The religious shape of capitalism

A new study published in Management Science is making a very Max Weber-like claim about the essential differences of religions affecting engagements with capitalism & shaping capitalism.

According to the University of Georgia and Southern Methodist University study, mutual funds are done differently in areas dominated by Catholics than they are in areas dominated by Protestants. The study says that difference is best explained by the respective natures of the different versions of Christianity.

From the abstract:

"Funds located in low-Protestant or high-Catholic areas exhibit significantly higher fund return volatilities. [...] Risk-taking associated with local religious beliefs manifests in higher portfolio concentrations, higher portfolio turnover, more aggressive interim trading, and more "tournament" risk-shifting behaviors, but not over-weighting risky individual stocks. Overall, our results suggest that local religious beliefs have significant influences on mutual fund behaviors."

One of the study's authors told CNN that Baptists in particular make a difference.

The theory, here, is that Baptists are more suspicious of promises of "great solutions" and "great returns," and that, in certain concentrations, that suspicion is adopted by the whole culture.

It will be interesting to see if this holds up & how far the study goes in attempting to explain the data. There's a real statistical difference, apparently, but the more useful/interesting part of the study for religion will be if there's any good argument as to why. Weber's own version of this idea that religion shapes economics, which was an inversion of Marx's claim, has the tendency to seem really persuasive on a certain level, but to not withstand a lot of detailed historical analysis.

A bit of Weber, from the classic The Protestant Work Ethic and the Spirit of Capitalism, written in 1904 and '05:

"[I]t is a fact that the Protestants (especially certain branches of the movement to be fully discussed later) both as ruling classes and as ruled, both as majority and as minority, have shown a special tendency to develop economic rationalism which cannot be observed to the same extent among Catholics either in the one situation or in the other. Thus the principal explanation of this difference must be sought in the permanent intrinsic character of their religious beliefs, and not only in their temporary external historico-political situations."

"[...] one might be tempted to express the difference by saying that the greater other-worldliness of Catholicism, the ascetic character of its highest ideals, must have brought up its adherents to a greater indifference toward the good things of this world. Such an explanation fits the popular tendency in the judgment of both religions. On the Protestant side it is used as a basis of criticism of those (real or imagined) ascetic ideals of the 'Catholic way of life,' while the Catholics answer with the accusation that materialism results from the secularization of all ideals through Protestantism."