Back when the world was young, in a dusty classroom overlooking the top end of Dublin’s Harcourt Street, Malcolm was instructed in the Peace of Augsburg. The Diet of Augsburg brought to an end the first phase, the prologue, of the ongoing religious wars that would stretch, and worsen, into the next century.
We are the precious chosen few, let all the rest be damned …
The essential determination of Augsburg was cuius regio, eius religion — each local bossman, secular or religious, would determine whether his fief was Catholic or Lutheran. As Tom Lehrer noticed:
Oh, the Protestants hate the Catholics,
And the Catholics hate the Protestants,
And the Hindus hate the Muslims,
And everybody hates the Jews.
OK, your persistence and persuasion prevailed on Malcolm:
.. there’s only room for one or two: we can’t have heaven crammed!
Similarly Augsburg did nothing for the Calvinists. Nor, of course, for any other untolerated faiths and communities: they could be harassed, exploited, defenestrated or burned at will. Nor, even more of course, for the Jewish minority. And there’s something to look forward to, coming back serially to haunt European decency for centuries to come.
Let us recall, in the same year as Augsburg, Giovanni Pietro Carafa, Pope Paul IV, thorough-going Thomist, and main-man of the Italian Inquisition, was promulgating Cum nimis absurdum, establishing the Roman Ghetto of rione Sant’Angelo among others, and prescribing the innovation of distinctive clothing (stylish yellow hats for men and fashionable shawls for women) for the Jews in his Papal lands.
All past history, right?
Well, perhaps not.
As a notion, it’s been floating around for some time. Now it has been fully formulated in a piece by Chris Bowlby for BBC Radio 4:
The eurozone’s religious failure
Discussion among eurozone leaders about the future of their single currency has become an increasingly divisive affair. On the surface, religion has nothing to do with it – but could Protestant and Catholic leaders have deep-seated instincts that lead them to pull the eurozone in different directions, until it breaks?
Following the last European summit in Brussels there was much talk of defeat for Chancellor Merkel by what was described as a “new Latin Alliance” of Italy and Spain backed by France.
Many Germans protested that too much had been conceded by their government – and it might not be too far-fetched to see this as just the latest Protestant criticism of the Latin approach to matters monetary, which has deep roots in German culture, shaped by religious belief.
The “logic” is somewhat simplistic, and certainly (to stay with the classical analogies), an argumentum ad hominem. Or specifically ad feminam: Angela Merkel is the daughter of a Lutheran pastor. Which provokes Bowlby to this:
Merkel’s frequent assertion that “there is no alternative” to austerity policies (while reminiscent to Britons of Margaret Thatcher) has been likened to the famous stubborn statement by German Reformation leader Martin Luther: “Here I stand. I can do no other”.
Presumably Angela Kasner was indoctrinated in good monetary values by father Horst of the Evangelical Church in Berlin-Brandenburg, as much as the Blessed Margaret took on board the socio-economics of Alderman Roberts. A bit thin, do you think? Especially since Horst Kasner seems to have been extended a charmed and mobile life from the Stasi, unlike his wife Herlind Jentzsch (who was systematically refused travel permits).
If that were not tendentious enough, Bowlby follows with this:
The new German president, Joachim Gauck, who might play an important role in constitutional arguments about the single currency, is also from the Protestant fold — he is a former Lutheran pastor.
Eny fule kno that the Bundespräsident is no more than a figurehead, with limited reserve powers under the Basic Law. Gauck has been, over the years, both an avowed anti-communist and all-things-to-all-men in contemporary democratic politics. He is certainly left-centre to Merkel’s neo-conservativism. Where Bowlby may have a point is in Merkel and Gauck both sharing “Ossie” (i.e. East German) origins, as opposed to the dour Catholic and “Wessie” Adenaur. Again, only an intrusive fool would indulge in N/Osztalgia.
So here comes Bowlby’s essence:
German reunification at that time also meant the capital moving back to Berlin, away from closer Catholic connections felt in the west and south of the country.
And the eurozone crisis has intensified a deep-rooted debate about whether Germans, shaped by Protestantism, are fundamentally different from Catholic “Latin” countries and their allies.
German banking has, from medieval times, been more cautious than that in Italy and Spain. And sceptical Germans looking at the history of previous currency union troubles point to the 19th Century Latin Currency Union.Germany, unifying under Prussian leadership through its own customs union, did not join. The Latin Union struggled to survive after a number of countries, notably the Papal States, minted and printed more money than they were meant to.
If ever there was a prime example of not presenting complex ideas in single-sentence tabloid paragraphs, it is there. Believe it or not, Bowlby reinforces that bit of fluff with a graphic:
Just too conveniently that omits (say) Poland (and see further below), which would be on 200 basis points (or 2%) and papally purple. And most certainly part of any “Northern euro bloc”.
So where is all this coming from? Only towards the end does Bowlby come clean. His inspiration derives from a May article for the Globalist by Stephan Richter, and unashamedly tongue-in-cheek. Richter goes where Bowlby chickens out:
Before the idea of considering this analysis as a serious case of religious stereotyping sets in, let me point to some very important nuances that break the pattern suggested above. Take Slovakia. The Slovaks are Catholics and have always had a vastly superior work ethic, contrary to Max Weber’s notions or the Luther rule presented above.
And what about Italy? There isn’t a single entity called Italy. There are two completely different Italys. In the one camp is the old Kingdom of Naples and the Two Sicilies, starting at Rome stretching south. It remains a corrupt sinkhole. Then there is the other camp, northern Italy, including Tuscany, which is one of best-run and most efficient industrial economies on earth. And they’re both Catholic.
How to resolve the riddle? Simple. Think of it as a blend of the adaptation principle from biology. Even though Luther failed to take hold in these places, even core Catholic areas like France, Slovakia, Austria and northern Italy have gradually adapted the economic values, work ethic and integrity of Dr. Luther and John Calvin.
Aha! That good ol’ boy of economic orthodoxy, the Puritan/Protestant Work Ethic! Which, another hole below the Bowlby waterline, is all about Calvinism, not soggy Luther. To be fair, Bowlby probably does get the point — he certainly hints at it:
Churchgoing has been in decline in Germany as elsewhere as secularisation has spread, but religious ideas still shape the way Germans talk and think about money. The German word for debt – schuld – is the same as the word for “guilt” or “sin”.
But Bowlby has dumbed down, or been dumbed down for Radio 4, which is rarely up to financial rocket science. Let us, instead go on a side trip to revisit a bit of economic history.
By the end of the fifteenth century the process of raising loans was being regularised. Pope Paul II was licensing pawn shops in 1467. In 1494 Laurentius de Rudolph was accepting that states had to raise Montes Profani, though good Christians were to have as little to do as possible with such messy, if necessary business. Johann Eck (by no coincidence a client of the Fugger banking family of Augsburg), in 1515, was defending 5% as a decent rate for both sides of the deal.
1545 was a very odd year?
Calvin responded in a letter to Claude de Sachin, a merchant looking for a definitive statement on whether usury was intrinsically evil. With all kinds of offing-and-butting, and various subsequent retrenchments, Calvin explained there were two Hebrew words for usury: one meant “to bite”, the other “to take proper increase”. Hence, as long as loan-rates didn’t “bite”, he pronounced usury passed muster: I cannot see usury altogether condemned by any testimony of Holy Scripture.
Henry VIII went the same route, and, also in 1545, all the previous legislation against usury was repealed, and loan-rates up to 10% were acceptable. As a mark of how disingenuous all of this was, this was, officially, an Act against Usury. The stoner was that money was still based on gold and silver values — and 1545 was the same year the Potosi silver mines (in modern Bolivia) were “discovered”, began to release an avalanche of bullion into Spain and hence inflating price-levels across Europe.
Along comes Catholic Mary I, and in 1552 usury is again made illegal. It wasn’t, however, just a straight conflict between Papists and heretics. Consider —
Wilson was, by origin, a yellowbelly, from good yeoman-farmer stock. At Eton he fell under the influence of humanist headmaster Nicholas Udall, and at Cambridge into the protestant circle of John Cheke. With the accession of Mary I he followed Cheke to exile and law study at Padua. Then he was in Rome, dealing with a convoluted matrimonial dispute involving Cardinal Peto’s relative, Agnes Woodhull. Cardinal Pole, apparently wanted the case to be returned to English jurisdiction, denounced Wilson to the Inquisition, and for nine torrid months into the papal prison on via Ripetta. On the death of Pope Paul IV, the Roman mob burned down the hated prison of the Inquisition and Wilson was released. So from Rome to Ferrara, a doctorate in law, and back to (now Elizabeth’s) England in late 1560.
Under the patronage of Archbishop Parker, Cecil and Dudley, wright gained lay-ecclesiastic and political (the bounds between the two being very thin) preferments. He was employed by the Privy Council as an interrogator of prestigious political prisoners (including Howard, Duke of Norfolk, and the Ridolfi plotters). And so into European diplomacy, first in the Spanish Low Countries (where he won permission for English traders to use the English prayerbook, as well as opening the Scheldt for English trade). During the 1570s he was a very political diplomat, machinating the disturbances against the Spanish, keeping the French out of the loop, channelling English finance to the States General and William of Orange, spying on English Catholics, all at the time when Elizabeth’s marriage to Anjou was in the air. By 1577 Wilson was in the Privy Council, and one of Elizabeth’s two principal secretaries.
As an MP, his first major speech (and this is directly relevant to this posting) was on the subject of usury. That appeared as A Discourse upon Usury in 1572, and represents the austere protestant line on what was a hot topical issue. Wilson was against usury (allowing reasonable interest returns on money lent) and against enclosures — both of those are fundamental to the evolving mercantile system.
What Wilson and his well-intended but unsuccessful campaign against usury tell us is that economic England was in violent flux. All the certainties were up for reconsideration. The State itself was being thoroughly reconstructed.
What was coming down the turnpike was a conception of a utilitarian theory of money. Charles du Moulin, otherwise Molinaeus, was on the case by 1546 in Tractatus commerciorum et usarum.
In due course Elizabethan England accepted realities with the law of 1571. Although moralistic qualms wouldn’t fully be overcome until mercantilism was fully into its stride, by the eighteenth century, the principle of interest rates was effectively now settled. All that remained was to discuss the actual rate: the Law of 1624, for an obvious example, lowered the “acceptable” rate to 8% .
Back to Bowlby
Bowlby, tailing off his piece, notes that Stephan Richter:
… is himself a Catholic, but an admirer of thrifty economics. “Too much Catholicism” he suggests, “is detrimental to a nation’s fiscal health, even today in the 21st Century”.
But he believes some historically Catholic countries, such as Austria and Poland, may have come under more Germanic influence due to their geographical proximity. They are “Catholics perhaps, but with a healthy dose of fiscal Protestantism,” he reasons.
All we need now is number the angels on each national push-pin.