Martin Luther's Legacy

I’ve always found the studies that look at the effect of religion on economic growth a bit fluffy. But this very clever paper goes far further than previous work in explaining why Protestant countries and regions might grow faster. If you learn to read the bible, you can read other things too.

Was Weber Wrong? A Human Capital Theory of Protestant Economic  History
Sascha Becker & Ludger Woessmann
Max Weber attributed the higher economic prosperity of Protestant regions to a Protestant work ethic. We provide an alternative theory, where Protestant economies prospered because instruction in reading the Bible generated the human capital crucial to economic prosperity. County-level data from late 19th century Prussia reveal that Protestantism was indeed associated not only with higher economic prosperity, but also with better education. We find that Protestants’ higher literacy can account for the whole gap in economic prosperity. Results hold when we exploit the initial concentric dispersion of the Reformation to use distance to Wittenberg as an instrument for Protestantism.

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6 Responses to Martin Luther's Legacy

  1. Matt Cowgill says:

    Hi Andrew,
    Sorry to go completely off topic, but I want to ask what you think of Wayne Swan’s view of an ALP tax policy as superfluous. I just re-read your progressive essay on tax reform and would like to know what you think about the ALP ‘vacating the field’ on this issue.
    Thanks
    Matt

  2. Pingback: Tim Worstall

  3. Antonios says:

    Reminds me of why Jews are often intellectuals.

    Every good Jew is expected to do some exegesis in their time and those good at it are highly regarded, so not surprisingly, many often end up being bookish.

  4. Jim says:

    I’d also suggest that the Protestant idea of reading and forming your own opinion – within a context of a tradition – might also promote an attitude of independent action in other spheres of life.
    A longer post on the subject on my blog

  5. jack strocchi says:

    I am sure that Protestant biblical literacy was beneficial to eco growth. But Protestants were also big on numeracy, since they regarded mathematics as the language of God. Newton viewed theology with suspicion and concentrated on divining Gods purposes by mathematical analysis of nature.

    In fact Protestantism encouraged a whole range of economic attitudes and aptitudes that promoted economic growth. The notion of morphing spiritual professions into secular professions encouraged the notion of an industrial career, self-regulated according to worthy moral norms.

    Also the Protestant notion of “doing ones own thing according to ones own lights” undoubtedly encouraged entrepreneurial enterprises, as opposed to rentier feudalism or parasitical statism.

    Protestant social pluralism was therefore a sufficient condition for self-sustaining industrial growth. Obviously it is not a necessary condition since many non-Protestant nations have taken off. But these nations seem to have spent a lot of time copying Protestant traditions, or being occupied by protestant states.

  6. Very interesting – Ken and Will Hopper support this theory on pages 55 to 56 of their book “THE PURITAN GIFT” where they tell us that:

    “Most commentators agree in attributing the supportive attitude of the American workforce to better education. Education in the common schools had all kinds of consequences and implications. For one thing, it facilitated the practice of thinking and behaving rationally, abstract thought not coming easily to an illiterate and innumerate population. Since it applied to both sexes, it tended to equalize them. It created a more open and receptive mind on the part of workmen. It also served to eliminate social barriers, never very strong in any case in the north-eastern colonies or states. The ordinary workman, who could talk, write and count as easily as his bosses, was a natural candidate for promotion to the new junior, middle and senior management positions that the American System was throwing up. This aspect was much remarked on by visitors from the Old World at that time.

    For example, the British engineer, Sir Joseph Whitworth (1803–1887), wrote in 1854:

    “It rarely happens that an [American] workman who possesses peculiar skill in his craft is disqualified to take the responsible position of superintendent, by want of education and general knowledge, as is frequently the case in this country. In every State in the Union, and particularly in the north, education is, by means of the common schools, placed within the reach of each individual, and all classes avail themselves of the opportunities afforded.“

    A similar point of view would be expressed eleven years later in evidence to a House of Commons committee by a British hardware manufacturer, A. Field, who had spent fourteen years in the United States: ‘An American [workman] readily produces a new article; he understands everything you say to him as well as a man from a college in England would; he helps the employer by his own acuteness and intelligence . . .’

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