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A most ingenious paradox

July 12, 2015

A number of the arguments for capitalism as a moral positive trace back to a concept known as the Protestant work ethic, alleged to be responsible for the economic success of the United States, the Netherlands, and the French Huguenots in the early modern era. The theory of the work ethic, which has been especially popular in the United States in recent years, suggests that the act of labor was viewed by Protestant faiths as a means of worship. A man’s moral standing and likelihood of salvation were determined in large part by how hard a worker he was. Wealth, as the product of one’s labor or skill in trading, was seen as a simple way of measuring one’s devotion to God. However, this set up an awkward ethical problem for the New England Protestants, who simultaneously viewed riches as a source of temptation, a form of vanity and boasting, and, without proper use, a sure guarantee of damnation.

The spread of capitalism and the joint stock company – the latter of which was in large part responsible for the acts of colonization that give rise to the Protestant work ethic in the first place – resolved the paradox. Capitalism provided the wealthy with a means of incremental investment that would eliminate the moral stigma of their wealth. Shares of stock could not be readily spent on luxuries which would qualify as a form of boasting. Neither would they be an ever-present distraction from spiritual affairs in the same way a box of specie might be. Investments in productive businesses could be interpreted as a form of charity directed at the investor’s fellow men, by providing employment and increasing the availability of goods. As an additional benefit, this sort of half-charity was an alternative to outright donations to the poor, whom the Protestant work ethic dismissed as slothful (why else would they be impoverished, since God rewards the worker?) and unworthy of encouragement. Most importantly, the capitalist system allowed the investor to secure all these benefits for himself without actually giving up his wealth. After all, to have simply renounced it would have marked him as wasteful and a poor steward, not to mention impious. This elaborate construction of the right and wrong uses of wealth gave capitalism a moral impetus that remains with it into the twenty-first century, one which continues to be revived each time its defenders argue in favor of the charity of a starvation wage, the sacredness of profit, and the inviolability of shareholdings.

This lingering moral impulse is also partly responsible for a phenomenon that progressives in the United States find inexplicable: that even the poor and the workers, who stand to benefit the most from increased social services funded by higher taxes on the wealthy, should be largely opposed to such tax raises. But if wealth is not only desirable for its own sake but also as a guarantee of morality, so the unspoken legacy of the Protestant work ethic goes, why support any proposal which might make such wealth harder to obtain? The so-called American dream, reduced to its essentials, is the desire for riches coupled with a reasonable chance that those riches are attainable. The possibility of wealth must be preserved in order for that dream to come true, and those who have not yet realized the dream are even more committed to its preservation than those who have already achieved it.

Nearly every man wants to be rich. Neither the rich nor the poor will tolerate a threat that strikes at that shared ambition, which their culture teaches is both desirable and right.

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