The Economics of Protestantism

The Protestant Work Ethic in Practice

You can listen to the audio narration of this article here.

You can read an informational addendum to this article here.


Introduction:

I’ve been reading “Lectures on Calvinism” by Abraham Kuyper, which is all about the impact of Reformed theology on other areas of life and thought. It’s prompted me to think about Reformed theology in relation to economics – an area Kuyper addresses only briefly. Much has been made of the so-called “Protestant work ethic” (also called the Calvinist or Puritan work ethic), and I thought it might be interesting to take a look at the empirical evidence and see if there’s anything to it. But first we should address the theory behind it.

What is the Protestant work ethic?

The term stems from the title of German sociologist Max Weber’s 1905 book “The Protestant Ethic and the Spirit of Capitalism,” (the 8th most-cited book written before 1950). Weber hypothesized that Protestantism – but especially Calvinism – viewed one’s financial success as a confirmation of one’s election and thus provided a means of assurance. To anyone vaguely familiar with Reformed theology, this is immediately seen as a complete misunderstanding.

Mistaken as Weber’s thesis may be, however, there is a reason it has caught on. The rejection of the priesthood as the dispenser of forgiveness led Luther to appropriate the term “vocation,” which was previously used to denote ordination to priesthood or monasticism, and apply it to the labors of the laity. As Weber puts it,

The only way of living acceptably to God was not to surpass worldly morality in monastic asceticism, but solely through the fulfilment of the obligations imposed upon the individual by his position in the world. That was his calling.1

It is certainly true that Protestants sanctified the vocation of the common man, but Weber’s explanation falls short. A better explanation is as follows: The Roman Catholic Church conceives of itself as an institution founded directly by Jesus in his earthly ministry and ruled by his Apostles and their successors. The self-conception of the Roman Catholic Church as a novel institution runs contrary to the Reformed conception of the church as consisting of the totality of the elect.2 The Reformed view was of the church as one people joined to God by one covenant of grace – albeit through different administrations. Thus, they naturally saw more commonality between themselves and the Old Testament saints – saints which, despite being simple farmers and herdsmen, God richly blessed. Furthermore, the early church fathers tended to interpret the Old Testament allegorically, and this tendency only grew throughout the Middle Ages. The Reformed, on the other hand, treated the law not as a collection of spiritual allegories but a real and practical guide to inform believers how to live.3 The laity took to heart God’s promises of material blessings for obedience and viewed the proper response to such blessings not as ascetic rejection but thankful enjoyment (Deuteronomy 8:18 & 28:47). This can be seen in the Westminster Larger Catechism, which asks, “Q. 141. What are the duties required in the eighth commandment?” It answers in part, “an endeavor, by all just and lawful means, to procure, preserve, and further the wealth and outward estate of others, as well as our own.” This, I think, explains the Reformed appreciation of ordinary vocation far better than Weber’s thesis.

But is there really anything to the theory at all? Does Protestantism really influence the economic life of a nation? Or are these simply aimless, data-free speculations? Are there observable ramifications of the so-called Protestant work ethic? I believe there most certainly are.

The Methodology:

So how will we go about analyzing the theory? We’ll simply figure out the correlation between the percentage of the nation that’s Protestant and metrics like GDP per capita. We’re going to look only at European nations and their colonies (e.g., Canada, U.S., etc.). There are several reasons for this. First, due to human biodiversity, different ancestral groups have differing capabilities, which in turn produce disparate economic outcomes. Second, while the gospel is spreading throughout many non-European nations, it hasn’t yet had the kind of culture-shaping, multi-generational effect it’s had on the European nations. I will exclude the miniscule nations of Europe (e.g., Luxembourg, Vatican City, etc.) both because these outliers will skew the correlations and less data is available on them.

As we look through these correlations, we need to know what kind of correlation is meaningful. Correlation values range from 1 (a perfect correlation) to 0 (no correlation). This chart provides a helpful guide. Keep in mind that the assessment used in the field of politics (center row) will be the most applicable here.

The Results:

Protestantism & GDP/capita4: .5

Protestantism & Labor Force Participation Rate: .25

Protestantism & Education Index5: .4

Protestantism & Programme for International Student Assessment Score6: .23

Protestantism & Personal Freedom Index: .28

Protestantism & Economic Freedom Index7: .17

Analysis:

Of all the factors measured, Protestantism was most highly correlated with GDP/capita at .5, which is a very robust correlation. In other words, the more Protestant a nation is, the more economically prosperous it tends to be. For some comparison, it’s taken as received wisdom among economists that more economic freedom results in more economic prosperity. I found the correlation between economic freedom and GDP/capita to be .32. In other words, Protestantism was a better predictor of economic prosperity than economic freedom. Protestantism was also somewhat correlated with better education and more freedom, though not quite as strongly.

Now, there is an obvious question someone may well ask in response to this: “Protestantism tends to be most prevalent in western Europe, but isn’t it the free economies of these countries that better explain their prosperity?” But this question misses two things. First, Protestantism is generally correlated with economic freedom, so this simply makes Protestantism an indirect rather than direct cause of economic prosperity. Second, even if we limit ourselves to just the western European nations (those nations which were never part of the Soviet bloc), the Protestantism-GDP correlation is still .28. In the chart below, we can see that just being Western doesn’t completely explain the correlations. Even though confining ourselves to western Europe reduces some correlations, it pronounces others.

So I think we are empirically justified in noting that Protestantism really does have an economic impact on a nation as a whole. Obviously more study would need to be conducted to refine the correlation more, but even this brief foray into the data yields very positive results.

I should also note that the economic effect of Protestantism cannot be an argument for it. In fact, it’s generally the Catholic and especially the Eastern Orthodox nations which still hold more “traditional” or “conservative” values. These groups would no doubt attribute the liberalism of the West to Protestantism’s rejection of tradition as an infallible authority, but I would argue it’s simply our ridiculous wealth which has bred the West’s apostasy. As it is written (Deuteronomy 32:15),

But Jeshurun grew fat, and kicked;

you grew fat, stout, and sleek;

then he forsook God who made him,

and scoffed at the Rock of his salvation.

And so, we see that returning to the Old Testament view of wealth is what produced the economic effects of Protestantism. But the resulting prosperity has led to its decline. If we want to avoid this in the future, we must also adopt the Old Testament’s prioritization of multi-generational faithfulness.

Editor’s Note: If you would like to look at the data for yourself, we’d be more than happy to send you the Excel file. Just drop us a line: protestantpostblog@gmail.com.

1

Pg. 40. This video provides a more nuanced and helpful explanation of the Protestant doctrine of vocation.

2

Cf. Westminster Confession, Chapter 25, Article 1, and Acts 7:38, KJV.

3

Cf. Calvin’s discussion of the third use of the law in the Institutes, Book 2, Chapter 7, Section 12.

4

Sources for Protestantism, GDP, and population.

6

The programme for international student assessment data can be scanned at your leisure here.

7

The report on the personal and economic freedom of different nations can be found here. Note that, as a libertarian publication, it counts things such as legal same-sex marriage, legal divorce, and open immigration as personal “freedoms.” While it does fall short in this area, it counts more heavily things like freedom of the press and information, a reasonable justice system, freedom of assembly, religious freedoms, etc.


Article by Alex Carrow. Join us on MeWeTelegramGabYouTube, or feel free to:

Subscribe now