Posted on by Mark Movsesian

Muller on Capitalism and Judaism

Princeton University Press has released a paperback edition of Capitalism and the Jews (2010) by Catholic University historian Jerry Z. Muller. The publisher’s description follows.

The unique historical relationship between capitalism and the Jews is crucial to understanding modern European and Jewish history. But the subject has been addressed less often by mainstream historians than by anti-Semites or apologists. In this book Jerry Muller, a leading historian of capitalism, separates myth from reality to explain why the Jewish experience with capitalism has been so important and complex–and so ambivalent.

Drawing on economic, social, political, and intellectual history from medieval Europe through contemporary America and Israel, Capitalism and the Jews examines the ways in which thinking about capitalism and thinking about the Jews have gone hand in hand in European thought, and why anticapitalism and anti-Semitism have frequently been linked. The book explains why Jews have tended to be disproportionately successful in capitalist societies, but also why Jews have numbered among the fiercest anticapitalists and Communists. The book shows how the ancient idea that money was unproductive led from the stigmatization of usury and the Jews to the stigmatization of finance and, ultimately, in Marxism, the stigmatization of capitalism itself. Finally, the book traces how the traditional status of the Jews as a diasporic merchant minority both encouraged their economic success and made them particularly vulnerable to the ethnic nationalism of the nineteenth and twentieth centuries.

Providing a fresh look at an important but frequently misunderstood subject, Capitalism and the Jews will interest anyone who wants to understand the Jewish role in the development of capitalism, the role of capitalism in the modern fate of the Jews, or the ways in which the story of capitalism and the Jews has affected the history of Europe and beyond, from the medieval period to our own.

Posted on by Marc O. DeGirolami

Ekelund & Tollison, “Economic Origins of Roman Christianity”

It isn’t often that law and economics and law and religion meet up, but this book, Economic Origins of Roman Christianity (U. Chicago Press 2011), by Robert B. Ekelund, Jr. and Robert D. Tollison, looks to be an exception.  The book is itself an example of how Americans believe that the tools of economics and the market can be fruitfully applied to understand all sorts of social phenomena — indeed, how the metaphor of the market is a natural fit for understanding religious experience.  Definitely worth a look, though I am not familiar with the designation, “Roman Christianity” (I’m sure the authors explain why they chose it).  The publisher’s description follows.

In the global marketplace of ideas, few realms spark as much conflict as religion. For millions of people, it is an integral part of everyday life, reflected by a widely divergent supply of practices and philosophical perspectives. Yet, historically, the marketplace has not always been competitive. While the early Common Era saw competition between Christianity, Judaism, and the many pagan cults, Roman Christianity came eventually to dominate Western Europe.
 
Using basic concepts of economic theory, Robert B. Ekelund Jr. and Robert D. Tollison explain the origin and subsequent spread of Roman Christianity, showing first how the standard concepts of risk, cost, and benefit can account for the demand for religion. Then, drawing on the economics of networking, entrepreneurship, and industrial organization, the book explains Christianity’s rapid ascent. Like a business, the church developed sound business strategies that increased its market share to a near monopoly in the medieval period. This book offers a fascinating look at the dynamics of Christianity’s rise, as well as how aspects the church’s structure—developed over the first millennium—illuminate a number of critical problems faced by the Church today. 
Posted on by Mark Movsesian

Delahunty on Trade and Islamist Terrorism

In attempting to come to grips with Islamist terrorism, some observers, particularly in the West, have suggested that poverty provides the ultimate explanation. Islamist terrorism thrives, the argument goes, because Muslim societies are poor; if Muslim societies experienced economic growth – through trade with the outside world, for example – terrorism would be much less a problem. In an excellent new paper, Terrorism and Trade: A Reply to Professor Bhala, Robert Delahunty (St. Thomas – Minnesota) debunks this argument. He notes that studies repeatedly fail to show a significant empirical link between terrorism and poverty, particularly the poverty which results from a lack of trade with the outside world. In fact, Islamist terrorism in the twenty-first century, like communist terrorism in the nineteenth century, is principally a middle-class phenomenon. Both the leadership and ranks of jihadist movements are made up of educated, upwardly-mobile professionals with ties to the global economy. Like other economic explanations, Delahunty suggests at the end of his paper, the “counter-terrorism through trade” argument may be a way for secular-minded Westerners to avoid coming to terms with the ultimate explanation for religious and ideological terrorism, namely, that its motivations are primarily religious and ideological. There is much more in the paper which, as usual with Delahunty, is remarkably erudite and lucid.

Posted on by Mark Movsesian

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

Posted on by Mark Movsesian · 1 Comment

Christianity and Capital Markets

During the financial crisis of 2008, a cartoon appeared in a British newspaper showing two bankers earnestly puzzling over something. “I know what a ‘hazard’ is,” one says to the other, “but what does ‘moral’ mean?” The idea that capital markets are amoral — indeed, that they are immoral — is a standard critique. In a recent paper for a meeting of the American Academy of Religion, Seth Payne argues that capital markets are, in fact, a force for good that Christians and other people of faith should use “to amplify their moral, ecclesiastical, humanitarian, and pastoral duties.” The abstract follows. — MLM (Hat tip: ProfessorBainbridge.com).

The financial turmoil of the past several years has caused many to question the integrity, stability, and very purpose of financial systems which, in today’s world, represent a unique blend of primarily capitalism but also aspects of socialism and collectivism as well. A key factor contributing to this sustained period of economic upheaval has been the uncertainty surrounding capital markets – the fuel that powers all modern economies. Capital markets have, in the minds of many, come to represent the embodiment of greed, unrestrained egoism, and exploitation of the vulnerable – conceptions at complete odds with the central values of social justice as set forth in both Christian and Jewish primary sources: caring for the poor, protecting the weak, and the promotion of justice.

In this paper I argue that capital markets, rather than being a means for the powerful to exploit the weak, have in fact become a force for social good in the aggregate. Indeed capital markets are, in fact, a social contract and as such must be governed by a set of normative ethical principles – both self imposed, and imposed by government regulation. I explore the ethical difficulties that have led to the systemic problems and market failures that lead to not only this current financial crisis, but literally all financial crises over the past eight hundred years. Capital markets, left to their own devices and without both self and governmental oversight, quickly become hotbeds of manipulation and exploitation. In order for markets to function properly, principles of basic fairness must become normative. It is when capital markets become unfair and unjust, that they fail. Thus, these markets must be structured in such a way as to 1) promote Rawl’s “Justice as Fairness” principle and 2) align the interests of market participants to produce universally beneficial market efficiency and stability.

Finally, I propose concrete ways in which the power of capital markets may be harnessed to promote the central moral values of Christian tradition and be used by people of faith to promote the ideals of social justice.


Posted on by Mark Movsesian · 1 Comment

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

Posted on by Mark Movsesian

Religious Belief and Economic Attitudes – A Surprising New Survey

From Baylor University, an interesting new study of how religion and attitudes toward economic regulation interact in today’s America: The Values and Beliefs of the American Public.  According to the study, most Americans believe that God has a plan for their lives; that’s not too surprising, given levels of religious faith in America. Americans who believe most strongly that God has a plan for their lives earn less and have less education; I suppose some people would not find that surprising, either. What is surprising is this: even though they are relatively poor and lack the education that would lead to higher-paying jobs, Americans who believe most strongly that God has a plan for their lives “are the most likely to believe that the United States’ economic system is fair without government intervention.” For example, they are much more likely to believe that “anything is possible through hard work” and that “healthy people don’t deserve unemployment benefits. “  The bottom line, according to the study’s authors, is this: “In today’s United States, with high levels of unemployment and vastly expanding wealth inequality, belief in God’s plan sustains belief in the fairness of our economic system and our ability to eschew government assistance to stem the tide of our economic woes.” Worth a look.  — MLM