TheMarketForIdeas

Following the exploration in Part I of the historical interplay between religion, state, and economic life, this second part turns to the Eastern trajectories and, in particular, to the Iranian case as a revealing study. It concludes by returning to the central question: what truly makes a good life possible?

Buddha and the capitalist spirit in the East

But what about the East?

A precapitalist spirit – as a set of traits among individuals inclined toward saving – existed here many years before Europe.

The “state of mind,” in other words, had a significant temporal lead in this space.

What was missing? The permissive background.

Feudal dogmas, clothed in religious form, still constrained initiative, failing to inspire the pioneers of the new world – the middle classes, the “upstarts on the rise,” as Adam Smith called them –, those inclined toward risk and eager for gain, ready, for this purpose, to break with tradition. Until Asia found its own Calvin, in the person of Buddha, things stagnated.

Distancing from Confucianism – a conservative, group-oriented, and restrictive doctrine – opened the way toward individualism and the world of business. The infusion of rational, organizational spirit from the West, including through colonial influence, did the rest.

The Qur’an is not opposed to capitalist ethics

For the Muslim world, as a distinct part of the East, the Qur’an does not contain teachings hostile to capitalist economic practices.

On the contrary, it is far more permissive than is often believed, to such an extent that a specialist in the field, Maxime Rodinson, wrote – admittedly in 1966 – that Islam “grants a greater place to rationality than the canonical texts of Judaism and Christianity.”

Thus, the three Abrahamic religions, sharing a common ancestor, develop – through the Gospel, the Torah, the Qur’an, and the Sunnah – a philosophy which, when put into practice, cannot but improve life, anywhere and anytime. Even in areas such as restrictions concerning the role of women in society and in the workforce, or the regulation of alcohol and tobacco, at least in their early stages, the three religions displayed notable similarities.

The “success model” of the Islamic Republic of Iran

But neither East nor West has become “capitalist” in a uniform way.

Culture – and especially religion, as a major component of it – has determined both the rhythm and the physiognomy of these different capitalisms.

For a long time, I held the belief that, by its very nature, capitalism would eventually bring this world together. I even wrote, in 2000, in a book on capitalism, not without a certain emphasis, that “in the end, capitalism becomes liberalism or becomes nothing; that the alliance between a strong, authoritarian state and capitalism can only be temporary; that by its very nature capitalism erodes and represses despotism, whether state or individual.”

Today, I view this dynamic with real skepticism.

I am thinking of the capitalism – or whatever it may be – of the East. If the Korean, Israeli, Japanese, New Zealand models follow a Weberian line, the Islamic variant, embedded in republics and monarchies, raises serious questions about the internal capacity of such regimes to generate their own corrective mechanisms and evolve toward liberalism and democracy.

There are places where religious authority has not only failed to prepare the ground for people to act according to their nature, but has gained preeminence even over the state. In such systems, the economy no longer provides the essence; instead, ideology does – an ideology resembling a fusion of state and religion in which the state becomes increasingly invisible. As a result, developments no longer arise organically, but only through the will of an absolute master.

When that master comes from religion and claims to represent God directly in the exercise of power, the state – as a macro-managerial structure – disappears. This is the model of “perfect success” of religion’s victory over the state known as the Islamic Republic of Iran. I hesitate to think that this has anything to do with capitalism – or with God.

What happened in Iran?

I turn to this “case study” in order to better answer the question posed in the title.

In essence, I believe that Iran has reached this point primarily because religious authority was given free rein and, as elsewhere and at other times in history, demonstrated its ability to do what it has been inclined to do from the beginning: to seize and subjugate the state.

It is not new that such a trajectory leads to immeasurable harm. Niccolò Machiavelli remains relevant here, advising the Prince to use religious authority to maintain order and moral health, but as an instrument, under control. Equally interesting is his reflection on the direction from which corruption arises in this unhappy marriage: the Church, through its involvement in politics, corrupts the state – not the other way around. The logic? If it were not already corrupted and confined to its own affairs, it would not aspire to political power.

It is often said that every people get the leaders they deserve.

It is difficult to believe that the Iranian people deserve what their so-called Republic offers them today. Were they so gravely mistaken in 1979 when, instead of a Shah with authoritarian tendencies – admittedly – but open to the free world, leading a country in full development, with Sharia banned and Western-style institutions in place, they chose an ayatollah whose past should have inspired at least caution?

Did they not know that the Shah’s White Revolution of 1963 had angered the opposition led by the future Supreme Leader Ruhollah Khomeini precisely over the banning of Sharia and the confiscation of the clergy’s vast lands? A clergy which, together with religious foundations and large landowners, controlled around 70% of the country’s agricultural land – and which formed a “monstrous” coalition, supported by a misled population, that expelled the Shah in 1979?

What did they achieve by jumping from a lake into a deep well after nearly half a century of indigenous Shiite Islamism?

A bitter balance sheet

Here is a brief synthesis:

- A massive administrative-military-religious apparatus that drains the country’s resources. A pyramidal monstrosity with the ayatollah at the top, followed by 88 religious experts, 12 members of the Guardian Council, and the Islamic Revolutionary Guards – distinct from the army and consuming funds at a ratio of 1:8. Numerous foundations, under exclusive religious administration and beyond any control, circulate an estimated 20-30% of GDP. Together with the Revolutionary Guards, they control up to 60% of the economy. These entities are quasi-state: they do not pay taxes, are subsidized by national resources, and answer only to the Supreme Leader. The result? A country rich in hydrocarbons ranks around 120-130 globally in GDP per capita. In 1979, it ranked among the top 45-50. No comment.

- A state pushed to the margins, with a president and parliament reduced to decorative roles, as all important decisions must be approved by the Supreme Leader, including judicial ones. A terrifying dictatorship impossible to oppose: how do you resist a leader who claims to represent God directly? Any opposition becomes blasphemy.

- A systematic “carving” of citizens by these self-proclaimed superior beings, instilling obedience as natural law, aligned with Islam and the promise of a better afterlife – while rejecting individual initiative, political plurality, and the right to dissent. Over time, non-values risk becoming normalized, even for future generations.

- A Sharia that constitutionally lowers the marriage age for girls to as young as nine – what in the normal world is called paedophilia.

- A constitutional provision declaring Israel an illegitimate entity that must disappear.

And so on.

What is to be learned?

Is there anything to be learned from this?

The Iranian people will decide their own path. But for our purposes, several lessons stand out.

First, history shows that whenever religion is left unchecked – whether in East or West – it tends to subjugate the state and commit excesses.

Second, a division of labour must be enforced. The state should handle earthly matters – security, food, shelter. Religion should focus on enlightenment: helping us understand where we come from, why we are here, and where we are going.

Each must do its own job.

Third, religion deserves a place in education – but as history of religions, not dogma. Properly taught, it can deepen understanding without suppressing critical thinking.

Money means freedom

So how do we answer the question in the title?

The state can contribute – if it does not suffocate us.

Religion can contribute – even when its presence is subtle.

But money also matters.

When state power collaborates with religious authority and each stays within its proper domain, then God is with us – and money is not the devil’s eye. It can bring an additional good, if not happiness, at least a better life.

Because when it fills the wallet, even if not directly through its “clinking” functions, money remains, in the apt words of Fyodor Dostoevsky, “freedom minted.”

And without freedom, nothing exists.

The illusion of a world without money

The utopian socialists – and after them, the so-called scientific communists – intuitively grasped the link between money and freedom. With his characteristic charm, Karl Marx argued that in a society of free individuals, money would become unnecessary.

In other words, in a world where everything belongs to everyone, money would quietly disappear.

Joseph Stalin glimpsed the idea but placed it in a distant future. That distant horizon was brought dramatically closer by a disciple from the region – Pol Pot. Under his rule, the Khmer Rouge revolution in Cambodia in 1975 actually abolished money.

The result remains in history for its cruelty: famine, total dependence on state authority, and absolute control over the population. Without money, people became entirely dependent – and thus easily enslaved.

Final answer

We should take note when answering the question posed in the title.

Money is desirable – more of it, earned through honest work, skill, and entrepreneurial spirit. Only through it can poverty be driven out and a decent life achieved.

Only with money can we pay for the services we receive – from priests to doctors. With it, we can also give the state what is due, in order to benefit from public goods – though always under vigilance, lest it strip us bare.

In the end, a good life is made possible by a balance: a state that does not suffocate, a religion that illuminates, and money that sustains freedom.

Because without freedom, nothing is possible.