gfiles Magazine November Issue 2011

REFLECTIONS

 

bn uniyal

 

 

Culture of crisis

Ethical values can radically alter economics

 

THE first two pages I look at when The Economist arrives every week are the last two, the ones that carry the global economic and financial indicators. This is the result of an old habit from the days when I edited an economic newspaper, though I seldom, if ever, wrote anything substantial on any economic subject. Some weeks ago, while scanning the pages of the magazine in my hotel room in Berlin, I was struck by the thought that the European economic crisis was more endemic to countries that are predominantly Roman Catholic than the ones that have been traditionally Protestant.

 

Ireland, where the crisis first exploded two years ago, is predominantly Roman Catholic. So is Italy and so are Spain, Portugal and Poland, all badly affected by the current crisis. Greece, at present the worst affected, is Eastern Orthodox but the orthodox ethic is not very different from that of the Roman Catholics in its essence. France, which some say is also slipping into the grip of a crisis, is Roman Catholic too. The economic balance sheets of all these countries are in the red. I have just checked the past few months’ global economic and financial indicators in The Economist. All the figures for the latest GDP, trade balance, budget balance, industrial production, unemployment and so on for all these countries have been in the negative for many months. Only one Roman Catholic country on the continent can be said to be in good economic health and that is Austria but it is a Germanic nation.

 

Now, compare all this to countries with strong roots in Protestantism such as Germany, Switzerland, the Netherlands, Norway, Denmark and Sweden. Almost all figures for these are in the black with a plus sign in front. The global crisis has no doubt affected them too but certainly not as virulently as it has others. The pall of gloom is visibly much less in these countries. The sense of crisis is not as palpable as elsewhere. Actually, in countries like Germany and Sweden, the sense of crisis is almost negligible though German citizens are certainly concerned about the possible negative fallout of their country’s commitments in Greece, Spain and elsewhere.

 

Otherwise, Germany is still in great economic health. With a near $2 billion trade surplus, it is ahead of China, the world’s largest economy, and oil-rich Russia and Saudi Arabia. GDP growth in Germany and other Protestant countries is higher than in most others in the region. What is significant is that the figures for the economies in all these countries have remained consistently in the plus for a long time even as nations in their neighbourhood have been crumbling.

 

All this is not strange, considering the fact that the rise of capitalism itself in the West was long ago attributed largely to the Protestant and puritanical ethic. Max Weber said so in Protestant Ethic and the Rise of Capitalism as far back as 1905. The French scholar, Ernest Renan, had made an observation to that effect much before in 1870 when he said: “Catholicism cretinizes the individual…whereas Protestantism develops them.”

 

 

While in Sweden and listening to the Swedes, I have often been reminded of the many moral tales and proverbs and adages from the old times that our parents and elders used to tell us.

 

THERE is no doubt that the Protestant ethic, especially its north European Calvinist version, has contributed largely to the economic, moral and social strength and cohesion of the people of these countries. The world and these countries themselves have changed a great deal through the last 500 years or so since John Calvin’s days but the ethic he had preached still imbues the minds and spirits of the people of these north European nations.

 

The ethic is basically based on individual self-reliance, discipline, honesty and integrity, devotion to duty and work, avoidance of indebtedness, mutual trust and cooperation, a strong sense of social responsibility, care and concern for the weak and the needy and, perhaps, more than anything else, simple living and a distaste for excessive acquisition. Goods do not make a good life, as a Swede would say. I have been spending part of the year in Sweden, where our son lives, and elsewhere in Europe over the last several years which has enabled me to observe the lives of the people in these countries closely.

 

While in Sweden and listening to the Swedes, I have often been reminded of the many moral tales and proverbs and adages from the old times that our elders would tell us when we were children.

 

The moral values they tried to imbue us with were no different: live simply, do not seek to show off, work is worship, cultivate vidya or knowledge; first save, then spend; do not incur debt and, if you do, repay as soon as you can, for indebtedness is the worst slavery in life; live well but do not seek to make unnecessary accumulations, for you are not going to carry your wealth to the other world, and so on.

 

Most of these teachings have rubbed off from our minds. Manmohan Singh and Montek Singh Ahluwalia are seeing to it that whatever remains is erased too. But not all is lost.

 

 

Wherever this ethic is tinged with religious sentiment, as among the Jains and the Baniyas, especially in States like Gujarat, the crunch of the economic crisis has not been so bad. Not even in the south. I would wish to talk of Vaishnavism, Shaivism, Kali worship, Tantric worship and economic progress but that would need a book! g