{"id":78279,"date":"2022-08-29T15:37:00","date_gmt":"2022-08-29T19:37:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=78279"},"modified":"2022-09-09T14:13:30","modified_gmt":"2022-09-09T18:13:30","slug":"the-spirit-of-capitalism","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/the-spirit-of-capitalism\/","title":{"rendered":"How the Spirit of Capitalism Arose From the Protestant Ethic"},"content":{"rendered":"\n<p>How did <a href=\"https:\/\/www.shortform.com\/blog\/capitalism-theory\/\">capitalism<\/a> take hold as a major world economy? How much of an influence did religion have?<\/p>\n\n\n\n<p>Max Weber argued in his 1905 classic that the early Protestants in western Europe and America pioneered the way of life that became the modern capitalist\u2019s lifestyle. And, in doing so, they provided the cultural and financial impetus for capitalism to become a full-fledged economic system.<\/p>\n\n\n\n<p>Continue reading to learn how the spirit of capitalism arose from the Protestant ethic.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-spirit-of-capitalism\">The Spirit of Capitalism<\/h2>\n\n\n\n<p>In <a href=\"https:\/\/www.penguinrandomhouse.com\/books\/296551\/the-protestant-ethic-and-the-spirit-of-capitalism-by-max-weber\/\"><em>The Protestant Ethic and the Spirit of Capitalism<\/em><\/a>, Max Weber contends that the Protestants\u2019 way of life influenced the rise of a full-fledged capitalist economy. He says that Protestantism influenced capitalism in three ways:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Influence #1: <\/strong>Church divisions between elect (saved) and reprobate (damned) provided the moral justification for the exploitation of labor. Further, the Protestants\u2019 beliefs created people who were willing to work longer and harder hours.<\/li><li><strong>Influence #2: <\/strong>The Protestants\u2019 \u201cwaste no time\u201d attitude created the \u201cmorality of usefulness\u201d that characterizes modern capitalism.<\/li><li><strong>Influence #3: <\/strong>The Protestant\u2019s systematic pursuit of his calling became the modern capitalist\u2019s systematic pursuit of wealth as an end in itself.&nbsp;<\/li><\/ul>\n\n\n\n<p>Weber suggests that all of these changes had taken hold by the late 1700s and early 1800s.&nbsp;<\/p>\n\n\n\n<p>(Shortform note: Scholars have debated Weber\u2019s precise thesis for decades. Some believe that Weber is saying that Protestantism created capitalism, and others point out that he never explicitly states this. Weber instead makes a heavily qualified argument that Protestantism did, in some ways, contribute to the development of certain aspects of the attitudes and lifestyles necessary to the onset of modern capitalism. This nuance is often lost in looking to distill and simplify his works.)<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-influence-1-church-divisions-justify-labor-exploitation\">Influence #1: Church Divisions Justify Labor Exploitation<\/h3>\n\n\n\n<p><strong><a href=\"https:\/\/www.shortform.com\/blog\/the-first-way\/\">The first way<\/a> that Protestantism influenced capitalism took place in the divide between the wealthy and the common person.<\/strong> When some Protestants began to get wealthy, they became more confident in their status as the elect. Over time, Weber says, those wealthy Protestants who succeeded in their callings drew themselves apart from those who didn\u2019t. The successful saw themselves as morally superior to the unsuccessful, who God evidently didn\u2019t favor.&nbsp;<\/p>\n\n\n\n<p>This led to divisions in the church. The elect created sects entirely apart from the reprobate; you could only get in if you\u2019d proved yourself before God and community. In other words, if you\u2019d become successful in your calling.<\/p>\n\n\n\n<p>(Shortform note: The theological position for these divisions was <a href=\"https:\/\/carm.org\/about-the-church\/what-is-the-difference-between-the-visible-and-the-invisible-church\/\">the notion of the \u201cvisible\u201d versus the \u201cinvisible\u201d church<\/a>. The visible church is the physical, outward expression of the church\u2014physical buildings, ceremonial robes, altars, and so on. The invisible church, according to Protestantism, is composed only of true believers who have been \u201cborn again\u201d through genuine faith. As a result, divisions arose between the elect, who felt themselves to be the only genuine Christians, and those they perceived as reprobate, who attended the visible church but weren\u2019t considered members of the invisible church.)&nbsp;<\/p>\n\n\n\n<p><strong>As this occurred, the successful elect determined that it was morally appropriate for them to use the labor of the reprobate.<\/strong> Since God gave everyone their station in life, the elect felt it was only right that, as God\u2019s chosen people, they could exploit the reprobate. At the same time, the reprobate Protestants also felt that it was their place to work long and hard hours. After all, that was God\u2019s will for them. Even if God didn\u2019t seem to have chosen them, they still felt compelled to serve and glorify him.<\/p>\n\n\n\n<p>This dynamic, Weber argues, presaged the <a href=\"https:\/\/www.shortform.com\/blog\/global-economic-inequality\/\">economic divide<\/a> between the capitalists, who own the means of production, and the workers, who trade their labor for wages. He implies that <strong>it provided the moral justification that allowed capitalists to exploit the labor of the poor and underprivileged.<\/strong> It also allowed them to view economic inequality as morally just, since it was God\u2019s will that some succeed and some fail.<\/p>\n\n\n\n<p>(Shortform note: Marx would argue that Weber isn\u2019t telling the full story of labor exploitation. Specifically, he doesn\u2019t account for the phenomenon of \u201cprimitive accumulation,\u201d a concept that denotes how <a href=\"https:\/\/publicpolicy.pepperdine.edu\/academics\/research\/faculty-research\/intellectual-foundations\/marx-engels\/marx_part8.htm\">violent force allowed the powerful to take land and resources from the common people<\/a>. Nobility and those with physical power made this land private property, forcing the common people to work for them or look for a living in emerging cities. This \u201c<a href=\"https:\/\/www.thelandmagazine.org.uk\/articles\/short-history-enclosure-britain\">enclosure of the commons<\/a>\u201d was, according to Marxist thought, a main factor in the onset of labor exploitation and class struggle in the modern era.)<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-influence-2-protestant-morality-gives-way-to-utilitarianism\">Influence #2: Protestant Morality Gives Way to Utilitarianism<\/h3>\n\n\n\n<p>In a related vein, the Protestants\u2019 willingness to work for its own sake also created a distinct morality: <strong>Whether something was <\/strong><strong><em>good<\/em><\/strong><strong> depended on whether it was <\/strong><strong><em>useful to glorify God<\/em><\/strong><strong>. <\/strong>This attitude was passed on to capitalism, minus the emphasis on God.&nbsp;<\/p>\n\n\n\n<p>Weber says that, as the successful Protestants began to get wealthy, they also became more secularized. Into the 18th century, the religious zeal that fueled the earliest Protestants began to lessen. As serving God in every moment became less of an immediate imperative, people lost the association between \u201cusefulness\u201d and \u201cglorifying God.\u201d&nbsp;<\/p>\n\n\n\n<p>(Shortform note: As a formal moral system, <a href=\"https:\/\/plato.stanford.edu\/entries\/utilitarianism-history\/\">utilitarianism was first articulated by Jeremy Bentham in the late 1700s<\/a>, though earlier thinkers laid the groundwork in the 1600s. Put simply, utilitarianism holds that moral actions are those that produce the greatest good for the greatest number of people. Early thinkers reasoned that what is good is human happiness, and that because God wants humans to be happy, we should <a href=\"https:\/\/www.shortform.com\/blog\/maximize-happiness\/\">maximize happiness<\/a>. This view isn\u2019t explicitly Calvinist, but it may have contributed to the later secular position that we should maximize the productivity of our actions. In this view, a business that solves a problem for many people is doing something good\u2014which would\u2019ve helped business owners feel morally upright.)<\/p>\n\n\n\n<p>At the same time, these wealthy Protestants retained their systematic, rigorous lifestyles. They began to focus more on money than God; money took God\u2019s place in their moral equations. <strong>What qualified as useful became what helped them earn money<\/strong>, rather than what glorified God. Weber argues that this led to the utilitarian capitalist attitude that \u201ctime is money,\u201d which was common by the time of Benjamin Franklin (mid to late 1700s).&nbsp;<\/p>\n\n\n\n<p>(Shortform note: Franklin is credited with <a href=\"https:\/\/web.archive.org\/web\/20211004204608\/https:\/\/liberalarts.utexas.edu\/coretexts\/_files\/resources\/texts\/1748%20Franklin%20Advice.pdf\">having said \u201cremember that time is money<\/a>\u201d in his letter \u201cAdvice to a Young Tradesman.\u201d This short passage was <a href=\"https:\/\/archive.org\/details\/2554018R.nlm.nih.gov\/page\/n9\/mode\/2up\">published in the 1770 book <em>The American Instructor<\/em><\/a>, which contains contributions concerning mathematics, writing, basic business and accounting strategies, as well as advice about medicine and personal health\u2014making it one of the earliest American business and self-help titles. Note also that while Weber takes Franklin\u2019s ideas as characteristic of the American business spirit, <a href=\"https:\/\/www.leftvoice.org\/weber-s-protestant-ethic-a-marxist-critique\/\">others argue that they shouldn\u2019t be taken as a bellwether for the age<\/a>, and that Franklin was simply offering advice rather than espousing moral imperatives.)<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-influence-3-people-begin-to-systematically-pursue-wealth\">Influence #3: People Begin to Systematically Pursue Wealth<\/h3>\n\n\n\n<p>Weber acknowledges that people did engage in capitalist activity before the Protestant Reformation. However, they did so unsystematically. As we discussed in \u201cThe Protestants Became Rational Economic Actors\u201d section of this guide, the traditional economic style was to earn only as much money as you needed to maintain your life. This changed with the Protestants, who pioneered the unique blend of beliefs, morals, and habits that resulted in a lifestyle of <em>systematically<\/em> pursuing wealth.&nbsp;<\/p>\n\n\n\n<p>(Shortform note: Some argue that the Protestants were not the first people to operate a capitalist economy. Ferdinand Braudel, a 20th-century French historian, <a href=\"https:\/\/www.nytimes.com\/1983\/07\/10\/books\/the-roots-of-modern-capitalism.html\">described the development of commerce and capitalist patterns throughout European history<\/a> and says that 13th- and 14th-century Italy and France were capitalist. <a href=\"https:\/\/opensiuc.lib.siu.edu\/cgi\/viewcontent.cgi?article=1007&amp;context=pn_wp\">These areas had complex systems of credit, banking, and commerce<\/a> well before the Protestants\u2019 time. Here, though, note that Weber edits the second version of his argument to acknowledge that he describes the origins of <em>modern<\/em> capitalism, rather than capitalism in general.)<\/p>\n\n\n\n<p>As the early Protestants\u2019 religious zeal faded, Weber suggests that pursuing wealth for God\u2019s glory became the notion that <em>wealth was the end in itself<\/em>. In turn, the systematic way of life pioneered by the Protestants lent itself to economic success. <strong>As such, t<\/strong><strong>he increasingly secularized Protestants inherited the methodical, meticulous, and frugal way of life that became the modern capitalist\u2019s lifestyle:<\/strong> Wake early, stay healthy, work hard. Waste no time; be productive and efficient. Account for all your wealth, and reinvest to grow it.&nbsp;<\/p>\n\n\n\n<p>Most importantly, the Protestants\u2019 asceticism led to the accumulation of capital that was necessary for capitalism to become a full-fledged economic system. Whereas previous classes of wealthy people would purchase land and seek to become nobles, the Protestants <em>invested<\/em>. Instead of spending money on something that wouldn\u2019t give a return, they put the money back into their own businesses and the stock market. Weber implies that <strong>this investment activity gave the early capitalist economy the kick-start it needed to gain momentum in America and western Europe.<\/strong><\/p>\n\n\n\n<p>(Shortform note: While Weber wrote <em>The Protestant Ethic <\/em>in 1905, this economic way of life echoes still today, especially in the life philosophies espoused by figures such as Warren Buffett and other investing giants. Buffett is a more modern example of the \u201cspirit of capitalism,\u201d having worked for decades, sticking to a systematic strategy for life and investing, and <a href=\"https:\/\/www.shortform.com\/blog\/being-frugal\/\">living frugally<\/a> despite <a href=\"https:\/\/www.shortform.com\/blog\/how-to-get-wealthy\/\">becoming wealthy<\/a>. Weber might say this isn\u2019t a coincidence, given that <a href=\"https:\/\/hollowverse.com\/warren-buffett\">Buffett was raised Presbyterian, one of the main Calvinist sects<\/a>.)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How did capitalism take hold as a major world economy? How much of an influence did religion have? Max Weber argued in his 1905 classic that the early Protestants in western Europe and America pioneered the way of life that became the modern capitalist\u2019s lifestyle. And, in doing so, they provided the cultural and financial impetus for capitalism to become a full-fledged economic system. Continue reading to learn how the spirit of capitalism arose from the Protestant ethic.<\/p>\n","protected":false},"author":9,"featured_media":78287,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81,39,24],"tags":[736],"class_list":["post-78279","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-history","category-society","tag-the-protestant-ethic-and-the-spirit-of-capitalism","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How the Spirit of Capitalism Arose From the Protestant Ethic - Shortform Books<\/title>\n<meta name=\"description\" content=\"Max Weber says that Protestantism influenced capitalism in three ways. 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