Breakingviews - Hadas: Martin Luther's unexpected business legacy

LONDON (Reuters Breakingviews) - When Martin Luther started the Protestant Reformation, just about the last thing on his mind was the promotion of commerce and manufacturing. The German monk’s 95 theses, posted on the door of Wittenberg’s All Saints’ Church on Oct. 31, 1517, were directly aimed at the unsavoury Roman Catholic business of selling indulgences which promised to smooth the entry into heaven. Luther detested these cash-for-grace deals, much as he despised Jewish usurers. He thought that both were motivated by a greed which was antithetical to true religion.

German theologian Martin Luther's theses door is pictured during the 500th anniversary of the Reformation at the Castle Church in Wittenberg, Germany, October 31, 2017. REUTERS/Hannibal Hanschke

History, though, is full of ironies. Just as the especially poverty-loving Cistercian order of Roman Catholic monks played a major role in advancing mediaeval agriculture, Protestant piety helped lay the foundation for the industrial economy, big welfare states and individualistic consumerism.

Scholars have long wondered why Protestant countries in northern Europe became the seedbeds of both capitalism and government social programmes. One approach is to look at what are sometimes called the three main tenets of Protestant theology.

The first is “sola scriptura”, Latin for “by the Bible alone”. Luther rejected the Roman Catholic reliance on traditional authorities – the Pope, the church’s tradition and Aristotelian philosophy. The rebel was certain that people could find religious truth just by reading the holy book themselves.

For the unity of Christianity, this confidence was a disaster. Protestants have argued bitterly and fought violently over exactly what the Bible teaches. For the development of capitalism, it was a godsend.

Protestant piety encouraged literacy. Personal study of the Bible eventually encouraged analytic study of other matters. And the disregard for established thinking encouraged experimentation. The Protestant ethic, as the German sociologist Max Weber called it in 1905, included openness to socially disruptive new ideas and practices. In other words, Luther’s approach helped create the skills and attitudes needed to reshape the economy.

Of course, the Reformation brought more than faith to the economic development of Europe. The dissolution of monasteries and the subsequent religious wars greatly disrupted traditional society, allowing new economic practices to take root. Protestant demand for spiritual texts also encouraged the development of printing, which eventually helped spread new technologies and to train the workers needed to run the industrial economy.

The second Lutheran principle is “sola fide”. shorthand for the idea that salvation comes from faith rather than good works. In practice, this led to encouraging personal encounters with the Saviour while doubting the spiritual value of supporting charitable institutions.

With that attitude, it is not surprising that over the centuries Protestant countries came to reject the traditional Roman Catholic idea that organised charity was naturally the work of the organised Church. Protestants also lacked the small armies of monks and nuns which Catholics could throw at social problems.

So in Protestant countries the responsibility of charity gradually fell to governments, which took them up as Christians, socialists or some combination of the two. Of course, big government is more a socialist idea than a Protestant one. It is a pretty big stretch to hold Luther even indirectly responsible for Karl Marx and his followers. Still, the Reformation probably aided the transition from the medieval welfare Church to the modern welfare state.

The final central Protestant principle is “sola gratia”, that only God’s freely given grace brings salvation. Weber thought that idea, which is more closely associated with Luther’s leading Protestant rival John Calvin than with Luther himself, was unbearably depressing. The sociologist argued that the popular response to the total spiritual dependence on God’s inscrutable will was a turn to worldly activity. Success in that was taken as a sign of divine favour.

Few scholars now accept Weber’s explanation. Still, a broader interpretation along similar lines has some merit. Calvinist theology did leave each person all alone to worry about salvation, and it did separate out the mysterious gift of grace from the approachable daily life in the world. The eventual result of that combination was probably to encourage what Weber called the spirit of capitalism, an individualistic and disciplined attention to worldly matters.

When that spirit reigns, people work hard and pile up consumption goods instead of spiritual indulgences. Business people and bureaucracies take up some of the social role of priests and sacraments. The economists’ standard assumption about human nature, that people are self-interested materialists, does not seem totally ridiculous.

Luther is certainly not responsible, even indirectly and unintentionally, for all the values and practices of the contemporary economy. For one thing, you don’t have to be Protestant to have the capitalist spirit. Countries with dominant religious traditions ranging from Roman Catholic to Confucian have taken it on. Besides, the modern economy seems to be essentially non-religious.

Nonetheless, the Reformation made a significant contribution to the industrial revolution. Luther and the movement he started helped open up Europe, and eventually the world, to a new age with new values. The modern economy is just one of the fruits of his spiritual and cultural revolution.


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