I was raised on the glories of the Reformation. Like all Lutherans, each Sunday I was further enlightened about Catholic wickedness and about how Martin Luther had set us free to think for ourselves and to seek knowledge, thereby bringing about the modern world. Although I had outgrown much of this by the time I entered graduate school, once there I was instructed in depth and detail in the gospel of Max Weber (1864–1920): that Protestantism gave birth to a unique work ethic that spawned capitalism, and thus it is that modernity is a direct result of the Reformation.

Even now, Weber’s thesis of the “Protestant work ethic” lives on among sociologists, being recounted in detail in every introductory textbook on the market. According to Weber, Protestants dominated the capitalist economy of the West because of all the world’s religions only Protestantism provided a moral vision that led people to restrain their material consumption while vigorously seeking wealth.

Weber argued that prior to the Reformation restraint on consumption was invariably linked to asceticism and, hence, to condemnations of commerce. Conversely, the pursuit of wealth was linked to profligate consumption. Either cultural pattern was inimical to capitalism. Weber claimed that the Protestant ethic shattered these traditional linkages, creating a culture of frugal entrepreneurs content to systematically reinvest profits in order to pursue ever greater wealth; and therein lies the key to capitalism and the path to modernity.

Perhaps because it was such an elegant thesis, it was widely accepted – despite the fact that it was so obviously wrong. As a great deal of subsequent research has demonstrated, Catholic areas of western Europe did not lag in their industrial development. And fully developed capitalism had appeared in Europe many centuries before the Reformation.

As Hugh Trevor-Roper explained: “The idea that large-scale industrial capitalism was ideologically impossible before the Reformation is exploded by the simple fact that it existed.” The celebrated Fernand Braudel complained that “all historians have opposed this tenuous theory [the Protestant ethic], although they have not managed to be rid of it once and for all. Yet it is clearly false. The northern countries took over the place that earlier had been so long and brilliantly occupied by the old capitalist centres of the Mediterranean. They invented nothing, either in technology or business management.” Moreover, during their critical period of economic development, these northern centres of capitalism were Catholic, not Protestant – the Reformation still lay well into the future.

Everyone writing on capitalism accepts that it rests upon free markets, secure property rights and free (uncoerced) labour. By this definition, capitalism was a very Catholic invention: it first appeared in the great Catholic monastic estates, way back in the 9th century.

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