Religion and the Open Society Symposium: Session Three: Religion, Innovation, and Economic Progress

Tuesday, March 25, 2008

This event is part of the Religion and Foreign Policy Symposia Series, which is made possible by the generous support of the Henry Luce Foundation.

This event is part of the Religion and Foreign Policy Symposia Series, which is made possible by the generous support of the Henry Luce Foundation.


PETER STEINFELS:  I am Peter Steinfels, and it's my pleasure and privilege to preside over this third session of a fascinating day -- this session being on religion, innovation and economic progress.

I'd just like to repeat the ritual request that all of you turn off cell phones, BlackBerrys, camcorders, whatever makes spontaneous and unwanted noises.

Secondly, again, I'll remind you that this session is on-the-record and it is being webcast live to a larger audience.  So you might want to keep that in mind.

We have three very distinguished panelists here today.  In the program you have there are much more extended biographies, which you really ought to look at.  They're very interesting.  But I'll give them very brief introductions here.

From right next to me is Timur Kuran, who's a professor of Economics, Political Science and of Islam and Social Sciences at Duke University.  Among his areas of study are Islamic teachings and economic innovation and the economic lag in the Middle East.

Next to him is Lawrence Harrison, who is director of the Cultural Change Institute at the Fletcher School.  He is well known to many of us for very extensive writings on the impact of culture and religious values on economic development.

And at the end is Robert Woodberry, who's a professor at the University of Texas in Austin.  And he has conducted studies of the role of missionaries as a way of analyzing and examining change and diffusion in both economic and political values.

I've asked each one of the panelists just to begin not with the larger theoretical picture or their larger conclusions, necessarily -- though they may want to refer to those -- but with a specific concrete example of the way in their work where they have seen the impact of religion and culture -- religion primarily -- these values on economic change or development.

I've said you can give a positive example or a negative example, but if each one of them would give a single or two anecdotes or cases, and then we'll move from there to the larger theoretical structure that they've been working with in their studies.

So, Professor Kuran.

TIMUR KURAN:  Thank you.

My answer will be both positive and negative and will come in -- the example will come in two parts, which may seem contradictory.

Muslim societies have always welcomed change.  If you look at the last two centuries, you can see this.  Two centuries ago nowhere in the Islamic world were there corporations, did banks exist, did stock markets exist, was there standardized accounting.  These institutions, these practices have been accepted -- widely accepted all across the Islamic world.  And in fact, even Islamists who -- radical Islamists who oppose various elements of modernity accept these.  They don't make an issue out of them.

In earlier times, tax systems repeatedly changed.  Military technologies were -- new military technologies were generated.  Military technologies were borrowed from abroad again and again.

The same token, certain elements of -- certain elements of the infrastructure of the private economy remained stagnant for almost a millennium across the Islamic world.  If someone -- if a merchant who had lived in the 10th century came alive in 1800, he would find the types of contracts in use quite familiar.  Credit markets would be quite familiar.  Economic relations would seem quite similar to those that he had experienced eight centuries earlier.

So the economic infrastructure of the economy had undergone a stagnation.  And it turns out that this -- even though changes had occurred in other areas, in this particular area the stagnation mattered dramatically to economic development.

STEINFELS:  Professor Harrison.

LAWRENCE HARRISON:  First of all, consistent with the ambiance of dissent that was established this morning, I would like to express my strong disagreement with Peter Berger.  Having spent the morning in the unpadded seats of the audience, being up on the stage in the lineup is a great blessing.  (Laughter.)

I'm going to read a sentence to you, which will summarize my case in a general sense.  And then I'm going to give you the most immediate example:  Religious relativism -- the notion that all religions are essentially equal -- is an illusion when it comes to progress.  Some religions or ethical codes -- for example, Protestantism, Judaism and Confucianism -- do better than others, in the extreme case, Haitian Voodoo.

The example that I want to cite is the example of our own Hemisphere.  Carlos Rangel, a very distinguished Venezuelan writer, wrote in a book that he published in the 1970s that in the year 1700, viewed from Europe, the Spanish colonies in the south of the New World looked to be much more successful, much more promising, much more affluent than the British colonies in the north.  Three hundred years later there's been an immense flip-flop.  How can it be explained, he goes on to say?

And he answers it in basically the answer that our analysis illuminates.  What you have is Ibero-Catholic culture, which is progress resistant in the sense not only of economics, but also in the sense of social justice and democracy -- democratic governance -- falling far behind Anglo-Protestant culture in terms of its ability to produce democratic societies.  Social justice certainly in a much greater degree than in Latin America and a greater degree of prosperity.

So that in the year 2008, Latin America, which may well have been ahead of the English colonies in the north in the year 1700, is now perhaps 50 or 75 years behind.  And while a number of other factors are involved, I believe that the contrast between Ibero-Catholic and Anglo-Protestant culture is a principal explanation.

STEINFELS:  Professor Woodberry.

ROBERT WOODBERRY:  There are lots of things that we think have a secular origin or origin due to technology, which actually have religious origins and then we forget.

One of the things you can you look at with that is, for example, the spread of printing and mass literacy.  We think that's a technological development, which inevitably leads to newspapers and mass literacy and other things like that.  It's not.  The early places to have mass printing -- or the early places to have significant printing -- were Germany, Italy, France and Spain.  The early places to have mass literacy were Scandinavia, Geneva, the Puritan areas of England, lowland Scotland, New England, Iceland, et cetera -- not the places with early printing.

The spread of printing internationally demonstrates this clearly as well.  Printing gets used for mass printing and newspapers and things like that in the religious debates with reformations and spreads internationally, primarily with the spread of Protestant missions.  You can show that most societies knew about printing and had examples of printing in their own language for 200 to 300 years before they ever used it.  The Chinese and the Koreans invented printing and they had moveable fonts, metal type, prior to Europe.  They didn't have newspapers until the 19th century until they were introduced by Protestant missionaries.  They didn't have literacy until the 19th century when it was introduced by Protestant missionaries.

Throughout Asia -- throughout Asia, the first people to print significantly were Catholic missionaries, but they mostly printed only 100 to 200 copies of their texts and it didn't overwhelm the copyists and no one ever copied them.  Foreign trade companies also printed treaties, but also in small numbers.  It didn't overwhelm the copyists.  No one copied them.

When protestant missionaries came, they printed so many copies it overwhelmed the ability of people to copy by hand.  So in India, the first three British missionaries -- who actually had to go to Danish colonies, because they were banned from British colonies -- printed over 200,000 copies -- over 200,000 books in 14 languages in 32 years.  Copyists could not keep up.  The first printers -- Indian printers -- were people who had worked with the missionaries.  And I can show that throughout Asia.  And the early people who printed newspapers, indigenous people, had also worked with missionaries -- (inaudible).

STEINFELS:  Thank you.

Now I think we'll give each of the panelists a chance to explain how the specific things they mentioned fit into a larger pattern.

Beginning with you, Professor Kuran, you talked about the contrast between the dynamism of Islamic societies in many respects and the stagnation in the economic area.  Would you like to expand on that a little bit more and are there differences in those Islamic societies that also shed light on the reasons?

KURAN:  I deliberately used the same examples in the last 200 years -- the dramatic change in commercial life in the Middle East and the rest of the Islamic world came about through transplants.  And the transplants occurred, institutions were borrowed from the West at a time of crisis when it appeared that unless major borrowings took place, unless merchants and investors were given ways to pool resources on a large scale to take advantage of modern technologies, that they would all be dominated -- that these societies would be dominated by outsiders.

Now, the big question is:  Why did these institutions, these modern institutions -- say, joint stock companies, the corporations, banks, large-scale organizations, stock markets, standardized accounting -- why did these develop organically in Europe and why didn't they develop organically within the Islamic civilization so they have to be borrowed in a period of crisis from abroad with all of the distortions that accompany it?  This is the question.

Now, here is where Islam and specific aspects of Islam come into play and that helps us explain why there was a long period of stagnation.  Certain institutions that are elements of Islamic law failed to create the incentives for organizational modernization.  And parallel institutions in Europe did create those incentives so you have cascading phases of the modernization.

Let me give you an example of an institution that made a difference:  Islam's inheritance system.  By medieval standards, Islam's inheritance system is highly egalitarian.  It mandates a share for all children, male and female -- and surviving parents, sometimes also members of the extended family.  It was much more egalitarian than the inheritance systems elsewhere in the world in the medieval period.

One problem that this creates -- that this inheritance system created is it made it very difficult to carry successful enterprises from one generation to the next.  And the problem was particularly acute with successful businessmen who left large estates.  Why?  Because they had -- they typically, as a sign of their success, as a result of their success, they had multiple wives and many children.  More surviving children than in the West.  They had huge numbers of heirs.  So the successful business -- all the assets got fragmented very quickly.

Europe was able to solve this problem, because unlike Islam, in Christianity the inheritance -- there is no inheritance system grounded in the Bible.  There's a great deal of flexibility.  In some places, and particularly the places that eventually gave us the industrial revolution, primogenitor -- leaving the assets, all the assets to the oldest son -- was adopted as a solution.  This enabled successful businesses to be passed to the son.

Now, why is this so important to economic development?  Because if you can pass on an enterprise to others, it can grow over -- as an industry grow over time.  That growth generates communication and coordination problems that then require the development of new organizational forms.  It developed --

for example, a need for standardized accounting develops, a need for stock market develops when people instead of forming short-lived enterprises, they form enterprises that are going to last more than a generation.

So this is a dynamic that was not -- did not take off in the Middle East.  And this is not because Islam was designed as an inflexible religion, that there was a certain, you know, rule in Islam that says enterprises have to be small and short-lived.  This was an unanticipated, unintended consequence of an inheritance system that served certain needs quite well.

STEINFELS:  Thank you.

Professor Harrison, you gave the example of the contrast between the Ibero-Catholic culture in Latin America and the protestant culture in North America.  You have a larger study in which these kinds of questions are extended globally.

HARRISON:  You all should have a copy of a table, which is probably very mystifying to you.  It is a table that appears and it is, actually, the basis of chapter four of my most recent book, "The Central Liberal Truth".  And what it does is take 117 countries, and based on predominant religion, assess each of them against 10 indicators of progress.

Those 10 indicators of progress include the U.N. human development index, which is a combination of health, education and prosperity; the literacy, which is self-explanatory -- female literacy both from U.N. data; fertility's also self-explanatory.  The freedom total is from Freedom House's annual surveys of the state of democracy in virtually all the countries of the world.  The democratization date is the date of the start of democratic continuity.  And you'll notice that there are several blanks -- there are some groups or countries that have yet to achieve this.  The per capital GDP is self-explanatory.  The Gini coefficient, of course, is the way to assess the equitability of income distribution.  Trust is from the World Values Survey.  Corruption from Transparency International's data -- their corruption perception's index.

It's obviously a highly generalized table, and there are a lot of other factors that are not presented in it.  Very importantly, the performance in several of these issues -- for literacy and quite possibly trust -- is a function of the degree of economic advance.  The more affluent countries are likely to do better than the less affluent.

We have tried to take into account some of the income effects on this table by breaking out first world countries in the Protestant, Catholic and Confucian groups from the others.  But weighted -- by the way, weighted averages are weighted by population.  And there are a whole host of other factors that could influence this.  So you've got to look for very, very gross discrepancies.

And what -- when you do find them, you're led to certain conclusions.  And the conclusions that we reached -- again, they're elaborated on in chapter four -- are that generally, Protestants have done better than Catholics.  But the Nordic countries are the champions of progress.  We could refer to them as Lutheran-agnostics now.  That in the vanguard of progress a millennium ago, Islam has fallen far behind and this obviously has contributed to the humiliation that I believe is at one of the roots of jihadism.

There are close parallels between Catholics and Orthodox Christians -- particularly discomfort with capitalism.  I might add that the most recent Catholic miracles -- economic miracles -- have taken place in countries -- Spain, Ireland, the Province of Quebec -- that are now referred to often as post-Catholic.  Buddhism and Hinduism are not progress prone.

Finally, there is the evidence in this analysis -- and the analysis that is contained through the book, "The Central Liberal Truth" that there is a universal progress culture that emphasizes education, merit, achievement, frugality and community.  And these are values that are largely shared among Protestants, Jews, Confucians, Sikhs and other groups.

STEINFELS:  Thank you.

Professor Woodberry, your example suggests a very strong connection between focus on the Bible, literacy, printing and so on.  Did you want to expand that further?

And I'm interested, also, in the question of -- since you were talking about missionaries -- of the interaction of the missionaries and the cultures in which they were operating, which could be very complicated, I think.

WOODBERRY:  Right.  I think an important thing to emphasize is that religious traditions are not static.  They change and they change through interaction and competition.  So there's nothing inherent about Islam that's anti-printing or anti-mass literacy.  But there were some restrictions on religious liberty that influenced the spread of missionaries and colonial powers enforced those, because they kept missionaries out of Muslim areas and not out of other areas, for the most part.  And in the Muslim world, they were allowed in areas with Christians -- Lebanon, Egypt, et cetera.  And you have early printing and newspapers and early education there.

But through competition, these things spread to other cultures.  And so if you compare Catholic education in Ireland or North America, it's really quite good.  They didn't want the Catholics to become Protestant, so they invested in education to fight the Protestant education and the Protestant state education.  And that happens everywhere.

If you want to reduce the impact of Protestantism on a lot of these outcomes, you need to control for the prevalence of Protestant missionaries per capita and the length of Protestant missionary activity, and you can remove or very strongly reduce the impact of Protestantism.

People don't have to be converted to be influenced by the idea that everyone should be educated or you should have mass printing or you should have organizations outside state control.  They spread, and people copy them.

So you get these Protestant-initiated social movements or organizational forums, like the YMCA, and then you get the Young Men's Muslim Association, the Young Men's Hebrew Association, and the Young Men's Buddhist Association.  You get movements to fight Sufi in India, and then you get the rise of Brahmo Samaj and Calcutta Darama Sabah (sp) and these other organizations that copy the same tactics and organizational forms to fight them and become the foundation for political parties and civil society prior to decolonization, et cetera.  So people don't have to convert in order to copy.

STEINFELS:  Professor Kuran?

KURAN:  I'd like to add something to what Bob has said.  It's certainly true that missionaries in the 19th century -- even earlier -- and the 20th century certainly have been at the forefront of transferring certain technologies.  They've set up schools, promoted literacy.  They've set up hospitals, certainly.  But I think we should recognize also that from -- transfers from the West to places like India that you mentioned, originate from other groups.

Merchants carried the institutions of the modern economy, modern commercial techniques, modern organizational forms, to India and to the Middle East.  Before the British arrived, Muslims India pooled resources thorough Islamic partnerships.  These were small and ephemeral, for the various reasons that I gave earlier.  Hindus used family firms, which enjoyed continuity.  The firm could -- a business could stay in the family for generations, but they were limited by the resources of the single family.

The British introduced modern organizational forms like the joint stock company and the corporation, and they established secular commercial courts where disputes involving these modern organizational forms could be adjudicated.  And Muslims and Hindus -- Hindus more rapidly than the Muslims -- started using these modern organizational forms, started doing -- using contracts that would be filed in the modern courts.  And this gave a big boost to the Indian economy.

STEINFELS:  (Off mike.)

HARRISON:  With respect to the ripple effect from innovation, there is still evidence, it seems to me, historic evidence, that a rigid culture can resist for an extended period of time these otherwise widely accepted innovations.  The printing press is the thing that comes to mind.

And if I remember correctly, the printing press was not made legal in the Ottoman Empire until the 18th century -- is that right, Timur?

KURAN:  Seventeen twenty-seven, yeah.

HARRISON:  Seventeen twenty-seven.  And of course it had become a commonplace artifact throughout the Western world for a couple of hundred years before that.

WOODBERRY:  Well, it was not made legal for Muslims.  It was used by Jews and Christians earlier than that.

HARRISON:  Okay.  Okay.


KURAN:  On a small scale, though.  Very, very small scale.

WOODBERRY:  On a very small scale.  But also, the introduction was only basically one person, and when he died, you know --

STEINFELS:  What do you think is the key to resistance?  I shouldn't say "the" key; there's probably a number of different factors.  But why in the face of borrowing or transfers or so on, are some religious, cultural configurations more ready to accept and adapt, and others see the threat there?  Is this doctrinal, political?  What factors?

WOODBERRY:  I think it's a combination of a lot of things.  You have to look at elite interests.  Elites didn't want mass education and they didn't want mass access to books.  They wanted to reinforce their elite status.  You need a religious reason to get around that.  Once you have a particular class structure, as that develops in Latin American through the colonial policy, et cetera, that's very hard to overcome.  It doesn't -- it's not overcome instantly.

Religious groups undermine that because they're trying to convert -- well, at least some groups are trying to convert everyone.  They're trying to convert poor people and women, et cetera.  They transfer resources for them as part of this exchange, and sort of exposing themselves to witness and also because, for religious reasons, like they need to be able to read the Bible in their own language.

Eventually, that changes the class structure which changes political calculations.  But that does not change instantly.  Once a class structure is embedded, it's very hard to change and there's elite interests that block that change.

There's also -- not all cultural ideas are equally easy to change.  Some threaten the authority of a religious tradition more profoundly than others.  So if you have a law that's provided by Mohamed or provided by God and then you have the example of Mohamed and the caliph and the early righteous caliphs, et cetera, of establishing a state with a Shari'a law, you have to deal with that.  You can't just -- I mean, there's interpretation, but it's something you have to deal with.

With Christians, it was a hard enough process going to separation of church and state, but you didn't have a religious law.  And the example of Jesus and the early apostles was not setting up a state, which made the process easier, et cetera.

So, I mean, there are cultural reasons change is harder or easier in particular contexts because of the threat to a religious institution, but secular reasons are important, too.

STEINFELS:  Professor Kuran?

KURAN:  As Bob said, there were multiple factors or multiple mechanisms at play, and these reinforced each other.  I would add that in the case of the printing press and the Ottoman Empire, the key factor was lack of demand.

The conventional wisdom is that there was clerical resistance, but the people who say there was clerical resistance have great difficulty finding examples of clerical resistance.  And when the printing press was finally introduced, there wasn't much clerical resistance.  The issue was lack of demand.

So one has to ask why was there no demand for the printing press?  This technology was certainly known, as Bob has said.  Jews in the Ottoman Empire were allowed to print books in Hebrew.  Christians were allowed to print books.  Why was there -- was the demand limited, and why did Christians and Jews print so few books?  These are elements of the puzzle.

Now, the two issues -- one is stagnation of education, and there's another institution that if I have time I can get into, but education stagnated in the 18th century.  When the printing press was introduced in the madrassas, the colleges, of the Islamic world, people were learning the sciences from texts that go back many centuries.  So --

And the reason for that is that the madrassas were organized as trusts and the founder of the trusts, called the waqfs in Islamic law, would say exactly what would be taught in the madrassa and how many professors there would be and so on.  These were created as static institutions.  So there wasn't a need for new books to communicate new bits of knowledge.

The second factor is that -- is related to the points I made earlier.  Exchange was still personal, predominantly personal.  The transition -- the region had not yet made the transition, as Europe was already doing so, the transition from personal exchange to impersonal exchange.

When you move to impersonal exchange, you need forms, you need bylaws of companies.  These are not, in an economy where exchange is personal, contracts are oral, you don't have much need for forms and books.  So these two factors reduced the demand.

When, of course, the demand increased, or a demand emerged, the adoption of the printing press was quite rapid and spread of the printing press was quite rapid across the Islamic world.

HARRISON:  I think the question of the adoption goes beyond culture to personality and to the performance of the elites.  The case that comes to mind is the response of China and the response in Japan to the European incursions in the 19th century.

The Chinese leadership, basically the Mandarin mentality, said these guys are barbarians.  We of the Middle Kingdom know all and have all and we can't get anything from them.  The Japanese, particularly after the -- Meiji restoration, after the ouster of the Togogawa Dynasty, said these guys could have murdered us.  They're so far ahead of us in so many respects, we've got to learn from them.

And one of the first things that the young Meiji leaders did was to spend nine months in the United States, nine months in Western Europe studying the advanced institutions and technologies of the West and starting the adaptation process.

STEINFELS:  At this point, although I may reserve the right to slip in a question myself later on, if no one asks it from the audience, but I would like to invite questions from everyone.  The instructions, as before, are to please wait for the microphone, to speak into it, to identify yourself and your affiliation, and to keep your questions brief and clear.

There's one right here.

QUESTIONER:  Thank you.  Mustafa Akyol, from Turkish Daily News and from the first panel.  I'd just like to add also -- I mean, I very much agree with the Ottoman printing problem, and it was the scribes actually who opposed the coming of the printing press, because they clashed.  I mean, it was not in their interest.  Turkish secularists loved to put the blame on religion, but there was more of a kind of internal class problem there.

And just a question.  Protestant religion has been obviously successful in creating economy progress, and this is what Max Weber pointed out a century ago.  Could it be related to the fact that the geography in which the Protestant religion expanded and is dominant still today is also a geography which allows economic progress?  Because if it's -- Middle East is dry and North Europe is not, and you can have sea trade.

And we should also not forget that the world trade routes had changed from the Mediterranean to the oceans, which just dried up the whole Middle East.  And even the Mediterranean itself, which enriched Europe, and is the success of the Protestant religion can be related -- its theology definitely has a share, but is it also related to those kind of secular elements?  And also, would that explain the fall and the stagnation of the Middle East, and is it maybe because of not Islam's own texts, but because of the geography and how it's unfolded?  Does geography play also a role in all this?

STEINFELS:  Thank you very much.  This is a very basic question which I hope all of you address, which is what is the relationship of the kind of religious and cultural factors that you have examined to all those other factors that are often advanced to explain economic change and innovation, whether it be geography, whether it be natural resources?  Or recently, you know, botany and germs and all sorts of things have been --changes in the weather patterns have been advanced as important factors in that.

So if you would relate your -- why don't we start with you at the end -- to those other explanations which are --

WOODBERRY:  Okay.  Well, there's two issues.  One, the issue of demand and printing, I think the idea that every household should have access to God's word, with the Reformation, overcame that problem of the resistance of class.

But geography, I've spent a lot of time thinking and working about that and measuring it.  A lot of the arguments in Europe get bogged about the impact of religion on economic development, get bogged down on well, maybe it's the class structure, maybe it's the power of the state, maybe it's geography, et cetera.

What you can test, though, is with the spread of missions and colonialism and European settlers, et cetera, you have sort of a test case where their spread is not influenced necessarily by the same factors that happened in Europe, and then look at economic development, education, political democracy, et cetera.  And then control for -- I controlled for over 26 geographic factors -- percent swamp, access to a navigable river, distance from the coast, distance from Europe, blah, blah, blah, blah, blah.  And you keep on.

It does not remove the impact of Protestant missions.  It does remove the impact of European settlers and who colonized you, et cetera.  The spread of Protestant missions is not just in Northeastern Europe.  They were trying to convert everyone.  They were restricted by regulations and they were restricted by disease, which I've done a lot of work to try and control for the factors that influenced where they went.  And it's still a very powerful effect.

So for example, to just name one case, you can explain about half the variation in post-colonial democracy with the number of Protestant missionaries per capital in 1923, the length of Protestant missionary activity, and estimates of the percent of the population evangelized by 1900.  It removed who colonized you, for how long, percent European -- all these geographic factors -- percent Muslim, all kinds of stuff.

It's a very powerful effect, and it's not just the geography in Northwest Europe.

STEINFELS:  Professor Harrison?

HARRISON:  I think that geography and climate are an indispensable first approximation to understanding why some societies move more rapidly than others.  It's clear that most of the poorer countries are in tropical zones and that most of the affluent countries are in temperate zones.

But then you run into the exceptions.  For example, roughly a third of Australia is in the tropical zones.  A third of Mexico is in the temperate zones.  In Latin America, populations tended to gravitate to the higher elevations where you have temperate climate.  That's true in the Andean countries and several of the Central American countries as well.

When you really start to disaggregate, you run into some real problems with taking the climate and geographical arguments to their logical extreme.  For example, how can one explain the difference between Haiti and the Dominican Republic, which share the island of Hispaniola?  How can one explain the striking difference between Nicaragua and Costa Rica?  How can one explain the striking differences between Australia and Argentina?

So at that point, the geographic and climate arguments break down and you've got to look with more finesse at cultural explanations, it seems to me.

KURAN:  I agree with the points that Bob and Larry made, so I'm going to, rather than repeating the points, I'm going to answer the question in relation to the Islamic world -- could it be climate or geography that explains why the Islamic world slipped into a state of economic underdevelopment?

The climatic conditions are not uniform across the Islamic world.  The proximity to the sea or proximity to the ocean is not uniform.  So if climate or proximity to the sea or elevation were key factors, we would expect the places that are more favorably situated in temperate climates, close to the sea, low elevation, et cetera, we would expect those places to have escaped this state of underdevelopment.  So I think that this is a second-order factor.  Institutions are more important.

People could also migrate from one place to another and, I would argue, that within the Middle East, even in places that have climates that are not ideal, there were periods of great progress.  Iraq is a good example.

Baghdad had a flourishing economy.  It had -- it was a place that attracted scholars, it was a place where innovations were made, technological innovations.  So it's -- despite the climate.

STEINFELS:  There's a question --



QUESTIONER:  Walter Mead, Council on Foreign Relations.

I wonder if any of you would care to be predictive, looking at particularly some of the religious changes that have taken place in the last century, the rise of Christianity in sub-Saharan Africa, rise of evangelical Protestant Christianity in much of Latin America.  Should we be fastening our seat belts and getting ready for major booms in these areas, or do you think that some of the associations that you see in the past may not be as prevalent or as important in the future?

Also, do we have to continue to be so pessimistic about India which, according to some of this analysis, looks like it shouldn't be progressing, but seems to be?  How does the past project forward, in your minds?

STEINFELS:  Professor Harrison, do you want to take a shot at that, or --

(Cross talk.)

HARRISON:  Okay.  No, I'll take a shot at it.

With respect to India, we have to be mindful that what lies behind the Indian miracle is a fragment of India's population.  A geographic fragment, a cultural fragment, and a fragment that has been powerfully influenced by British values.  And, I might add, a native-speaking English fragment.  English is one of the valuable resources, national resources of some several countries that have developed very rapidly -- Ireland leaps to mind.

And so I believe that enough of the democratic tradition has taken root in India, and that I think the British can take some considerable claim to responsibility for.  Enough of the education systems that were installed by the British, coupled with some very deep-rooted Indian traditions of entrepreneurship that go back way before the Raj, to leave me quite hopeful, really, about India's prospects.

STEINFELS:  Anyone else want to offer a --

Professor Kuran?

KURAN:  It's been said that prediction is pretty risky, especially when it's about the future, and particularly risky when the person making the prediction has been immersed in economic and political history.

But on the basis of the work that I've done, I'm optimistic in the long run.  With respect to the Islamic world, I'm optimistic in the long run.  I think in the short run, there could be more trouble, more turbulence, and we shouldn't expect major economic breakthroughs any time soon.

But why am I optimistic for the longer run?  Because the -- all of the institutional obstacles to development of the private economy and development of a strong civil society, these have already been put in place.  These exist now in all of the major countries.  You have corporations, you have -- it's possible to form NGOs that have flexibilities that they would have lacked two centuries or earlier.

Civil societies are still weak.  The private economies of the major countries are still weak, but they are developing.  What is holding the region back now, or the Islamic world as a whole back, is political systems that generate instability and that discourage innovation -- very repressive regimes.  But sooner or later, change is going to come from within.  When you have growing civil societies, increasing numbers of organizations that don't have direct ties to the state, increasing numbers of corporations that are privately controlled, sooner or later, they are going to put in place democratic freedoms.

WOODBERRY:  I think religious change takes time.  One thing, class structures are pretty much in place.  Changing them takes a lot of time.  You don't suddenly get a middle class; you don't suddenly change the calculations that elites make.  Elites try and keep in power and reinforce their distinction; that's hard to overcome.

Cultures also don't change instantly, because they're not just what you think.  It's what you think other people think.  It's expectations; it's how the system works.  Changing that doesn't happen instantly with the introduction of a new religious tradition.  It's something that takes time.

QUESTIONER:  So that would be relevant to sub-Saharan Africa?

WOODBERRY:  Sub-Saharan Africa.  It's not going to instantly become low-corruption, high-democratic, whatever, because you have a lot of spread of Protestantism and Catholicism as well as Islam.

Religious competition is important.  Religious liberty is important in terms of transferring some of these things and -- one -- in terms of transferring resources to the poor -- when the people who are more likely to defect or convert are the people who are not being serviced by any particular system.  So gays and lesbians in the United States or African Americans in the United States, et cetera, are more likely to convert to other religious traditions.

In other countries, poor people, whatever, the non-elite, and missionaries go and work with them.  When they do that, then whatever the dominant religion is starts to have to transfer resources towards them.  Eventually, that changes the class structure.  Eventually, that changes the calculations that people make.  But that takes a long time.  It's not an instant thing.

Another comment I want to make is I think the British get far too much credit for being a great colonizer.  They were as mean and selfish and violent as anyone else.  They lived in a different situation.  They were forced to allow religious liberty -- separation of church and state in the colonies after 1813, by political pressure.

Then -- and in that same process they were forced to establish the Grant-in-Aid System, the education system which then they get so much credit for doing.  They didn't do it voluntarily; they were forced to do it by religiously motivated activists who were doing this for religious reasons.  And then moderating -- (inaudible) -- this is also through that mechanism -- I can go into detail the rise of evolutionism, et cetera -- it's directly connected to non-state missionaries working directly with slaves and sending back information to England, et cetera.

So you can go on a -- the British were a selfish and vial as anyone else.  And before the rise of non-state missions, you could have plenty of evidence for it.

STEINFELS:  Other questions -- way in the back there.  And then up here.

QUESTIONER:  Jim Dingman, INM World Report.

How does the panel understand the whole question of synchrotism in the modern world, such as Solufism.

And in your discussion, while you talk about economic change, there's been a couple of references to the question of outright war and the effect of wars of imperial conquest and colonialism for several centuries because we've seen West Africa, East Africa, Southeast Asia, et cetera, manifestations of a political synchrotism rising to oppose these movements.  And I wonder how you see that factoring into the picture you talk about.

STEINFELS:  And war is certainly a factor both for and against in the economic change and development.

Anyone have any observations about -- yeah.

KURAN:  I might say a course that where religious movements advocate wars, advocate violence, which is just a source in instability and you're not going to have healthy economic growth in a place like Afghanistan or Iraq until law and order is established so these religious movements can do great harm.

At the same time I'd like to add that most of the Islamists are not pursuing a violent agenda.  They do want to -- they do have Islamization agendas, but often they're quite compatible with modern economic growth.  The Islamists in many countries have embraced modern economic institutions.  They quietly in fact incorporated them into their own traditions with forgetting conveniently that the foreign origins -- Islamic banking is a good example -- there was no bank in the Islamic tradition -- there was no such thing as an Islamic bank before the mid-20th century.

They've incorporated these things and they've shown that they can be quite good businessmen.  They can invest quite wisely.  But the radical fringes of the Islamists movement, or for that matter, other religious movements are a source of instability.

STEINFELS:  Question here.

QUESTIONER:  Sayid Yarazn (sp), Muslim Public Affairs Council.

I think one of the problems in innovation is that there seems to be natural resistance amongst humans to change -- I mean, period -- any kind of change.  We just resist change.

And also all the panelists seem to have focused, if you will, in the post reformation, you know, which is just the last 500 years of, what did this change?  There was this whole time, if you will -- it reminds me that I think it took the Catholic Church to adopt Arabic numerals after they had been -- it had been 300 years before they could realize that this is a far more efficient method than the Roman numerals.

So it seems to me that whether it -- I mean, if we were to study this over thousands of years, the process, the only -- I mean, what will would then the factors of change come from?  I mean it would seem to me it would come from what the process of globalization, so to speak, has gone on forever, gone on for thousands of years, it is the interactions of various cultures and peoples that causes change and you cannot really -- you can -- in a microcosm, you could say Protestantism and all that but that is like being conditioned by what you're trying to study in the first place rather than answering the bigger question.

MR. STEINFELS:  We'll take that as a question for comment or a -- if there is any about --

MR. WOODBERRY:  Yeah.  I think competition -- any religious tradition can contribute things.  So the zero comes from the Hindus and then it's used by the Muslims, the Arabs.  And it's -- really religious idea of nothing which became a very valuable concept which then through interaction and competition gets spread, first to the Muslims and then to Europe.

So any group can develop new ideas through interaction and competition.  The things that work get adapted and used and adopted as people's own and often forgotten the origin of them and they just use them.  So it doesn't have to be from Protestantism, it just -- the example -- that's what I've studied and so in the examples I'm using are from Protestantism, but could be from Islam; it could be from Hinduism; it could be from any tradition.

HARRISON:  But we have talked about how different traditions may have different factors that contribute in different ways.  For example, your original illustration about printing and literacy seem to me to be very tightly connected to a certain element of Protestant Christianity.  We were discussing earlier today the question of, why didn't the concern for the Koran play that same role?  And I think at lunchtime you pointed out that the Koran was used differently; it was a different kind of document than the text and the Bible; it was shorter; it was recited; it was memorized, et cetera, which is pretty hard to do with the Hebrew Bible and the New Testament.

WOODBERRY:  Yeah.  Well, I think it's --

HARRISON:  And so there may not have been that concern for literacy.

Now, I'm only giving that as one example and I'd be interested in picking out other examples from other religious traditions of elements that were more positive or negative toward our economic change.

STEINFELS:  I think we've got to look at the question of leadership.  In his book, "Guns, Germs, and Steel", Jared Diamond leaves open a very big parenthesis in his final chapter for leadership that is not necessarily related to environmental or historic antecedents.  The examples that come to mind include Ataturk in Turkey, the Meiji leadership in Japan, and in our own hemisphere, the young leaders of Quebec at the time of the Silent Revolution in the 1960s who had a different vision of what their society should be, to be sure they all operated in environments in which stimuli were applied to them.  In the case of Turkey, the collapse of the Ottoman Empire, the almost disappearance of Turkey as an entity and the military leadership converting to a position of almost unprecedented political power.

In the case of Japan, you have young leaders who almost astonishingly sensed that their country was at a great disadvantage because it had not kept abreast of developments in the other parts of the world and seeking out every possible development they could find in the other parts in the world.

In the case of --

KURAN:  Oh, I'm sorry.

STEINFELS:  In the case of Quebec, you have the indignation of young leaders who saw their province falling far behind the provinces and wanting to show that they were as good as anybody else.

But in each case it was a leader with a vision that made a big difference.

KURAN:  You're absolutely right that Islamists -- that periods of great success and those periods had to be ones when Islam was open to borrowing.  Islamic civilization was a magnificent synthesis because it borrowed from many earlier traditions -- laws were borrowed from the Romans and the Persians and others, and they were then synthesized creatively; they were added to; technologies were borrowed.  And in other periods also -- I've given other examples of borrowings that have taken place more or less seamlessly without creating a major religious crisis.

I've also said that Islam has -- at least those of them who are pursuing their agendas peacefully have been quite open to technological change and institutional change.  I would like to add a footnote to that comment because it's appropriate here -- there are areas in which Islamists are resisting change.  And they all have to do with the overarching campaign of Islamism which is defined and put in practice on Islamic way of life, a distinctly Islamic way of life.

So a number of issues have been selected as pet issues, key issues that in the minds of Islamists, define the proper Muslim behavior.  You either accept those, you know, proper -- you're a good Muslim or you're not a good Muslim or you're not a Muslim at all.

In the economic sphere, interest is one of these.  Interest has always been given and taken in the Islamic world, more or less openly in some places as in Medieval Europe there various strategists that were used to get around it; the Islamic banks today give and take interest as a matter of course.

But this is one of those issues, being committed to the ratification of interests is one of those issues.  Gender issues, family issues -- these also are elements where Islamists are resisting change.  And in those areas I think they are keeping the Islamic world backwards.

STEINFELS:  This is the time I want to slip in a question because it follows from that, which is that in looking at possible sources of resistance to new developments, whether from within or borrowed from without, one that seems fairly on the surface is a fear of secularization, namely the eroding of any distinctive way of life.  And we have tended to see secularization as not necessarily inimical to carrying on a religious tradition.  Yet at the same time in Western Europe certainly, it meant the removal of the economy to a large extent from direct oversight or supervision by religious authorities.

And I'm also struck by Professor Harrison's mentions of the Nordic countries as at the high end of his list of successes in terms of the things we're talking about.

Is there in fact more grounds for resistance based on this fear of secularization than perhaps we have acknowledged?

Silence falls.

HARRISON:  Well, I tend to think with Peter Berger that modernization leads to pluralization.  There creates a space for secular people to voice their points of view and mobilize for their types of things as well as various types of religious groups.  That can be a fear unless we make Northwestern Europe sort of the example of what inevitably modernism leads to, then we do have secularization as a thing and that really will scare religious people.

I think an argument against, say the most radical forms of Islamism, have to be made on religious grounds.  And one of them could be, for example, seeing what's the effect of establishing Islamic state on Muslim religiousocity and belief.  If you can show that it undermines religiousocity and belief, there will be religious grounds to fight it.  But you can't just make an argument on secular grounds because you have religiously motivated people.

And people sometimes either if that evidence can be given or else people sometimes need to experience something in order for it to be undermined.  So as long as the U.S. is fighting this thing and trying to undermine all the Islamists groups and whatever, then it can be anti-Americanism and it can be glorified and we'd have perfection if the Americans just stopped us from, you know, didn't -- because it's the U.S. fault for stopping all this stuff.  Maybe people have to experience -- undermines the desire for an Islamic state in Iran and Afghanistan at least among the non-Pashtun people, et cetera.

STEINFELS:  Professor Kuran?

KURAN:  I can say something briefly.  I think among certain groups there is a fear of secularization, but it relates to areas outside of economics.  Turkey's of course the extreme case of trying to remove religion from public life in the guides of secularization.  And there are people who feel that religion should play a role in political life and in education among other areas, and in social life as well.

But they are not -- bringing religion into economic life has not been outside the few symbolic areas, has not been a big issue.  And I think people are, where experiments have occurred in Pakistan and Iran to reform the economy along Islamic lines, they've been failures and they're widely recognized as failures.  I don't think there's a fear of economic secularization that has much substance.

STEINFELS:  A question back over there?

QUESTIONER:  Paul Rauschenbush from Princeton University.

I'm curious about economic progress and whether -- how that's been identified with Protestantism and perhaps is identified with the United States, and if some fear of gross materialism might be at the basis of some of the resistance to what's viewed as, you know, American progress.


HARRISON:  American progress is perhaps an extreme expression of democratic capitalism.  And it's perhaps underscored by the extreme inequality of income distribution in the United States which is the most inequitable of the advanced democracies.

But when you consider my champions of progress from Nordic countries are basically democratic capitalist countries and guided by highly Protestant ethic considerations even though the Protestant religion may not be as viable in the full sense of it as it was 30, 40, 50, 100 years ago.

It seems to me that really what you're talking about is a reaction to the American style of life and this is something which varies.  Our style there is to some extent with depending on who's --whether you have a Democratic or Republican administration.  I'm very troubled by the tendency of people outside the United States to generalize on the United States over history on the basis of the performance of the United States in the last eight years.  The reality is that there is going to be another administration; I will lay my cards on the table and say I hope it is a Democratic administration.  And the United States is probably -- even if it is not a Democratic administration -- is probably going to look a lot different to the rest of the world after 2008.

So it troubles me when American "greed" -- in quotation marks -- is -- becomes the focus of attention around the world as representative of the consequences of democratic capitalism when you have, as I said before, in the Nordic countries, the full interplay of democracy and capitalism.

STEINFELS:  Professor Kuran.

KURAN:  People everywhere including the very poorest countries -- they want to achieve prosperity; they want to enjoy many of the comforts that people in the advanced countries, the richest countries enjoy, including the United States.  What generates, I think, a reaction and an intensifying reaction is the crass materialism that people everywhere can now see on a daily basis on television and over the Internet -- Hollywood's version of the American lifestyle which is something that people resent partly because they can't attain it -- most people in the United States can't attain the type of lifestyle that is depicted in the Hollywood series -- and also because the lifestyles that are depicted in television series and over the Internet can be very destabilizing to communities.  So there is a reason for resenting it and objecting to it and expecting, hoping that the United States would rein it in.

STEINFELS:  There's a question here.

QUESTIONER:  Thank you.  Mona Aboelnaga with Proctor Investment Managers.

I'm curious about learning more about the core values or traditions that different religions may have that may impact economic development.

So, for example, Professor Kuran, you mentioned specifically organizational structures and the lack of those structures in the past in much of the Islamic world and how through borrowing and other mechanisms they are now there and, thus, you are more optimistic for the future.

And I guess -- I'm curious as to why there isn't a more fundamental issue at hand.  So as we talk about different traditions amongst religions, the Koran, for example, the tradition of memorization, of which has become something you can see in educational systems in terms of learning versus the way perhaps in the educational systems in the U.S. we think in essay form or more freely.

Why aren't you questioning more the basic issues of how a culture is encouraged to think and educate its citizens and that impact on economic development?

KURAN:  But this is -- you do make a good point, attitudes do matter but they also change.  And attitudes are -- attitudes co-evolve with institutions.  And institutions change, so do those attitudes.

Now today -- and this is something that I think Larry would be able to speak to much better than I can -- but if you ask, if you survey people in the Middle East and also, say in Western Europe or the United States, you're likely to find more people who will consider knowledge -- in the Middle East -- knowledge to be something that you acquire from the previous generation and then pass on to the next generation unchanged as opposed to something that you receive from the previous generation, add to, refine, perhaps change and then pass on to the next generation in a different form or in a more advanced form.

What this was -- these attitudes didn't develop differently independent of the educational institutions.  In the Middle East, I mentioned this briefly before, the schools were organized; schools were run by trust and they were set up with a particular mission, their educational mission, what they were to teach generally was what was specified.  They were committed to a static concept of knowledge.

In the West, schools were established, generally, certainly schools acquired learning were established as corporations which were -- could change.  They were meant to be self-renewing, self-governing organizations.  So the knowledge that they taught changed -- they expected it to change.

This is something these institutions have changed now.  Schools have, in many parts of the Islamic world, now have much more flexibility; they do change their curriculum much more easily than in the past.  The attitudes however don't -- the attitudes are the old attitudes; they are changing gradually and it will take time to change.  The point that Bob made, that they don't get changed immediately, but I'm optimistic that new institutions, those attitudes will gradually erode.

STEINFELS:  Professor Harrison and Professor Woodberry, I think we might wind up with any comments you have about this sort of question of fundamental things that we either attended to or didn't attend to sufficiently in our discussion.

HARRISON:  Well, taking off on your question -- well, the final sections of Chapter Four of the book that I mentioned that is a source of the table that I distributed, talks about the importance of cultural change through religious reform.  And this is a question of fundamental values that are enumerated in an earlier chapter -- such questions as, does the religion nurture rationality achievement?  Does it promote materials pursuits?  Does it focus on this world rather than the next world?  Is it pragmatic?  In contrast, does it -- to those religions that may nurture irrationality -- inhibit material pursuits and may focus on the other in a more Utopian way?  The view of a religion with respect to destiny, the extent to which a person can influence their own destiny is a very important factor.  Time orientation -- does the religion focus the eyes of its faithful unto the future or does it keep them in the present or focused on the past?

These are the kinds of issues that are very central to the role that religion plays in culture.  But there's one underlying factor in this discussion that we've, I think, ignored, and that is that religion is not the only source of values and attitudes.  And it does -- the culture changes.  There is so much compelling evidence of that which, of course, is why the institute that I direct is called The Cultural Change Institute.  And we believe that focusing on cultural change offers some really hopeful opportunities for a better world.

STEINFELS:  Professor Woodberry, if you'd spend a minute or so on --

WOODBERRY:  I would say the focus on memorization, et cetera, is not just an Islamic thing, that's a traditional thing that was in Confucion society and Buddhist society and Hindu society and probably Christian society, and Jewish society, et cetera.  It hasn't inhibited change over time in particular context.  Jews have been very successful economically -- a long tradition of memorization and recitation and looking backwards.  Same thing with rationality -- a lot of Islamic arguments, Jewish arguments, Christian arguments -- very, very rational but maybe not focused on, you know, scientific experimentation.

I don't think these are things are inherently inimical to progress.  They do change.  I think important factors are more contextual.  It's a combination of beliefs and the context and the amount of competition between traditions and class structure and things like that.  It's a more complex thing than just a particular belief shaping the outcome of a society.

STEINFELS:  I'm sure you all want to join me in thanking this panel for a superb discussion.  (Applause.)










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