December 25, 2005

Catholic Ireland has turned economically Protestant

Posted in Celtic Tiger · 4 comments ·

�It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of heaven.�
This is one of the few Bible parables I remember from school. The image jumped – or rather waddled – out of the page at me.
The picture of the fat, rich man is powerful, however, like many other images, it has now been turned on its head because these days, the rich are thin while the poor are fat.
Yet, the picture of the fatty struggling to get through the eye of a needle, while the lithe, penniless pauper limbo-danced through effortlessly was always going to stick with me.
The sentiment was quite simple: being rich could well be a hindrance in the hereafter. Material possessions said nothing about your spiritual status. In fact, the more you had in this world, the harder it would be to do well in the next. Catholicism held that there was an explicit inverted relationship between being rich and your moral status on earth.
With the emergence of Protestantism in Europe, the idea that the rich were in some way morally suspect or the notion that wealth should be shared by the community and given to the poor was challenged. A new idea – Protestant in nature – contended that there was virtue in commerce, in materialism and in individual activities.
As Article 39 of the 39 Articles of the Anglican Faith sets out: �Contrary to what some Anabaptists claim, the wealth and possessions of Christians are not common, as far as the right, title, and possession of them is concerned.�
Thus, within Christianity, two competing economic philosophies emerged that had enormous implications for the evolution of countries, societies and peoples.
This religious element to economics has often been neglected. Christmas gives us an opportunity to reassess the role of religion in economics. Despite the best efforts of many in academia, economics is not just about remote concepts, such as money supply, elasticity and current accounts. Crucially, it is about deep culture.
As the two conflicting stories – the Protestant and the Catholic ones – on wealth above indicate, the economy of a country � how it performs, where it invests and how it works � sheds much more light on its culture than many realise.
Just as a huge part of culture and self-identification is about religion, economics is also about religion. Which religions perform best economically? Why did Catholic countries fall behind financially in the 17th century? Why did Protestant countries go into relative decline in the second half of the 20th century?
Why have Europe’s traditionally laggard Catholic states been economic dynamos in the last decade?
In Ireland, is it merely a coincidence that the economy took off in the 1990s at the same time as the Catholic Church fell from grace? How can we explain the enduring relative poverty of Muslim countries?
These questions are fundamental, yet rarely find their way into the business pages or the financial press in general. To try to explain the link between economics and religion, the best place to start is with Galileo.
He was no saint and was partial to a fair bit of carousing. But he was the father of experimental science, the sharpest thinker of his time, a great debater and a dismissive polemicist.
In 1663, he was condemned by the Vatican for heresy. The Vatican’s charge against Galileo read: �The opinion that the sun is at the centre of the world and immobile is absurd, false in philosophy and formally heretical because it is expressly contrary to Holy Scripture.�
Galileo’s big mistake was, not so much taking on the Vatican, but rather how he did it. He made a fatal error by publishing his heretical views in Italian, rather than Latin. At a stroke, he put his views beyond the Church and disseminated them to the public.
Popularising heresy – rather than the heresy itself – was the greater sin, as it could do greater damage to the reputation of the sitting Pope.
Ultimately Galileo retracted, but was heard to say at the end: �Eppure, si mouve’� (�Say what you want, it moves’�).
The vilification of Galileo sparked a massive migration of cosmologists, scientists and mathematicians to the north – if not physically, then at least spiritually.
In 1670, a French priest visiting Amsterdam wrote of Galileo’s paradigm: �They are all for it here.�
From then on, the die was cast. In general, Protestant countries embraced scientific discovery, allowed refugees to mingle among their own, encouraged trade and discourse and, more than anything else, fostered individualism.
Thus, it was fine to embrace Newtonian physics and be a good dissenter. This tolerance (as opposed to encouragement) of irreverence, questioning and enquiry allowed innovation to flourish.
Innovation made the Protestant merchants rich and this permeated through society. A French count concluded: �The English are rich because they make things, not for the rich, but for the people.�
Throughout the Protestant world, trade surged. Commerce and the pursuit of trade and riches was enshrined in the 39 Articles, which put the profit and loss account on sound theological ground.
In contrast, the Catholic world went backwards.
The Church’s obsession with control and its fear of scientific enquiry, plus its alliances with the gentry, meant that the system of land-based (rather than trade-based) wealth endured.
The stronger the central control, the less likely it was that tradesmen would innovate and the more likely that a corrupt system of licence-based trade and clientelism would emerge.
Nowhere is this more evident than in the economic history of America.
Obviously there were huge differences to begin with when the first Spaniards and the first Puritans arrived in South and North America. In 1600, Spanish Catholic Mexico was ten times richer than Massachusetts. By 1800, it was twice as poor. By 1900, it had fallen back much further.
The gap in economic performance can be explained by the different cultural and religious approaches to trade, innovation, enquiry and finance.
Starting from a much lower base and a much harsher environment, the Protestant settlers out-thought, out-traded and eventually overwhelmed the conquistadors of Mexico, Texas and California.
Weber wrote about the Protestant work ethic in the 1930s, and, although it had historical resonance then, as a forecasting model it has not stood the test of time very well.
This is because the economic history of Europe and Asia since 1945 has been one of the collapse of a Protestant economic hegemony in the face of resurgent Catholic wealth in Europe – most evident in France, Italy and Catholic south-west Germany from 1945 to 1985. Traditional Protestant powers – such as Holland and, especially, Britain fared badly.
On the global stage, the emergence of Confucian capitalism in south-east Asia in the 1980s and 1990s and Japan’s lasting dominance in trade knocked Weber’s theories on the head.
Back home, the difference between the performance of the Republic versus the North made a mockery of Weber, while the stellar growth rates of Catholic Spain and Portugal reinforce the emergence of Catholic nations as economic models.
Maybe the crux of the theocratic dilemma is that Catholic nations have achieved economic vibrancy by becoming more �Protestant’ in the traditional trading sense. By opening up to ideas, trade and immigration, we have not only taken off, but overtaken the traditional Protestant European powers.
Some would go as far as to say that, in Ireland at least, the Catholic south now looks more like the tolerant, mercantile, reformed Holland of the 18th century than the Protestant north, which is a dead ringer for the atavistic, protectionist, unenlightened, suspicious Vatican of Galileo’s day.
Rome Rule, how are you? We have become a nation of Protestant Catholics.
Happy Christmas!

  1. Stephen

    Another very interesting train of thought from Mr
    McWilliams, although I had always been thought in
    (catholic) school that Martin Luther started the
    reformation because of his discontent with the sale of
    indulgences to rich catholics?

    Despite what is written in the bible, I doubt that many
    rich catholics, in Ireland or elsewhere, ever felt much
    guilt about their wealth – sure wasn’t it the will of God!
    Contrarily the majority of poor catholics were given the
    exact same reason for their financial state, whereas
    someone of the protestant mindset knew that it was within
    their own hands to improve their lot – with a little help
    from Jesus. As for the fall of the great muslim states from
    enriched and enlightened lands to their current second
    world status; this had more to do with the stagnation
    caused by centuries of Ottoman control and later the
    exploitation and division by the great powers of Europe
    than it had to do with any religious dogma.

    I would say it’s slightly insulting to call the Irish of
    today Protestant Catholics. What I see in Irish society
    today is the complete worship of the God of consumption. To
    consume is to worship and the 24/7 opening of department
    stores testifies to that fact, especially at Christmas.

    As the ads on Newstalk106 tempt us “Missed out on the
    property boom here, not to worry plenty of cheap apartments
    going in Bulgaria!” My God, does anyone sit down and think
    what they are spending their money on?

    Indeed, for every year of the Celtic Tiger that passes by
    Irish society would seem not only less catholic, but less
    christian. With couples more worried about his and hers 06
    numberplates rather than their health, their family, their
    neighbours and those less fortunate than themselves.

    This post is not intended to be begrudging of Ireland’s
    recent economic success and all the wonderful consequences
    that it has brought with it like zero unemployment,
    returning emigrants and of course the cosmopolitan mix of
    the country in the 21st century. It is just a reminder to
    keep things in perspective in case this house of cards
    comes tumbling down ….

  2. Paul Rux, Ph.D.

    David, this is another example of why I read
    you “religiously” – pun intended. Ready or not, here
    comes 2006! May it bring good things.

  3. Ben Carter

    I agreed 100% with the comments of David Mc Williams made on the RTE Radio One “Spectrum” Christmas special.I regard the casual use of the word “racist” to stifle any debate on immigration into Ireland as particularly sinister.

  4. Ben Carter

    The following comment is not related to the above articles, so apologies if it is inserted into the wrong place. I agreed 100% with the comments of David Mc Williams made on the RTE Radio One “Spectrum” Christmas special regarding immigration into Ireland.Generally I regard the casual use of the word “racist” to stifle any debate on immigration into Ireland as being sinister. However I regarded its usage by those other guests on the programme opposing Davids views as being particularly crude and desperate replacement for rational consideration of position of the majority of the indiginous populations everyday struggles to survive. This majority of the indigenous population : people struggling economically and with health concerns etc, recieve various forms of ‘dogs abuse’ from many quarters and in many contexts continually, in an ever increasingly aggressive Irish society. One of the reasons for this increased aggression is undeniably the influx of aggressive and greedy people who have, merging with similar Irish people, collectinely caused the general ‘quality of life’ to deteriote for everybody – not just immigrants. . Further this type of language/strategy (for that is what is is) being used by people in order to get their own way, or particularly coming from people who are trying to carve out political careers by using immigration as a vehicle should be treated with particular scepticism

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