In my last piece Are Romanians afraid to invest? I wrote about the genuine fact that many of my compatriots understand the role of money in a way that generates a very low level of investments. Romanians don’t have money working for them, hence neither for the Romanian economy. A lot of money is lost and so are many opportunities for solving Romania’s problems and for developing our economy and society. This way of using money is very different to the Western perspective and one essential question is: what could be the causes of this inefficient use of money? I remembered an essay which I read years ago – Protestant ethics and the spirit of capitalism written between 1904 – 1905 by the German economist and sociologist, Max Weber. The essay was published for the first time in Germany in 1905 and it was translated and published in English in 1930. Although this essay was written one hundred years ago, it is, in my opinion, very up to date especially for Romania.
The essay argues that the Protestant ethics and their ideas were cornerstone for the development of capitalism. But what does Max Weber say precisely? I selected just a few of his ideas relevant to the topic.
1. Activity in capitalism is strongly linked to the rational organization of free labor
2. Free labor is calculated and administrated within continuously functioning enterprise
3. Rationalized capitalistic enterprise involves a disciplined labor force and the regularized investment of capital
4. The rational organization of the capitalistic enterprise is possible due to two essential factors for its development: the separation of business by the household and rational book keeping
5. Modern capitalism is built on a calculable legal system and an administration in terms of formal rules
5. To achieve economic efficiency it is necessary to have correct reproduction of capital and the continuous investment and reinvestment of it
6. The entrepreneurs associated with the development of rational capitalism combine the impulse to accumulation with a positively frugal life style, which is termed “worldly asceticism”
7. The worldly asceticism is focused on the “calling” concept, which means that the highest form of moral obligation of the individual is to fulfill his or her duty in worldly affairs.
So, according to Weber, the essence of the spirit of modern capitalism is, as he wrote:
Man is dominated by the making of money, by acquisition as the ultimate purpose of his life. Economic acquisition is no longer subordinated to man as the means for the satisfaction of his material needs (Chapter 2 – “The spirit of capitalism”, pg.18).
After this brief presentation of a few of Max Weber’s ideas, let’s go back, step by step, to Romania, trying to find the right answers for the questions which arise after reading Weber’s ideas.
Does Romania have a labor market that is rationally organized and administrated and which takes into account the needs of the economy? Is discipline the fundamental characteristic of the labor force in Romania?
Is its business separated from the household? Does Romania have a predictable legal system, a regularized investment of capital and rational book keeping? Is the impulse of accumulation balanced by a frugal lifestyle in the case of Romanians?
Do Romanians understand that the basis of economic efficiency is a correct investment and reinvestment of the capital? Do Romanians know and, above all, accept the spirit of capitalism as it was defined by Max Weber?
For some questions, the answer is yes, but for the majority, it is no. In my opinion, after about 22 years of so-called capitalism, Romania doesn’t have the basic conditions for a true capitalist economy in the Western (protestant) way. A few steps have been made, such as a laws governing investments, beginning the implementation of Western accounting and financial rules and regulations, the penetration of the foreign capital which brought the productive corporate governance model and more effective organizational cultures, but, generally speaking Romania and the Romanians are far from the type of capitalism described by Max Weber. Maybe this gap was generated not only by traditions, history, communism, poverty. Maybe we should also look at our Orthodox belief which focuses more on spiritual matters and is less pragmatic, when trying to understand the relationship between us and our money. Maybe this is what has made us more prone to dreaming, more passive and instilled the fear of investing money in so many Romanians.
Somebody could ask why we should appreciate the Western capitalism as being the best example. The answer is easy…because the protestant countries are the most productive; the richest all over the world and have the highest standards of living. So, for our progress it is better to compare ourselves to the best, I think. The question is, how could Romanians change this mental pattern about the role and the use of money, while still remaining good Orthodox people ? This answer is easy too, in my opinion. Taking over what is good, productive, ethical from the protestant perspective way of living, applying the best practices of these societies and still being Orthodox believers, if this is our choice. So basically balancing out pragmatism and dreaming. The only thing needed is to have an open mind and to understand that this can be possible.
By Mariana Ganea, Guest Writer