“The 18th Century English cleric and theologian John Wesley was troubled by a paradox that emerged as his teaching spread. He, like other Protestant thinkers stretching back to Calvin, taught that one could honor God through hard work and thrift. The subsequent burst of industry and frugality generated by Wesley’s message improved the lot of many of his working-class followers and helped advance capitalism in England. But, “wherever riches have increased, the essence of religion has decreased in the same proportion,” Wesley observed, and subsequently pride and greed are growing more common, he complained.
The emergence of what Max Weber described as the Protestant ethic represented an important point in the evolution of capitalism because it combined a reverence for hard work with an emphasis on thrift and forthrightness in one’s dealings with others. Where those virtues were most ardently practiced markets advanced and societies prospered. And, as Wesley foresaw, what slowly followed was a rise in materialism and a reverence of wealth for its own sake.
Today, we seem to be living out Wesley’s most feared version of the pursuit of affluence unencumbered by virtue. Scam artists perpetrate giant Ponzi schemes against their friends and associates. Executives arrange compensation packages that pay themselves handily for failure. Ordinary people by the hundreds of thousands seek a shortcut to riches by lying on mortgage applications. Heartless phony bailout schemes take the last dollar of people already in distress.
To survive all of this it seems capitalism needs a new dose of restraint. But absent a vast religious revival in the West, which seems unlikely, where will a renewal of the virtues of the work ethic come from? That question becomes ever more difficult to consider because as religious practice fades and our institutions reject traditional values, so too does the memory of the role that these elements played in the rise of capitalism.
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The meltdown of the financial markets in the last few months has left us grappling with how we can keep markets free and principled at the same time. The only debate so far is between those who want more government regulation -- who want to impose from the outside via the regulator’s eye the restraint that our institutions once tried to instill in us -- and those who think that more government will only undermine our prosperity. Neither side seems to be winning the public debate because most Americans are probably equally as appalled by the shortcomings of the markets as they are by the prospect of more government control of them.
People instinctively know something is missing, just not what. A religious revival in America seems unlikely. Is it equally as unlikely that our institutions, most especially our schools, would once again promote the virtues that made capitalism thrive and Western societies prosper -- not just hard work, but thrift and integrity, or what we once called the Protestant ethic?”
Steven Malanga, “Can Free Markets Survive In a Secularized World?”, RealClearMarkets Blog (28 January 2009).
http://www.realclearmarkets.com/articles/2009/01/can_free_markets_survive_in_a.html
Steven Malanga is an editor for RealClearMarkets and a senior fellow at the Manhattan Institute.
As Adam Smith stressed, market economies require a virtuous people to generate prosperity, with a concern for balancing both commercial values of prudence, justice, industry and frugality and nobler virtues of benevolence, generosity, compassion, kindness, friendship and concern for others.
But does prosperity produce an increasingly less principled people? And can, as Washington asked, morality be maintained without religion?
The challenge before us today is to recognize that Washington was right when he said our political prosperity rests on morality as “a necessary spring of popular government”. Equally, like Adam Smith, we must recognize that the restoration of our economy from the failures of declining standards and rampant greed requires more than mere economics and must be founded on a strong foundation in religious principle. But how to maintain “the essence of religion”, as Wesley put it, and its essential contribution to our prosperity, when our “riches have increased”, may prove the greatest challenge of all.
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