Gross national products?

The Spirit of Capitalism
October 18, 2002

This book poses two very big questions: what brought about the modern economy, and how have economic matters become so central to modern life? As Liah Greenfeld observes, few of us appear to believe these are worth inquiring into because sustained growth has long been an unquestioned goal and the primacy of the economy over everything else seems self-evident. With an anthropologist's insight, Greenfeld starts from the presumption that how we go about things needs explanation, and that something decidedly queer must have happened to get us into this condition. Why, she asks, don't we stop working when we have enough to live comfortably, as most people have done throughout history? What convinced our ancestors around the 17th century that economic expansion in itself was a good thing? Why is it that nowadays hard-working business people are admired when for much of history they were maligned and marginalised?

These questions take her back to Max Weber and his argument in T he Protestant Ethic and the Spirit of Capitalism (1904-5) that religious doctrine is crucial to understanding the unprecedented rise and continued expansion of the West. Greenfeld shares with Weber the conviction that the emergence of the modern economy lies in belief systems, and to this degree her study follows in the tracks of the master. Her admiration for Weber is evident in her book's title. However, Greenfeld argues that the key belief is not found in religion, but in the doctrine of nationalism. She argues that the vision of belonging to a nation that bound people together and imbued them with the desire to work hard, both for themselves, and to be bigger and stronger than the rest, was the critical factor in England's early rise. Enthusiasm for trade, to better the French and other continentals by developing the economy, spread through the land in the 17th century and triggered the industrial revolution. The Netherlands may have preceded the English in economic efficiency, but there nationalism waned and the economy weakened accordingly. Other nations such as Japan and Germany came later, but there, too, nationalism was the ethical spur to economic expansion. Last of all came the US, but with a vengeance, since the fundamental tenet of this "economic civilisation" was money-making from the outset. So strong was economic nationalism that business took on a religious format, being in itself testament to the nation's virtue and the duty of patriots.

The Spirit of Capitalism shares with Weber a commitment to historical and comparative analysis. This is a learned if irreverent and enjoyable book that is rooted in close study of several nations, and Greenfeld's command of diverse historical sources is impressive. It builds on her earlier book, Nationalism: Five Roads to Modernity (1992), in which the economic dimension was, she admits, neglected. Spurred by criticism from a reviewer in The Economist magazine, Greenfeld is determined to address its neglect. She contends here that there are three variants of nationalism: individualist-civic, collectivist-civic and collectivist-ethnic. These are ideal types, but useful in assessing respectively England, Germany and Japan, as well as other countries. Individualist-civic nationalism identifies a collection of individuals who come together in civic life and abide by its conventions, but essentially go their own way. Collectivist-civic is where the state takes precedence over its members and, often in an authoritarian manner, directs national enterprise. Collectivist-ethnic is directed from above and exclusionary of outsiders.

Greenfeld presents a strong case for a cultural explanation of economic expansion. She castigates those who presume that the rise of the modern economy is natural. Conservatives come in for criticism, and she has some sport with Walt Rostow's Stages of Economic Growth (1961), which described what growth entailed but never got round to explaining why it happened. She reserves her fiercest attacks for Marxists who, she says, neither bother to explain the emergence of the modern economy nor get beyond economically reductionist accounts of human action. Greenfeld's roots in US culture are manifest here. She appears as unversed in Marxist scholarship (which does try to account for the rise of capitalism, for instance in examining the role of the slave trade) as she is in Marx's writings (to castigate him as an economic determinist is to be blind to, say, his Class Struggles in France ).

The Spirit of Capitalism will give heart to those who ask the big questions of life, and its suggestion that this doctrine risks turning the already rich into workaholics, driven to better others though it leaves them no time to live, is well worth reflecting on.

I am not persuaded that nationalism is the silver bullet to account for economic modernity, but Greenfeld certainly presents a scholarly and eloquent case for its importance. Her chirpy and cheeky style is also refreshing in areas dominated by somewhat arid economic historians.

Frank Webster is professor of sociology, City University, London.

The Spirit of Capitalism: Nationalism and Economic Growth

Author - Liah Greenfeld
ISBN - 0 674 00614 3
Publisher - Harvard University Press
Price - £29.95
Pages - 541

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