Dear friends of Istituto Acton,
I spent last week in London attending a couple of stimulating conferences at the Institute for Economic Affairs  (IEA) and the Transformational Business Network  (TBN), and catching up with some friends and acquaintances. All of the discussions were either officially off-the-record or of a personal nature, so I can’t be too specific about who said what but my general impression, obvious to anyone who’s visited, is that London remains an extremely vibrant, forward-looking, prosperous global capital in stark contrast to much of Europe and even other parts of Britain. But the reasons why are varied and may upset some seemingly-settled orthodoxies about religion and wealth.
London’s wealth is certainly tied to the City and international finance, even if giants such as the Royal Bank of Scotland are posting record losses  (£9 billion in 2013). There’s much distress about such losses, especially subsequent to the massive bailouts RBS and other banks received in the wake of the 2008 financial crisis. We often forget that making bad investments and taking losses is part of the normal, necessary functioning of the market economy; Milton Friedman  went so far to say that losses are even more important the profits. Wealth can’t be created if we don’t allow losses to get rid of badly-managed or mistaken enterprises.
No one wants to fail, of course, but without failure, we can’t have success, even at the individual level. I’m reminded of a Teddy Roosevelt image  we used to have at the office of my college newspaper emblazoned with the words, “The only man who never makes mistakes is the one who never does anything.” Certainly true, even if the vice of sloth and complacency often tells us otherwise; what’s more important is to learn from one’s mistakes and try again.
Critics of capitalism have often cited the constant striving and relentless competition as negative aspects; what’s the point of hard work, after all, if we can never enjoy its fruits? The austerity and disciple required by the market are sometime called “Protestant” because they supposedly imply a pessimistic, individualistic view of human nature, as opposed to Catholicism’s more positive, “relaxed,” social view. Made famous by the German sociologist Max Weber , this thesis has always seemed to contain some elements of truth but never completely accurate to me, and my time in London confirmed my doubts.
The seminar I attended at the IEA was actually on prison reform, not what one would normally consider a free-market issue. But it turns out that Britain’s state-run prisons have done little to rehabilitate its inmates and are rife with drugs, violence, and badly-trained, corrupt guards. Private-run prisons seem to do considerably better, even if they are far from perfect. I was pleasantly surprised to hear market advocates speak of the importance of stable family networks and other social elements that economists usually refrain from addressing.
The TBN conference, made up of “social” venture capitalists and entrepreneurs, discussed all kind of innovative ways to invest in poor countries in sectors such as health care and education. There were some quite engaging analyses about the direction of the global economy and why countries like South Korea have better prospects than others such as Russia and India. Again, not necessarily what you would expect from fund managers, who always counsel caution and have their own records of failed predictions but who nevertheless are examples of socially committed, market enthusiasts.
The above were strong counterfactuals to the “globalization of indifference ” that Pope Francis and other religious leaders have charged markets of exacerbating. And it got me to asking if the anthropology behind capitalism was really so Protestant after all. Couldn’t one make the case that free trade assumes that people are actually the prudent judges of their own self-interest and not necessarily depraved or ignorant? Aren’t capitalist societies more welcoming of immigrants (see London, New York, Hong Kong), even if it’s for economic rather than humanitarian reasons, and thereby more reflective of a truly “catholic” vision? And to what degree can we say that the countries of northern Europe and the Anglosphere  (mainly the UK, US, Ireland, Canada, Australia and New Zealand, but also including India and parts of Africa) are Protestant, rather than secular in the positive sense of the term? If we’re going to argue the question of roots, all of these countries were either once Catholic or contain sizable Catholic minorities as well. And what about Asia, the least Christian of continents, and its remarkable growth? Describing the global economy and attempting to locate its religious sources are far from child’s play.
So in Rome and other southern European and Latin American countries, there’s a strong tendency for people to describe themselves as Catholic, at least culturally speaking, while the rest of the developed Christian world is Protestant. But attending weekday Catholic Masses at St. Mary Moorfields  in the City and Immaculate Conception  on Farm Street and praying at Tyburn Convent , the former site of the gallows where 105 Catholic martyrs were hanged, reminded me that there is an Anglosphere Catholicism every bit as historical and legitimate as the better-known Latin variety.
How Catholicism took on different characteristics in different parts of the world is a subject matter that could fill volumes, but I’d like to point out one way that has become more apparent to me recently. Many southern European and Latin American countries tend to look at the State not only as the guarantor of the common good but as it were the father of a particular society, whereas most Anglosphere countries regard it as type of referee, there to establish and enforce rules but not to determine the outcome of the game. It’s a very rough analogy but one that makes some sense of the political and economic divergence.
A Latin may look upon the State as an extension of the human family whose responsibility is to make sure that all its members are taken care of. A citizen in one of the Anglosphere countries is more likely to recognize sources of authority other than the State and divided social responsibilities among them. Granted, the Protestant Reformation may have more than a little to do with these different approaches to religious and political authority, but I am tempted to say that the Protestant/Catholic distinction is less relevant in today’s world.
Modeling society based on the premises of a particular anthropology has definite advantages, but what happens when those premises are no longer widely shared? Our non-telelogical, rights-based liberalism, based as it is on the “pursuit of happiness” and leaving each person free to decide what makes him happy, is one possible cause or effect and a far cry from the ancient city-state or medieval Christendom. But that’s not to say that we don’t have other ways of forming a civilizing basis for social unity around commerce, as thinkers such as Adam Smith and Montesquieu recommended. Rather than wish for a unity that no longer exists, our task may be to work with the world we have.
Whether the modern work ethic is Protestant or not shouldn’t be a major concern of ours when that work itself seems to be disappearing from view in much of the Latin Catholic world. Somewhere between 200,000-400,000 French  have decided they’d rather be in London, while youth unemployment in Italy  has surpassed 40 percent, an all-time high; it’s no accident I heard lots of Italian on the streets of London during my stay. These facts point to the need to revisit the case for a thriving (i.e. growing) commercial society, look for ways to make work pay , and avoid inciting envy  and class conflict. If the Dalai Lama  can change his tune, other religious luminaries ought to be able to as well.
I hope you enjoy this month’s newsletter, which features Sam Gregg’s RealClearReligion profile on Cardinal George Pell, the Prefect of the newly-created Secretariat for the Economy in the Vatican. Cardinal Pell is an old and trusted friend of the Acton Institute, and we look forward to his bringing the tough-minded common sense and faithful optimism  of the Anglosphere to the Roman Curia. It’s remarkable that his office will work officially in English as well as Italian - perhaps a much-needed sign of things to come.