The Protestant Ethic and The Spirit of Capitalism

Classical Sociological Theory

McGill University, Fall 2004

SOCI-330, Prof. Nelson

ESSAY # 4

Submitted By:

DIEU HOANG, Quynh 119233107

Introduction – In accounting for the origins of bourgeois capitalism, Weber did not begin with the concept of ‘human desire’ for personal gain. Apparently universal, this is equally evident across a wide range of historical conditions. The general acceptance of a way of life based upon rational, legal acquisition through individual effort, on the other hand, he regarded as unique to the modern Occident. Looking for its origins, he studied that wide body of persons whose commercial and productive innovations, beginning at about the middle of the seventeenth century, revolutionized the European economy (Poggi, 1983).

Though different in many ways, these persons had in common an earnestness of purpose that gave dignity to their economic activities. Diligently disciplined in their quest for profit they seem not to have been motivated by a desire to use their gains for the satisfaction of their material appetites. They were hard working and thought always in terms of potential consequences. Their very definite ideas about the nature and purpose of a business enterprise were for Weber “the spirit of capitalism” (Weber, 1976).

The people of medieval and early modern Europe defined their ‘interests’ in terms primarily of their eternal fate; the redefinition in terms of worldly goods could not have occurred without a positive religious sanction. Weber (Weber, 1976) recognized, of course, that non-religious elements played a part in the development of the Protestant ethic and in its influence on social arrangements. He addressed early in his argument the overwhelming importance if effective legal systems, the availability of labor, and rational bookkeeping. He also placed heavy emphasis on the importance of money but he also argued that such material conditions could not in themselves provide a complete explanation for great historic processes. Ideas also played an important and significant part. In explaining the appearance of modern capitalism, one had to necessarily refer to the specifically religious ethos that paved the way for it (Weber, 1976).

According to Weber, “it […] has been claimed that the greater participation of Protestants in the positions of ownership and management in modern economic life may to-day be understood, in part at least, simply as a result of the greater material wealth they have inherited. But there are certain other phenomena which cannot be explained in the same way.” As evidence of this claim, he points out that there exist a discrepancy in education, in positions of ‘upper ranks skilled labor’ between Protestant and Catholic families whereby the latter lags behind and exhibit a “stronger propensity to remain in their crafts” while Protestants are more likely to fill upper managerial positions. This discrepancy, Weber attributes to differences in religious ethos: “the explanation […] is undoubtedly that then mental and spiritual peculiarities acquired from the environment, here they type of education favored by the religious atmosphere of the home community and the parental home have determined the choice of occupation, and through it the professional career.”

Capitalism: Economic Ethos – In attempting to provide an explanation for the rise of capitalism, Weber begins by distinguishing ‘capitalism’ and ‘modern capitalism’; for Weber, capitalism as involving an exchange of goods in return for money has always existed in the form of ‘profit based upon the utilization of opportunities for exchange’ but this type of ‘adventure capitalism’ is different from ‘modern capitalism’ in the sense that the former entails a relatively free exchange of goods in markets, of superior methods of bookkeeping but more importantly, of workers and the workplace itself as being more rational, systematic and organized in nature (Weber, 1976). However, what truly separates modern capitalism from its more primitive form is economic ethos. This ethic legitimatize and forms the basis of workers’ motivation for hard and arduous work for whom work is not necessarily an end in itself in terms of accumulating vast amounts of money and wealth nor as a means to salvation as implied by certain religious doctrines (e.g. Calvinism) but rather as something virtuous and noble. For Weber (1976), the perceiving of work as something honest and decent constitutes the true ‘spirit of capitalism’ as opposed to traditional capitalism in which individuals tended to regard work as drudgery and something to be avoided as soon as it provided the minimum level of resources necessary for subsistence.

According to Weber, under the traditional economic ‘spirit’, capitalism could never flourish because there would be no progression in society insofar that no technological advances will be made because individuals will avoid work because it is seen as laborious and strenuous and hence, something to be steered away from. Nevertheless, Weber concludes that even with an economic ethos, capitalism itself did not produce the spirit of capitalism but argued instead that religious doctrines and ideologies produced a shift from traditional economic spirit to that of a modern economic one thus, moving work from an end-producing means to the center ...

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Religious Dogmas and Their Influence on Capitalism – Weber, like others in Germany in the seventeenth century, believed that religious beliefs influenced on individuals’ work habit and approaches to business and as well, to life in general. In his search for the sources and influences that led to the creation of the spirit of capitalism, Weber looked to medieval Catholicism, Lutheranism and the ascetic Protestant churches and sects to examine the degree to which religious belief engender motivations thereby giving rise to a ‘methodical-rational organization of life’ and also, the extent to which these beliefs situate ‘psychological rewards’ directly upon systematic economic activity.

Beginning with Catholicism, it was discovered that economic activity was never linked to religious beliefs. Prayers, church attendance, confessing sins, upholding the Commandments and engaging in ‘good works’ were methods that people of the Middle Age used to alleviate their anxiety. These were considered by Weber as ‘isolated actions’ that were not reflective of w systematic, rational, organized and methodical way of living. Only monks and nuns organized their lives in these ways but other than their existence (which was outside the real world) no other Catholic person lived their life in this way.

For Lutherans, work was perceived as a ‘calling’ in which individuals were duty bound to remain in a specific line of work for it was believed that each person had a per-destined “vocation” that he or she was meant to perform for the duration of their lives. Because Lutheranism never emphasized that success was a goal for which individual should strive towards nor the striving for beyond the standards set by each work, work became a moral legitimation and mundane since individuals were encouraged to remain in their God-given vocation (Weber, 1976).

In his examination of ascetic Protestantism (i.e. the Puritan sects and churches of the seventeenth century such as Calvinism, Pietism, Methodism, Baptists, Quakers and the Mennonites) Weber discovered that the spirit of capitalism most likely originated from the dogmas of Calvinism. The central theme of Weber’s thesis is ‘ascetic’ which from the Greek word which meant ‘one who exercises’ and means, among other things, “anyone who lives with strict discipline and abstinence.” A person engages in such behaviors, says Weber, with the intention of subjecting himself to the “supremacy of a purposeful will, to bring his actions under constant self-control with a careful consideration of their ethical consequences.”

The disciplines most characteristic of Western asceticism are thought to be chastity, poverty, and obedience; the ascetic expects to rise above the demands of human nature by forcing it to follow a path contrary to the one which is natural to it. Such a person has accepted personal responsibility for pushing aside every distraction in order to direct his or her life toward the realization of some supreme value. The values, it is argued, may vary from one historical situation to the next but the single-mindedness with which they are pursued probably will not. The problem of personal choice, which in earlier times was handled by means of rigid socialization, is now dealt with by means of individualized character. The seeds of this personality type are to be found in medieval asceticism. When the emphasis on obedience shifted to an emphasis on personal effort, the highly motivated individual, fixed upon definite purposes and guided by internalized principles, emerged as the prime mover of Western civilization. The story of this transformation is the story of the Protestant ethic.

Beginning in the sixth century, a considerable number of the devout felt themselves called by God to rise above the demands of the flesh by living the ascetic life in a monastery. Here, they found that obedience was expected to take the form of hard work. Work became the ascetic discipline par excellence (Weber, 1976). In the thinking of the Protestant reformers, work remained a religious discipline, with this difference, however, that it was a discipline to be followed in the secular world rather than in isolated religious community. Calvin, for example, thought that the best way to serve God was by means of work in a calling that would serve society. Brotherly love was to be expressed in the fulfillment of economic responsibilities.

The same Protestant sects that placed heavy emphasis upon the necessity of personal religious commitment (the ascetic sects) were also those who were the most vigorous in demanding that their adherents be busy with whatever it was that God had given them to do. The seventeenth century Puritan who came to his pastor concerned about his terrible uncertainty with regard to the nature of the eternity to which he had been predestined was advised simply to work hard at his calling. Deprived of the release in which the Catholic found in the confessional and the Lutheran in his sense of communion with God, Baptists and Quakers (and later Methodists) could testify to the reality of their faith only by means of practical achievement (Weber, 1976).

Since the Church was no longer a means of grace, the sacraments no longer objective proof of salvation, the individual was now required to show that he is worthy of salvation through continuous productivity. Because the human lifespan is infinitely short and barely sufficient to ensure the attainment of salvation, it was therefore essential that individuals make the best possible use of their time. Adherents of the Protestant ethic thus placed a high value upon continuous productive activity. Socializing, idle talk, and luxurious spending were thereby all regarded as morally reprehensible. Individuals were encouraged to push aside all distractions in order to accept complete personal responsibility for the achievement of that which they value.

Although hard work and optimal productivity were emphasized as being important, it was not enough that people simply engaged in hard work and long hours. For the Protestant, if an individual could find a better way of doing things and failed to employ it, he was considered as being guilty of casting a blessing back into the face of the Eternal. The result was a drive, among those imbued with such attitudes, to find constantly newer and more efficient means of production. The member of an ascetic sect was thus encouraged to be diligent in every aspect of his or her economic activities. The deliberate pursuit of wealth (i.e. avarice) was however condemned; for example, the Puritan businessman who acquire his wealth as a result of deliberate profit-seeking and/or dishonest transactions with his clients can never hope to achieve salvation. Quakers and Baptists earned their salvation by their honest business conduct (e.g. fixed pricing, reliable economic transactions) with the result that their neighbors were willing to do business with them and to invest in their enterprises. Piety paved the way for material success (Weber, 1976).

The material blessings that followed this success however had to be utilized with care and not

abused for personal enjoyment. The notion of vicarious consumption was greatly frowned upon by ascetic Protestants; the ascetic Protestant believed that he had to account for every penny and to avoid wasteful expenditure whose purpose was solely personal enjoyment. The result was that the successful individual, having made modest provision for himself and his family, reinvested what remained of the earnings and as a consequence, his business also expanded and in turn, more earnings were produced and vice versa.

Capitalism Today: The Modern Businessman – We cannot return to the seventeenth century in order to make a detailed empirical examination of this model. What we can attempt to do is understand the system of values Weber described, see what has become of it, and examine its effects upon contemporary attitudes and work behaviour. Perhaps one of the best way to examine whether these values has any effects on economic success is to examine ‘successful’ business leaders in today’s time and explore their motivations, impetus, principles and so forth and whether, if any, they bore any relationship to their success as premised by Weber’s model. Perhaps no one is better suited than William Henry III Gates – better known simply as Bill Gates of Microsoft – to explore Weber’s central thesis.

In 2004, Forbes infamous ‘Forbes’ 400 List’ ranked Bill Gates as the number one richest man in North America. In fact, not only is Bill Gates this year’s richest man in America, he has steadily maintained this position for the past decade. It is argued that his ability to accumulate more earnings and assets each successive year can be attributed to his work ethics, ethics that economists have akin to Weber’s Protestant ethic but in a secularized form. Many supporters of Bill Gates would argue that his present wealth is the product of a combination of work values and personal traits: a more-than-average intelligence, ingenuity, innovativeness, creativity, visionary and of course, hard work. In Bill Gates' new book Business @ The Speed of Thought, he lays out 11 rules that students do not learn in high school or college, but should. The central theme of these rules is that nothing in life is given for free and if one wants to have a moderately god life

one must be willing to work hard.

Whether or not Gates’ working principles are tied in any way to religious beliefs of productivity is something not easily done but according to a PBS interview with David Frost in 1995, Bill Gates stated, "In terms of doing things I take a fairly scientific approach to why things happen and how they happen. I don't know if there's a god or not, but I think religious principles are quite valid." What Gates’ meant by this is uncertain but we can presuppose that the implied meaning is rather one of ‘luck, chance and fortune’ and/or implicit reference to hard work being compensated rather than that implied by Weber’s model. In an interview with Time Magazine when asked about religion and God’s existence, Gates answered, “I don't have any evidence of that... Just in terms of allocation of time resources, religion is not very efficient. There's a lot more I could be doing on a Sunday morning."

Since Gates’ rise to wealth and hence stardom, hundreds and possibly, thousands of articles have been published and as well, websites, and Internet discussion forums have been established to either extol the virtues of Bill Gates or to criticize him. Depending on your position – that is, whether you envy his wealth or not – you’re likely to regard him as being the most successful and hard-driven capitalist who has earned the right to own $48.0 billion in assets and personal wealth or conversely, to censure him for being so rich while the rest of the world lives below the poverty line. The facts about Bill Gates as they relate to his present success are: he is work-driven, is passionate about computers, an entrepreneur, a competitor, ambitious and motivated. Of course, depending on the semantics used, he is also known to be a work alcoholic, aggressive, ruthless, demanding, and confrontational in his management style. If we were to simply take his wealth as direct evidence of the effects of the Protestant Ethic, even then, the concept is invalid as it presupposes that individuals who work are necessarily motivated by religious beliefs and aspirations instead of material goals and motivations.

Conclusion – In the twenty-first century, there is little evidence that people engage in productive work for the attainment of salvation. With the exception of the Amish people, most workers in contemporary times do so primarily for reasons other than a belief in the afterlife, hell or heaven or something like that. If religion or religiosity is going affect economic performance, it's going to work by affecting beliefs that affect certain character traits such as: work ethic, honesty, integrity, truthfulness and so forth. It might be, for example, that formal religion or other things influence beliefs, and those might work in a positive direction to encourage productivity and growth. Nevertheless, if we were to examine the growing trend in corporate scandals and malfeasance in today’s times, there is little to suggest that religiosity as a system affecting honesty, ethical work practices, and good work standards is the key basis of capitalism today. Nevertheless, as market relations shows, dishonest business can only be an exception and certainly not a rule. The essence of a market is equivalent exchange. A market is simply a way to structure the complicated system called ‘the economy’ once it stops being natural. However, a normal functioning of that system is impossible unless all of the participants therein abide by rather stringent legal and ethical norms. This is especially true in developing countries in which a reliable legal base is not yet outlined, the significance of ethical restrictions doubles.

Thus, on the threshold of the 21st century we have once again discovered the purely utilitarian link between moral rules and business principles, which Benjamin Franklin mentioned as early as the 18th century: honesty is useful, for it brings credit. In short, it is rewarding to be honest.

APPENDIX – Bill Gates’ 11 Rules

RULE 1 Life is not fair - get used to it.

RULE 2 The world won't care about your self-esteem. The world will expect you to accomplish something BEFORE you feel good about yourself.

RULE 3 You will NOT make 50 thousand dollars a year right out of high school. You won't be a vice president with a car phone, until you earn both.

RULE 4 If you think your teacher is tough, wait till you get a boss. He doesn't have tenure.

RULE 5 Flipping burgers is not beneath your dignity. Your grandparents had a different word for burger flipping - they called it opportunity.

RULE 6 If you mess up, it's not your parents' fault, so don't whine about your mistakes, learn from them.

RULE 7 Before you were born, your parents weren't as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you are. So before you save the rain forest from the parasites of your parent's generation, try delousing the closet in your own room.

RULE 8 Your school may have done away with winners and losers, but life has not. In some schools they have abolished failing grades and they'll give you as many times as you want to get the right answer. This doesn't bear the slightest resemblance to ANYTHING in real life.

RULE 9 Life is not divided into semesters. You don't get summers off and very few employers are interested in helping you find yourself. Do that on your own time.

RULE 10 Television is NOT real life. In real life people actually have to leave the coffee shop and go to jobs.

RULE 11 Be nice to nerds. Chances are you'll end up working for one. Things that are necessary, although not sufficient, to know in order to score well on the first exam in Soc 483

REFERENCES

Poggi, G. 1983. Calvinism and The Capitalist Spirit: Max Weber's Protestant Ethic. Amherst: University of Massachusetts Press.

Internet Sources

Weber, M. 1976. The Protestant Ethic and The Spirit of Capitalism. Translated by Talcott Parsons and Anthony. New York: Scribner. This article was attained online at: http://wikisource.org/wiki/The_Protestant_Ethic_and_the_Spirit_of_Capitalism#Religious_Affiliation_and_Social_Stratification

www.geocities.com/johnbitenc - 11 rules

http://waltonfeed.com/self/email/billgates.html - 11 rules

Quote from “The Protestant Ethic and the Spirit of Capitalism” online at Wikisource.org (http://wikisource.org/wiki/The_Protestant_Ethic_and_the_Spirit_of_Capitalism#Religious_Affiliation_and_Social_Stratification)

Webster’s Twentieth Century Dictionary, Unabridged, 2nd ed., p. 108

See Appendix: “Bill Gates 11 Rules”

http://en.wikipedia.org/wiki/Bill_Gates

http://www.antioffline.com/HUM/bill.gates.quotes.html