On October 18, Fordham’s Institute on Religion, Law & Lawyer’s Work will host what looks to be a fascinating panel discussion, “Why Morality-Free Economic Theory Does Not Work: A Natural Law Perspective in the Wake of the Recent Financial Crisis.” Speakers include Luigino Bruni (Milan-Bicocca), Michael Baur (Fordham) and Russell Pearce (Fordham). Details are here.
What Really Matters
This fall, as the Eurozone’s constitutional and economic crisis deepened, some observers suggested a religious explanation: the crisis had resulted from different worldviews in the Protestant north and the Catholic (and Orthodox) south. The Protestant culture of the north is thrifty, sober, and bourgeois: a contract society. The Catholic (and Orthodox) culture of the south is profligate, emotional, and traditional: a status society. Among the observers who have offered such explanations are Estonian President Toomas Hendrik Ilves and Harvard Professor Steven Ozment.
As First Things’s Matt Schmitz points out in a fun post yesterday, these observations have an implicit moral component: Protestant values are better, or at least better promote economic efficiency. Maybe, says Schmitz, morality cuts the other way. The “passionate and ecstatic culture” of the Catholic and Orthodox south, he writes (quoting Christopher Dawson), a culture which “finds its supreme expressions in the art of music and in religious mysticism,” may, in fact, be morally superior. Schmitz would doubtless agree with Hillaire Belloc’s famous observation:
Wherever the Catholic sun doth shine,
There’s always laughter and good red wine.
At least I’ve always found it so.
Benedicamus Domino!
I need to think some more about all this. But it’ll have to wait till tomorrow. Here at the Center, we knock off early on Fridays, so we can drink ouzo and listen to Monteverdi.
Ozment on Lutheranism and Eurobonds
A few weeks ago, I noted an essay by Estonian president Toomas Ilves hinting that religion may have something to do with Europe’s inability to agree on a solution to its fiscal crisis. Thrifty, rule-abiding Northern Protestants, Ilves suggested, do not like the idea of sending money to profligate Southern Catholics who think the rules about not spending what you don’t have don’t apply to them. Here’s another essay, by Harvard historian Steven Ozment, arguing that the roots of Northern unwillingness to bankroll the South lie in the Protestant Reformation. Germany’s refusal to agree to eurobonds, Ozment writes, reflects the Lutheranism that, notwithstanding “the forces of multiculturalism and secularism,” still informs German culture:
How little has changed in 500 years. The German chancellor, Angela Merkel, a born-and-baptized daughter of an East German Lutheran pastor, clearly believes the age-old moral virtues and remedies are the best medicine for the euro crisis. She has no desire to press a Read more
More on Religion and the Eurozone Crisis
Last week, I discussed Walter Russell Mead’s interesting post on how the Greek crisis implicates the divide between the Eastern and Western Christian worlds. Here’s another reference to the religious implications of the eurozone crisis, in an essay by Estonian President Toomas Hendrik Ilves. Ilves complains that northern countries have been trying for decades to be fiscally responsible. Now, he says, the EU is asking these countries, even relatively poor countries like Estonia, to fund transfer payments to profligate southern countries like Greece, Italy, Portugal, and Spain. And when political leaders in the northern countries object, their counterparts in the rest of the eurozone accuse them of courting “populism,” which, in the European context, carries the connotation of fascism.
These accusations irritate Ilves, and he says so bluntly. In the course of his essay, he makes a startling religious reference. It’s only a quick reference in a long essay, with a subtle, almost dog-whistle quality. But I think it’s significant. Ilves draws on the image of the Protestant Reformation to explain the current eurozone crisis:
When we still talk about new and old members, we still talk nonsense about “populism” in all the wrong ways. Indeed I believe that the “populism” and the “specter of the 30s” that all kinds of pundits unknowledgeably appeal to has nothing to do with the populism we see in Northern Europe. That is not a populism of the dispossessed, the unemployed. It is a populism more akin to what Calvin and Luther appealed to than what the fascists of the 1930s appealed to. It is, like most populism, based on resentment, and resentment at unfairness. But the unfairness is, as it was in the 16th Century, a resentment of those who flaunt their flouting the rules by which others abide. Resentment on the part of those who take commitments seriously regarding those who do not: Is that the “specter of the 30s”?
It would be silly to ascribe the whole eurozone crisis to the different worldviews of Protestants and Catholics, and Ilves doesn’t do so. Some fiscally responsible countries that Ilves praises, like Austria and Poland, are historically Catholic. And, anyway, politics throughout Europe is quite secular, and there’s plenty of blame to go around. Still, one can’t help noticing that the “frugal” countries happen to be mostly northern and historically Protestant, and the “profligate” countries tend to be southern and historically Catholic (or Orthodox). Paging Max Weber! H/T: Rod Dreher.
Walter Russell Mead on Religious Identity and the Eurozone
Over at Via Meadia, Walter Russell Mead has an insightful post on the issues of religious identity that surround Greece’s possible exit from the eurozone. One often hears Europe described, sometimes disparagingly, as a Christian club. That’s certainly how Muslim Turks see it. But it may be more correct to see Europe as a Western Christian, as opposed to an Eastern Christian, entity. Of the 17 eurozone members, only two, Greece and Cyprus, are historically Orthodox. Greece is on the brink of ruin, and Cyprus’s economic fortunes are closely tied to Greece’s. Many Greeks feel intensely bitter about the way other European countries have treated it and do not seem to care too much about remaining in the eurozone. Many other Europeans apparently feel the same way about Greece. If Greece does exit the eurozone, Mead predicts, it will find solidarity in a relationship with a similarly alienated Orthodox country, Russia. Mead explains why:
Americans often don’t “get” the Russia-Greek connection. In Ottoman times, Orthodox Russia was the protector of Orthodox Christians in the great Islamic empire and frequently used its diplomatic clout to defend the rights of its co-religionists. Greece looked to Russia as a reliable ally during much of the troubled period after modern Greece gained independence from the Turks.
The feeling is reciprocal. Russia received the gospel from Greek Christians. The Russian tsars married into the Byzantine royal house; the word tsar (or czar) is the Russian form of Caesar, indicating the strong Russian sense that Orthodox Moscow, after the fall of Constantinople, was the “Third Rome.” Much of modern Russian identity and sense of a unique place in the world is wrapped up in its civilizational connection with Byzantine culture and religion.
Mount Athos, the center of Orthodox monasticism and the spiritual heart of Greece, looms large in Russia. No less a person than President Vladimir Putin has made pilgrimages to this site.
In the 1990s, the late Samuel Huntington wrote a controversial book, The Clash of Civilizations, which discussed, among other things, the Orthodox/Western fault line that runs through Eastern Europe. At the time, Huntington’s work was dismissed as reductive, even offensive, particularly by some Orthodox, who resented the suggestion that they weren’t fully part of Western culture. Shared religious identity really does matter, however, and Huntington was surely on to something, as Mead’s analysis of the present situation demonstrates.
Langton et al., “Islamic Economics and Finance: A European Perspective”
From Palgrave Macmillian, a new work on applying Islamic finance in the 
European context, Islamic Economics and Finance: A European Perspective (Jonathan Langton, Cristina Trullols and Abdullah Q. Turkistani eds. 2011). The authors suggest that the global financial crisis has led to an interest in alternative economic models, including the Islamic, with its emphasis on business ethics. The publisher’s description follows:
The global economic crisis has driven many economists around the world to seek alternative solutions to the western capitalist model which has proven to have some shortcomings. One prominent area of that research has been Islamic Economics and Finance. Based on the Muslim teachings of shari’ah, this system differs significantly from conventional economics and finance, notably in the prohibition of interest and strong emphasis on moral ethics.
In June 2010, IE Business School, with King Abdulaziz University, gathered in Madrid some of the world’s foremost scholars, academics and practitioners of Islamic Economics and Finance to discuss how this alternative philosophy can be applied in western financial markets. This collection of highlights from that conference and original articles, specifically addresses the post-crisis application, as well as the Legal and Tax Implications, of this growing and relevant economic philosophy in Europe, including in the area of Project Financing.
Italy’s Catholic Church flexible on property tax
That’s the headline of an AP story over the weekend, here. Italian law has traditionally granted a tax exemption on real property owned by non-profits, including the Catholic Church. The exemption extends not only to property used for religious reasons, but more broadly to any property that is not “exclusively commercial” in nature — for example, guest houses for pilgrims and medical clinics. Critics argue that the exemption allows the Church (and other non-profits, presumably) to conduct commercial activities without paying tax. Given Italy’s fiscal crisis, the new government is signaling that it will reconsider the breadth of the exemption, and the Church is signaling that it may go along:
One of Monti’s Cabinet ministers, Andrea Riccardi, is one of the most prominent lay Catholics in Italy, the founder of the Sant’Egidio Community with close ties to the Vatican.
He said this week that the church should pay the property tax if commercial activity is being carried out on the property. “I think that all the all the religious and cultural activities of the church are a richness for the country and the tax shouldn’t be paid,” he told RAI state television.
But if individual cases are discovered where commercial activity is being carried out, “necessary measures should be taken.”
Church Funding in Europe and America
Sociologist Grace Davie has famously described churches in Europe as “public utilities,” state-supported institutions that people assume will be there for them when the occasion demands — weddings and funerals, for example. She contrasts this with the American idea of churches as “firms,” that is, private associations that members support through voluntary contributions. From La Stampa this week, a fascinating piece addressing attempts by the Catholic Church in Europe to move to the American model, so far without success. State budgetary shortfalls and church scandals have made public funding much less certain, and the Church is encouraging European Catholics to see themselves as “stewards” who must support their local parishes financially. The long tradition of state funding makes Europeans reluctant to accept this new responsibility, however.
Vatican Statement on World Financial Crisis, Cont.
Some more information about the Pontifical Council”s recent statement on the world financial crisis, which drew attention for suggesting the need for global government. According to veteran Vatican correspondent Sandro Magister of the Italian newsweekly, L’Espresso, the Pontifical Council’s statement surprised many inside the Vatican, including Secretary of State Cardinal Bertone, who apparently did not know of the statement until shortly before its release. Magister argues that the Pontifical Council’s statement, particularly its call for a global financial authority, contradicts the tone of Pope Benedict XVI’s recent encyclical, Caritas in Veritate, which endorses subsidiarity rather than centralized world government. The Vatican has not withdrawn the Pontifical Council’s statement. According to Magister, however, Cardinal Bertone will now have to approve all Vatican documents before their release. — MLM
Religious Law and the Financial Crisis
In this recent interview in L’Express (in French), Gilles Bernheim, the Chief Rabbi of France, makes some points about the relationship between religious law, specifically Talmudic Law, and contemporary economics. Although the Talmud could not imagine today’s financial arrangements, he concedes, it did teach, in the language of its time, that individualism was the worst enemy of communal confidence. According to the Talmudic view, we should place confidence in work, solidarity, and justice, not the “audacity” of rugged individualism “that dares all without concern for others.” The Talmudic worldview, one infers, would help avert crises like the one we’re currently experiencing.
Rabbi Bernheim’s critique of market economics from a religious perspective is quite familiar; it is very similar, for example, to the critique in Catholic Social Thought (another reminder that one should not reflexively link religion with the political right). And the financial crisis we’re living through does reflect reckless behavior by people who should have known better. A sense of responsibility to the community, which a religious worldview might have imparted, might have helped to avert the crisis.
That said, we should avoid being simplistic about things. Of course individualism “that dares all without concern for others” is incompatible with a religious worldview, but egotism like that is inconsistent with sane market economics as well. And in the United States, at least, the housing bubble that led to the Panic of 2008 was caused in part by government programs that encouraged people to purchase homes they could not afford. In other words, the crisis was not caused only by rugged individualism and greed; it was also caused by a misguided egalitarian project that had terrible consequences for everyone, including its supposed beneficiaries. Anyway, the relationship among selfishness, communal solidarity, and financial collapse is a complicated one that the Chief Rabbi more or less slides by. Though perhaps one shouldn’t expect too much from a newspaper interview – or a blog post. – MLM