This article first appeared in Forum, The Edge Malaysia Weekly on October 2, 2017 - October 8, 2017

Capitalism is the economic system that is found practically throughout the world. It is a system that several generations have been born into such that people assume it has existed for hundreds or even thousands of years. Yet, capitalism is a relatively new system that came into being about 200 to 300 years ago. It started in Europe and then spread throughout the rest of the world. For most of history, humans were in fact not providing for their livelihood by means of the capitalist system.

Capitalism is an economic system in which the ownership of and control over the means of production, distribution and exchange of wealth is in the hands of private individuals or corporations. By virtue of the fact that the vast majority of people do not own or control the means of production, they have to sell their labour to the owners of capital. The owners of capital, the primary means of production in the capitalist system, are the capitalists, while those who sell their labour for wages constitute the working class. Karl Marx (1818-1883) was an ardent critic of capitalism and believed that the relationship between capitalist and worker was one of exploitation. By exploitation, Marx meant that the worker did not get back in the form of a wage the full value of what he or she put into the production process.

Although Marx is often seen as a founder of communism, he wrote very little about communism. He was first and foremost a theorist of capitalist society. Most of his writings seek to understand the origins, nature and consequences of the capitalist system.

Another famous scholar who sought to understand the nature and workings of capitalism was Max Weber (1864-1920) who was, like Marx, a German.

One of the contentious issues discussed by scholars like Marx, Weber and many others during the 19th century was the question of the origins of capitalism. Given that capitalism was such a dynamic system that was characterised by growth rates and technological developments never seen in earlier economic systems, what was the reason that capitalism originated in Europe and not elsewhere?

Weber’s explanation had to do with the role of religion. Weber looked at what he considered to be various factors that accounted for the emergence of capitalism in the West. Among the more important of factors that explained the origins of capitalism in Europe for Weber was Protestantism. Weber believed that Protestants had a particular work ethic that played a vital role in the origins of capitalism. His writings on this topic came to be referred to as the Protestant ethic thesis. It was discussed in his work, the classic The Protestant Ethic and the Spirit of Capitalism.

The impact of Protestantism was such that it imparted in its adherents a specific type of work ethic that facilitated such a scale of capital accumulation that it eventually resulted in a new economic system. The economic system of capitalism required a certain attitude that Weber called the spirit of capitalism. This was an attitude in which the spontaneous enjoyment of life was avoided. Capitalism was to develop in the eighteenth century in those areas where there was the spirit of capitalism. These were the areas in Europe where there was a Protestant religious upbringing. This was because Protestants practised what Weber called a this-worldy asceticism. Asceticism itself referred to a life of severe self-discipline without the ordinary pleasures of life. This asceticism is called this-worldy because it does not frown upon economic activity and capital accumulation in this world as long as that accumulation did not result in an ostentatious, wasteful life of greed and consumption.

When the Protestant merchant traded and acquired capital through his profits, this acquisition was not for the satisfaction of material needs. Rather, there was a higher purpose behind it. The acquisition of capital was a religious calling that made it possible for capitalism to become a systematic way of life. The pursuit of profit was seen as a spiritual end. Protestant teachings were not against worldly activity and did not frown upon wealth acquisition per se. The Protestant sects, in particular Calvinism, drove their adherents to hard work, discipline and frugality. They had this effect because the attainment of wealth as a fruit of labour was a sign of God’s blessing. The practical result of all this was the ascetic compulsion to work hard, avoid spontaneous enjoyment and, therefore, to save. It is this attitude towards life that Weber called the spirit of capitalism.

In fact, the unwillingness to work was a sign of the lack of grace. Work was not just an occupation. It was a religious calling. God shows the believers an opportunity for profit with a purpose and the faithful Christian must take advantage of this. Furthermore, Weber stressed that for the Protestants in the 18th century, success in worldly activity, such as capital accumulation, was a sign of the certainty of grace and salvation in the hereafter. The practical but certainly unanticipated result of this religious outlook was the rapid accumulation of capital.

But Weber and others had been quick to point out that capitalism was to create a culture that it defined in its own terms. The market values that form the basis of capitalism, such as calculability, predictability and quantification, have spread beyond the economic arena to other areas of life. The result is a crude and sometimes dangerous materialistic outlook on life. For example, human beings are becoming more calculative in the way they bring children into the world. Technology has made it possible for would-be parents to reject foetuses that are “defective”.

Religion itself has become affected by the capitalist mentality. It has been noted that some Christians have entered into an unholy matrimony with the consumerist culture of capitalism. A good example is the commercialisation of Christmas. What used to be a religious holiday and festival in precapitalist times gradually became part of big business. Wrapping paper alone is said to be more than a US$2.6 billion industry.

Islam has not been immune to the encroachment of market values. The field of Islamic economics actually functions ideologically to support capitalism, although it claims to offer an alternative to the capitalist system. Many economic policymakers in Muslim countries reinforce an attitude that has been described as Islamic Protestantism. This refers to a sense of piety in economic action in the context of the loss of traditional culture and the buying into a crude materialistic outlook. An example frequently cited are the development projects around the Masjid al-Haram in Mecca.

Many historical sites in Mecca have been demolished to the extent that much of the prophetic legacy is disappearing. Irfan al-Alawi, director of the UK-based Islamic Heritage Research Foundation, said, “The authorities are trying to destroy anything in Mecca that is associated with the Prophet's life”. The homes of the Prophet’s wife, grandson and one of his companions have been demolished. Other historical sites have been replaced with skyscraper hotels. This is a modernist ethic, found in many parts of the Muslim world, that is promoted by a type of political and business elite that subscribes to a crass consumerist culture which seems to be supported by Islamic financial and banking systems that themselves are ultimately driven by the same profit motive as the conventional banking and financial system that do not decry the tearing down of old neighbourhoods and razing of forested areas to make way for shopping malls, luxury apartments and hotels.

Syed Farid Alatas is Professor of Sociology at the National University of Singapore

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