Financial History 141 Spring 2022 - Page 19

yet , why do so many Americans who have no chance whatever of inheriting money from a taxable estate passionately advocate abolishing “ death taxes ”? And is it merely a coincidence that these antitax crusaders , along with opponents of government regulation of business , and the countless lower-income supporters of benefits for corporations for which they do not work ( and whose stock they do not own ), disproportionately belong to the nation ’ s increasingly influential evangelical churches ? Nor is the present-day relevance of this historical influence of religious thinking on economic thinking limited to the United States : Why is there , today , an “ Anglo-Saxon model ” of how to organize an economy and run a country ’ s economic policy ? And why do so many people , in countries otherwise very similar to ours , reject it ?
Nearly 100 years ago the English historian R . H . Tawney published a book with the same title as this article ( and the book from which it is excerpted ). Both the setting and the argument were different . Tawney ’ s book was a response , in part a rebuttal , to Max Weber ’ s classic work , The Protestant Ethic and the Spirit of Capitalism . Weber had claimed that Calvinist religion — specifically , the belief that whether or not individual men and women are saved is a matter determined before they are even born , and over which they have no control — was historically a spur to forms of personal behavior that gave rise to modern capitalism . Moreover , Weber argued , this influence of belief in predestination persisted long after most people had ceased to hold it : indeed , long enough for most people to forget that such a belief had ever influenced their parents ’ or grandparents ’ behavior in the first place .
My argument shares some strands of that long-ago controversy — the powerful influence of religion , and the continuing force of this influence even after the driving religious beliefs have faded — but in substance it is more nearly Weber upside down . The primary focus is not on economic behavior , but thinking about economics . Even more different , the creators of modern economics lived not during the time Weber emphasized ( whether his view of the matter was right or wrong ), but a century and more later when belief in predestination was in retreat among English-speaking Protestants . What opened the way for the early economists ’ insight into the beneficial consequences of individually motivated initiative carried out in competitive markets was the expanded vision of the human character and its possibilities that the movement away from predestinarian Calvinism fostered . Further , this benign sense of our human potential , enabled by the historic transition in religious thinking that first preceded and then accompanied it , has continued to influence the trajectory of modern Western economic thinking ever since .
Understanding the historical connection between religious thinking and the economic thinking that is ours , and that shapes the world in which we live today , helps to explain not only how economics came to be what it is but also aspects of our current economic policy debate that are otherwise difficult to fathom , including especially questions that revolve around the efficacy and appropriate role of markets and , in parallel , the appropriate role of government in our society . We may not be aware of the religious influences that mold our economic views , but they are at work nonetheless , and our future economic trajectory depends on them . As the work of another great American historian , Bernard Bailyn , demonstrated , not only do ideas matter for events ; often ideas operate over the heads of the participants , guiding both their thinking and their choices in ways they cannot foresee and that we cannot otherwise explain .
The influence on economics of certain strands of religious thinking — the affinity to some ideas , the instinctive dislike of others , at the broadest level simply our way of looking at the world of which markets and incentives and economic behavior are an essential part — turns out to be quite understandable in historical perspective . Our confidence in the outcome of individual striving for self-improvement , played out primarily in the economic sphere ; the respect we attach to economic selfimprovement as an expression of political liberty ; the commitment to economic development on the national and even world scale , both on material grounds and because we assume economic progress leads to moral progress as well ; above all , the belief in the efficacy of the market mechanism as a way to harness our individual economic energies for our own good and that of others too — all are reflections of an influence of religious thinking that is both historical and ongoing . This influence of religious thinking pervades the way in which ordinary citizens today think about economic questions . And because over time it has become particularly American , it also affects how the rest of the world sees our country and sees us .
Economics as we know it is still a young science . The influence of religious thinking was present at its creation .
Benjamin M . Friedman is the William Joseph Maier Professor of Political Economy , and formerly Chairman of the Department of Economics , at Harvard University . He is the author of The Moral Consequences of Economic Growth ( Knopf ) and Day of Reckoning : The Consequences of American Economic Policy Under Reagan and After ( Random House ) and has also written or edited 14 other books , and more than 150 articles in professional journals , aimed primarily at economists and economic policymakers .
This article was adapted from his latest book , Religion and the Rise of Capitalism . Reprinted by permission of Vintage Books , an imprint of the Knopf Doubleday Publishing Group , a division of Penguin Random House LLC . Copyright © 2021 by Benjamin M . Friedman .
www . MoAF . org | Spring 2022 | FINANCIAL HISTORY 17