Religion and capitalism? Alvaro Vargas Llosa

Some questions: Has religion helped or hindered the development of modern free societies? Did the Protestant work-ethic make capitalism? Do Catholicism and Eastern Orthodox explain why the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) have been among the most economically-troubled European nations? Is the economic backwardness of much of the Middle East due to Islam?

Here are five data points from Alvaro Vargas Llosa’s enjoyable Liberty for Latin America (Farrar, Straus and Giroux, 2005):

1. One can get capitalism with or without Protestantism: “It seems beyond dispute that the Puritan spirit helped shape many capitalist institutions. But it is equally true that there were manifestations of capitalist enterprise in northern Italy long before the Reformation … .”

2. Muslims also can be a part of a dynamic trading culture: “thanks to the relative freedoms they enjoyed, the people — Muslims and otherwise — of the Saracen civilization were already involved in scientific discovery and vibrant trade when most of western Europe was still living in the Dark Ages.”

3. Iberian Catholicism has led to both prosperous and un-prosperous cultures: “It is true that the Ibero-Catholic tradition weighs heavily against Latin American development, but it is also true that Spain and Portugal, where that culture originated, have since prospered while Latin America has not.”

4. Cubans under Spanish-versus-US influence: “Iberian heritage has played a key part in Cuba’s underdevelopment (Spain controlled Cuba for the whole of the nineteenth century), but Cuban immigrants in the United State quickly and successfully adapt to American institutions.”

5. Confucianism has also co-existed with economic development and stagnation: “The very same Confucian values that today account, in the eyes of many, for the social capital on which development has rested in East Asia were present in that part of the world before the 1960s, that is, in the midst of underdevelopment.”

So is there no correlation between religious culture and economic results?

Source: Alvaro Vargas Llosa, Liberty for Latin America (Farrar, Straus and Giroux, 2005), pp. 7-ff.

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