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Sirico Parables book

by Michael Novak
Journal of Markets & Morality
October 1998

The Impact of Religion on Economics

The great sociologist of economics Max Weber (1864-1920) demonstrated to the scholarly world that religious convictions alter economic systems. Against the Marxists, Weber showed that profound currents, stirring deeply in the human spirit, shake human beings from their bodily torpor in remarkably different ways, with notable effects upon economic systems. Although he is most famous for The Protestant Ethic and The Spirit of Capitalism (1904), Weber examined the interplay of religion and economics in many books on the history of various cultures. Because of the abundance of literature available today on "the clash of civilizations" and the real-world consequences of different formations of the human spirit through religion and culture, Max Weber’s work may be more influential than ever.

Indeed, Weber’s work suggests an important perspective for approaching the topic of human dignity. Empirical research led Weber to the hypothesis that Christianity (in one of its forms) and, behind Christianity, Judaism shaped human expectations in ways favorable to economic development. Stated in this general way, Weber’s hypothesis has been solidly confirmed by a century of further research, although modified in important ways by other findings. For example, Professor Randall Collins has shown how, from about a.d. 1100 to 1350, the international system of Catholic monasteries produced several important characteristics of a capitalist economy: an explosion of economically useful inventions, the rule of law, a rationalized system of responsibilities, among others.

These [Cistercian] monasteries were the most economically effective units that had ever existed in Europe, and perhaps in the world, before that time. The community of monks typically operated a factory. There would be a complex of mills, usually hydraulically powered, for grinding corn as well as for other purposes. In iron-producing regions, they operated forges with water-powered trip-hammers; after 1250 the Cistercians dominated iron production in central France. Iron was produced for their own use but also for sale. In England, the entire monastic economy was geared toward producing wool for the export market. The Cistercians were the cutting edge of medieval economic growth. They pioneered in machinery because of their continuing concern to find laborsaving devices. Their mills were not only used by the surrounding populace (at a fee) for grinding corn but were widely imitated. The spread of Cistercian monasteries around Europe was probably the catalyst for much other economic development, including imitation of its cutthroat investment practices.

In my own work, on the conceptual rather than the empirical level, I have attempted to demonstrate that the theological category of imago Dei (which affirms that every single human is made in the image of God) implies a specific kind of "calling" or "vocation" that Weber oddly neglects, the vocation to be creative, inventive, and intellectually alert in a practical way, in order "to build up the kingdom of God." It is not so much the asceticism of biblical teaching as its call to creativity and inventiveness that accounts for the dynamism of Jewish and Christian civilization, including economic dynamism.

Most economists accept the principle that "ideas have consequences." Nonetheless, it has been a convention ever since the Enlightenment to regard as less than consequential the immense explosion of theological ideas during the era a.d. 1100-1350, an explosion that erupted in the breakthrough mentioned above. This is a serious practical error. Scores of thousands of men and women entered monasteries and launched highly rationalized and disciplined economic ventures. Moreover, at least five concepts crucial to the theme of human dignity and human liberty were brought to light during that period: the concepts of person, conscience, truth, liberty, and dignity. Although some shadow of each of these terms can be found in the pre-Christian period, no full understanding of any of them existed that would enable a fashioning of a new practical order, a new civilization, the new "city on the hill" that the medieval civitas was taught to emulate. It was the work of the medieval schoolmen that can be credited with developing these crucial tools.

In recognition of this achievement, Nobel laureate Friedrich Hayek (1899-1992), following Lord Acton, called one of these monks, Thomas Aquinas (1224-1274), "the First Whig," that is, the founder of the party of liberty in human history. Many commentators have also noted that in The Divine Comedy, one of the greatest works of poetry in any language, Alighieri Dante (1265-1321) created both a dramatic rendition of the Thomist vision and a testament to the high importance an entire civilization attached to human liberty. Dante had wholeheartedly accepted the fact that every story in the Bible–Jewish and Christian–gathers its suspense from the free choices that confront every human being. How humans use their liberty determines their destiny; how we use our freedom is the essential human drama. Liberty is the axial point of the universe, the point of its creation. That is the premise of The Divine Comedy and the ground of human dignity.

Human Dignity

What, after all, is human dignity? The English word dignity is rooted in the Latin dignus, "worthy of esteem and honor, due a certain respect, of weighty importance." In ordinary discourse, we use dignity only in reference to human persons. (But, of course, in the Bible it is also used of other special persons or "spiritual substances," that is, beings capable of insight and choice such as God, angels, and demons). Both Aristotle and Plato held that most humans are by nature slavish and suitable only to be slaves. Most do not have natures worthy of freedom and proper to free men. The Greeks did not use the term dignity for all human beings, only the few. By contrast, Christianity insisted that every single human is loved by the Creator, made in His image, and destined for eternal friendship and communion. Following Judaism, Christianity made human dignity a concept of universal application. "Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me" (Matt. 25:40). Christianity made it a matter of self-condemnation to use another human as a means to an end. Each human being is to be shown the dignity due to God because God loves each as a friend. Each has God as "a father."

Obviously, many students of economics are neither Christians nor even believers in God. They, therefore, do not hold such things or look at the world in precisely this way. Nonetheless, as a matter of intellectual history, it is of great utility to discover the origin of concepts. Conventionally, intellectual history has been undertaken from the point of view of the Enlightenment, with a certain insouciant dismissal of what went before (as part of the "darkness," over against which the "enlightenment" is placed in contrast). But this is to gloss over too many deeply buried presuppositions and hidden premises. Today, as the Enlightenment recedes ever further back in history and as its own limitations and failures become clearer, the intellectual arrogance of its early generations has dissipated. Its own inadequacies, too, are under judgment.

In particular, the partisans of the Enlightenment have not weathered well the assaults of nihilists, relativists, and post-modernists, especially in the last two decades. Reason, it sometimes seems, is inadequate for its own defense. In Western universities, those who loathe the Enlightenment as an expression of "white male hegemony"—"phallic," "patriarchal," from the "right side of the brain," and "oppressive"—seem to outnumber, or at least to intimidate, those who remain reason’s supporters. Even many supporters of reason today express their commitment to it, not as a self-confident assertion of truth as of yore but as a personal preference; they speak in the language of faith. Partisans of the Enlightenment were successful in pushing aside religious people—which they neatly did by changing the rules to "Religion within the bounds of reason alone." But they have not been successful in meeting the assault on their other flank from those who do not share any faith in reason at all.

It is both fascinating and frightening in our time to watch the high priests of the Enlightenment being unceremoniously disestablished and mocked; fascinating because so they once treated the earlier establishment; frightening because the twentieth century began with the abandonment of reason (in nazism and socialism) and one does not wish the twenty-first century to repeat the twentieth.

Among the figures of the Enlightenment, Immanuel Kant (1724-1804) is probably the one who most clearly spoke to the concept of human dignity. He did so in the light of a categorical imperative that he discerned in the rational being, and he made famous this formulation of the principle of human dignity: "Act so that you treat humanity, whether in your own person or in that of another, always as an end and never as a means only." This is not, of course, a description of the way in which humans always (or even mostly) treat other human beings. It is, in the Kantian scheme, a prescription, an imperative, a duty. Whereas, in other schemes, it might appear as an aspiration, a good to be pursued, an ideal for which to strive.

Still, it is not difficult, I think, to see in Kant’s formulation a repetition in non-biblical language of the essential teaching of Judaism and Christianity: "Thou shalt love thy neighbor as thyself" (Lev. 19:18). "And this commandment have we from him, That he who loveth God love his brother also" (1 John 4:21). This interpretation of Kant seems correct for two reasons: First, the ancient philosophers of Greece and Rome, before the contact of those regions with Christianity, did not reach this principle. Second, one must note the quiet but strong culture of German pietism in which Kant grew to maturity.

From the point of view of modern history, of course, it seems absurd to say that humans are not means but only ends. In the twentieth century, more than a hundred million persons in Europe alone died by violence, often in a way they could not have foreseen even in their worst nightmares. In our century, history has been a butcher’s bench, and the words human dignity have often sounded empty.

From the point of view of modern astronomy, too, it seems absurd to imagine the human being as the center of the drama of creation. The earth is far from being the center of the known universe; not even our solar system seems to be at the center, or even to be a major system among the almost innumerable galaxies (such as we see in the Milky Way) already known to us, not to mention many others whose existence we have reason to suspect. To many, it seems likely that there are other forms of rational life—beings capable of insight and choice—in other galaxies, although no such creatures have actually been detected. What seems beyond doubt, however, is that the human race is tiny and seems insignificant and highly perishable in the vastness known to modern physics. As a secular friend of mine puts it, the cockroaches or even simple bacteria may be more important in the scheme of things than we—and outlast us. So where does modern science leave human dignity? Regrettably, I must refrain from discussing here the "Anthropic Principle" advanced by some physicists who hypothesize that from the very first "Big Bang," so many fundamental contingencies had to be in place for humans to have emerged, as we in fact have emerged, that a consistent pattern of improbable happenings in favor of human life is apparent.

Liberty and Truth

Jews and Christians explain human dignity by pointing to human liberty. For Christianity and Judaism, human liberty is an absolutely fundamental datum of God’s revelation to humanity—or, if you prefer, an absolutely central datum of Jewish and Christian philosophy. It is less central to Islam because key Islamic philosophers of the early Middle Ages, such as Avicenna (980-1037), Omar Khayyam (1048-1123), and Averroes (1126-98), developed concepts from Aristotle in a way that gave God total initiative and power over the human intellect, and thus, over the human will; they pictured the will of Allah as all-mastering. The essence of their theory was that in human understanding it is not the human subject who understands but, rather, the one Agent Intellect in creation, that of the Almighty. This seemed plausible since we often experience as a surprise and a gift an insight that we have for a long time struggled to attain.

In the thirteenth century, many Christian philosophers and even theologians at the university of Paris and elsewhere first encountered Aristotle through these Arab philosophers (many of the original Greek manuscripts had been lost for centuries) and were swayed by the Arab interpretation. Not Thomas Aquinas. He understood immediately that human liberty was at stake. He was also fortunate to have in his hands, through his teacher Albert the Great of Cologne (Albertus Magnus, 1200-80) fresh Latin translations from the original Greek. The fifteen-year struggle of Thomas against the Averroists—who wanted him driven out of Paris—was a decisive event for Christian humanism and for the cause of liberty in the West. It fully earned Thomas the title of "the First Whig," first given him by Lord Acton and later by Hayek.

Because the teaching of the Gospels is intended for Christians in every sort of culture, political system, and time, Christian philosophers are first of all concerned with an understanding of the interior act of liberty, only in the second place with liberty as a political and economic act. Confronted with any proposition—of fact, principle, theory, or faith—humans are responsible for the assent or the dissent they give to it. They are responsible for gathering the evidence necessary to make such judgments wisely, for struggling to understand the necessary materials, and for disposing themselves to judge such evidence soberly, calmly, and dispassionately. When they declare a proposition to be true or false, they assert what is true and real. In so doing, they open themselves to counter-argument and challenge from others, in the light of the evidence, over which no one person has total control. In this way, each person is called to be open to the truth of things, to the whole of reality, and each is subject to criticism from those who may be more penetrating, or less one-sided, than they. When human beings reach a judgment, they reveal a great deal about themselves. They are, in effect, under judgment by reality itself, as mediated by the community of inquirers who seek the truth of things.

Thomas Aquinas further noted that in every human act there are two moments. In the first place, human consciousness is open to everything around us—to, as the Harvard philosopher William James (1842-1910) called it, the whole "blooming, buzzing confusion" of present sensory impressions, memory, emotion, passion, imagination, concept, idea, and expectation. Human understanding cannot focus on all of these things at the same time, at least not directly. Thus, the first human liberty is the liberty of human understanding to focus (like a searchlight in the dark chaos) on one thing rather than another. Aquinas called this the liberty of specification. Then, as the human understanding focuses on the many materials relevant to its consent or its dissent, another liberty becomes apparent: the liberty involved in reaching a determination that sufficient evidence is at hand for reaching a judgment, and the decision not to evade the evidence but, rather, to be faithful to it—to go ahead and make the judgment. This last step is not to be taken for granted. Often, we dread the evidence mounting before us or the consequences of what we are about to decide. At such times, we are tempted to take evasive action. Aquinas calls this second moment of liberty, the liberty of exercise. Thus, even within the inner realm of the soul there are already two moments of liberty.

In the prison literature of the twentieth century, there are many witnesses to the inner drama of these two internal acts of liberty—in the prison reflections of Mihailo Mihailov and Nathan Scharansky, for example, but also in many others. Even when all other external liberties are taken away, even in prison and under torture, the human mind and will retain the power to perform these two acts of liberty. Those who, when all else is lost, cling to the ideal of truth seeking retain their liberty of specification. They retain their liberty of exercise by being determined not to be complicit in lies. "Purity of heart is to will one thing," Søren Kierkegaard (1813-55) wrote. To will to be perfectly faithful to the truth of things is to live by purity of heart and to act as a free man or woman even in the most extreme of circumstances.

To move from this profound concept of internal liberty to a projection of the sort of political, economic, and cultural institutions that make pure human liberty of this sort frequent in human lives is a very long step. It requires many generations of social experimentation. It is not to be imagined that the way to building a city of true liberty is a purely rational, abstract, conceptual achievement. Hayek quite rightly calls this "the fatal conceit." That conceit was the chief engine of the murderous ideologies of the twentieth century.

The Concept of Conscience

In conjunction with his defense of the interior ground of human liberty, Aquinas also formulated, for the first time, the concept of conscience. Conscience is not a term of the ancient Greeks or Romans. Neither is it, exactly, a biblical concept, although many texts in the Bible show the inner conflicts that gave rise to the need for such a concept: "And it came to pass afterward, that David’s heart smote him, because he had cut off Saul’s skirt" (1 Sam. 24:5); "The spirit indeed is willing but the flesh is weak" (Matt. 26:40); and "For the good that I would I do not: but the evil which I would not, that I do" (Rom. 7:19). After Kant, it has become common for modern people to think of the moral life as a matter of duties to be observed—a kind of obedience. But in earlier Christian ages, the moral life was thought of rather as a way to be walked, a set of paths to follow (with the lives of the saints as pathbreakers), an archetype (Christ) to model one’s life upon, an image of a life to be lived out: "Whosoever will come after me, let him deny himself, and take up his cross, and follow me" (Mark 8:34).

For Thomas Aquinas, the first practical problem of the moral life is to find out what to do in the unique circumstances in which you, a unique, irreparable person, now find yourself. The moral life taxes our capacities for practical knowing. Even when we know the model or ideal we are pursuing, the right thing to do now is not always clear. Besides, we sometimes wish to evade clear knowledge, or we prefer to let passion drive us. Afterward, following an act of passion or evasion, we sometimes see clearly what we ought to have done, and feel the bite of remorse. This bite, too, comes from our faculty of practical knowing. Conscience, then, is the habit of practical knowing by which we discern the right thing to do in immediate circumstances, and by which we blame ourselves when we have turned away from this discernment—that is, failed to use the light within us. By frequent failures to use it, and by deliberate abuse of it, we can dim this light and all but extinguish conscience. We can also deceive it, and some of the stratagems by which we deceive our own consciences are so classic that the great Oxford writer C. S. Lewis (1896-1963) set them forth vividly in The Screwtape Letters.

The Person

Finally, it is useful to mention that the concept of person also entered Western thought by way of sustained reflection on the Bible. For one thing, a concept was needed to name the special kind of spiritual substance capable of acts of insight and choice–such as the human being is–but not only the human being, but also God and the angels. Physicists speculate these days about whether in other galaxies there is also personal life capable of insight and choice that is not of the human species. In fact, the Bible describes creatures of that sort—many different genera and species of them—and calls them angels and archangels. The idea of many other living species is not unbiblical.

In another context, the concept of person was also needed to express the dual nature of Jesus Christ, who, according to the Bible, has both a human and a divine nature that remains the same. In other words, what is the principle that unites these two natures? This is the historical genesis of the concept of person. Its utility lies in designating what exactly it is in humans that is the ground of their dignity and the source of their free acts of insight and choice. A person is a substance with a capacity for insight and choice and an independent existence as a locus of responsibility. The fifth-century Christian thinker Boethius (c. 480-524) was the first to codify the definition: A person is a substantia rationalis subsistens. This concept of the "person" adds a significant new note to the concept of the "individual." A cat or a dog may be utterly individual and even manifest (in an extended sense) a distinctive personality. Still, cats are not held responsible for their acts, never have to choose a vocation, or a career—i.e., do not qualify as persons. Human beings are persons, as other individual animals are not. "The problem with animal rights," a friend of mine once said, "is getting the animals to respect them."

Acquiring this concept of the person was a crucial step for the modern age, for it led directly to the first declaration of human rights in history, when the Spanish missionaries argued that the Indians encountered in the New World were persons of full human dignity, not some inferior species. The missionaries argued that it was sinful before God and contrary to natural law to offend the dignity of the Indians, as many of their compatriots were obviously doing. They pressed their case at the Spanish Court, urging the monarch to rule accordingly. The suit was argued successfully by theologians of Salamanca, the same school of theologians to whom Joseph Schumpeter (1883-1950) and Friedrich Hayek have given credit for many of the pioneering insights into the distinctive features of economic action, as well.

This successful lawsuit helps to explain why outside the United Nations building in New York there stands a statue of one of the greatest of these theologians, the founder of international law, Francesco de Vitoria (1486-1546). The public recognition that oppression of the Indians was sinful, and the public declaration of their rights, alas, did not prevent terrible abuses. This is another indication of the power of the observation by James Madison (1751-1836) in the United States that mere declarations of rights are not enough. Rights are never sufficiently defended by "parchment barriers," but only by internalized habits and institutions that incorporate checks and balances.

Conclusion: The New Economics

The civilized world is already beginning to celebrate the imminent arrival of the third millennium after the birth of Christ. Since the crucial civilizing ideas of human dignity, liberty, truth, conscience, and person have been slowly developed over the first two millennia after Christ’s birth, and since their development was given a powerful impulsion by Christ’s teaching, it is perhaps not at all unfitting that we should take note of these contributions at this crucial time.

One of the most important contributions of the New Economics is to have focused attention on the primary importance of human capital. The concept of human capital, as Nobel Laureate Gary Becker makes clear, includes personal and social habits, as well as the slowly and experimentally developed social practices and institutions that are decisive for economic development. On the role of social trust and others of these social practices, the recent book by Francis Fukayama and earlier ones by Laurence Harrison are highly instructive.

A second important contribution of the New Economics is to have focussed on human action and the human subject—that is, on the human person and human liberty. A third contribution of the New Economics is to have focused on the central role of choice—personal choice and public choice—in the dynamics of economic life.

It is my hope that on all of these important contributions of the New Economics the present reflections have shed some historical and conceptual light. Helping to ground the New Economics in an accurate representation of human history and culture, and thus to engraft it into larger movements of culture, is the distinctive contribution I hope this essay furthers.