Civilization #42: The Protestant Reformation and the Birth of Capitalism

This exploration will be conceptually challenging because we will take concepts we learned before and combine them to help explain the world we live in today. The logic must be clear, so if anything is confusing or debatable, it's worth pausing to consider.

First, I will explain the three major differences between the Protestant and Catholic religions. In many ways, the Protestant religion is a response to the problems created by the Catholic religion.

Catholicism vs. Protestantism: A Fundamental Shift

Let's first look at the three main characteristics of the Catholic religion.

Because of disconnection, corruption, and hypocrisy, there had always been dissent against the Catholic Church in Europe, such as the Cathars and the Waldensians. The Protestant religion was developed in response to these problems.

However, the Protestant religion, while solving some problems, created others. The demand for literacy meant that in the beginning, most adherents to this new religion were from the aspirational middle class—people of some means who wanted to aspire to more wealth. The problem of diversity led to tens of thousands of Protestant denominations, compared to the one Catholic Church. But the most significant new problem was anxiety. How do you know you truly believe in God? How do you really know you have faith? This doubt makes you anxious.

The Psychological Crucible of the New Faith

The new religion created profound problems in the minds of the faithful, stemming from core Christian concepts that were no longer mediated by the Church.

The Holy Trinity and the Unknowable God

Within the Christian religion is the idea of the Holy Trinity: Jesus, God, and the Holy Spirit are different forces, independent of each other, but also equal and part of the same thing. For the human mind, it is impossible to understand this concept. It's like saying a pen is both here and not here simultaneously. Your mind cannot believe in contradictions. The only way our mind can process this is by believing it is a symbol—something that is both nothing and everything, depending on how you perceive it.

The problem with this is that it creates anxiety. Our fundamental need is to connect with God, but the concept of the Holy Trinity means we can never truly connect with God. It is an abstraction, removed from us. We can never be intimate with God; it's either away from us or through us, but we can never touch or feel it.

Before, this wasn't a problem because the Church stood between the believer and the Holy Trinity. All you had to do was believe in the Church, and you were fine. But when you get rid of the Church, you have to grapple with the Holy Trinity yourself. And remember, one of the main ideas of the Protestant religion is that you must struggle with your faith. You must fully realize your faith in God, or you'll be condemned to hell. This impossible task creates immense anxiety.

Anxiety, OCD, and the Need to Rationalize

Anxiety comes from confusion. To remove this anxiety, you try to order your physical world. People with obsessive-compulsive behavior (OCD) like to clean houses, buy things, or lose weight. They are trying to rationalize the world around them to reduce their anxiety. This anxiety, born from a spiritual crisis, forces you to try to rationalize the material world.

Double Predestination

A third problem in the Protestant religion is the idea of double predestination. If you remove the corrupt Church, the problem arises: how do you know if you're going to heaven? Who decides?

A theologian named John Calvin proposed the idea of double predestination. The idea is this: God, at the beginning of time, has already decided who will be saved and who will be condemned. This decision is final. You cannot persuade Him that He is wrong because He is perfect, eternal, and immutable.

Only a few, the elect, will be saved. Everyone else will be condemned to hell. And who are the elect? The elect are those who truly believe that they have been saved. Only those who truly believe in God's mercy and grace will be saved. This, of course, creates even more anxiety. How do you know if you're one of the saved? You have to work hard to solve this problem.

The Solution: How Money Became God

Over decades and centuries, a solution to these anxieties emerged. That solution was money. Money is how these three paradoxes—the incomprehensible Trinity, the anxiety-driven need to rationalize, and the terror of predestination—were resolved.

To understand this, we first have to understand what money is. In the world, we are all different. Each individual is unique and sees the world differently, which creates confusion. If I ask you why you're in school, one person might say to learn mathematics, another to go to college in America, and a third simply to learn.

But if I introduce the concept of money, it standardizes, systemizes, clarifies, and simplifies everyone's understanding into one coherent whole. Experimenters once conducted a wine test, giving people three different bottles and asking them to identify the best one. Most people could not tell the difference. Then, the experimenters put price tags on each bottle: $10, $20, and $50. Suddenly, everyone knew: of course, the $50 bottle is better.

That's what money does. It allows us to simplify the world to understand it. All our beliefs, values, and judgments are placed into this one symbol. Then, we take this money and reshape the world according to it. Now, if I ask why you are going to school, everyone agrees: to make money in the future. Money is a system to standardize thought, and once that happens, it reshapes reality into a rational order.

Now we can explain how money reduces the paradoxes of Protestantism:

1. Rationalizing the World: You're anxious. What do you do to reduce this anxiety? Make money. Make more money. Don't stop until you make the most money.
2. Solving the God Issue: Money is also a symbol. Mentally, you can conflate God with money. Money is God. God is money. That makes sense to people.
3. Solving Predestination: Now that you've conflated God with money, you can solve the predestination problem. How do I know I have faith in God? Because I have a lot of money. I spend my entire life accumulating it. How do I know I'm going to heaven? Because I'm rich. My wealth shows that I have true faith in God. If I have true faith, then I must be one of those predestined by God to be the elect. Therefore, I have nothing to worry about.

The beauty of this system is that it creates the concept of capitalism.

Never before in human history have people believed that it is a good thing to accumulate money for the sake of accumulating money.

Before, it was always about accumulating money to increase your social status. Wealthy people would spend their money holding community feasts, giving to the poor, and helping the community. When Julius Caesar died, he was the wealthiest man in the world, but he gave a third of his money to the poor people of Rome and another third to building parks.

But now, what's important is that you accumulate as much money as possible. Don't waste it, because if you do, it's a sign of corruption and a lack of faith in God. That is why we have capitalism: because of the anxiety created by the Protestant Reformation.

This was a process that took centuries, but it defines the world we live in today. Even though most people today are not Protestant, do not believe in double predestination, and don't understand the Holy Trinity, we have absorbed this mentality. We believe that we should accumulate money for the sake of accumulating money. That's why we worship people like Elon Musk and Jeff Bezos. They've just accumulated a symbol—money is actually nothing—but we worship them because we believe that money is reality itself.

Capitalism is a belief that money is reality in itself.

The Historical Context of the Reformation

The Protestant Reformation was a process that took place from 1517, when theologian Martin Luther published his 95 Theses, to 1648, with the Peace of Westphalia. This period ended after decades of violent warfare between Protestants and Catholics, culminating in the Thirty Years' War, which was, before World War I, the deadliest war in European history, killing up to 8 million people. The war ended with the Treaty of Westphalia, which guaranteed religious freedom to everyone in Europe.

Martin Luther and the 95 Theses

While there were many earlier thinkers who opposed the Catholic Church, like John Wycliffe and Jan Hus, Martin Luther was fortunate to have powerful political patrons—the princes of the Holy Roman Empire who wanted more autonomy from the Church.

Luther is most famous for his 95 Theses, a direct criticism of the Church's corruption. At the time, the Church was selling indulgences to finance the building of St. Peter's Basilica in the Vatican. Indulgences were essentially tickets that would reduce the punishment of your relatives in purgatory. It was basically bribing God. For a true Christian, this was insulting and offensive.

In his theses, Luther laid out his case against indulgences and, by extension, against the authority of the Pope.

• Thesis 36: "Every truly repentant Christian has a right to full remission of penalty and guilt, even without indulgence letters." He is arguing for salvation by faith. If you truly believe, God will forgive you. You have direct access to God.
• Thesis 47: "Christians are to be taught that the pope, in granting indulgences, needs and thus desires their devout prayer more than their money." This is a direct insult, suggesting the Pope has offended God and needs prayers.
• Thesis 86: "Why does not the pope, whose wealth is today greater than the wealth of the richest Crassus, build this one basilica of St. Peter with his own money rather than with the money of poor believers?" He is accusing the Pope of exploiting the poor when he is the richest man in the world.

The Church was furious and deemed him a heretic. But protected by his patrons, a war was fought over the issue, ending with the Peace of Augsburg, which divided the Holy Roman Empire into Lutheran and Catholic areas.

John Calvin and the Spread of Radical Ideas

While Martin Luther wanted to reform the Church, John Calvin introduced the idea of double predestination, which sought to deny the authority of the Church entirely. He told people that because God has already decided who will go to heaven, the Church is lying to you. A Frenchman, he was deemed a heretic and fled to Geneva, Switzerland, one of the birthplaces of the Reformation. The first believers were often townspeople—the aspirational middle class who wanted a religion that encouraged them to achieve more in life.

The Reformation opened a Pandora's box. With the Pope's authority gone, people were free to believe whatever they wanted.

• The Peasants' War (1524-1525): A proto-communist movement where peasants rebelled against feudal lords, believing feudalism was evil in the eyes of God. They wanted total equality and freedom. An estimated 300,000 joined the rebellion, but being unorganized and uneducated, they were massacred by aristocratic armies.
• Act of Supremacy (1534): King Henry VIII of England declared his independence from the Pope, creating the Church of England (the Anglican religion) with himself at its head, though he maintained many Catholic practices.

The Diversity of Protestantism

The Reformation was extremely diverse, leading to many different denominations:

• Lutherans: Followers of Martin Luther.
• Calvinists: Believers in double predestination.
• Anglicans: English followers of the king instead of the Pope.
• Hussites: Followers of Jan Hus in Bohemia.
• Unitarians: Those who deny the divinity of Jesus and the Holy Trinity, seeing Jesus as a prophet but not God.
• Anabaptists: Those who believe only adults can be baptized, as faith must be a conscious choice.

Geographically, Protestantism took hold in Northern Europe (England, Germany, the Nordic countries, Switzerland), while the South (France, Spain, Italy) remained largely Catholic. The one exception was the south of France, where the French Protestants, known as Huguenots, were concentrated. This was the same region where the Cathars had been located, suggesting a cultural continuity of dissent.

The Huguenots were mainly middle class, well-educated, prosperous, and joined by the nobility. The King of France saw them as a threat, leading to the St. Bartholomew's Day massacre in 1572, where tens of thousands of Huguenots were killed. This started a process where these extremely hardworking and wealthy people fled to Protestant countries like England, the Netherlands, and Germany, bringing their expertise and helping to jumpstart the Industrial Revolution in those nations.

The Thirty Years' War (1618-1648)

Eventually, Europe was divided into two factions, Catholic and Protestant, which engaged in the Thirty Years' War. The Habsburgs of the Holy Roman Empire, supported by the Pope, fought against the Protestant states of Germany. It was a religious war but also a geopolitical one; Catholic France joined the Protestants because they feared the imperial threat of the Habsburgs. The war ended with the Peace of Westphalia, which guaranteed religious freedom and allowed the Protestant religion to develop independently.

A Tale of Two Cultures: Roman vs. Viking

Why did the North become Protestant while the South remained Catholic? One possibility is the persistence of culture.

The southern European countries of Spain, France, and Italy were heavily influenced by Roman culture, which was based on an imperial bureaucracy. The three core values of the Romans were:

1. Liberty: Obedience to the law.
2. Res Publica: Public virtue; obeying authority for the public good.
3. Piety: Respect for customs, history, and traditions.

In contrast, the proto-Indo-Europeans of the North, who never fully assimilated into Roman culture (what we can broadly call "Viking culture"), valued:

1. Courage: Self-exploration, venturing into the unknown.
2. Loyalty: Mutual love and respect.
3. Resourcefulness: Individual struggle and self-reliance.

Now, let's map these cultural values onto the religious beliefs.

This is not a perfect match, but it suggests that the cultural residue from the past played a significant role in why certain regions adopted Protestantism while others remained Catholic.

The Tools of Revolution

The Protestants won against the wealthier and more populous Catholic powers for three main reasons, tied to new inventions:

1. The Printing Press: Allowed for mass literacy and education. Everyone could now read the Bible and become self-educated. Protestants as a whole became more educated than Catholics.
2. The Musket: This weapon could pierce the armor of a knight, making the professional, noble warrior class obsolete. It took only about 60 days for anyone to learn how to use a musket, democratizing warfare. Anyone with courage and devotion—mainly the Protestants—could now fight effectively.
3. Banknotes: Before, trade used gold or coins, which were finite. Banknotes, or paper money, allowed for the monetization of hard work and frugality. Since there is an infinite source of banknotes, you can work infinitely hard. This new system incentivized hard work in a way that slavery, which was based on eternal debt, could not. In the Protestant system, slavery became an evil because it denied people the capacity to be with God through hard work. This eventually led to the abolition of slavery and the rise of the middle class.

The Sociological Diagnosis: Weber, Simmel, and Durkheim

Around the year 1900, at the height of Protestant cultural and economic dominance, three major founders of the social sciences—Max Weber, Georg Simmel, and Émile Durkheim—sought to understand what was really going on. At the time, Protestant nations like Germany, Britain, and the United States were the most powerful empires in the world. Capitalism and the Industrial Revolution were seen as divinely sent blessings. These thinkers, however, saw the deep problems within the system.

Max Weber: The Iron Cage

In his work The Protestant Ethic and the Spirit of Capitalism (1905), Max Weber tried to explain why Protestants were generally wealthier than Catholics. He argued that the doctrine of predestination created two powerful pastoral recommendations:

On the one hand it is held to be an absolute duty to consider oneself chosen, and to combat all doubts as temptations of the devil, since lack of self-confidence is the result of insufficient faith, hence of imperfect grace... On the other hand, in order to attain that self-confidence intense worldly activity is recommended as the most suitable means. It and it alone disperses religious doubts and gives the certainty of grace.

You had to prove you were one of the elect by focusing your energies on conquering this world. How? Through work. Specifically, making money, because money was proof of God's grace.

At the same time, this "worldly Protestant asceticism" forbade the enjoyment of that wealth.

It acted powerfully against the spontaneous enjoyment of possessions; it restricted consumption, especially of luxuries... On the other hand, it had the psychological effect of freeing the acquisition of goods from the inhibitions of traditionalistic ethics. It broke the bonds of the impulse of acquisition in that it not only legalized it but... looked upon it as directly willed by God.

It was not evil to make a lot of money; it was evil to use that money to enjoy yourself. This created a system where vast sums of wealth were accumulated but not spent on luxuries. This surplus capital was then available for investment, fueling the engine of capitalism and empire.

But Weber saw the dark side of this development. The system created by the Puritans to serve God had become a prison for everyone else.

The Puritan wanted to work in a calling; we are forced to do so... This order is now bound to the technical and economic conditions of machine production which to-day determine the lives of all the individuals who are born into this mechanism... with irresistible force. Perhaps it will so determine them until the last ton of fossilized coal is burnt.

The original religious motivation was gone, but the system remained.

In Baxter’s view the care for external goods should only lie on the shoulders of the “saint like a light cloak, which can be thrown aside at any moment.” But fate decreed that the cloak should become an iron cage.

Money was supposed to be a tool to connect with God, but now capitalism and industrial production have become our prison. Weber predicted that this system would produce a soulless, zombie civilization.

For of the last stage of this cultural development, it might well be truly said: "Specialists without spirit, sensualists without heart; this nullity imagines that it has attained a level of civilization never before achieved."

Georg Simmel: Money as the Embodiment of Reality

Georg Simmel, a contemporary of Weber, explained in The Philosophy of Money how money became a substitute for God. He argued that the mind's ability to project abstract relationships into concrete objects finds its greatest triumph in money.

Money represents pure interaction in its purest form... It is an individual thing whose essential significance is to reach beyond individualities... Thus, money is the adequate expression of the relationship of man to the world, which can only be grasped in single and concrete instances, yet can only really be conceived when the singular becomes the embodiment of the living mental process which interweaves all singularities and in this fashion creates reality.

Money takes all our different perspectives and converges them into one thing, and then it redesigns reality through that lens. It becomes reality itself.

Émile Durkheim: Capitalism and the Path to Suicide

The French sociologist Émile Durkheim, in his book Suicide, sought to explain why Protestants were much more likely to kill themselves than Catholics. His answer was that Protestants believe you must struggle individually with faith, whereas Catholics follow community rituals. Protestants feel alone and abandoned, which leads to tremendous energy but also, sometimes, to hopelessness and self-defeat.

He argued that this anxiety is transferred to the accumulation of wealth, but this race is inherently unsatisfying.

Overweening ambition always exceeds the results obtained, great as they may be, since there is no warning to pause here. Consequently, one is condemned to a perpetual struggle without end and without appeasement... This race toward an unattainable goal can give no other satisfaction but the race itself... if one happens to fall behind, one is left with nothing.

You are so focused on obtaining wealth that if you stop the process, you feel devoid of everything. You could have $50 billion in the bank, but if you drop out of the race, you will fall into anxiety and depression. This endless, unregulated competition breaks down all social bonds, customs, and norms.

All classes are caught up in the race, from top to bottom of the ladder, and the struggle is the more violent the less it is regulated. The effort is thus all the greater, just when it is becoming more unproductive. How, in these conditions, can the will to live not be weakened?

What are the solutions to this civilizational crisis?

These social scientists diagnosed the problem: the anxiety that fuels capitalism ultimately leads to civilizational decline. Weber predicted three possible responses:

1. Nothingness: We become a zombie society, going through the motions day-to-day without soul, spirit, or energy.
2. A Return to Theocracy: A reaction against capitalism could lead to a return to a system like the Catholic Church—a theocracy that provides meaning, purpose, and spirituality at the cost of individual freedom.
3. New Prophets: New movements could arise to channel the discontent with capitalism, just as Luther did against the Church. In the 20th century, these were communism and fascism.

After the defeat of fascism in World War II and communism in the Cold War, we are left with two paths: a zombie society or a return to theocracy.

Durkheim's work suggests that capitalism itself creates the conditions for its own rejection. The disconnection, anxiety, and suicide it produces make a return to a highly structured, meaning-giving theocracy almost a natural outcome.

Why are Protestant suicide rates higher if suicide is a sin?

In the Catholic religion, suicide is the worst sin you can commit. While Protestantism also has mechanisms against suicide, the logic of double predestination changes the equation. If God has already decided who will be saved and who will be damned, and there's nothing you can do to change it, then committing suicide is simply fulfilling God's will. It's not a sin so much as a sign of weakness—a sign that you lacked the faith to believe you were one of the elect and were therefore condemned anyway.

More fundamentally, suicide is a result of disconnection. Protestants are more likely to kill themselves because Protestantism is a much more individualistic religion than Catholicism.

A Final Thought Experiment

Let's say I have anxiety, and the way I deal with it is by collecting newspapers. I fill this room with newspapers, then the next room. Everyone would say I am hoarding, and that it is a disease. A psychologist would diagnose me and prescribe medication.

Now, let's say I have anxiety, and all I want to do is make money. I make a million dollars and put it in the bank. Then I make two million, then three hundred million. I'm not spending it; it's all in the bank. How is that different from hoarding newspapers?

It's not. There's no difference. But everyone would think I'm a great person because I'm working hard and saving money. This is the core contradiction of our society. It exists because our civilization is incapable of recognizing that we are a zombie civilization on the path to civilizational suicide.