Tracing the Matrix of Nationalism and Capitalism

The debate over Max Weber’s Protestant Ethic and the Spirit of Capitalism has “still not gone off the boil,” wrote Anthony Giddens in 1976. It seems that Weber’s striking thesis, a quarter of a century after Giddens’s remark, has still not lost any of its steam, a fact manifested by its ability to provoke the thought and research of a scholar as able as Liah Greenfeld.

Greenfeld is, as Weber was, a sociologist, and she believes that Weber was correct in his contention that the predominance of a particular, collective ethic was (and remains) the decisive criterion in bringing about the material realities that can be described as the modern capitalist economy. She thinks that Weber was wrong, however, in identifying that societal ethic as Protestant theology. Instead, as she contends in The Spirit of Capitalism (a recent receipient of the the Historical Society’s Donald Kagan Best Book in European History Prize), it is the spirit of nationalism.

Greenfeld argues that nationalism, “a unique form of social consciousness” that emerged in sixteenth-century England and gradually spread across the world, is the key to explaining the rise of modern economies, defined as those economies that are oriented toward and experience sustained growth. She pits her thesis against economic determinism, of both Marxist and Western social scientific varieties. In her estimation, adherents of both approaches fail to grasp the central significance of nationalism because they are blinded by the assumption that the economic progress characteristic of modern economies is inevitable. Instead, economic modernization should be seen as dependent on the wide acceptance of a certain set of ideas (nationalism) that provides the impetus for economic growth.

Social scientists, she argues convincingly, have until now concentrated mostly on explaining how modern economies develop, detailing the conditions necessary for and attendant to the rise of an ever-expanding economy. Greenfeld, following Weber, seeks to explain why this development occurs at all. Weber asked the right question, she says, and the question led him to the sphere of human ideas and motivation. Subsequent observers, correctly critical of the connection that Weber drew between the Protestant ethic and the rise of capitalism, missed the forest for the trees. They failed to appreciate the broader theoretical significance of Weber’s work—namely, his emphasis on the sphere of ideas to explain what was not an inexorable historical development: the rise of modern economies. Greenfeld’s sweeping investigation across four centuries and six countries aims to demonstrate the singular and potent effect of the rise of national consciousness on economic life.

National Progress, Realized Economically

The story begins in Britain, whose rise to economic prominence in the seventeenth century is widely acknowledged. Greenfeld’s unique interpretation of that rise, however, is that it was propelled not so much by the spread of a conventionally understood ethic of self-interest, as by the spread of the ideal of national progress, realized economically. In other words, what wrought the transformation in England’s economy was an intellectual transformation that led the English to identify self-interest with national economic vitality. A convincing example that Greenfeld adduces in this connection is the demise of the Hanseatic League, a fact that cannot be explained by the self-interest of English merchants who, on the basis of individual economic well-being, should have supported the continuation of the league.

Conveniently, there is an exceptional example that provides a negative proof for Greenfeld’s thesis. The seventeenth-century Netherlands, she explains, possessed all the characteristics that conventional economists would attribute to a modern economy. The Dutch economy, however, stagnated in the latter half of the century, becoming disqualified for status as an early example of a truly modern economy. What the Low Countries lacked, Greenfeld insists, was a national identity. Unlike their British counterparts, the Dutch merchant classes were solely self-interested, resulting in economic growth that could not be sustained.

Greenfeld addresses the rise of nationalism and its contribution to modern economies in France, Germany, Japan, and the United States, drawing the parallels necessary to demonstrate the validity of her thesis while carefully preserving the unique characteristics of each national situation. One of the assets of Greenfeld’s thesis is that it posits a universal explanatory phenomenon (nationalism) for the rise of modern economies, but she parses nationalism in such a way that it can be applied to each national context without doing damage to the religious, cultural, and political uniqueness of those contexts.

As is often the case with broad, powerful theses, the obverse of this argument’s strength is its weakness. It is necessary for Greenfeld to paint with broad strokes to accomplish her project, but it remains an open question as to whether those broad strokes conceal details that would undermine the argument. Experts in the history of each of the nations examined will need to determine the historical merits of Greenfeld’s case. It may be the case that she has the general contours of those histories correct enough that her thesis maintains its plausibility. It is at least troubling, however, that her tendency is to call forth one major spokesman per nation who proceeds to articulate the spirit of the age. German romanticism was doubtlessly an important intellectual movement, but did it have the definitive impact on the collective German psyche that Greenfeld attributes to it? The book raises a hundred such questions.

Theories in Need of Modification

The book also raises important questions about the role of religion in history. Greenfeld presents a compelling case for her claim that nationalism is the decisive factor in creating a modern economy. The thesis circumvents the problem of those (including Weber and, in a different way, Michael Novak) who have argued that there is some close connection between modern capitalism and Christianity. How does one explain, for instance, the successful economies of nations relatively untouched by Christianity (Japan being the most obvious example)? Greenfeld’s blanket concept of nationalism, on the other hand, applies as well to Japan as it does to England.

One is not entirely satisfied, however, that this approach adequately addresses the role of religion. The reason for this dissatisfaction is that religion and nationalism are not completely unrelated. Greenfeld is not insensitive to the importance of religion. In fact, her treatment of the way in which nationalism builds upon and transforms religion, in both Western European and Asian contexts, is often insightful and thought-provoking. For instance, Greenfeld explains how the Japanese ethical system of Shingaku served as a link between traditional Buddhism and the nationalist ethic. Yet, ultimately, Greenfeld seems too accepting of the popular view that modernism equals secularism. Nationalism, in this respect, appears as secularization by another name, the process by which loyalties are transferred from the church to the state.

The relationships among religion, nationalism, and secularism may be more complicated than that, however. Historians and sociologists are continuously puzzled by the United States, generally accepted as the site simultaneously of an eminently modern economy and a welter of thriving religious bodies. How can this be, they ask, when the theories all imply that the marks of modernization such as republican governments and market economies ought to be accompanied by the decline of religious belief? This essay will not be the first to suggest that perhaps the theories need to be modified. Greenfeld interprets the fact that nationalism was often suffused with religious meaning as a sign of the power of nationalism. It could be read, alternatively, as an indication of the power of religion.

The Spirit of Capitalism is a bold and important book. It provides a new perspective from which to view not only the history of the last four hundred years but also a host of theoretical debates that have troubled the social sciences since their beginning. While this essay has not ignored the problems of attempting such a broad, interdisciplinary project, Greenfeld is to be commended both for making the attempt and for placing human intelligence and action, rather than illusory iron laws of history, at the center of her story.