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Nationalism and Economic Growth The Spirit of Capitalism LIAH GREENFELD The Spirit of Capitalism Nationalism and Economic Growth HARVARD UNIVERSITY PRESS Cambridge, Massachusetts, and London, England Copyright © 2001 by Liah Greenfeld All rights reserved Printed in the United States of America First Harvard University Press paperback edition, 2003 Second printing, 2003 Library of Congress Cataloging-in-Publication Data Greenfeld, Liah. The spirit of capitalism : nationalism and economic growth / Liah Greenfeld. p. cm. Includes bibliographical references and index. ISBN 0-674-00614-3 (cloth) ISBN 0-674-01239-9 (paper) 1. Economic development. 2. Nationalism—Economic aspects. I. Title. HD82.G655 2001 338.9—dc21 2001024608 To Gil Contents Acknowledgments ix Introduction 1 I Another Take on How It All Began 27 1 The Capitalist Spirit and the British Economic Miracle 29 2 “The Great Seventeenth-Century Exception” 59 II The Spread of the New Economic Consciousness on the European Continent 105 3 The First Convert: France 107 4 The Power of Concerted Action: Putting the Spirit of Capitalism to Work in Germany 154 III The Asian Challenge: The Way of Japan 225 5 Japanese Nationalism 227 6 Racing and Fighting 299 IV The Economic Civilization: The Spirit of Capitalism in the New World 363 7 Searching for the American System 369 8 The Thrust 428 Epilogue: Looking Backward from Year 2000 473 Notes 487 Index 533 Acknowledgments An anonymous reviewer of the manuscript for this book wondered about the disciplinary affiliation of the author. Some parts of the manuscript sug- gested she was an economist, others seemed to reflect the hand of a histo- rian, still others made the reviewer think of political science. The whole made for a difficult decision. I regard this as one of the most flattering compliments ever paid to my work (thus deserving the place at the head of this list of ac- knowledgments), all the more so since my “true” disciplinary identity—I was trained as a sociologist/social anthropologist—apparently remained hidden; I have mixed my accents well. My reviewer’s difficulty is a confirmation of the feasibility of the unified ap- proach to the study of social reality whose validity for me admits no doubt. Spheres of social experience are intricately interrelated and interdependent, and to attempt to study any one of them in isolation is akin to creating inde- pendent subspecialties with an exclusive focus on legs or stomach in biology. All of this experience, whether economic, political, or familial, and how- ever public and material, is culturally—that is, symbolically—defined, because culture is what distinguishes humanity from other species. To attempt to un- derstand social reality while leaving culture out of the account is similar to ad- dressing questions of modern biology while denying the relevance of genet- ics. Finally, social experience by definition takes place in history, the collective name for the multitude of social processes; to study it out of historical con- text is to limit one’s knowledge of social reality to an unconnected snapshot of a multiplane, ever-changing, live moving picture. The obvious validity of the unified cultural and historical approach to the study of social reality does not, however, make it any less unorthodox and its obviously unreasonable—topological, mechanistic, and ahistorical—alterna- tive any less dominant. No one can safely challenge the reigning orthodoxy alone. It is, therefore, only thanks to the backing and encouragement of cer- tain institutions and individuals that I could offend against the current no- tions of academic propriety, climbing over disciplinary fences and disregard- ing the clear “no trespassing” signs posted all along them, with (relative) x Acknowledgments impunity. It is literally true that the present book could not have been written without the support of the University Professors, a unique interdisciplinary college at Boston University, which provided me with a congenial and toler- ant academic home; I am in particular grateful to John Silber and Claudio Véliz for bringing me there. This book also would not have been published without the help of David Landes, the great economic historian and an even greater man. I have no words to express my gratitude to him and only want him to know that I know how much I am in his debt. Many colleagues, near and far, anthropologists, economists, historians, po- litical scientists, sociologists, and even some biologists (!), both generalists and specialists in American, British, Dutch, French, German, and Japanese history and culture (including, obviously, economic history and culture) gave generously of their time, reading and commenting on chapters and sharing their expertise. I am grateful to them all and apologize for limiting myself to the shortest possible list, which must include Daniel Bell, Kevin Doak, Na- than Glazer, Richard John, Suzanne Keller, Hans Kornberg, John Lampe, Walter Laqueur, Charles Lindholm, Glenn Loury, Jeffrey Miron, Chandler Rosenberger, Chikako Takeishi, Michael Thurman, Claudio Véliz, and Ezra Vogel. The Earhart Foundation funded a summer of research in the Bibliothèque Nationale in Paris in 1997, and the Woodrow Wilson International Center for Scholars a semester free of teaching, spent in the proximity of the Library of Congress, during which I was able to complete the chapters on Germany and Japan, in 1998. In Boston, thanks to Brendan Dooley, I could use yet an- other great library, the Widener (all the while thinking about the merits of nationalization of certain kinds of private property). I am grateful to the former editor-in-chief of Harvard University Press, Aida Donald, for taking the book on and to my editor there, Michael Aronson, for his suggestions and capable handling of the process. Thanks are also due to anonymous reviewers for contributing the time a manuscript of this length required and for bearing with its author’s controversial argu- ment, as well as to copyeditor Amanda Heller for meticulous work on my (too numerous, in her view) commas and (insufficient) definite and indefinite articles, which after almost twenty years of life in English still remain for me “a hidden Mystery.” While working on this book, I have incurred debts in several languages. Professor Chikako Takeishi of Chuo University, Tokyo, guided me, as good as blind, through early editions of Motoori Norinaga and scrupulously supervised and edited my use of Japanese texts generally. Dr. Michael Thurman reviewed and translated Dutch sources for me. Their assis- tance was invaluable. But English was the language in which I needed most help. My students—the first, captive, audience of this book—tried, how- Acknowledgmentsxi ever gently, to draw my attention to potential problems and made numerous helpful suggestions, among them syntactic. (In this context I must mention in particular Oliver Benoit, Oyeshiku Carr, Zana Citak, Jonathan Eastwood, and Rosanne Felicello—members of the 1998–99 Modernity Seminar—as well as Peter Tamm.) Jonathan Eastwood heroically took upon himself the exclusive responsibility for the correct use of the tricky the’s and a’s (in addi- tion to helping with references and index); Irina Ostrovskaya did her best to correct whatever he left uncorrected. At the eleventh hour Michael McKernan stepped in to cross the remaining t’s and dot the remaining i’s, in- cluding, specifically, in the notes. I am certain these collective efforts made the book more readable than it would have been otherwise. Faced with the alternative of cutting out the notes altogether and urged by the press to economize wherever possible, I throughout the text com- bined references originally spread over several pages. The resulting composite notes, as a rule, and unless otherwise indicated, list specific references in the order in which material cited appears in the discussion. I apologize for any inconvenience this may cause the reader, but I believe that including the notes, however compressed, in the book is preferable to posting them on the Internet. The Introduction and Chapter 1 incorporate portions of my articles “The Worth of Nations: Some Economic Implications of Nationalism” and “The Birth of Economic Competitiveness,” published in the Critical Review, 9:4 (Fall 1995) and 10:3 (Summer 1996), respectively. I am grateful to the edi- tor, Jeffrey Friedman, for valuable comments. The spirit with whom I communed while writing The Spirit of Capitalism was that of the great Max Weber: the borrowed title of this book makes evi- dent its inspiration. But I would be remiss not to acknowledge the contribu- tion of an anonymous reviewer for The Economist (March 27, 1993), who pointed to the economic lacunae in my book Nationalism: Five Roads to Mo- dernity, then newly published. That comment was the immediate reason for my decision to focus on the links between nationalism and economic growth. Belmont, Massachusetts March 2001 The Spirit of Capitalism Introduction This book attempts to answer two questions: (1) What was the direct cause of the emergence of modern economy; that is, what explains the sustained ori- entation of this economy, which distinguishes it from all others, to growth? (2) What made the economic sphere so central in the modern, and in particu- lar American, consciousness that our civilization can in truth be called an “economic civilization”; that is, what persuaded millions of men and women, contrary to much of the historical experience and intimations of their own self-knowledge, to put their trust in economic growth (seen as natural) as the necessary and sufficient condition of social progress and political felicity? The focus is on the immediate motivating causes, or reasons, rather than condi- tions: on why, rather than how, modern economy and “economic civilization” came about. The emergence of the new economic orientation in England, France, Germany, and Japan—the first and, with the exception of France, particularly impressive cases of modern economic performance—provides the empirical basis for the answer to the first question.
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