Lutheran economics

The New York Times, no less, has published a piece by Harvard Luther scholar Steven Ozment (author of that new book on Cranach that I intend to blog about at some point) on the Lutheran elements in today’s German economic policy towards the Eurozone:

Even today Germany, though religiously diverse and politically secular, defines itself and its mission through the writings and actions of the 16th century reformer, who left a succinct definition of Lutheran society in his treatise “The Freedom of a Christian,” which he summarized in two sentences: “A Christian is a perfectly free Lord of all, subject to none, and a Christian is a perfectly dutiful servant of all.”

Consider Luther’s view on charity and the poor. He made the care of the poor an organized, civic obligation by proposing that a common chest be put in every German town; rather than skimp along with the traditional practice of almsgiving to the needy and deserving native poor, Luther proposed that they receive grants, or loans, from the chest. Each recipient would pledge to repay the borrowed amount after a timely recovery and return to self-sufficiency, thereby taking responsibility for both his neighbors and himself. This was love of one’s neighbor through shared civic responsibility, what the Lutherans still call “faith begetting charity.”

How little has changed in 500 years. The German chancellor, Angela Merkel, a born-and-baptized daughter of an East German Lutheran pastor, clearly believes the age-old moral virtues and remedies are the best medicine for the euro crisis. She has no desire to press a secular ideology, let alone an institutional religious faith, on her country, but her politics draws unmistakably from an austere and self-sacrificing, yet charitable and fair, Protestantism.

If Ms. Merkel refuses to support so-called euro bonds, it is not because it would be like giving free money to the undeserving poor but because it would not help the redeemed poor take responsibility for their own houses and grow strong for both themselves and their needy neighbors. He who receives, recovers and profits from society in a time of need has a moral responsibility to pay society back by acting in turn as a strong citizen who can help fill the common chests and sacrifice for his now needy neighbors, who had once helped him. Such is the sacrificial Lutheran society.

For this point of view Ms. Merkel has been derided as the “austerity queen,” and worse. But she is undeterred. She admits that austerity is the toughest road home but hastens to add that it is also the surest and quickest way to recover the economy and gain full emancipation from the crisis. Luther would agree.

According to polls, so do Ms. Merkel’s fellow Germans. They hold tight to their belief, born of staunch Lutheran teachings, that human life cannot thrive in deadbeat towns and profligate lands. They know that money is a scarce commodity that has to be systematically processed, recorded and safeguarded before being put out to new borrowers and petitioners.

And they take comfort in the fact that, unlike what they consider the disenchanted, spendthrift countries of Greece and Italy, those living in model German lands have obeyed the chancellor’s austerity laws and other survival programs designed for a fair, shared recovery.

But if their Lutheran heritage of sacrificing for their neighbors makes Germans choose austerity, it also leads them to social engagement. In classic Lutheran teaching, the salvation of the believer “by faith alone” does not curtail the need for constant charitable good works, as ill-informed critics allege. Faith, rather, empowers the believer to act in the world by taking the worry out of his present and future religious life.

via In Euro Crisis, Germany Looks to Martin Luther – NYTimes.com.

We often complain on this blog that the Lutheran influence via the state churches of Germany and Scandinavia is “only cultural.”  And of course, cultural influence means little without saving faith.  Still, at a time when Christianity and churches seem to be losing their influence to the detriment of society and at a time when Christians are trying to figure out how to be influential once again. it’s worth contemplating how churches have, in fact, both in the past and continuing into the present, influenced their cultures.

If Lutheranism influenced and is still an influence in those increasingly secular European states, it must, somehow, be a presence and it must, somehow, be influential.  How does this happen?

Can any of you speak about some other specific cultural influences of Lutheranism in, say, Scandinavia, or that of other theological traditions in other countries?

For example, Scandinavians are often portrayed  culturally as BOTH guilt-ridden AND morally permissive.  Is this a twisted, secularist remnant of Law and Gospel?

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • Pete

    The austerity and “low-impact” style of living of my paternal grandparents – German immigrants, non-Lutherans – was truly mind-boggling. This was also evident, in a slightly more relaxed form, in my father and present but even more relaxed in myself. I’ve often wondered where we would be on the global warming curve if everyone lived as they did.
    The political humorist P. J. O’Rourke has a hilarious passage in one of his books (sorry – I forget which one) that is likely shaped by the things expressed above. O’Rourke is interviewing a Swedish government official who points out that, in contrast to the United States, there is essentially no unemployment in socialist Sweden. O’Rourke’s alert reply was that there seems to be essentially no unemployment among Swedes in America, either.

  • Pete

    The austerity and “low-impact” style of living of my paternal grandparents – German immigrants, non-Lutherans – was truly mind-boggling. This was also evident, in a slightly more relaxed form, in my father and present but even more relaxed in myself. I’ve often wondered where we would be on the global warming curve if everyone lived as they did.
    The political humorist P. J. O’Rourke has a hilarious passage in one of his books (sorry – I forget which one) that is likely shaped by the things expressed above. O’Rourke is interviewing a Swedish government official who points out that, in contrast to the United States, there is essentially no unemployment in socialist Sweden. O’Rourke’s alert reply was that there seems to be essentially no unemployment among Swedes in America, either.

  • http://enterthevein.wordpress.com J. Dean

    I like the idea of those profiting from welfare being required to pay it back. People probably wouldn’t be so hotly against welfare if it were to be applied like that.

  • http://enterthevein.wordpress.com J. Dean

    I like the idea of those profiting from welfare being required to pay it back. People probably wouldn’t be so hotly against welfare if it were to be applied like that.

  • Klasie Kraalogies

    The first old age pension was implemented by Bismarck.

    But German economists with the longest shadows over German economic practice, like Roepke, were also heavily influenced by Catholic Social Theory.

  • Klasie Kraalogies

    The first old age pension was implemented by Bismarck.

    But German economists with the longest shadows over German economic practice, like Roepke, were also heavily influenced by Catholic Social Theory.

  • SKPeterson

    There is the corresponding notion that welfare is to alleviate a temporary condition, not to create a lifelong dependency, or a massive bureaucracy to administer such programs.

    Now, there may be definite public resources that could and should be brought to bear within the context of welfare. However, I don’t equate those public funds with goverment programs. Rather they would be funds publicly available through churches and civic organizations. As it might be noted in the example of Luther’s day – welfare funds were generated and distributed on a very local level.

  • SKPeterson

    There is the corresponding notion that welfare is to alleviate a temporary condition, not to create a lifelong dependency, or a massive bureaucracy to administer such programs.

    Now, there may be definite public resources that could and should be brought to bear within the context of welfare. However, I don’t equate those public funds with goverment programs. Rather they would be funds publicly available through churches and civic organizations. As it might be noted in the example of Luther’s day – welfare funds were generated and distributed on a very local level.

  • larry

    Also, what might be similarly noted about other cultures largely base lined in and influenced mostly by other faiths such as France, England and the US with Calvinism? The most prominent and undisputable point of Calvinism’s economic thought is its proclivity toward usury. In Calvin’s defense usury came a long way from the limits he set on it such as it being fine provided that it is not charged in loans to the poor (opposite of what the US has been doing in its credit card and bank fiascos) who would the be hurt by such payment and enslaved by them. Calvin also set a legal maximum that must be obeyed (another American ever creeping violation). And critical so that Calvin is not broad brushed he required that no one should function as a professional moneylender (ooops American institutions). Here we see Calvin not too far from Luther.

  • larry

    Also, what might be similarly noted about other cultures largely base lined in and influenced mostly by other faiths such as France, England and the US with Calvinism? The most prominent and undisputable point of Calvinism’s economic thought is its proclivity toward usury. In Calvin’s defense usury came a long way from the limits he set on it such as it being fine provided that it is not charged in loans to the poor (opposite of what the US has been doing in its credit card and bank fiascos) who would the be hurt by such payment and enslaved by them. Calvin also set a legal maximum that must be obeyed (another American ever creeping violation). And critical so that Calvin is not broad brushed he required that no one should function as a professional moneylender (ooops American institutions). Here we see Calvin not too far from Luther.

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  • Klasie Kraalogies

    Larry, I know you don’t like Calvin, but sheesh…

  • Klasie Kraalogies

    Larry, I know you don’t like Calvin, but sheesh…

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    My son and I were discussing zero marginally productive employees, when it occurred to me that some people are even worse than zero, they are negatively productive. That is they not only do not produce, they also reduce the productivity of the more productive employees. So, as bad as welfare seems, it is actually the most efficient and least expensive way to deal with folks who are such poor workers that the best you can do for business productivity is to pay them to stay away.
    Any thoughts?

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    My son and I were discussing zero marginally productive employees, when it occurred to me that some people are even worse than zero, they are negatively productive. That is they not only do not produce, they also reduce the productivity of the more productive employees. So, as bad as welfare seems, it is actually the most efficient and least expensive way to deal with folks who are such poor workers that the best you can do for business productivity is to pay them to stay away.
    Any thoughts?

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    @6

    Okay, what about Hobbes?
    :D

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    @6

    Okay, what about Hobbes?
    :D

  • larry

    KK,

    Quite whining and your stupid false accusations, I was actually supporting Calvin on this as my quote CLEARLY shows. He’s often MIS understood on usury by Lutherans. I think what Calvin REALLY outlined was great not bad!

    The point was which you ignorantly missed, was juxtapositioning what Calvinistic baseline countries had become, through their abuse, as opposed to what Calvin had meant and did (good).

  • larry

    KK,

    Quite whining and your stupid false accusations, I was actually supporting Calvin on this as my quote CLEARLY shows. He’s often MIS understood on usury by Lutherans. I think what Calvin REALLY outlined was great not bad!

    The point was which you ignorantly missed, was juxtapositioning what Calvinistic baseline countries had become, through their abuse, as opposed to what Calvin had meant and did (good).

  • larry

    SG,

    Haa! Funny you mention Hobbes. Check this out concerning Hobbes:

    http://jackkilcrease.blogspot.com/

  • larry

    SG,

    Haa! Funny you mention Hobbes. Check this out concerning Hobbes:

    http://jackkilcrease.blogspot.com/

  • Donegality

    I don’t know why but this has got me thinking on the book of Proverbs. As a recent convert to The Lutheran church from broad evangelicaldom, what was Luther’s, or other orthodox Lutheran writers for that matter, approach to the book of Proverbs?

  • Donegality

    I don’t know why but this has got me thinking on the book of Proverbs. As a recent convert to The Lutheran church from broad evangelicaldom, what was Luther’s, or other orthodox Lutheran writers for that matter, approach to the book of Proverbs?

  • Klasie Kraalogies

    Larry, the most “Calvinist” country, in terms of heritage, is the Netherlands. When considers their economy, your point falls apart.

  • Klasie Kraalogies

    Larry, the most “Calvinist” country, in terms of heritage, is the Netherlands. When considers their economy, your point falls apart.

  • Klasie Kraalogies

    That last sentence should read “When one considers …”

  • Klasie Kraalogies

    That last sentence should read “When one considers …”

  • Cincinnatus

    Someone here must have read their Weber, right? Engrained within the Protestant tradition–and that includes both Calvin and Luther–is the work ethic, the “spirit of capitalism.”

    A spirit that certainly isn’t engrained in Catholicism, which historically prohibited “usury” (i.e., interest on money lent), “unjust” profits, and, in general, the sort of individualistic profit-seeking characteristic in free market economies. In fact, a recent study I encountered endeavors to “test” Weber’s thesis regarding the “Protestant ethic and the spirit of capitalism” by comparing the economies of historically Catholic and historical Protestant countries. While I’m not endorsing the study’s results, the general conclusion was that Weber is right: Catholic countries like Spain, Italy, and France are more economically sluggish, prioritizing other economic goods (like more leisure, etc.) over sheer profit; historically Protestant countries like the Netherlands, Germany, England, and, yes, America are the powerhouses of industrial capitalism.

    That said, is the question whether there is a specifically Lutheran economics or a specifically Christian economics? If the former, the answer is an obvious yes, and the thinking has been done long ago (cf., again, Weber); just as there is, empirically speaking, a Catholic economic theory–actually, several, at least one of them “official”–there is an identifiable Lutheran and more broadly Protestant economic philosophy. But is there a properly “Christian” economics–as in one that is presumably rooted in the teachings of Christ or the Scriptures? I’m not so sure. Nothing in the Gospels leads me to conclude that Christ was either a capitalist, a communist, or anything in between.

  • Cincinnatus

    Someone here must have read their Weber, right? Engrained within the Protestant tradition–and that includes both Calvin and Luther–is the work ethic, the “spirit of capitalism.”

    A spirit that certainly isn’t engrained in Catholicism, which historically prohibited “usury” (i.e., interest on money lent), “unjust” profits, and, in general, the sort of individualistic profit-seeking characteristic in free market economies. In fact, a recent study I encountered endeavors to “test” Weber’s thesis regarding the “Protestant ethic and the spirit of capitalism” by comparing the economies of historically Catholic and historical Protestant countries. While I’m not endorsing the study’s results, the general conclusion was that Weber is right: Catholic countries like Spain, Italy, and France are more economically sluggish, prioritizing other economic goods (like more leisure, etc.) over sheer profit; historically Protestant countries like the Netherlands, Germany, England, and, yes, America are the powerhouses of industrial capitalism.

    That said, is the question whether there is a specifically Lutheran economics or a specifically Christian economics? If the former, the answer is an obvious yes, and the thinking has been done long ago (cf., again, Weber); just as there is, empirically speaking, a Catholic economic theory–actually, several, at least one of them “official”–there is an identifiable Lutheran and more broadly Protestant economic philosophy. But is there a properly “Christian” economics–as in one that is presumably rooted in the teachings of Christ or the Scriptures? I’m not so sure. Nothing in the Gospels leads me to conclude that Christ was either a capitalist, a communist, or anything in between.

  • Random Lutheran

    Here’s something to chew on, based on #14: imagine a scenario where you would be, by way of random draw, plopped down for life in a nation that’s either historically Protestant, or historically Roman Catholic. Which pool of nations would you choose to have your future homeland chosen from? And why?

  • Random Lutheran

    Here’s something to chew on, based on #14: imagine a scenario where you would be, by way of random draw, plopped down for life in a nation that’s either historically Protestant, or historically Roman Catholic. Which pool of nations would you choose to have your future homeland chosen from? And why?

  • larry

    Kk,

    Defend your stupid and deflect your un called for false accusation, signatory of your giddy spirit, as you wish but the facts remain the same, I was not dissing John Calvin but defending him in the often miss understanding of usury and not defending success yea or nea. Calvin was right on his cautious use of it and in fact not that far removed from Luther. Calvin the man would be quite shocked today to see the pragmatic abuse his doctrine has taken, make no mistake about it.

    So spare me your ruse to cover up your false and uncalled for false accusation against me.

  • larry

    Kk,

    Defend your stupid and deflect your un called for false accusation, signatory of your giddy spirit, as you wish but the facts remain the same, I was not dissing John Calvin but defending him in the often miss understanding of usury and not defending success yea or nea. Calvin was right on his cautious use of it and in fact not that far removed from Luther. Calvin the man would be quite shocked today to see the pragmatic abuse his doctrine has taken, make no mistake about it.

    So spare me your ruse to cover up your false and uncalled for false accusation against me.

  • Klasie Kraalogies

    Larry, calm down. I was objecting to your thesis – in my mind, you are ascribing far too much power to Calvin’s legacy, forgetting the deliterous affects of ordinary human sinfulness. I myself have serious issues with Calvin, but it would be wrong to ascribed to him a near-omnipotent presence as a purveyor of falsehood. That is all.

  • Klasie Kraalogies

    Larry, calm down. I was objecting to your thesis – in my mind, you are ascribing far too much power to Calvin’s legacy, forgetting the deliterous affects of ordinary human sinfulness. I myself have serious issues with Calvin, but it would be wrong to ascribed to him a near-omnipotent presence as a purveyor of falsehood. That is all.

  • larry

    Ok that’s fine but you missed my point grossly, then, on both points. 1. I was not being negative toward Calvin as your “sheesh” and statement made. 2. The neat omni purveyor of falsehood was clearly wrong being my comment of his earthly kingdom economics was positive. 3. I’m not confounding the two kingdoms ad you are. False teaching has yo to with faith, economics not.

  • larry

    Ok that’s fine but you missed my point grossly, then, on both points. 1. I was not being negative toward Calvin as your “sheesh” and statement made. 2. The neat omni purveyor of falsehood was clearly wrong being my comment of his earthly kingdom economics was positive. 3. I’m not confounding the two kingdoms ad you are. False teaching has yo to with faith, economics not.

  • Klasie Kraalogies

    Larry, I don’t understand your reply @ 18. But I am intrigued by your assertion that I confuse the 2 kingdoms. Please denonstrate? What I took away from your first post is that you place the root of the problems of non-German western economies on the influence of Calvin. This, too me, was not only a gross overestimation of Calvin’s influence, but also inaccurate, insofar as a consideration of a the economy of a country heavily influenced by Calvin, say Netherlands, shows. That is all.

  • Klasie Kraalogies

    Larry, I don’t understand your reply @ 18. But I am intrigued by your assertion that I confuse the 2 kingdoms. Please denonstrate? What I took away from your first post is that you place the root of the problems of non-German western economies on the influence of Calvin. This, too me, was not only a gross overestimation of Calvin’s influence, but also inaccurate, insofar as a consideration of a the economy of a country heavily influenced by Calvin, say Netherlands, shows. That is all.

  • Larry

    “is that you place the root of the problems of non-German western economies on the influence of Calvin”

    And there’s your error point blank. That was not even close nor obvious in what I stated period. I clearly posed the question what about economics, analytically, that were more calvinistically influenced. Here is Calvin’s positive reality on the primary issue of usury, not by the way as Lutheran’s often simplistically portray the man. I.e. his cautions were closer to Luther. Yet, today here is the abuses, to no fault of Calvin’s, in fact against what he hedged usury from.

    From that you preceded to exercise your giddy spirit and say there goes Larry again against Calvin because of his false teachings.

    But we are not speaking here of Word or Sacraments nor things of faith, the kingdom of heaven, but of good earthly order, the earthly kingdom.

    Thus, two fold, you ignorantly accused me of the very opposite I was doing, i.e. I was obviously being positive toward Calvin on this issue, you accused negativity. Second, EVEN IF, let’s imagine I was being “negative” concerning his ideas and influence, which I was not which is obvious in what I stated so clear a child could have comprehended it, BUT lets imagine I was “negative” regarding this issue of usury…it would not arise to the level of a false teaching or heresy but a disagreement on what earthly good is good. And there in your false accusation lay your confusion of the two kingdoms.

  • Larry

    “is that you place the root of the problems of non-German western economies on the influence of Calvin”

    And there’s your error point blank. That was not even close nor obvious in what I stated period. I clearly posed the question what about economics, analytically, that were more calvinistically influenced. Here is Calvin’s positive reality on the primary issue of usury, not by the way as Lutheran’s often simplistically portray the man. I.e. his cautions were closer to Luther. Yet, today here is the abuses, to no fault of Calvin’s, in fact against what he hedged usury from.

    From that you preceded to exercise your giddy spirit and say there goes Larry again against Calvin because of his false teachings.

    But we are not speaking here of Word or Sacraments nor things of faith, the kingdom of heaven, but of good earthly order, the earthly kingdom.

    Thus, two fold, you ignorantly accused me of the very opposite I was doing, i.e. I was obviously being positive toward Calvin on this issue, you accused negativity. Second, EVEN IF, let’s imagine I was being “negative” concerning his ideas and influence, which I was not which is obvious in what I stated so clear a child could have comprehended it, BUT lets imagine I was “negative” regarding this issue of usury…it would not arise to the level of a false teaching or heresy but a disagreement on what earthly good is good. And there in your false accusation lay your confusion of the two kingdoms.

  • Klasie Kraalogies

    Larry, you seriously over-analyze. If I misread you, fine, it happens. But leave it at that. I just don’t see the need to bring Calvin and his mistakes/heresies/curly toenails into every damn discussion – if anything, that is what “made me all giddy” (nice one, btw, hiiihaaah!)

  • Klasie Kraalogies

    Larry, you seriously over-analyze. If I misread you, fine, it happens. But leave it at that. I just don’t see the need to bring Calvin and his mistakes/heresies/curly toenails into every damn discussion – if anything, that is what “made me all giddy” (nice one, btw, hiiihaaah!)

  • larry

    KK,

    It’s not that you mis read me, its continue to falsely accuse me this way, bait and switch on me and your last post proves it:

    “I just don’t see the need to bring Calvin and his mistakes/heresies/curly toenails into every damn discussion”

    I NEVER ONCE was doing that and it is crystal clear from my initial post. In fact when I read your respons I though, “what in the hell is he talking about” so alien was it to my post and thought at the time.

    Your argument boils down to this after falsely accusing me:

    I claim the sky is blue. You reply, “Larry the sky is not silver as you claim”. I reply, “KK I said blue not silver”. You defend, “Well because you said it was silver…”. I clarify again, “But I said blue.” You respond, “Well if you had said it was silver, therefore I’m right.”

    You say in the above reply that “you misread me”, sounds like a legitimate correction, but then you proceed to reassert the misreading you say you did and reaccuse me. Surely you see this.

    It’s not that I mind you misunderstanding me, that happens to all of us. What I mind is your over emotionalism and constant false accusations and then defending them.

    If you misread me, fine, no problem, easy to do for any of us and so we are cool.

  • larry

    KK,

    It’s not that you mis read me, its continue to falsely accuse me this way, bait and switch on me and your last post proves it:

    “I just don’t see the need to bring Calvin and his mistakes/heresies/curly toenails into every damn discussion”

    I NEVER ONCE was doing that and it is crystal clear from my initial post. In fact when I read your respons I though, “what in the hell is he talking about” so alien was it to my post and thought at the time.

    Your argument boils down to this after falsely accusing me:

    I claim the sky is blue. You reply, “Larry the sky is not silver as you claim”. I reply, “KK I said blue not silver”. You defend, “Well because you said it was silver…”. I clarify again, “But I said blue.” You respond, “Well if you had said it was silver, therefore I’m right.”

    You say in the above reply that “you misread me”, sounds like a legitimate correction, but then you proceed to reassert the misreading you say you did and reaccuse me. Surely you see this.

    It’s not that I mind you misunderstanding me, that happens to all of us. What I mind is your over emotionalism and constant false accusations and then defending them.

    If you misread me, fine, no problem, easy to do for any of us and so we are cool.

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