As the author pointed out, without selecting examples, it’s impossible to affirm that Protestantism had a hand in the progress of the former peripheral countries.

      • elarga

        You seem to be begging the question: “the former countries were slow to change their ways.” Why? and “Chances were that …” Neither answers the “protestant” thesis.

        • The Protestant thesis would be proven right if Protestant countries would suddenly come out of poverty with its introduction and wide adoption. However, Africa dismisses such thesis.

        • The Protestant thesis would be proven right if Protestant countries would suddenly come out of poverty with its introduction and wide adoption. However, Africa dismisses such thesis.

  • brians

    If all this is to say that Weber’s research was based on (at the time) incomplete historical information, that’s fine. If the point is some absurd neocon notion that modern capitalism, as it has come to exist (based largely on exploitative usury and fiat currency), is consistent with a Just, Catholic, society, that’s simply laughable. Also, as to the Westminster Confession: official teachings and the cultural implications borne out of those teachings don’t always line up perfectly. Catholics should be more aware of this than any other religious group.

    • “Modern Capitalism” as practiced in the OECD countries is arguably something that might perhaps be called neo-mercantilism. Without the state legal tender laws to impose a fiat money on the people, this new form of mercantilism would not be possible.

  • DevotedCatholic

    What intrigues me is how Weber seem to numb the senses in order to embrace capitalism. The Protestant Ethics forms the basis of what Weber promotes which does goes against the grain of what most Catholic believes e.g the promotion of worldly wealth as opposed to Spiritual wealth. I quote “The Protestant ethic was a force behind an unplanned and uncoordinated mass action that influenced the development of capitalism…”~Weber

    The excerpt quoted below is evident of the promotion of rational thinking over and above what most Catholics align with in essence.

    “At its heart, Weber insisted, capitalism was a state of mind: an outlook that involved, among other things, the subordination of emotion, custom, tradition, folklore, and myth to the workings of instrumental reason.’~Gregg, S

  • Menschenrechte

    It would be helpful if Gregg explained what he means by “Absolutism.” It can be understood as a theory of sovereignty (i.e. an ideology) or as a set as actual governing practices. As theory its most well known proponents were a Frenchman (Jean Bodin) and an Englishman (Thomas Hobbes). Neither 16th France nor 17th century England was absolutist in practice. Protestant England came closest under the Protestant Oliver Cromwell. France was not in any sense absolutist, because France like Spain was a composite kingdom, rather than a unitary state. Neither France nor Spain had a unified legal system, nor even a unified administrative system. Neither had an internal police force. Both France and Spain had a plethora of mediating institutions, parliaments, estates, the Catholic Church, and myriad political communities (down to the level of the commune) each with their own individual (and quite different) sets of inherited rights, privileges, and customs. Absolutism as a practice was only achieved by the French Revolutionaries who abolished all these mediating institutions, imposed a unified administration, a unified legal system, and an internal police force and arrogated to themselves unlimited internal ‘sovereign’ powers, i.e. something that no ‘absolutist’ monarch ever possessed. One of the rich ironies of legal history is that the revolutionaries put absolutism into practice under the banner of combating a monarchial ‘absolutism’ that never existed. The bloated modern state, along with all its abuses, is the direct descendent of the French Republic, not the composite kingdoms of the ancien regime.

    • The first police state was Elizabethan England.

      By the way, theological revolts like Luther’s were not unknown, but his only got traction because it was timed with the ascent of the nation-state, whose monarchs, with absolutist aspirations, used to assert their power unhampered by Christian morals.

      • Menschenrechte

        I actually think Luther’s movement gained traction because it gave Northern German nobles theological cover to seize what had been until then inalienable Church lands. Think, e.g. of how in 1525 the Grand Master the Teutonic Order became a Lutheran and converted the Order’s Prussian territories into the Duchy of Prussia. The same happened on a smaller scale throughout Holy Roman Empire. Never were Church lands outright confiscated (one would have to wait until the French revolution to see that). Instead, the protestant nobles posed as the ‘protectors’ or ‘rescuers’ of lands that had been allegedly misused/abused at the hands of ‘corrupt’ / ‘heretical’ Catholics. Some of this, undoubtedly occurred in good faith by true-believing Lutherans. It is hard not to believe, however, that the vast majority of it occurred opportunistically; the opportunity for self-enrichment under cover of religious piety being too good to pass up.

  • It also goes without saying that, much closer to home in time and space, Catholic Quebec was the wealthiest and most industrial part of Canada until a couple of decades or so ago.

    • ATK

      I don’t think that is true. Most of Catholic French Quebec was rural, dirt poor until quite recently, very similar the the rural South. Until the 1950’s French Canadians were not even allowed to work in banks, as managers. Most of the economy was controlled by hard nosed Scottish and English business families in Montreal, Quebec city.

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  • ATK

    Interesting article, thank you.
    1) Sounds like Escriva borrowed, in turn, from Calvin, the Westminster Confession, Weber, to build his idea that work is Salvation
    2) The Hanseatic League was a business federation, that worked with and financed the Teutonic Knights. They, in turn, conducting bogus crusades, and usurped other Catholic ethnic groups. So the notion that it’s the Nation State that made people into tyrants, and
    that stateless free trade was always virtuous does not hold water.
    3) However, I do agree with the author that 19-20th century ideas, that somehow everything is due to circumstances, “historical context”, that there are not intrinsic truths, to be problematic.

  • JP

    I always understood Weber’s writings as a more general critique of Reason. He famously wrote :

    “Finally, as a naive optimism may have celebrated science… I believe I can leave this entire question aside in light of the annihilating critique which Nietzsche has made of the ” last men ” who have discovered happiness. Who then still believes in this, with the few exceptions of a few big babies in university chairs and editorial offices.”

    Weber, following Nietzsche’s lead questioned the entire Enlightenment project. In the US, economists by and large, treated their subject like any other scientists. We often hear the term Rational Markets, or Market Efficiencies. Yet, Weber pointed to the irrational as guiding economic behavior and not Reason. His investigations of his parent’s religion (or, at the very least his mother’s Calvinism), was the rational study of the irrational (ie religion). To him, the very idea of “free enterprise” was an absurdity, or at the very least a human construct. For the Weber, the scientific mindset after Nietzsche was dead. Religion and not Reason were the prime movers of culture; and the West ultimately was founded upon the bedrock of Christianity. Until Protestantism, economic forces took a back seat to religious forces. And even the “free market” Protestant societies ultimately were subject to irrational impulses of religion.

    I don’t think Weber ever found an answer for the conundrum of Reason vs Revelation. But, IMHO he looked down more kindly upon religion than his peers believed. Yes, he was an atheist ; but, he had a deep respect for the pious (after-all his mother was a pious Christian). Secularists may have a problem with this interpretation, but Weber saw the secularization of Europe as a disaster. Perhaps his own personal tragedies, as well as the disaster of the Great War clouded his thinking. But, I think he was one of the more important thinkers of the 20th Century.

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