Economy, Society, and History

Besides purely economic factors, such as the division of labor, money and capital accumulation, ideological factors also play a very important role in economic development and in the formation of societies. Ideological factors, in a way, even influenced such fundamental things as the attitude toward the division of labor in a given society, and in particular also the attitude toward capital accumulation, the desire to become wealthier or to be satisfied with low standards of living. I want to spend this lecture discussing certain ideological factors, mostly religious factors, influencing economic development.

I will start by reminding you that capital accumulation and—based on capital accumulation—the desire to make inventions, technological improvements and so forth, can be encouraged or can be discouraged by certain prevalent ideologies existing in society. Before I start talking about major religions, let me just give you some examples that make this intuitively clear. Imagine, for instance, if people believed in a deity that leaves the world with the instruction that things should be left the way they are. If such a religion were a powerful religion among people, you can easily imagine that such a society would not have much of a potential to develop and become prosperous. We would likely guess that societies such as this would tend to die out, or will be taken over by other societies. Or, imagine a society that has a very deep and profound ancestor worship. Of such a society, we would expect that it will display, to a large extent, very ritualistic behavior, and that it also will be reluctant to introduce any innovations.

The same is also true for slave societies. Of course in many parts of the world, for large parts of human history, we did have slave societies. The most prominent examples would be classical civilization, Greek and Roman civilizations, and also the more recent example of the United States. In slave societies, it is frequently the case that the slaves do the work and the masters laze around, don’t do much, are not involved in the day-to-day activities, and because they are not involved in the day-to-day activities, they also contribute little to improvements in the technology that can be employed in these day-to-day activities. Let me give you a brief quote from Carroll Quigley to this effect. He writes,

Suppose that the primitive tribe believes that its social organization was established by a deity who went away leaving strict instruction that nothing be changed. Such a society would invent very little. Egyptian civilization was something like that. Or any society that had ancestor worship would probably have weak incentives to invent. Or a society whose productive system was based on slavery, would probably be uninventive. Slave societies, such as classical civilization or the Southern states of the United States in the period before 1860, have been notoriously uninventive. No major inventions in the field of production came from either of these civilizations.1

This is not to say that these civilizations did not develop other achievements. Obviously, the Greek civilization allowed a class of philosophers to emerge, and they passed on another form of inheritance to us, namely that of rigorous logic or thinking, which has had a tremendous impact on human development. But when it comes to improving existing tools that one uses in production, they were indeed very unproductive.

Let me give a few other examples that will show how certain ideologies might prevent wealth from being accumulated in societies. There exist religions, for instance, that prescribe that whenever the master of a household dies, that he should be buried with all of his possessions. That seems to be, from the outset, a very stupid attitude, at least as far as ever making any progress is concerned; every generation would destroy whatever they have accumulated during that generation.

Or imagine societies that are ridden by feelings of envy. There exist numerous examples of this which you can find, for instance, in the famous book Envy by the German sociologist Helmut Schoeck. And you also find many examples, some of them taken from the Schoeck book, in Rothbard’s little book on Egalitarianism as a Revolt against Nature. Again, I just want to quote one example of a society such as this, from Herbert Spencer. Spencer writes,

[There exist reports about the chiefs among the Abipones, of the Dakotas:] The cacique has nothing either in his arms or his clothes to distinguish him from a common man, except the peculiar oldness and shabbiness of them. For, if he appears in the streets with new and handsome apparel, the first person he meets will boldly cry, “Give me that dress” and unless he immediately parts with it, he becomes the scoff and scorn of all and hears himself called covetous.2

Obviously, a society like this is not likely to accumulate much in terms of wealth. Or, there exist societies where as soon as the big chief has accumulated a certain amount of foodstuffs or other goods, he is obliged to throw a big party for the entire tribe and at this big party, all of the resources that have been accumulated will be wasted away. That is, a continuous process of capital accumulation simply does not take place in societies such as this. Now, it can be safely assumed that these types of examples that I give, are obviously not examples of societies that we would expect to stand the test of time, to last very long, but instead, being displaced by other societies that have different attitudes, and either defeat them in the form of warfare or simply displace them. That is, just make them leave or push them out of the territories that they inhabit to more unhabitable territories, and then they ultimately die out.

What I now want to do is undertake a survey of the major religions and their attitudes toward work and invention and capital accumulation. I’m not interested in the pure theological part of these religions, just in those parts of the religions that have repercussions for the day-to-day conduct that people are expected to engage in.

I will begin with one of the religions that is comparatively bad, when it comes to capital accumulation, inventiveness and so forth, and that is Hinduism. Hinduism is characterized, as far as its economic doctrines are concerned, first by explicit taboos against using certain resources. As you all know, for instance, cows cannot be used, and there exist other taboos that simply make it impossible for resources that could have been put to some useful employment to be used this way. In addition, Hinduism is a religion that is characterized by strict association taboos. That is to say, certain groups of people are not allowed to associate with certain other types of people, and you immediately recognize that this is, of course, quite an obstacle when it comes to the development of the division of labor. What you would expect of such a society, a society of castes that are prevented from having any systematic contact with each other, is that there will be some sort of petrification of production modes. Each caste sticks to its own techniques and tasks that are assigned to it, and there is no interchange of ideas; there is no social mobility of any kind and this, obviously, has negative repercussions as far as the economic growth potential is concerned. In addition, Hinduism requires strict obedience to the rules of the caste and has in place severe obstacles in the way of any economic progress. There is the promise of reincarnation into higher classes, which leads the lower classes to not rebel against the existing caste system, because rebelling against the existing caste system will prevent you from being reincarnated into a higher caste in a future life.

There is also—this has to do with taboos with respect to certain objects—the problem that there is no clear-cut distinction in the rank of creatures on Earth. Recall, for instance, in Christianity, in Genesis, we learn that man is the highest of all creatures and that he is given dominion over the rest of the world. On the other hand, if you have a religion that does not necessarily see mankind as the highest development having dominion over the animals, but that there are gradual differences between the animal kingdom and the human kingdom, then again, this is something that hampers the economic growth potential. It leads also to widespread vegetarianism, and widespread vegetarianism, despite the fact that there are some people who propagate it even in our societies, is certainly not a lifestyle that energizes you and makes you an entrepreneurial person, if you only just eat grain.

Hinduism also permits human sacrifice, which further indicates that the status of humans is not above everybody else. And it encourages orgies, that is, activities that display a high degree of time preference, having fun right now, just overdoing it completely, not disciplining yourself during these orgiastic experiences. On the other hand, they also emphasize pomp, that is the display of riches, and do not do what we will see later on, especially in puritanical religions, that is, you don’t live a pompous life; you are humble and invest, but don’t display for everyone how well off you are. And, in general, it is a religion that encourages submission—submission of certain groups vis-à-vis other groups. So, if we rank various religions, we can say from the outset that Hinduism, as long as people really adhere to it, is not exactly a religion that has great economic promises in store. And in a way, looking at India, we can see that that is borne out by the facts. In addition, India has also adopted another system, namely mass democracy, which contributes to their lack of economic promise, but this is a modern development. Traditional India, of course, was not democratic, by any means.

Let us then take another Eastern religion, Buddhism. And to a lesser extent, what applies to Buddhism also applies to Daoism. Buddhism started in a way as a reform movement of Hinduism, but essentially disappeared from India itself, and instead gained influence in Southeast Asia, outside of the Indian subcontinent. The Buddhist view of life is that ultimate wisdom consists in detachment from life, from the earthly, worldly life. It views life as painful, and it considers an ascetic lifestyle as a means to eliminate or to reduce the pain that comes from regular life. So, it advocates a life of ascetic meditation. Again, it should be perfectly clear that for people to withdraw from the world is not encouraging the type of attitude that we consider to be normal. The goal of the Buddhist religion is Nirvana, and Nirvana is a state of affairs that brings about the elimination of all desires. Now of course, if you try to eliminate all your human desires, then there will be little need to engage in productive activities, which are those activities that we consider to be necessary in order to reduce our pains. The essence and purpose of life for the Buddhist and also for the Daoist, to a certain extent, is not individual fulfillment and especially not individual fulfillment in this life. The life that anyone is living right now is just one of thousands of lives. So, there is very little emphasis on personal happiness, or on individual achievement. Daoism teaches the serene acceptance and humility and gentleness and passivity and understanding acceptance of whatever happens to occur, rather than individual accomplishment and individual advancement. Again, the empirical evidence bears that clearly out, that devoted Buddhist societies are not exactly highly developed societies.

Let me come to the next major religion, Islam. Islam also does not in any way encourage individual autonomy. As a matter of fact, the translation of the word “Islam” is “submission.” And what we frequently hear from proponents of Islam, is that they point out this golden age of Islam during the time that they occupied Spain, during which they rescued some of the achievements that were generated by the classical Greek culture and they then transmitted them to Christianity. But this so-called golden age is more of an exception, a fluke in Islam, than typical of the Islamic religion. The main proponents during this era, the main Islamic intellectuals of this era, were by and large intellectuals that had broken with orthodox Islam and were regarded with the utmost suspicion by the Islamic community at their time. So, it was only by breaking away from orthodox Islamic beliefs that these sorts of achievements became possible. The Islamic religion is very familistic, that is family-oriented, and rigidly hierarchically structured (not unlike the Chinese societies, to which I will come in a little bit.) Again, the hierarchical structure can be seen in particular in the relationships between males and females; females are clearly members of society with significantly fewer rights than males have.

In Islam, science and reason are not recognized as in Christianity, as a gift from God. They are not regarded as valuable in and of themselves, as they are, for instance, in Thomism, that is, in certain branches of Christianity. Rather, Islam views life on Earth as something that has no inherent or internal purpose, but it is mostly a preparation for the eternal life that comes afterward. In this regard, Islam is not all that different from very early Christianity, which also had a similar belief that life on Earth was of relatively minor importance and the main goal of it was just for the preparation for life after death. This is, of course, not characteristic of later Christianity, but in the early stages of Christianity, this sort of attitude did prevail. In the view of Islam, God, after the creation of the world, does not really retreat. The Christian view is that God creates a world and then he lets things happen, then mankind is on their own. Now, they have to prove themselves. From the point of view of Islam, God remains continuously involved in worldly affairs. But if God remains continuously involved in earthly affairs, this then makes the search for universal and eternal laws some sort of sinful behavior, almost blasphemous. If you think that God retreats and then lets the world run the way he has organized it, then, of course, it makes sense to try to figure out what the laws of the world are, but if God remains involved in earthly affairs, then, in a way, it doesn’t make any sense to even look out for universal regularities. As a matter of fact, to stipulate that there are universal regularities, is some sort of insult against the belief that God remains continuously involved in earthly affairs. So, this is considered to be somewhat a vain activity and to almost denying God’s almightiness.

What should be perfectly clear from the outset is that if, and to the extent that, these beliefs are the beliefs of the overwhelming majority of the people, then you should expect little in terms of scientific and scholarly achievement coming from such societies. The achievements coming from these societies, as I mentioned, are mostly produced by individuals who have somehow broken with the basic tenets of the religion. On this subject let me quote a German anthropologist who writes on this feature of Islam. His name is von Grünebaum, and he says that Islam was never able to accept that scientific research is a means of glorifying God.

Those accomplishments of Islamic mathematical and medical sciences which continue to compel our admiration were developed in areas and in periods where the elites were willing to go beyond and possibly against the basic strains of orthodox thought and feeling. For the sciences never shed the suspicion of bordering on the impious.…This is why the pursuit of the natural sciences, as that of philosophy, tended to become located in relatively small and esoteric circles and why but few of their representatives would escape an occasional uneasiness…which not infrequently did result in some kind of apology for their own work.3

Now, after Islam, also not exactly favorable to economic development and again, something that is borne out by the facts, we come now to Confucianism. And Confucianism, we have to admit from the outset, is far more suitable for economic growth; it has a far more positive attitude toward science and investigation and is, in a way, a very interesting case. Keep in mind that until 1500 or so, China was clearly the most developed region on the globe. Confucianism is entirely realistic in its outlook and entirely this-worldly. It has no anthropomorphic concept of a god. It does speak of heavens, but the heavens are some sort of impersonal thing. It has nothing to do with what we imagine God to be, which has, of course, some sort of manly image. They actually do not have a concept of a deity. They also have no promise of an afterlife. That can be an advantage, or it can be a disadvantage: that depends in a way on how other religions depict the afterlife. But, in any case, no promise of an afterlife is given. The entirely realistic and rationalistic attitude of Confucianism is also reflected in the fact that there exist no miracles for them, in contrast to Christianity, where we admit the existence of miraculous events. Miraculous events do not exist for Confucians. That is, everything can be rationally explained. And accordingly, there also exists no such thing as a saint. Confucius himself is neither a god, nor is he a prophet. Confucius is just a leader, a teacher. Because of this, some people have even doubted whether it is appropriate to refer to Confucianism as a religion. That is, without a god, without a prophet, can we legitimately refer to it as a religion? Let me, at this moment, give you a quote from Stanislav Andreski on Confucianism. Stanislav Andreski is a Polish sociologist who taught most of his life in England, and he is one of those very few sociologists who is not a leftist. There are a few others like Robert Nisbet and Helmut Schoeck. As I said, Stanislav Andreski is very interesting.4 He writes on Confucianism,

If we want to rank the religions in accordance with their compatibility with the findings of science, we must place Confucianism far ahead in first place. Indeed, its rationalistic and this-worldly outlook has led some scholars to deny that it is a religion. None the less, it certainly is a religion in the etymological sense (which is derived from the Latin word “to bind”) because it undoubtedly did constitute a bond which united many millions during two millennia. However, if we include an anthropomorphic concept of deity and a promise of life after death as essential characteristics of a religion, then we have to conclude that Confucianism was not a religion because to the Confucians, the supreme entity is the Heavens—an invisible and impersonal force rather than a personalized god modeled on the image of a terrestrial despot as in the religions born in the Near East.

When asked about what happens after death, Confucius replied, “When you don’t know enough about the living, how can you know about the dead?” He never claimed, nor was attributed posthumously by his followers, any powers which could be called supernatural or magical. The Confucians expect no miracles, have no saints and revere their founder not as a deity but as a great teacher.5  

So, we can say that Confucianism is certainly a world outlook that is clearly compatible with capitalism. It has a very strong emphasis on filial piety, on family solidarity, and that might have some sort of negative effect when it comes to individual inventiveness with respect to breaking out of existing traditions, but in principle, of course, filial piety and familialism is nothing that is incompatible with capitalism. Again, let me, as regards to this lack of innovative spirit that you can find among the Confucians, give you a quote from Charles Murray, out of his book Human Accomplishment: The Pursuit of Excellence, which I think captures this idea quite well. He says,

At the core of the Confucian ethic was the quality called ren, the supreme virtue in man—a quality that combines elements of goodness, benevolence and love. This ethic was most essential for those with the most power. “He who is magnanimous wins the multitude,” Confucius taught. “He who is diligent attains his objective, and he who is kind can get service from the people.” Indeed, to be a gentleman—another key concept in Confucian thought—required one above all to embody ren. And lest one think that a gentleman could get by with mouthing the proper platitudes, Confucius added, “The gentleman first practices what he preaches and then preaches what he practices.”6

Now, Chinese and Japanese children also, to a certain extent, are then, because of this strong family orientation, supposed to make their life decisions always mindful of first, the wishes and the welfare of their parents, then of their extended family, and finally of their community. There is a lack of encouragement for achieving one’s own fulfillment no matter what, something that you do find to a far larger extent, of course, in the Western tradition. In addition, there is great emphasis on learning among the Chinese; China is a meritocratic system, where people from all walks of life, from all ranks, can, through some sort of examination system, reach the highest levels of society. That is, it is a society that, in a way, selects for high IQs, and thereby also tends to bind the population to the earthly powers. It is because everyone can rise and there is a meritocratic system that makes it appear fair who rises and who doesn’t rise, even the lower strata of society are somehow consoled to live with this system.

What must be said as one of the explanations for why China nonetheless was not able to compete ultimately with the West, was the connection that existed between Confucianism and the state bureaucracies from very early on. That is, you did have, as you will see that we don’t have in the West, an immediate or a more or less direct identity between the earthly rulers (the Chinese emperor) and the top hierarchies of the Confucian doctrine, of the Confucian theology, for lack of a better word. So, Confucianism had tied its forces very early on to the state, and because of that, the inherent reluctance to invent and to innovate was further strengthened.

Again, I point this out. This combination of Confucianism with the state led to a certain amount of uncritical thinking, that is, what we know in the West and what we have learned in the West in particular, from the Greeks, to present an argument and then a counterargument and then another counterargument and try to hammer out what is right and what is wrong, try to refute each other in an endless game of back and forth, this is something that you rarely find among the Chinese. I must say, based on my personal experience (because we have lots of Oriental students in Nevada), I can even detect this among my students whenever it comes to writing critical essays. They are always extremely good when they do mathematical equations and multiple choice, they remember everything, they always rank on top of the class. But when it comes to writing pieces like we learned it in school, you have the thesis and then you have to present the counterarguments and then you have to filter out what arguments are stronger and which ones are weaker and possibly synthesize this sort of stuff in some way, they do show a significant weakness in this department. Another indicator for this—again, this is a little bit speculative—is while you do find a massive overrepresentation of Orientals in fields like mathematics, physics, engineering and so forth, they are significantly underrepresented in law schools. And in law schools is precisely where this sort of Greek-style arguing is, that we all in the West have learned from elementary school on. But, where this Greek style of arguing is in particularly high demand they are underrepresented, as compared with other fields where they are clearly overrepresented. Again, a brief quote from Charles Murray on this observation. He says about East Asia,

In the sciences, the disapproval of open dispute took a toll on the ability of East Asian science to build an edifice of cumulative knowledge....[T]he history of Chinese science is episodic, with the occasional brilliant scholarly discovery but no follow up. Progress in science in the West has been fostered by enthusiastic, nonstop, competitive argument in which the goal is to come out on top. East Asia did not have the cultural wherewithal to support enthusiastic, nonstop, competitive arguments. Even in today’s Japan, a century and a half after the nation began Westernizing, it is commonly observed that Japan’s technological feats far outweigh its slender body of original discoveries. One ready explanation for this discrepancy is the difference between progress that can be made consensually and hierarchically versus progress that requires individuals who insist that they alone are right.7

And of course you can tell that in the West there are plenty of people who think that they are right, that nobody else is right.

Now, from Confucianism, we will go to Judaism. From the outset, we will have to say that Judaism was always a very small and dispersed group of people, and as such they had in a way very little influence on the modern world. In addition, because they are a nonproselytizing religion, that is, they do not try to go on missions and convince other people to convert to their religion, they always remained a small group, dispersed over many places, with relatively limited influence. There are some people, such as German socialist Werner Sombart, one of the opponents of Ludwig von Mises, one of the so-called Katheder socialists, who advanced the thesis that the Jews were the inventors of modern capitalism, but this thesis is clearly false, for the following reason. Yes, it is true, for instance, that Holland, Venice, and a city like Frankfurt flourished after the influx of Jews into these places, and it is also true that after the expulsion of the Jews from Spain, Spain declined, but this does not necessarily show any causal relationship. There are also contrary examples. For instance, in Britain, industrial capitalism arose precisely during the period after the Jews were expelled from England and before they were readmitted to England, which shows that their presence was by no means necessary in order to develop capitalist institutions.

And there are other indicators that go in a different direction. For instance, wherever you had large numbers of Jews in the population, that is, wherever Jews were not a teeny-tiny minority surrounded by a different culture, as was the case, for instance, in Eastern Europe, there, the economic development was always negative. That is, there the Jewish presence went hand-in-hand with abject poverty. The Jews were more numerous in the backward countries like Poland and Russia, than they were in the advanced countries, Germany, France, and England.

When they begin to make major contributions to science, of course, nobody doubts this. This takes place only when they are small minorities in contact with dominant cultures surrounding them. For instance, in the Middle East, in Spain, during the so-called golden age of Arab rule and in particular, after the emancipation of the Jews by the Christians from the late eighteenth century on. I should emphasize that the emancipation of the Jews is a Christian achievement. The Jews were emancipated from their own rule and not by themselves, but by external forces, by Christians, no longer being willing, so to speak, to oppress them and treat them in the way that they were treated by their own. So, before the year 1800, you see comparatively little in terms of achievements coming from Jews, and the achievements that you do see are typically by people who had broken with their religion.

Traditional Orthodox Judaism requires, again, a rigid subordination to your family and to your community, not quite unlike what you find in Islamic societies. In the so-called ghettos there existed self-administration of the Jews, and this self-administration was frequently typically given to them by the outside ruler in exchange for paying the outside ruler a part of the fines that the rabbis imposed internally on their own community. The Jews living in ghettos had something to do with the fact that some of their taboos involved that they had to live very close to the synagogue and could not work during certain periods of the day, so they had to be in close proximity to certain places. They could not live widely dispersed from each other, at least if you were an Orthodox Jew.

In Spain, for instance, that was precisely the arrangement. You get self-administration in your ghetto; you can impose any type of fine, any type of punishment that Rabbinical Law allows to be imposed on other Jews, but a certain percentage of the money collected you have to give to the Spanish king. So, a mutually beneficial arrangement was found, established between the Spanish ruler, on the one hand, and the rabbis being in charge of the Jewish ghettos. Now, the life in the ghettos was almost completely under rabbinical control, not unlike the control that Islamic ayatollahs exercise over their population. To make money was permitted. To make money outside of the ghettos was permitted, but only in order to support Talmudic studies. And in order to do so, the Jews became the tools of the rulers, frequently in the suppression of the indigenous population. That was, in particular, the case in places like Poland and Russia. Jews working outside of the ghetto were used by the rulers as tax collectors vis-à-vis the Polish and Russian populations. The Jews were permitted to do this because…Max Weber refers to them as having a double ethic. That is, they had rules that applied to them internally that were different from the rules that applied to them externally. To give you just one example: while the Christians, for a long time, outlawed the charging of interest, the Jews also outlawed taking interest except from Christians. It was not permitted to take interest from other Jews, but it was permitted to take interest from Christians, which of course, made them particularly suitable for certain types of professions, like moneylenders.

In the ghettos—I’ll give you some quotes on that in a second—the reading of books in modern languages was completely outlawed. There was no writing allowed, even in Hebrew, unless it was explicitly permitted by the rabbis. We are nowadays used to the fact that Jews are particularly humorous people. Just think of Woody Allen or Murray Rothbard. But humor was something that was considered to be taboo in the ghettos. There was rigorous enforcement of eating and sexual taboos. Education was concerned exclusively with the Talmud and mystic writings. No math was taught, no science, no history, no geography. All violations were severely punished, up to and including flogging to death. And, as I said regarding the liberation of the Jews, from that point on we see that the dramatic achievements that they were capable of was essentially a Christian achievement, due to the attachment of the puritanical values of the Old Testament, which was also part of the tradition of Judaism. As soon as they were emancipated, combine that with the puritanical attitude that they had, they then became indeed enormously successful businessmen, as successful as any other group. I want to read you a little quote on this atmosphere in the Jewish ghettos.

[Before emancipation] there were no Jewish comedies, just as there were no comedies in Sparta, and for similar reasons. Or take the love of learning. Except for purely religious learning, which was, itself, in a debased and degenerate state. The Jews of Europe (and to a lesser extent also of the Arab countries) were dominated by a supreme contempt and hatred for all learning (excepting the Talmud and Jewish mysticism). Large parts of the Old Testament, all non-liturgical Hebrew poetry, most books on Jewish philosophy were not read and their very names were often anathematized. Study of all languages was strictly forbidden, as was the study of mathematics and science. Geography, history, even Jewish history, were completely unknown. Nothing was so forbidden, feared and therefore persecuted, as the most modest innovation or the most innocent criticism.

It was a world sunk in the most abject superstition, fanaticism and ignorance, a world in which the preface to the first work on geography in Hebrew, published 1803 in Russia, could complain that very many great rabbis were denying the existence of the American continent and saying that it is “impossible.”

The Jewish contribution begins after the emancipation of the Jews, basically from the outside. Before that they do not play a dominant role in the development of capitalism, but can actually be regarded as in some ways hampering that development.

Now I come to Christianity. While Western civilization eventually came to surpass all other civilizations, one has to admit that this was nothing that was obvious from the very beginning. Early Christianity was not individualistic, but it was absorbed in the collective community, to which a person was rigidly subordinated. Again, not quite unlike in Islam, earthly life was considered to be a mere preparation for the afterlife, and during the first millennium of influence exercised by Christianity, one must admit that Christianity presided over a regression in scientific knowledge and the division of labor. Recall, we saw this in an earlier lecture when we looked at population figures from 200 or 300 AD until about the year 1000; there is actually retrogression taking place—the population does not increase at all, and nothing in terms of scientific, scholarly, or technological achievements is accomplished during this period. So, what we have to say is that what we describe as a Western Christian outlook developed only gradually, especially through the incorporation of Greek Aristotelian ideas, culminating in Thomas Aquinas.

With Aquinas, the modern Christian view developed. Let me now describe this modern Christian view that turned out to be, obviously, quite successful in terms of the contributions that they made to science and economic development. In this modern Christian world view, the world is viewed basically as good and the greatest good lies in the future. The material and the spiritual world are seen as a unity. Recall, in Buddhism, for instance, it is somewhere suggested that the spiritual life separate itself from the flesh. In Christianity, spirit and body form a unity, and salvation also involves both, the body and the soul. There exists no soul without a body and only by the performance of bodily actions can the soul be saved. Man, as I mentioned before, in the Christian world view, is considered to be the high point of creation. Man is given dominion over the world; he is clearly separated and ranks above the animal kingdom. For Christians, there exists no such thing as a golden age that is in the past. Quite the contrary, progress is possible and the future holds promises for Christians. The world and the truth is knowable, because God has withdrawn and we can discover eternal laws. Wisdom comes as a consequence of effort; it is not automatically there, but requires achievements and efforts on the part of man, and it takes time to develop.

The social world is hierarchical, to a certain extent. There is God, and the pope, and then the cardinals, the bishops and the priests, and in the earthly realm, there is a king, the Lord, the father, the mother and the child. There is no ridiculous “equality.” The Christian church is antidemocratic, at least the Catholic Church is antidemocratic, but it is also individualistic, in the sense that everyone is created by God and everyone is capable of salvation, which attitude or outlook, of course, is mainly responsible for the fact that it was only in Christianity that one gradually got rid of the institution of slavery. Initially, of course, in old Christianity, slavery existed too, and there’s no clear-cut prohibition against it, but based on this view that everybody is a creature of God and capable of salvation and on the attitude that Christians were a missionary religion, trying to convert people, gradually the view became the dominant view that slavery is incompatible with Christian attitudes. It was not by accident that it was a few Spanish priests who, after the occupation and conquest of South America, were responsible for, not with immediate success, obviously, but over the time, with some success, to give rise to the opinion that the Indians, after all, are also human beings and not wild creatures that should be automatic objects of enslavement.

In addition, Christianity is social and cooperative and views the progress that is possible as a result of a cooperative effort. So, it is cooperation between people that brings us closer to the truth. And I’ll just make one remark about Catholicism and then I’ll come to a comparison between Protestantism and Catholicism. There is, of course, one strand of Christianity that has to be regarded with some degree of suspicion when it comes to the question of how suitable it is to allow the development of capitalism and capital accumulation. That would be the extreme Paulist view that one should love everyone like one loves oneself, instead of taking the view that one should love one’s neighbor as one loves oneself. It is possible to love your neighbor, but if your neighbors encompass, so to speak, the entire world and you are supposed to be charitable to the entire world, then this would, obviously, be a main obstacle in the way of capital accumulation. But, nonetheless, this is not the mainstream view, as far as I understand it.

Now, to the famous thesis of Max Weber, which you are all familiar with. Max Weber, of course, explains the rise of capitalism with the development of puritanical religions. And as we will see, there is some basic truth in this thesis, with some reservations. Now, capitalism as we know it was, of course, born in Italy and Italy is Catholic, so that clearly shows that Catholicism is definitely compatible with capitalism. In fact, the Roman church was a major banking institution, that is, it represented itself as a capitalist institution. And the first big centers of capitalism were Florence and Venice, again, Catholic places. And in addition one can say that as a matter of theology, Catholicism is, of course, far more enthusiastic about human existence and human autonomy and human reason and human intellect than, let’s say, Lutheranism and Calvinism is. Lutheranism and Calvinism are anti-intellectual doctrines, to a certain extent. For the Thomist, faith and intellect can somehow be reconciled and combined. For Lutherans and Calvinists, there exists a strict separation between the two, and they emphasize far more the importance of faith, of blind faith, than they emphasize reason.

On the other hand, in the Catholic religion, you have, of course, a greater emphasis on the enjoyment of life and you have, relatively speaking, a certain disdain for material things, that would, relating to the previous lecture, indicate that Catholics tend to have a slightly higher degree of time preference. And again, in looking at the present world, you can somehow see that that is true. I mean, la dolce vita—the good life or the sweet life—is something that is typical of southern countries, of Italy and Spain. La dolce vita in Germany in the nineteenth century was more or less unheard of. In the meantime, of course, we all live in some sort of secular age, so the Germans also do dolce vita plenty, in the meantime. But, again, talking about the time of a few hundred years ago when capitalism developed, it’s certainly clear that there was more of, as Murray Rothbard would say, life-affirming attitude among the Catholics, than there was among the Protestants for whom life was something less than enjoyable, to put it mildly.

In the twentieth century, I’m not sure if it applies anymore, but it seems to be that everybody has fun all the time, but in the old days, I think Catholics definitely had more fun because your sins could be easily forgiven, whereas the sins, of course, they stick with a Protestant forever. They never get rid of them. In fact, private property, until 1891, when Pope Leo XIII declared private property to be a good, private property had, before, been seen by the Catholics, as a regrettable, though unavoidable concession to the weakness of human nature. They were not opposed to it, but they thought it had something to do with human weakness and one had, regrettably, to accept this institution. Only relatively late, with Leo XIII, as a positive affirmation, was private property seen as a good thing.

Nonetheless, despite this more rationalistic attitude among Catholics, as compared to the blind faith attitude found among Protestants, Weber seems to be fundamentally right in the following way. In mixed populations, like in France or Germany, where large parts of the population are Catholic and large parts are Protestant, and Germany is almost half and half, we do find a significant overrepresentation of Protestants among the capitalists, and in general we can say that of course, capitalism was further developed and was more successful in northern Europe and also in the United States, than in southern Europe. And, of course, northern Europe is predominantly Protestant. This cannot be explained with the interest question. That is, Protestants had less difficulties with charging interest than Catholics, but in the Catholic doctrine, the interest prohibition had been by and large, undermined completely at the time. So, this is likely not the explanation for the greater success, as far as capitalistic development is concerned, of Protestant places.

Certainly, the doctrine of predestination has nothing to do with the greater success of the Protestant religions. If anything, if people had taken the doctrine of predestination seriously, they would have fallen into some kind of Oriental lethargic fatalism. After all, if all is predestined, why should I do anything? So, what we can infer from this is that the doctrine of predestination, while it existed on the books, was never really taken seriously by anybody. What is the most likely explanation for the greater amount of capital accumulation and success and so forth, of the Protestant religion, is simply their puritanical outlook, which involves the idea that you work without enjoyment. Work is the only way to riches. The riches or wealth that you accumulate are an indicator of grace. Work is, for Protestants, almost like prayer. There’s a certain amount of asceticism that Protestants accept. You don’t enjoy life; you just pain yourself, work harder and harder.

There is, among the Protestants, a more pronounced rejection of ostentatious consumption and of ostentatious displays of wealth. Again, you can see that even now; the rich people in countries like Italy or Spain live in places that look like rich people live there. I know many rich people in Germany that live in places which look no different from the place where I live. There is a rejection, of course, of gambling among the Puritans, drinking, all the rest of it. All of this that we might regard as an achievement of the puritanical religions, Lutheranism and Calvinism, however, might be regarded as some sort of mixed blessing, because what was truly unique in the Western world, and might have had a far greater impact on the ultimate superiority of Western civilization as compared to others than the Christian religion itself, is the fact that only in Europe was the power of the church and the power of the earthly rulers institutionally separated.

You had the pope in Rome, the Catholic Church being an international church, counterbalancing the power of the various local lords, reducing the power of these lords because they did not control the church at the same time. But, this separation of church and state, which was unique for Europe and existed in no other part of the world, this unique separation was, of course, to a large extent, if not completely, broken up and abolished, precisely through the Protestant Revolution. That is, by breaking up the international Catholic Church and founding various national churches—Lutherans, Calvinists, and Mr. Knox in Scotland and so forth—all of a sudden, the princely rulers realized that this gives the possibility for me to combine the highest rank in the worldly hierarchy, as king or prince, with the highest rank also in the church.

And insofar as—and this is the mixed blessing—Protestantism has systematically strengthened the power of the state and Protestantism has also been responsible, to a large extent, for the promotion of democratic values. Remember, I explained that in the Catholic Church you have hierarchies. The Catholic Church is in this sense antidemocratic. The Protestant churches are far more democratic. The high churches, the high Protestant churches have gone back, to a certain extent, in the direction of the Catholic Church because they were aware of the dangers that result if you let every individual interpret the Bible on his own. If you do that and if you have a document that is not internally consistent, then you get a splitting off of all sorts of weird sects. This is, of course, precisely, what one of the side effects of the Protestant Revolution was, that you had a multiplication of weird people, of weird things happening all of a sudden, which happens, of course, if every individual just interprets whatever he thinks is right, and nothing is filtered through some people who have more wisdom than others. And of course, the Lutheran Church, which was initially quite democratic, has abolished this, has also built up hierarchies, though not to the same extent as the Catholic Church, and so has the Anglican Church. And if you look at the present situation, the craziest churches are, of course, the churches that are most democratic, up to this point.

I want to briefly touch upon a very politically sensitive, if not to say, dangerous, subject. Again, I must say, I dared to bring it up at my university and I have not yet received any complaints. This is a table that is culled from IQ and the Wealth of Nations, a book recently published by Richard Lynn and Tatu Vanhanen, who did some very simple and elementary investigation and what they did was to try to show whether there exists some sort of correlation between IQ and measures of economic output such as GNP, or not.

I should say from the outset that they did not just use one IQ measure for countries; they typically had, from most of the countries, several types of IQ measures available. They showed first that these measures are all highly intercorrelated, convincing us that we can put a certain amount of trust in the numbers that they use, and they also did not just use one economic output measure such as GNP, but also if it was available, two or three, and again intercorrelated them and tried to show that there was a high internal consistency among the numbers. Now, the correlation that they established—and I’ll say something about the interpretation of this table—is extremely high for social sciences. It is close to 0.7, which is, if you have ever done empirical research in sociology or psychology or so, mind-bogglingly high. I mean, people are usually impressed already if you have correlations of 0.2 or 0.3 or something like that. That is already considered to be worth showing. So here, we get very high correlations.

The interpretation of Table 1 follows simply from the heading. The first number refers to the IQ; the second number is the actual GDP per capita in the year 1998, and the third number is called Fitted GDP, which would be the calculated GDP based on a regression analysis; that is, what we should expect the GDP to be, given the IQ in that country and taking the stable relationship between IQ and GDP into consideration. The countries are ordered here in alphabetical order, all the way to Zimbabwe.

TABLE 1

I should make one remark about the more underdeveloped countries. In the more underdeveloped countries, the actual GDP tends to be underestimated, because in very highly agricultural societies, where there is a relatively high degree of self-sufficiency, GDP numbers understate the productive output because GDP measures only goods and services that were actually bought and sold in markets. So, if you grow your own tomatoes and your own potatoes, they would not be counted, whereas if you grow potatoes and tomatoes and then sell them on the market, then they would be counted. Obviously, in terms of standard of living, that would make no difference, but in terms of GDP or GNP, numbers such as this, in one case it would be counted and in the other case it would not be counted.

The overall impression that you get from this list is that those countries that have high IQs also have high GDPs. And those countries that have very low IQs have, on the average, very low GDPs. There are, however, some clear-cut exceptions, obviously, which would have to be explained differently. Take the case of China, which is here listed with an IQ of 100 and a GDP per capita of $3,000 and a calculated GDP of $16,000. Now here, the explanation is that China was and still is, to a certain extent, a Communist country, leading, of course, to extremely low actual GDP and leading us, on the other hand, to the conclusion that if this type of system were abolished, the potential of China is significant. That is, we can expect GDPs of $16,000 per person or in the neighborhood of that. There are also some countries that seem to be overperforming. The Germans produce a higher GDP than their IQ would indicate, for instance. The same is true for the US, if I remember correctly. The US has an IQ of 98, and it has a significantly higher actual GDP than predicted GDP based on the intelligence of the population, which again, we would explain with having a relatively freer market system than some other places have. One might object to a table such as this, “Doesn’t intelligence also have something to do with picking the right economic system?” So, maybe there is something wrong with the Chinese, despite having such a great potential; after all, for a considerable amount of time, they lagged behind to such a great extent.

We can also—again, I do not want to overinterpret this table—but, you can also see, for instance, how relatively vain the attempt is, for instance, to expect economic miracles in Africa to take place. If you look at African countries and look at the IQs there, you will have a rather dim impression as far as the growth potential of those countries are concerned.

I will end this discussion—I think the table itself is highly interesting to study—by saying that, of course, IQs are also not what we might call invariable biological constants. They are subject to variation as well, even though it is not as easy to vary them as many other things. Obviously, we would expect that the old Babylonians and the old Egyptians must have done somewhat better than the present-day Babylonians and the present-day Egyptians, given their relatively low performance nowadays and their glorious achievements in the past. The most straightforward way to imagine that these numbers are subject to influence is to just realize that populations can, of course, engage in eugenic breeding practices, so to speak. For instance, societies where the upper classes, the more intelligent people, have it as a habit to have larger numbers of children, and the lower classes with lower IQs have smaller numbers of children, that would lead, over a few generations, obviously, to an upward lifting of average IQs. The same thing, of course, also applies in reverse. That is, if you had the lower classes with lower IQ levels producing the overwhelming bulk of children, and the upper classes producing very few or none, then one would expect that over the timespan of several generations the average IQ would fall.

Hypotheses have been advanced, for instance, for why is it that Jews tend to have a very high IQ, even though Israel here is not particularly outstanding, with an IQ of 94, but the Jewish population in the United States has an IQ well above. Partially, that can be explained simply by migration. That is, the more successful people are more mobile and go to places where there is more opportunity for them, and there is a larger concentration of those. For instance, they have done studies where they compare the IQ of Scots who live in London as compared with Scots who remain in Scotland and found that the IQ of Scots in London was significantly higher than Scots who stayed behind in Scotland. Again, that has a rather obvious explanation: the smarter ones moved. The case of East Germany versus West Germany is also interesting. They do not break it up here; German is simply listed as IQ of 102, but I have seen comparisons between East Germany and West Germany, and there the difference was that West Germany had one of 104 and East Germany of 98. And again, there exists a very straightforward explanation for a phenomenon such as this. East Germany was under socialist rule and expropriated the property of most of the successful individuals, and the most successful individuals left the country. So, of course, that lifted the IQ in West Germany and lowered the IQ in East Germany. Another explanation that has been advanced, coming back to the case of the Jews, for instance—I tend to be somewhat skeptical about that one, but just for illustrative purposes, I might mention it—that the largest numbers of children were in Orthodox Jewish families, typically produced by rabbis. If one assumes that the rabbis were the smartest of the bunch, then you would expect an upward tendency in IQs simply by a different type of breeding behavior. Clearly, explanations along this line are not sufficient when it comes to explaining the wealth of nations, but I think one would also be blind to the facts, if one simply dismisses things like this easily. The evidence that Lynn and Vanhanen present is dramatic and overwhelming. You will be shocked to see how easy the explanation for a phenomenon can be sometimes, an explanation that other people struggle around for decades and do not explain.

• 1Carroll Quigley, The Evolution of Civilizations, 2d ed. (Indianapolis, IN: Liberty Fund, 1979), p. 134.
• 2Herbert Spencer, Principles of Sociology, 2nd ed. (New York: D. Appleton Co., 1916), p. 557.
• 3G. E. von Grünebaum, Islam: Essays in the Nature and Growth of a Cultural Tradition (1955; Whitefish, MT: Kessinger Publishing, 2010).
• 4I recommended sociologist Stanislav Andreski. In addition to his general books, I want to mention one in particular, one that is also a hilarious book. It is called Social Sciences as Sorcery. It makes fun of the sociology profession in general. If you have not read that book, I highly recommend it. It is something that you should read late at night before you go to bed and you will laugh yourself to sleep. It is a wonderful book and it’s all you need to know about sociology.   
• 5Stanislav Andreski, Max Weber’s Insights and Errors (1984; London: Routledge, 2006), chap. 5, sec. 3.
• 6Charles Murray, Human Accomplishment: The Pursuit of Excellence in the Arts and Sciences, 800 B.C. to 1950 (New York: HarperCollins, 2003), pp. 41–42.
• 7Ibid., pp. 398–99.