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President George W. Bush has stated that the goal of the military campaign is to bring liberty to the people of Iraq. Although he is less specific about exactly which types of liberty, he would surely include economic and religious liberties. The president is a strong supporter of freedom in the marketplace, and he is strongly committed to freedom and vitality in matters of faith and religion. But some might wonder whether it is doable in Iraq, a country notably lacking in Western liberties.

The Iraqi population is about 75 percent Arab. Kurds, who live in northern Iraq, constitute about 15 to 20 percent of the population. Smaller groups include Turkmens and Yazidis. In the rural areas of the country many of the people still live in tribal communities, leading a nomadic or semi-nomadic existence. There are about 22 million people in all, and 97 percent of them are Muslim: Sunni Muslim in the north and Shi'ite elsewhere. The main Iraqi export is petroleum. Under these conditions, can free markets and Islam really coexist and work together in Iraq? Can Islam provide the moral-cultural (religious) underpinnings for democratic capitalism? Can the needed climate of toleration and peace take root? I do not purport to have definite answers, which only time can give us, but I hope to shed some light on these particular questions.

Calvinism Not Required

For illumination on questions about markets and their religious underpinnings, one can do no better than begin with Michael Novak. In 1993, Novak wrote The Catholic Ethic and the Spirit of Capitalism (New York: The Free Press) [1] to assist those in Eastern Europe and Latin America, the newest frontiers of democratic capitalism at the time. Now President Bush is opening yet another front for democratic capitalism in the Middle East. This is truly historic.

Novak stated his thesis as follows, drawing on the thoughts of sociologist Max Weber (1864-1920): “Out of the crucible of a hundred-year debate within the Church came a fuller and more satisfying vision of the capitalist ethic than Max Weber’s.” For Novak, Max Weber was certainly correct in his understanding that capitalism requires certain moral and cultural underpinnings if it is to succeed as a system. However, Weber’s two mistakes were, first, to limit these underpinnings to Calvinism and, second, to miss the positive moral aspects of these Calvinist underpinnings. For Novak, Catholicism can serve as a moral-cultural underpinning in Eastern Europe and Latin America. Most importantly for questions about Iraq’s future, if Novak is correct in concluding that Calvinism is not a necessary condition, then we are able to consider here whether Islam might also stand in to provide the requisite cultural underpinnings necessary for capitalism to flourish.

The Protestant ethic in the United States of America, which derived largely from Calvinism, promoted honesty, sobriety, self-discipline, diligence, saving, toleration, and planning ahead. This ethic was erected upon the commitment to serve the Lord God Almighty, Who made and governed the heavens and the earth. Islam today need take no second seat to this American Protestant ethic with respect to its moral code. Sobriety, self-discipline, honesty, and diligence are generally required as Islamic religious duties. Indeed, retribution under Islamic law sometimes seems fantastically harsh. (The punishment for stealing can be cutting off the offending limb in some cases.) Furthermore, the doctrines of God, creation, humanity, and judgment are adequately similar in both the Calvinistic and Islamic traditions. A strong belief in a God (Allah) who will judge all humankind undergirds Islamic codes. Muslims fear Allah – both in the sense of awe and fright – who is the source of all that is. Hence, creation is “good,” and what we do with it is very important. Foremost among God’s creation is the human person, deserving of special respect.

The Koran as a holy book is unlike the Christian Bible. The Koran is replete with ethical doctrines, whereas the Bible is more narrative. Central to the Koran are the Five Pillars of Islam. The First Pillar is to recite the creed that there is no God but God, and Muhammad is His Prophet. The Second Pillar entails praying five times each day while facing Mecca. The Third Pillar requires the giving of alms. The Koran specifies that annually two-and-a-half percent of a person’s income and wealth should be transferred to the poor. The Fourth Pillar includes keeping the fast of Ramadan during the ninth month of the Muslim year. Consumption of pork and alcohol, as well as usury, slander, and fraud, are prohibited at any time. The Fifth Pillar prescribes making a pilgrimage at least once to Mecca, if possible. This is the only Pillar with an optional characteristic to it. The closest biblical equivalent to Islam’s Five Pillars would probably be the Decalogue, which is hardly an equivalent at all. Additionally, the Decalogue does not occupy a position as central to Christian theology as the Five Pillars do in Islamic theology. Even so, these pillars reinforce rather than undermine the main point here. Calvinists still emphasized a spirituality and ethics that existed not only in a spiritual, supernatural realm, but also here on this earth. Belief had to show in everyday action. Thus, both Calvinism and Islam share an emphasis on being accountable through physical action, and the prescribed actions in both traditions are founded in similar conceptions of service to God.

While it is impossible to state definitively whether Islam can provide the moral and cultural underpinnings for a democratic capitalist system in Iraq, this abbreviated analysis offers a couple reasons to be outright hopeful that it can.

Primary Positive Moral Aspect: Reverence For The Human Person

The second point Weber overlooked in his analysis of democratic capitalism was some positive aspects of the system as informed by the American Protestant ethic. The collapse of socialism revealed several facts. The system of democratic capitalism, not socialism, responds to the natural human aspiration to exercise freedom. This is freedom not in a libertarian sense, but in the sense of being guided by a higher (natural) law. Creation, as judged by the impact on the environment, has also been better respected under democratic capitalism. The Eastern Bloc created an ecological catastrophe, and it has become apparent that the middle class of the Eastern Bloc fared no better than the poor of the West.

Yet for Novak, from the moral perspective, the primary advantage of capitalism over socialist and traditional political economies is not that it serves liberty better, nor its relative superiority in caring for the environment, nor its demonstrated ability to raise the lot of the poor. Capitalism’s primary moral advantage is brought out by John Paul II, who in recent documents speaks most clearly in favor of an anthropologically sound form of capitalism that recognizes the creative potential of active subjects.

As Novak interprets John Paul II in Centisimus Annus, the free market is the best system today to give reasonable expression to the anthropological truth that the human person is made in the image of God the Creator. Of course, the market must be appropriately guided, informed, and constrained by political and cultural forces (thereby excluding libertarianism). It is ethically wrong and (as the spectacular collapse of socialism demonstrates) disastrously inexpedient to deny human creativity its appropriate expression. No economic blueprint materializes here, but this is a vision broad enough to include political economies on the Left (Sweden, for example) and right (such as the United States).

It is unclear if this vision is broad enough to include a postwar Iraq rid of Saddam Hussein. Of course, this depends on the evolution of events in Iraq, but Islam itself need pose no obstacle. When we combine the Islamic doctrines about the holiness of creation, which was made by Allah, with its understanding of individual human responsibility, then we come close to what Novak has taken from Catholic social thought about the importance of the creativity of the human person. Because humans have been created in the likeness and image of God, human activity by its very nature can participate in the activity of God the Creator. This general perspective, a central underpinning for virtuous and successful democratic capitalism, is common to both the Islamic and Calvinist tradition. While this may be true, we still need to consider whether Islam is inherently radical, opposed to modern ideals of toleration, and ill-equipped to deal with modern processes.

Toleration: Islamic Radicalism, The World Trade Center, and Other Events

The event now succinctly called “9/11” was the worst attack ever on United States soil by a foreign force. More than that, this attack included other countries as well. Among the dead were citizens of Canada, Mexico, Dominican Republic, El Salvador, Venezuela, Colombia, Ecuador, Peru, Paraguay, Chile, Argentina, Uruguay, Brazil, the United Kingdom, Ireland, Portugal, Spain, France, Belgium, Denmark, Germany, Sweden, Switzerland, Italy, Egypt, Israel, Turkey, South Africa, Zimbabwe, Pakistan, Bangladesh, Thailand, Cambodia, Malaysia, Philippines, Taiwan, China, South Korea, Japan, Indonesia, and Australia. About 3,000 people were killed at the World Trade Center, including more than 200 Muslims.

Why did they do it? Why would anyone kill so many innocent people living and working on American soil? The reason most commonly offered – and I think we can accept it – is that the Muslim terrorists hate Western democracy, as represented most pointedly by the United States of America. They oppose what we consider the great and good things about this country: its freedom, democracy, free markets, and so forth. They have also denounced Western consumerism, sexual license, secularism, greed, and materialism. Whatever their reasons, their actions are a horrible offense against all humanity.

Fortunately, this highly radical form of Islam does not represent the faith of most Muslims. Anwar Sadat, president of Egypt in the 1970s and a devout Muslim man of peace, comes to mind. He was Time magazine's "Man of the Year" in 1977 and winner of the Nobel Peace Prize in 1978. (He gave the money to the poor over the objections of his wife!) Sadat, Israeli Prime Minister Menachem Begin, and President Carter signed the Camp David peace agreement on March 26, 1979. What a breathtaking sight that was: The most prominent political representatives of Islam, Judaism, and Christianity together signing a peace agreement.

In 1996 Madame Jehan Sadat, Sadat’s widow, described her husband and Islam this way:

Islam has been judged by images ever since some (radical) Iranian students held American diplomats hostage. Yet Islam is a religion based upon peace, love, and compassion. A religion that abhors violence and killing; upholding the sanctity of life is an obligation of all Muslims. Forgiveness for personal injuries is enjoined. Therefore, revenge and blood feuding are serious sins. And killing is one of the greatest sins. My husband was a devout Muslim who followed the teaching of Islam and lived by the words of the prophet Mohammed. One point I wish to stress is that Islam is not just a religion as religion is commonly understood in the West. It is a total way of life encompassing the entirety of man’s existence; not separating the spiritual from the material, the religious from the secular. It is a divine system governing man’s life by setting the rules and the standards for living. [2]

Hence it should be clear that Muslim terrorists who kill and maim people are no more representative of Islam than those involved in the Spanish Inquisition are representative of Christianity. Islam, Judaism, and Christianity all have in common great respect for human dignity. The Muslim population in the United States of America has climbed to 6.5 million, and many of them are the most patriotic of Americans. A profound understanding of this truth can only lead to greater mutual understanding and, one would hope, to a more peaceful world.

I believe that Islam actually is not inherently radical, not opposed to modern ideals of toleration, and not ill-equipped to deal with the modern processes. True, scholars and imams must retrieve the authentic tradition of Islam so that it can effectively manage itself in the modern world. This is an ambitious agenda, but I am confident that Islam in Iraq offers much promise in its ability to support a democratic capitalist system. It is a fascinating possibility for the Middle East as a whole. A democratic capitalist system in an Islamic environment will likely exist somewhat tangentially to the Sweden-United States spectrum given the way in which religion still embraces all of life under Islam. We will surely see a system that understands that freedom must be guided and that freedom cannot be understood as unrestricted license. The moral codes from the religious underpinnings will impinge much more strongly on daily economic activity for the reason given by Madame Jehan Sadat: Religion must encompass the entirety of a human’s existence if Islam is to be true to itself. The West might learn much from such a system, because it will surely be less decadent and will become remarkable in its own ways.

But I do not want to appear to be overly optimistic. The vision that I have described cannot happen overnight. Arab and non-Arab, Kurds, Turkmens, Yazidis, Sunni Muslims, and Shi'ite Muslims will have to live, work, and trade together in peace. They are richly blessed with natural resources (in this case oil), which cannot substitute for a smoothly working economic system, but can be a great asset to it.


1. The work is an important update from a previous work The Spirit of Democratic Capitalism. By his own account, Novak has gained a greater appreciation for the links between capitalism and creativity. He also writes in light of recent “groundbreaking” papal encyclicals that allow a certain reinterpretation of the entire tradition of Catholic social thought. Thirdly, the stunning collapse of communism in 1989 offers important data for reflection. For Novak, theology and (market) economics can and should achieve reconciliation because both sciences deal with the questions of incentives, private property, psychology of value, creative potential, and, most especially, human choice. In the case of Catholic social thought, Leo XIII began a course in this direction when he recommended the writings of St. Thomas, who achieved a synthesis of church and culture, as an important source for theology.

2. Madame Jehan Sadat, Presentation: “Religion and World Peace: A Muslim’s View,” Tanenbaum Center for Interreligious Understanding, New York City, April 18, 1996.