“The Orthodox Spirit and the Ethic of Capitalism”: A Case Study on Serbia and Montenegro and the Serbian Orthodox Church

Introduction

The fundamental tenant of the Vienna Conference¹ on “The Orthodox Spirit and the Ethic of Capitalism”² is to endeavor towards an Orthodox Christian approach to capitalism, predicated upon Max Weber’s monumental work The Protestant Ethic and the Spirit of Capitalism.³ Accordingly, Weber attempted to develop a systematic understanding of the emergence of capitalism in the West, which preceded other societies that had a seemingly advantageous climate to bolster market economies. According to the Weberian doctrine, it was Calvinist Protestantism that fostered an ethic of capitalism, catapulting their faithful toward the acquisition of wealth as an indicator of their being among the elect of God.⁴

Peter L. Berger, Director of the Institute on Culture, Religion and World Affairs at Boston University, asserts that Weber’s findings have “opened a debate that continues to this day concerning the impact of religious belief on social action. This debate has been examined in a variety of national and religious contexts—from Latin America to Asia, from Protestantism and Catholicism to Confucianism to Buddhism. However, the basic Weberian assumptions that religion and economics are linked and, more specifically, that religious belief and actions affect social organization and action, have not been systematically applied to any terms of the religious heritage of Eastern Europe and Russia. In particular, the relevance of Orthodox Christianity to the process of building market economies informed by the principles of social justice has remained virtually unexplored in the relevant social science and theological literatures.”⁵

As an empirical argument for his theory, Max Weber incorporated the fact that in the beginning of the 20th century in Germany, between the rich industrial businessmen, where Protestants were in the clear majority, and the regions where the majority of the population was Protestant were economically more developed than regions with a majority Roman Catholic population. The same holds true today in the post-communist economical development of the Baltic Republics. Estonia with its majority Protestant population is, according to economic indicators, the most rapidly developing country in the Baltic States.⁶ However, in the Germany of today, predominantly Roman Catholic Bavaria is one of the richest lands in the country.⁷

According to economics professor Zoran Hođera,⁸ Max Weber was a great sociologist, but he was not an economist. Today, Max Weber’s ideas are completely dismissed by most renowned economists and economic historians. ⁹ Hođera contends that the idea of Calvinist Protestantism fostering the spirit of capitalism is no longer accepted, as Capitalism developed out of the wealth accumulated by trading cities in the Mediterranean, Portugal and Netherlands, and by increased population in Northern Europe. Accordingly, three classes were the basis for its development: great landowners, merchants, and bankers. Despite the rejection of the Roman Catholic Church’s edict on usury by Calvin, most Protestant churches did not follow his teaching regarding that point. Usury laws existed in American Colonies and later in many states in the United States until mid-1970s. It is only after the Industrial Revolution in England in the 18th century that capitalism really boomed and became a major force in the economic development of the West. Therefore, it cannot be claimed that any specific religion had a major influence on the development of capitalism, except perhaps the Jews, who could not own land in the late Middle Ages and were not subject to the Roman Catholic edict on usury, and some, like the Rothchilds, becoming major financiers of states and various enterprises in England, France and Germany.¹⁰

However, under Pope John Paul II, the Roman Catholic Church changed its formerly anti-capitalistic views and became more accepting of capitalism, not only as an economic issue, but also in coming to terms with its moral underpinnings. In his encyclical Centesimus Annus,¹¹ the Pope pointed out that those endeavoring towards becoming successful capitalist businesspersons required the acquisition of individual virtues. As such, he also demonstrated that the unintended consequences of capitalistic self-interest correlate directly to the intended preaching of the Church: decreasing poverty, creating well-being, liberating people and keeping in check political power.¹²

The Weberian Thesis and Orthodox Christianity

In Byzantium, despite the prevalence of Symphonia wherein the patriarch and emperor co-reigned in the one common body comprised of Church and State, there were clear and precise boundaries between the influences of ecclesiastical spheres in society and the imperial state. The state, by providing full economical and political support, allowed the Eastern Christian monastic communities to focus on the inner exploration of spiritual life and otherworldly goals. However, in direct contrast, Western Christianity found itself becoming more oriented towards the secular world.

Here, the emergence of two distinct economic and theological traditions in Christian theoria and praxis can be seen as historical development rising from the western and eastern halves of the Roman Empire. In the West, through Thomas Aquinas, Aristotelian philosophy became a catalyst for the central orientation of Roman Catholic theology. Coming to know God, the Unmoved Mover, as Aristotle taught through nature, and philosophical and logical deductions, established the basis for the scientific revolution and the rise of rationalism, which paved the way for the modern secular world. This inherently scholastic approach to Western Christianity set itself at odds with Eastern Christianity, which is immersed in mystical spiritual discipline and attaining Theosis¹³ through Divine illumination.¹⁴

Beginning in the middle of the sixteenth century, Protestantism abolished monasticism as an institution of the Church and the veneration of the saints that directed the faithful on the path towards Theosis. Sociologist Kyriacos C. Markides¹⁵ contends: “Protestantism redirected believers to express their faith through a ‘this-worldly asceticism,’ an orientation of disciplined, rational action within the world. As the great German sociologist Max Weber showed, this reorientation of Western culture had as an unintended consequence the development of ‘Protestant work ethic’ that has played a major role in revolutionizing the world by opening the gates to modern capitalism and the Industrial Revolution.”¹⁶

The post-Medieval Western intellectual tradition was responsible for galvanizing an unrelenting adversarial spirit toward religion, now identified in the West as socially backward and prone to reactionary politics, while attempting to displace it with science as an acceptable alternative. Given that Eastern Christianity was historically insulated from such secularizing influences, it allowed for the nurturing of an otherworldly—mystical—approach to life, which according to Markides, would be “a state that Max Weber assumed existed only in Asiatic societies.”¹⁷

Although Weber did not touch upon the subject of Orthodox Christianity, his comparison of the religious doctrines of Roman Catholicism and Protestantism can be broadened in their perspective by the inclusion of Orthodox doctrines, which impact the daily life of Orthodox Christian believers, especially in traditional Orthodox countries. An interesting foundational study would need to embrace the admonition that, according to Metropolitan John (Zizioulas) of Pergamon, ethics, unlike ontology, only serve to divide humanity into categories of “good” and “bad”, according to their actions, rather than by virtue of their being.¹⁸ Here, it becomes readily obvious that the Weberian concept of divine favor, according to his application of ethics to capitalism, flagrantly divides an already divided humanity, thwarting the Church’s ability to serve as a cohesive, unifying factor. In light of Zizioulas’ understanding of ethics and ontology, and Weber’s ethical theory on capitalism, a unique seminal study on Orthodox Christianity and capitalism could encompass the economic successes and impact of Greek and Armenian Diasporas as minority, and often remnant, populations in Islamic majority countries, such as the case was, historically, in the Ottoman Empire.

Orthodox Christianity and Economics

According to Nikolas K. Gvozdev of the J. M. Dawson Institute of Church-State Studies, Baylor University, Orthodoxy has neither a specified plan for the political organization of the state, nor does it present concrete proposals for the structuring of the economy. In economic matters, the Orthodox ideal has been to seek a balance between wealth and poverty, between the concrete needs of the individual and the well being of the entire community. Orthodox Christianity does not uphold an economic system, which rewards laziness and encourages the poor to depend upon handouts from the state. Productive labor is a necessary, divinely ordained part of the human experience. Therefore, the Orthodox emphasis is upon self-sufficiency, ideally promoting a solid “middle class,” neither seeking existence at the level of mere subsistence, nor enjoying excess; deriding an unfettered, unregulated capitalist system (laissez-faire), while advocating a socially-responsible free-market system.¹⁹

Certain Orthodox societies, historically, have assumed aspects of socialist economies. The Byzantine Empire strictly regulated its given economy by controlling the production and sale of goods through established guilds. Persons engaged in any given trade were required to be members of an authorized guild, and in turn, each guild held a complete monopoly on the manufacturing and sales of its products. The regulation of prices, import and export duties, as well as profit percentages deduced from businesses, were all matters of governmental regulation. However, in tandem with the Church, the state also provide for the social welfare of its society through the establishment of hospitals and other social institutions, and from time to time, disseminating direct aid to populations in need.²⁰

The only economic role proper to Orthodox Churches in the Middle Ages was in receiving land grants from their respective rulers, which permitted them to enjoy relative stability and some of them even wealth, but that wealth was mostly agrarian. They had, however, substantial political influence on the court and an important say in education, which was mostly done in the monasteries. Since the 15th century, most all of the Orthodox Churches, with the given exception of Russia, were under the rule of the Ottoman Empire and their believers had no right to own substantial areas of land or acquire significant wealth. During that period, the Church’s main effort was preserving the faith, limited almost exclusively to the experience of liturgical worship and education, since the monasteries were the only centers where the population could acquire an education. (Here, the exception was Serbian Orthodox population in the Austro-Hungarian Empire.) The Orthodox Church in Russia mainly followed introspective views and, despite the efforts of Peter the Great and Catherine the Great, had no interest in accepting the Western ways of countries, which were not Orthodox.²¹

For these reasons, capitalism was late in developing in those countries, as it was in some areas inhabited by populations that were under the rule of states which were not ethnically their own, such as Poland, Romania, Slavic countries in the Austro-Hungarian Empire, large regions of Italy, etc. However in Russia before World War I and in these countries just mentioned, in the inter-war period, significant strides were made with free enterprise and capital accumulation, despite world crisis in the late 1920’s and 1930’s. But all this development was for naught first with the Bolshevik Revolution in Russia in 1917, then World War II destruction and ensuing Communism in other Eastern European countries.²²

The communist takeover resulted in the Iron Curtain descending on most of Eastern Europe, followed by merciless liquidation of all political enemies and the destruction of their economies. In the former Yugoslavia alone, between 150,000 and 300,000 people were liquidated (the true number will probably never be known). Orthodox Churches, as well as other Churches in East Germany, Poland, Czechoslovakia and Hungary, were subjected to martyrdom, with clergy thrown in prison or even loosing their lives. Church properties were confiscated²³ and the Churches’ contact with people was prevented. The regime brought economic destruction, a fall in the standard of living, corruption, and moral decay in government and in elements of the population. The fall of Berlin Wall and of Communism that followed, brought a degree of freedom to most Orthodox countries that were behind the Iron Curtain. However, the abuse of nationalism by communist leaders in former Yugoslavia resulted in a decade of civil wars, culminating in the two and a half month bombing of Serbia and Montenegro by NATO, the destruction of historical churches and monuments in Kosovo and Metohija with the continued persecution of non-Albanian populations, who remain stripped of basic existential rights.²⁴

The Case of Serbia and Montenegro and the Serbian Orthodox Church

Beginning in 1992, the Serbian Orthodox Church was the first to call upon “the Federal President and his government to resign in the name of the people and for the salvation of the people.”²⁵ Resounding consistently in 1996 and again, in 1999, the Holy Assembly of Bishops called for a government that would be equally acceptable to those at home and internationally. During the course of the federal elections in 2000, it was the Serbian Orthodox Church that played a critical role in urging its faithful to vote their conscience and to maintain peace at all times, even appealing directly to the police and the military forces. Ultimately, the Church was the pivotal factor, which helped usher democracy into Yugoslavia, yet again, by being the first institutionally to recognize the decisive victory of the then Yugoslav President-elect, Dr. Vojislav Koštunica.

Justifiably, the Standing Conference of Canonical Orthodox Bishops in the Americas noted in 1999: “If peace is to be won for all of southeastern Europe, it is particularly important that the Orthodox Churches of the region assume an active and constructive regional role in spiritual renewal, economic reconstruction, and humanitarian responsibility. It is critically important that the Serbian Orthodox Church be given quick and strong affirmation as a key participant in the process of regional reconstruction and that this involvement of the Church of Serbia be understood as an important starting point for the civil and democratic renewal of Yugoslavia.”²⁶

The Serbian Orthodox Church, as the most influential institution in both historical and contemporary Serbian society, has survived institutionally as it transcends governments and politics, and is identified with the socio-economic conditions of its people. The Church is not only the repository and guardian of Orthodox Christianity; it is also uniquely situated as the patron and protector of the Serbian people and their rich, world-class cultural and spiritual heritage. Also, the Church is key to the affluent Serbian Diaspora.

Causes and Consequences

In Serbia and Montenegro, environmental concerns, such as radiation levels and toxicity from the NATO bombing campaign, combined with disastrously low levels of social security, rampant unemployment against a near decimated “middle class,”²⁷ strikingly low birth rates against high mortality rates, and an excessive refugee population could continue to destabilize the region by producing a new outpouring of economic immigrants. The conviction prevails that it is necessary to develop good neighborly relations and to accelerate political and economic stabilization as a prerequisite of progress and prosperity. ²⁸ Extensive foreign investment as seen by Ana S. Trbović, Deputy Minister of Foreign Economic Relations of the Government of Serbia, is the only means by which to bridge the economic chasm created between disparaging total production and expenditures.²⁹ Otherwise, it is highly improbable that Serbia and Montenegro, whose State Union is burdened with two different economic systems and two currencies (the Dinar and the Euro) and itself is teetering, will be able to recover socially, politically or even culturally. It was estimated in 1999 that US$30 billion were needed over a decade for recovery.

Poor economic conditions tend to encourage political radicalism and provide a strong impetus for “localism” as a phenomenon, with its attempts to resolve economic problems through jobs, taxes to the central government and contracts through relatively small communities. According to Mlađan Dinkić, author of the bestseller The Economics of Destruction: “Leaving Serbia isolated is a grave error … I strongly believe that this was one of the main reasons for the violent disintegration of the former Yugoslavia…” Dinkić continues by arguing that nobody will be willing to invest in a country void of a functional infrastructure. “Taking this into consideration, once the economic interest prevail over an irrational war logic, all problems will be easily resolved.”³⁰

Drawing an inherent lesson from economic history, Jack A. Barbanel, acting executive director of Ekonomist magazine, stresses the particular ability to retain good, old traditions and progress with new, positive changes ultimately makes nations successful. Accordingly, the ability to change and the flexibility to reinvent oneself for the future, while honoring the good elements of the past, create prosperity and foster national pride. Either there is marked progression or regression. In the case of Serbia’s behavior over the past three years, he observes: “I have reached the conclusion that it is sincerely attempting to be flexible and reinvent itself into a flourishing European economy. This process is not quick and painless, nor is it simple, nevertheless it is occurring.”³¹

Despite the obstacles of the past decade and overcoming its remnant complications, Barbanel optimistically reports: “Serbia today has many of the elements required for a much improved economy and potential for political stability. It has a highly educated work force, it has preserved and developed many successful businesses and industries, it is located in a free trade agreement region with similar access to the Former Soviet Union markets, it is favored by a good climate and geographic location, it has a rich cultural tradition, a strong and successful Diaspora, and a world that is changing according to economic and cultural factors, all giving Serbia the chance to rejoin Europe in the economic sense which it was prior to World War II. Geopolitically, the region is important to Europe and the United States [the bridge between East and West], both wishing for economic and political stability.”³²

The Serbian Orthodox Church on Reform and Transition

As the former Yugoslavia began to break up, beginning in the early 1990s, the Serbian Orthodox Church and her faithful were confronted with a merciless decade of dysfunctional socialism, civil wars and sanctions and a depletion of the intellectual and professional classes. Today, Serbia and Montenegro retain one of the world’s largest refugee populations, still looming at 700,000. Here, the Church was germane to the dissemination of vast commodities of humanitarian aid, even giving cause to the formation of various charitable organizations, such as International Orthodox Christian Charities (IOCC)³³ and Philanthropy.³⁴ Presently, the Church in tandem with these non-governmental organizations assists in reconstituting the infrastructure by moving from emergency to developmental aid, and stimulates economic growth by sponsoring responsible micro-credit loans.

It is precisely here that Weber’s essential premise on the accumulation of wealth as a direct indicator of divine favor is in diametric opposition to the scriptural admonition: “Blessed are the poor in spirit, for theirs is the Kingdom of Heaven,”³⁵ which is directly implemented in the teachings and personal practice of His Holiness Patriarch Pavle of the Serbian Orthodox Church relative to the refugee crisis. As the Metropolitan of the city of Belgrade, Patriarch Pavle, whose tenure has been burdened with abject poverty, homelessness, displaced populations and a seeming endless array of civil strife and political unrest, single-handedly stopped the work on the St. Sava Memorial Church on Mount Vračar. This impressive Byzantine architectural jewel, which is the largest Orthodox Church in the Southeast Europe, is a symbol of national and religious pride, as well as of a moral victory against a half-century of the prohibition of its erection by atheistic authorities. Yet, while there were innumerable hungry mouths to be fed and a devastated society to be nurtured, the Patriarch halted even the solicitation of donations, which were readily coming forth, as he could not allow such a glorious edifice to be built in the wake of shattered lives.

The late Bishop Danilo Krstić of the Serbian Orthodox Diocese of Budapest held that a monumental cathedral is considered to be one of the three essential components of a world-class city, in addition to a major body of water and a prominent university. Today, with the stabilization of the refugee crisis, the work on the Memorial Church of St. Sava continues, generating a major source of income and fostering domestic employment. In turn, this attests to progress made in the restoration and rebuilding of life on the road forward to Europe, with Belgrade once again emerging as a major world metropolis, as well as the direct role of the Church in moving towards a better future through economic recovery.

Taken against the background of this present year, 2005, which is crucial to the Serbian people in general, it is anticipated that the following will impact directly upon the future course of the Serbian people, as:

1. 1. International discussions on the status of Kosovo and Metohija have been initiated;

2. 2. The 10th Anniversary of the Dayton Peace Accords bring into question the continued existence of the Serbian Republic (Republika Srpska); and

3. 3. Proposed accession towards Euro-Atlantic integration and candidacy for the European Union mandate the survival of the State Union of Serbia and Montenegro.

Therefore, regardless of political will, effect or outcome, the Church remains with its faithful. The Church is the clear moral voice of the people as it is above politics and political involvement. The steadfastness and truthfulness of the Church has ultimately earned its influential role in both historical and contemporary Serbian society, from state-maker to promoter of European integration, espousing social values from educational to ethical, including the implementation of religious education in the public school systems to morally supporting those surrendering themselves to the Hague Criminal Tribunal.

Towards an Orthodox Spirit and Ethic of Capitalism

Under such conditions, governments in former communist countries are going through a slow and painful process of transformation, from a state-owned economy in disarray, toward free enterprise. Orthodox Christians, and not without reason, worry about the market’s capacity to create what Zbigniew Brzezinski once called the permissive cornucopia.³⁶ In his article, “Faith Essential Ingredient of Democratic Capitalism,” George Weigel, president of the Ethics and Public Policy Center in Washington, DC, notes: “entrepreneurship and economic initiative are proposed as reflections of the divinely-ordered creativity that is a characteristic of every human person. Capitalist economies only work when a critical mass of people are [sic] possessed by certain habits of the mind and heart (what some of us used to call ‘virtues’): self-command, the capacity for prudent risk-taking, the ability to form cooperative working relationships, and the willingness to defer gratification. Corporations need to be very careful that, in their marketing and advertising, they don’t promote attitudes and counter-values that will, eventually, cause the market system to implode.”³⁷

However, the Church will continue to insist, and should continue to insist, that the free economy be tempered, directed, and disciplined by the moral-cultural order and by law. Therefore, the developmental aim of the Orthodox Church should be fourfold:

1. 1. Their primary objective is evangelization, that is to bring back the mainstream population to the Church after 50 or 70 years of practical interdiction by communist governments, and to increase among them the number of believers that adhere to the precepts of Holy Scripture, Tradition as espoused by the Orthodox faith;

2. 2. The second objective is to act in and outside the Church toward restoring the moral fiber among the people and in the government, to do what they can to eliminate corruption and crime, which has increased even more substantially during the period of disintegration of communist regimes;

3. 3. The third objective is the implementation of business ethics, relative to the process of transition toward an eclectic capitalist system. The Church must be engaged and concerned about the faith of employees who might loose their jobs in the process of reorganization and rationalization of enterprises during privatization, which is inevitable in capitalism. Governments in the process of privatization already make efforts in the short run, but, in the long run, it can be achieved only with the increase in investment—foreign and domestic—which would raise output and increase employment; and

4. 4. Finally, the fourth objective—but definitely not the least—for the Serbian Orthodox Church is the continuation of humanitarian and developmental aid to those unfortunate people who were forced to leave their homes in Kosovo and Metohija and elsewhere both in and outside Serbia and Montenegro and to seek asylum in those countries. The Church continues to make efforts to help them materially, and to help them return to their homes with all the rights as citizens and without danger to their existence. Here, the assistance of co-religionists in Europe, America and elsewhere is a vital sign of support and the assurance of Orthodox Christian solidarity and stewardship.

Conclusion

In their article on “The Road to Prosperity: Saving Capitalism from Capitalists,” Raghuram G. Rajan and Luigi Zingales warn that in countries where capitalism is part of the landscape, its emergence is spontaneous and the only risk that it faces is too much human intervention. The corruption of capitalism, in which healthy competition is eliminated in order to preserve privileged positions—which flies in the face of the Weberian thesis on the acquisition of wealth and God’s election—only serves to generate economic inefficiencies and social injustice, ultimately undermining a free-market-based economy. According to them, no intervention is the best policy.³⁸ Here Gvozdev ascertains that the danger—and the fault, from the Orthodox perspective—inherent in both capitalism and socialism is when both systems rely upon envy and greed to motivate the citizenry. Greed motivates the capitalist to get ahead of his neighbor by whatever means necessary; greed motivates the socialist to take away that which his neighbor has that he lacks.³⁹ The inherent danger of greed in the acquisition of wealth is allowing the wealth to take possession of the possessor, thus stripping the human person of his created dignity and the endowment of human freedom. Therefore in a democratic society, the aim of the Orthodox Churches should be beyond mere intervention in political and economic activities, but rather to be concerned with existential and humanitarian issues, by promoting the healthy development of an eclectic and equitable capitalist system with a human face.