The Ethics of Banking: Conclusions from the Financial Crisis (Issues ...

160 10 Disturbance of the Invisible Hand
but his credit history. Newcomers to the United States could not obtain an American
credit card, however high their income, unless they could prove their credit history –
which is impossible for someone who has just arrived in the United States, since a
credit history in a foreign country does not count. Likewise, a bounced check or any
other problem in the credit history could make it impossible to obtain a credit card
or severely delay the prospect.
Uncertainty about the repayment of credit in the future can only ever be reduced
by the credit history, but never completely eliminated. The individual may suddenly
become a wastrel from one day to the next, and gamble away a small fortune in
Las Vegas. For that very reason, a high income is no insurance in the bank’s eyes.
High earners have more means of turning into big spenders than low earners do, so
if anything, customers with high incomes are somewhat riskier for the bank.
The belief in credit in the USA has evolved over a long period of time, in stark
contrast to continental Europe. In Austria, for instance, it is still necessary to pay a
credit tax of 0.8% of the credit sum on any loan taken out. The credit tax, as a tax on
income that one does not have but owes to somebody else, is highly paradoxical. It is
Maria-Theresian statism. Perhaps part of the difficulties of the financial crisis lie in
the fact that in the USA, the ready availability of credit was no longer matched by the
strict Calvinist ethos that debts, once entered into, must be serviced. Calvinism also
supports a balance between the affirmation of economic success and the demand for
frugality in consumption. This balance, too, seems to have been shaken in the period
before the financial crisis.
According to Max Weber, the Calvinist entrepreneur is motivated to creativity
and to outstanding business achievements by incentives of an economic (the enjoyment
of being successful in business) and a religious (proof of being in a state of
grace with God) nature. Weber’s The Protestant Ethic and the Spirit of Capitalism
(1905/1958) shows that religious, cultural and economic incentives and motives
overlap in capitalist entrepreneurship, and create an impetus for economic creativity
and performance.
The Calvinist theory of justification undergoes a revision in Calvin’s successors.
The religious good of justification and predestination is partly redefined in terms
of economic success by the emerging entrepreneurial class. The Protestants’ uncertainty
about their “state of grace” with God is alleviated by the idea that economic
success is a sign of divine favor toward the individual concerned.
For in puritanical Calvinism, even “faith” itself is not a sufficient sign that the
believer is chosen by God. According to the Westminster Confession of 1646, God
elects those destined for eternal life “out of his free grace and love alone, without
any foresight of faith or good works [emphasis added by the author] or perseverance
in either of them, or any other thing in the creature, as conditions, or causes moving
him thereunto;” 21 so neither faith nor good works give assurance that man is in
21 Westminster Confession, Chapter III. Of God’s Eternal Decree, § 5: “Those of mankind that are
predestinated unto life, God, before the foundation of the world was laid, according to his eternal
and immutable purpose, and the secret counsel and good pleasure of his will, hath chosen in Christ,
unto everlasting glory, out of his free grace and love alone, without any foresight of faith or good