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GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
101
Chapter 10
ENTERING FOREIGN MARKETS
Learning Objectives
After studying this chapter, you should be able to:
1. Identify ways in which institutions and resources affect liability of foreignness.
2. match the quest for location-specific advantages with strategic goals.
3. compare and contrast first-mover and late-mover advantages.
4. list the steps in the comprehensive model of foreign market entries.
5. participate in three leading debates on foreign market entries.
6. draw implications for action.
General Teaching Suggestions
As will be brought out in this chapter, answers to the When, Where, and How questions
are vital to successful entry into foreign markets. It may be useful for students to
recognize that they do not have to go overseas to see first hand how companies have
successfully entered foreign markets. After all, the U.S. is a foreign market to companies
based in Europe and Asia but some have been very successful in the U.S. Ask students to
identify such companies and have them relate chapter contents to those companies.
Opening Case Discussion Guide
Pearl Rives Goes Abroad: Exports, Green-fields, Acquisitions covers a piano producer
that has been successful in China but has been almost unknown outside the country. As a
result, it sought to expand into the US but was unable to attract customers by using a
famous brand. Instead, it focused on low price. In order to offer a product that would be
better known, it acquired a German piano company. Ask students what they would do if
they were in charge of the Pearl River organization. Make the German brand in China?
Merge the brand names so that the German name is beside the Pearl River name? Use the
German distribution network to promote the product from China?
_______________________________________________________________________
CHAPTER OUTLINE: KEY CONCEPTS AND TERMS
Sections I through VI of Chapter 10
_______________________________________________________________________
I. OVERCOMING LIABILITY OF FOREIGNNESS
1. Key Concept
When entering foreign markets, firms confront liability of foreignness. Both
institution- and resource-based views cover how to overcome such liability.
II. WHERE TO ENTER?
1. Key Concept
This depends on location-specific advantages and firms’ strategic goals, such as
seeking (1) natural resources, (2) market, (3) efficiency, and (4) innovation.
2. Key Terms
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
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duplicated, or posted to a publicly accessible website, in whole or in part.
102
• Agglomeration: beyond geographic advantages, location-specific advantages
also arise from the clustering of economic activities in certain locations.
• Cultural distance: the difference between two cultures along some identifiable
dimensions.
• Efficiency seeking firms often single out the most efficient locations featuring a
combination of scale economies and low-cost factors.
• Innovation seeking firms target countries and regions renowned for generating
world-class innovations.
• Institutional distance: the extent of similarity or dissimilarity between the
regulatory, normative, and cognitive institutions of two countries.
• Location-specific advantages: favorable locations in certain countries may give
firms operating there an advantage.
• Market seeking firms go after countries that offer strong demand for their
products and services.
• Natural resource seeking: certain resources are tied to particular foreign
locations.
• Stage models: a school of thought that believes that firms will enter culturally
similar countries during their first stage of internationalization and that they may
gain more confidence to enter culturally distant countries in later stages.
III. WHEN TO ENTER?
1. Key Concepts
In regards to first- and late-mover advantages (when to enter), each has pros and
cons, and there is no conclusive evidence pointing in one direction.
2. Key Terms
• First-mover advantages: defined as the advantages that first movers obtain and
that later movers do not enjoy.
• Late-mover advantages include free ride on first mover investments, resolution
of technical and market uncertainty, and exploit first mover difficulties.
IV. HOW TO ENTER
1. Key Concept
How to enter depends on the scale of entry: large-scale versus small-scale entries.
A comprehensive model of foreign market entries first focuses on the equity
(ownership) issue. The second step focuses on making the actual selection, such
as exports, contractual agreements, JVs, or wholly owned subsidiaries.
2. Key Terms
• Acquisition: a wholly owned subsidiary is created through direct foreign
investment.
• Build-operate-transfer (BOT) agreement: a nonequity mode of entry used to
build a longer-term presence.
• Co-marketing: refers to efforts among a number of firms to jointly market their
products and services.
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
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duplicated, or posted to a publicly accessible website, in whole or in part.
103
• Direct export: represents the most basic mode of entry, which capitalizes on
economies of scale in production concentrated in the home country and affording
better control over distribution.
• Equity mode: a mode of entry (JVs and wholly owned subsidiaries) that is
indicative of relatively larger, harder to reverse commitments.
• Green-field operation: a wholly owned subsidiary is created by building new
factories and offices from scratch.
• Indirect export: a strategy of exporting through domestically based export
intermediaries.
• Joint venture: a new corporate entity given birth and jointly owned by two or
more parent companies.
• Licensing/franchising: an agreement in which the licensor/franchisor sells the
rights to intellectual property such as patents and know-how to the
licensee/franchisee for a royalty fee.
• Modes of entry are the format of foreign market entries. Among numerous
modes of entry, managers are unlikely to consider all of them at the same time.
• Nonequity mode: a mode of entry (exports and contractual agreements) that
tends to reflect relatively smaller commitments to overseas markets.
• R&D contract: refers to outsourcing agreements in R&D between firms.
• Scale of entry involves the decision as to whether it should be large or small
scale.
• Turnkey project: refers to projects in which clients pay contractors to design
and construct new facilities and train personnel.
• Wholly owned subsidiaries (WOS): overseas business operations totally owned
and obtained by either starting from scratch or acquiring a local company.
V. DEBATES AND EXTENSIONS
1. Key Concepts
The three leading debates are (1) liability versus asset of foreignness, (2) global
versus regional geographic diversification, and (3) cyberspace versus
conventional entries.
2. Key Terms
Country-of-origin effect: The positive or negative perception of firms and
products from a certain country.
VI. MANAGEMENT SAVVY
1. Key Concepts
From an institution-based view, managers need to understand the rules of the
game, both formal and informal, governing competition in foreign markets. From
a resource-based view, managers need to develop overwhelming capabilities to
offset the liability of foreignness.
Managers must learn to match pre- and post-entry efforts with the firm’s strategic
goals.
_______________________________________________________________________
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
104
END-OF-CHAPTER GUIDE
*Review Question Answers
*Critical Discussion Question Answers
*Global Action
*Video Case
*Closing Case
REVIEW QUESTION ANSWERS
1. How might foreign firms suffer from liability of foreignness?
• First, there are numerous differences in formal and informal institutions
governing the rules of the game in different countries.
• Second, although customers in this age of globalization supposedly no longer
discriminate against foreign firms, the reality is that foreign firms are often still
discriminated against, sometimes formally and other times informally. In
government procurement, “buy national” is often required.
2. What does the institution-based view suggest about how a firm should deal with
the liability of foreignness? What does the resource-based view advise?
The institution-based view suggests that firms need to undertake actions deemed
legitimate and appropriate by the various formal and informal institutions
governing market entries. The resource-based view argues that foreign firms need
to deploy overwhelming resources and capabilities so that, after offsetting the
liability of foreignness, there is still some competitive advantage.
3. What are some of the location-specific advantages found in agglomeration?
Countries may give firms operating there some of the following advantages.
• Efficiency seeking firms often single out the most efficient locations featuring a
combination of scale economies and low-cost factors.
• Innovation seeking firms target countries and regions renowned for generating
world-class innovations.
• Market seeking firms go after countries that offer strong demand for their
products and services.
• Natural resource seeking: certain resources are tied to particular foreign
locations.
4. Describe how four strategic goals may affect the decision of where to enter.
Four strategic goals include natural resources, markets, efficiency, and
innovations. In discussing this question, it might be good to point out that the
specific industry will affect the amount of weight put on each of these goals. It is
possible that a given location may compare unfavorably on a specific goal but
that goal may be relatively unimportant compared to the other three and
perhaps the location excels on those three.
5. Summarize the advantages of being a first mover.
• First movers may gain advantage through proprietary technology.
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
105
• First movers may make preemptive investments.
• First movers may erect significant entry barriers for late entrants, such as
customer switching costs.
• Intense domestic competition may drive some nondominant firms to seek fortunes
abroad so as to avoid clashing with dominant firms head on in their home
market.
• First movers may build precious relationships with key stakeholders such as
customers and governments.
6. What are the possible benefits of being a late mover?
Late-mover advantages include free ride on first mover investments, resolution of
technical and market uncertainty, and exploit first mover difficulties.
7. How does a large-scale entry differ from a small-scale entry?
There are two primary strategies: (1) currency hedging and (2) strategic
hedging.
• Currency hedging: a transaction that protects traders and investors from
exposure to the fluctuations of the spot rate, it involves the transactions discussed
in question eight in which the intent is to transfer risk from the hedgers to
speculators.
• Strategic hedging: spreading out activities in a number of countries in different
currency zones to offset the currency losses in certain regions through gains in
other regions.
8. What are some of the hallmarks of each type of equity mode?
• Acquisition: a wholly owned subsidiary is created through direct foreign
investment.
• Joint venture: a new corporate entity given birth and jointly owned by two or
more parent companies.
• Wholly owned subsidiaries (WOS): overseas business operations totally owned
and obtained by either starting from scratch or acquiring a local company.
9. How might the country-of-origin effect change for a firm over time?
Over time, the country-of-origin effect may shift and affect the use of that
country’s name as part of the corporate name. Foreignness can either be a
liability or an asset and changes are possible.
10. Devise your own example of how a firm might use its capabilities to
overwhelmingly offset the liability of foreignness as it moves into a new foreign
market.
In regards to the examples, the important thing is not so much the answer as the
extent to which the student demonstrates thought in providing the answer.
Students should address such factors as where to enter, how to enter, and when to
enter, and attempt to explain how to use these factors to turn the liability into an
asset.
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
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duplicated, or posted to a publicly accessible website, in whole or in part.
106
11. If you were a manager charged with choosing a new location for your firm’s
business, how would you go about matching the location options with your firm’s
strategic goals?
The important thing is not so much the answer as the extent to which the student
demonstrates thought in providing the answer. There may be instances in which
no location would be ideal and the strategic goals may thus need to be modified.
12. Compare Maps 3.1 and 3.4
a. To what extent are the richest countries also among the easiest to do business?
Are any of the richest countries among the most difficult in which to do business?
Indicate whether you think the relationship is coincidental or causal and why you
think that way.
The countries that are the richest are among those that are easiest to do business
but none of the richest are among those countries which are the most difficult to
do business. Since making it easier to be creative and to do things that will add to
employment and income creates growth, the relationship is most likely not
coincidental.
b. If you were thinking of expanding your firm’s operations, you would probably
wish to go where it is easier to do business and where income is higher.
Furthermore, at least some of the poorest countries might like to have our firm
expand into them to help lift income. If such is the case, why don’t they simply
make it easier to do business? What do you think?
Explanations may vary but the values prevailing within countries and cultures
may be a factor. Countries may forego economic growth by placing more
restraints on firms if the pursuit of wealth is viewed with disdain, free markets are
not trusted, and the potential negatives of business operations are of greater
concern than the positive outcomes.
CRITICAL DISCUSSION QUESTION ANSWERS
1. Pick an internationally active industry in your country. What are the top five most
favorite markets for firms in this industry? Why?
The specific choices will depend on the student’s home country. Even students
from the same country who have picked the same choices may disagree as to the
“why?” part of the question, but their answers should reflect their understanding
of location advantages.
2. From institution- and resource-based views, identify the obstacles confronting
MNEs from emerging economies interested in expanding overseas. How can such
firms overcome them?
This is a question in which the answer is not as important as the thought process
and the ability to clearly articulate. Responses may include the possibility that a
company in an emerging economy may not be given the same level of respect as a
comparable company in an advanced economy. One way such a company could
gain greater respect would be to acquire an existing company in an advanced
economy.
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
107
3. ON ETHICS: Entering foreign markets, by definition, means not investing in a
firm’s home country. For example, Nissan closed factories in Japan and added a
new factory in the United States. GM shut down factories in the United States but
kept them open in Europe. What are the ethical dilemmas here? What are your
recommendations?
You should first start out by asking students whether there is truly an ethical
dilemma. Within the United States firms will sometimes shut down an operation in
one part of the country and expand in another part of the country. Ask students
as to the reasons for the actions of Nissan. After discussing why such actions
might make sense, encourage them to explore for relocation actions that might be
unethical: examples might include using relocation as example of what a
company will do if it does not get its way regarding a labor contract or proposed
legislation.
GLOBAL ACTION
1. The most important element of your company’s success in its domestic market
thus far has been its electronic readiness and competitiveness. This has
allowed the organization to develop very stringent internal processes and
controls that are the envy of the industry. As such, entering a foreign market
requires a sufficient level of technological prowess among possible target
locations. An evaluation of the “e-readiness” of specific locations can provide
considerable insight for your company’s anticipated internationalization in
Asia. Gather information and provide an overview of the five most
technologically ready Asian locations.
Exercise 1 Answers
One resource which can be used is “EIU: E-readiness Rankings 2009”. This
website can be found by entering the search term “e-readiness” at the
globalEDGE™ Resource Desk search box located at
http://globaledge.msu.edu/resourceDesk/. Once at the website, follow the link to
download the briefing paper (found at the bottom). Then, scroll to page 5 of the
report where Singapore, Hong Kong, Taiwan, South Korea, and Japan are found
to have the highest e-readiness among Asian locations. On page 4 of the report, it
is discovered that consumer and business adoption is the most important element
of this ranking while legal environment is the category with the lowest
importance.
Search Term: “e-readiness”
Resource Name: EIU: E-readiness Rankings 2009
Website:
http://www.eiu.com/site_info.asp?info_name=ereadiness&page=noads&rf=0
globalEDGE™ Tag: Rankings
2. Global competition is determined in part by both efficiency and innovation.
To develop a foreign market entry strategy for your company, a colleague
informed you of a competitiveness report that is published periodically to
evaluate the standing of each specific economy worldwide. Locate this report
for assessment. Which countries rank highest on both measures of efficiency
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
108
and innovation? Which regions of the world appear to rank well for each
category?
What conclusions may be drawn from this information?
Exercise 2 Answers
One resource which can be used is “World Economic Forum: Global
Competitiveness Report”. This website can be found by entering the search term
“competitiveness report” at the globalEDGE™ Resource Desk search box located
at http://globaledge.msu.edu/resourceDesk/. Once at the World Economic Forum:
Global Competitiveness Report website, click on the “Download the Full Report”
link (located in the middle). After accessing the data available, the top 5 most
efficient countries are: the U.S., Singapore, Switzerland, Canada, and Hong Kong.
In addition, the top 5 most innovative countries are: the U.S., Japan, Switzerland,
Sweden, and Germany. For efficiency, a more equal global distribution appears to
be present (2 North American, 2 Asian, and 1 European entity) than with
innovation (3 European, 1 North American, and 1 Asian entity). While student
answers may vary, the notion of efficiency could be related to implementation
capabilities while innovation could be linked to creative capabilities in each
national entity.
Search Term: “competitiveness report”
Resource Name: World Economic Forum: Global Competitiveness Report
Website:
http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Repor
t/index.htm
globalEDGE™ Tag: Country Level
VIDEO CASE
Watch “Researching and Understanding Markets” by Luke Johnson of Channel 4
Television. In the following questions, imagine that your company is seeking to
expand into another country through the use of an acquisition or at least a major
equity position in a local firm.
4. Which would be better, to gain control of a small firm that you then seek to
expand, or to acquire a company that is among the top five in its industry? Why?
According to Johnson, when expanding into an industry that is dominated by a
few players, it is better to acquire one of those big players who can crush the
smaller players than to be one of the smaller players who can be crushed.
2. What would be the benefit of expanding in an industry that is fragmented?
An industry that is fragmented is not dominated by any big firm capable of
crushing others thus such an industry may offer a better chance of survival and
even growth.
3. Johnson indicates that sometimes instead of investing in a given industry, it
may be best to expand into one that can benefit from that industry. How does
he use FedEx and UPS as an example of that concept? Evaluate the pros and
cons of that approach.
When online retailing first began to develop, some companies directly involved
commanded high prices for their stock so Johnson instead chose to invest in
companies that would benefit from the success of the online retailers – i.e. those
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or
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109
involved in delivering the goods bought online. One “pro” of that approach is
that it avoids buying the stock of companies directly involved in a growth industry
that may be selling at such a high price that they would have to enjoy a huge
amount of growth to ever justify that high price. On the other hand, the stock of a
company benefiting from the growth industry may have received less investor
attention and thus sell at a lower price - a price which will go up as the growth
industry expands.
4. Johnson points out the benefit of looking for a niche. Do you think there is
more or less risk in entering a niche overseas market through acquisitions?
Johnson points to the value of a niche but he also points out that a niche in itself
does not assure success – good management is still needed. He illustrates that
point with a personal story of how he hoped to benefit from delivery firms that
support online retailing in Europe but instead invested in a loser organization.
5. Pick a specific firm or industry and show how you would use Johnson’s
advice in entering a foreign market.
This is not a question with a right or wrong answer. However, students’ answers
should demonstrate that they have determined who the bigger players in their
chosen industry/market are, and should reflect a thoughtful analysis behind their
choices and plans.
CLOSING CASE
• Closing Case Discussion Guide
When considering entering a foreign market, there may be laws and customs that
would seem to eliminate any incentive to enter that market. The case provides an
excellent example in which a barrier continues to exist but the firm uses creativity
to avoid the barrier and achieve success.
• Closing Case Discussion Question Answers
1. What resources and capabilities does Naver have that Google does not?
Naver has gone beyond simply being a search engine and has been creative in
providing a variety of other services that its customers find to be useful.
2. Why are the top two search engine providers in Japan foreign entrants, while in
South Korea and China, it is a domestic incumbent that dominates the industry?
The foreign firms in Japan were pioneers and Japanese firms have found
themselves continually playing catch up.
3. Does Naver have what it takes to succeed in overseas markets, such as Japan and
the United States?
Naver has a very effective approach that may enable it to be successful in new
markets. The firm studies it markets and targets its services in a way that deals
with the unique elements of a given market.
GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
110
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I prefer congratulating the authors of l'Université Catholique on
the firmness and fidelity with which they have remained faithful to
their name and standard. In their excellent design, and on account
of the conciliatory spirit which pervaded it, they encountered a
shoal under their prow. They ran the danger of being induced to
become effeminate and enervated, to pervert their own doctrines,
the Catholic doctrines and spirit, in order to render their
accommodation more in accordance with the ideas and spirit of the
age. More than once analogous attempts, conceived in the best
intentions, have split on this rock. It is thus that we have heard
applied to natural religion and the general spirit of religion; these
maxims that the dogma is of little consequence, the moral only
being of importance, that various creeds must be brought back to
those portions which they hold in common, and formulas and
prayers be drawn up which may suit all alike: thence the desire to
transform the great principles and facts of Christianity into symbols
left to the interpretations of philosophy; those strange efforts also
to unite the revolutionary with the religious spirit; or, lastly, those
attempts to deny, or at least consign to oblivion the past of the
Catholic church, her traditions, her customs, which ages and events
have united with her, and substitute, under the name of Primitive, a
newly invented Catholicism. False conceptions, vain endeavours,
from which pious feeling and a certain knowledge of our social
state have not always been free, but which denote little knowledge
of human nature or religion, and a superficial appreciation of the
means by which great institutions, whether religious or civil, are
founded and endure. No doubt but that Catholicism has something,
has much to do in order to adapt itself to all that is new in the
world, and to take in our social system the place and part suitable
to it. But let it be true to itself, let it not deny its origin, its history,
its doctrine, its law; let it not stoop to cowardice or hypocrisy. It
would lose its dignity which is essential to its strength, it would fail
in obtaining the new strength which it needs. Were I not convinced
that harmony may be re-established between the old religion and
modern society with truth and honor to both, I would not counsel
the attempt. God does not admit of the possibility of falsehood in
such high positions for such great objects.
Let, then, l'Université Catholique proceed in its course of exact
and scrupulous orthodoxy. It is said, I hope truly, that she has
many of the clergy for readers. They should be on their guard
against attacks on these points. Sometimes, despite appearances of
moderation, the attempts succeed, and strike a blow on the vital
conditions of their existence. By others they are drawn into the
very passions and pursuits from which their mission is mainly
intended to keep mankind. Generally such have hitherto had but
little success. The most recent example, that of M. l'Abbé de
Lamennais, has eventuated in one of the most melancholy
spectacles of error and fall that man can present. Surely there are
here just reasons for distrust and hesitation. The authors of
l'Université Catholique are clearly aware of it themselves; for
they have been careful to keep themselves clear of these unhappy
flights, and to remain, in their own words, "immovably attached to
the rock of the Church." They doubtless are so from conviction and
duty. They should also be so from prudence, and attend to all the
sentiments, scruples, and susceptibilities of the Catholic portion of
the public. It is this public especially whom they address, it is the
public whom they wish to enlighten, satisfy, reassure, and reconcile
with the true progress, the accomplished facts and necessities of
our time. That is really the great service wanted by modern society.
Let them never lose sight of this essential end. And as to that part
of the public which is ruled by the spirit of the age, no doubt their
language should reassure and quiet it also, and draw it back to
religion, for it has very justly its own susceptibilities and distrusts.
But let not the authors of l'Université Catholique deceive
themselves; they will inspire the public with the greater respect and
confidence according as they are themselves found serious and
faithful. The public will be the more easily attracted to religion, as
she presents herself stable and lofty; for, in the uneasiness which is
now prevalent, the public aspire to something fixed and elevated,
despite of the passions which still keep it wavering and abased.
Whilst in Catholicism this new religious and social movement, of
which l'Université Catholique appears to be the most serious
manifestation, is beginning, an analogous work is going on in the
other Christian communions, and reveals itself by remarkable signs.
For many years something fruitful and active has been at work in
French Protestantism. Almost immediately after the establishment
of peace and international relations in 1814, the English dissenters,
struck by the languid state of religion in France, and animated by
faith and a strong desire for proselytism, undertook the task of
awaking amidst their continental co-religionists the religious spirit,
or, more precisely, Protestant Christian feelings. Journeys,
correspondence, publications, sermons, pious associations—of
which some, as the Bible Society, the Society for the Propagation of
the Gospel, the Religious Tract Society, possess extent and notoriety
—were the instruments used to forward their design; a design
which excited and still excites in French Protestantism some trouble
and embarrassment. The established Protestant church was moved.
Indifference took offence. Toleration and reason felt some alarm.
Impressions not altogether at first void of reason; facts which
deserve observation and watchfulness, but of which the importance
in our society, and with the guarantees of our laws and customs, is,
in my opinion, much less than that of the religious feeling which
roused them, and its character and results. The Christian faith, the
real and profound faith in the constituent dogmas of Christianity, is
springing up again amidst Protestants, but accompanied by that
liberty and assiduous search which alter the form of unity but keep
up religious vitality; which cares less for the government of men's
minds than for the internal life of their souls. This life has its
instincts, its imperious and everlasting wants. There is no
indifference, no authority, which does or can abolish or cause to be
long forgotten the essential and eternal problems of our nature and
destiny. Whence does evil spring in the world and in ourselves?
How is it to be escaped? Is our own liberty sufficient? Is God's
power over and in us needed? What are the relations here below
and hereafter between God and our souls? What lot awaits us
beyond this life, and how far do our resolutions and actions
influence it? This is the definite and practical object of religion.
These the questions to which mankind has, through all ages, in all
the earth, in every condition, in the confusion of controversy, in the
secret heart desired and asked an answer. This is promised to him
by Christianity. The dogmas of that faith are replies to these
questions, so vital to man generally and individually. These replies
are contained in Christian books, and are succeeded by the
precepts, the consolation, and the hopes which flow from them. To
seek them there, to read them, to draw continually from that spring
the means of opposing the evil inclinations, the passions, the
weaknesses, the disquiet, the langour of the soul, thereby
sustaining it in this world and regenerating it for eternity; such is
the Christian Protestant spirit, the spirit which is again animating
the French Protestants; the spirit which has had and may again
have its faults, like all great ambitions and all great aspirations of
the human soul, but which is nevertheless a spirit of true piety and
true morality; which suffices for our most exalted intellects, and
exercises for all, in all, the most salutary influence over our inward
dispositions and outward actions.
Many periodical works, amongst them the Semeur, [Footnote 3]
and the Archives of Christianity in the XIX. Century, are
devoted to this spirit, and seek to satisfy and spread it.
[Footnote 3: The Semeur has ceased to appear.]
In them all publications, all the incidents which belong at home or
abroad to Christian life, are examined, commented on, debated
with a reality and earnestness of conviction always rare, but now
especially so. Men of rare ability, too, and first of all M. Vinet,
professor of French literature at Lausanne, write for the Semeur,
and often with the most distinguished talent. I might find in these
works, even without going very deeply into the question of their
doctrines, some traces of political radicalism, very injurious to
religion; and also, in matters of religion, traces of a severe and
somewhat exclusive spirit, which, when dominant, tends to
sectarianism and fanaticism. But clearly here as elsewhere the good
spirit of the age, the spirit of light, of justice, and universal
benevolence will every day make its way; will clothe the religious
spirit of ideas and sentiments in words which will suit them
admirably, but which they have not always worn. And thus here as
elsewhere I prefer dwelling on what is good to what is evil. When
the movement which is good preponderates, I believe in its power;
I trust to it, strenuous as may be the opposition, tardy as its
progress may appear.
Have we not besides, in liberty, liberty of conscience and speech,
the most certain and efficacious of guarantees against fanaticism
and religious despotism. L'Université Catholique maintains, and
will unceasingly uphold the maxims, traditions, and laws of
Catholicism. At her side, the spirit of Protestantism reveals herself
full of faith and vigour. And as in the bosom of Protestantism the
Semeur and the Archives of Christianity do not express the
feelings of all, other collections—the Protestant Review, the Free
Enquiry, the Evangelist—labour to make clear and nourish
another idea, more scientific, more attached to modern notions and
a national church, more occupied in enlightening than deeply
stirring the mind.
I do not doubt but that, in this fresh springing up of different
beliefs, men interested in their success, and the different sections
of the public whom they address, reciprocally inspire but little
mistrust or disquiet; that the remembrance of ancient dislikes,
ancient animosity still lurk in many a heart, and may break out
afresh. It may be occasionally discerned, with all its want of
reflection and its harshness. However, take it altogether, the spirit
of antipathy and contest, which has so long prevailed in the
religious sphere, is becoming weaker and less common. Each creed
is more occupied about itself than about others; more anxious to
impress the hearts that are inclined to its reception or have
received it, than quarrel with those who maintain their own belief.
This is the natural result of liberty, and the check imposed on every
belief by the civil power which sustains it. It is also the most
favourable condition for the very creeds themselves, as obliging
them to proceed directly towards their true object, and prevents
them from turning aside to alter or lower themselves in despotism
or rebellion.
The spirit of religion comes again into the world to conquer but not
to usurp. Religious creeds rise and increase together, at once free
and contented; free to elevate themselves, to elevate souls to
heaven, restrained by their mental liberty and by the independence
of the civil power. Let us honor the community in the bosom of
which such a sight is possible! It needs, it absolutely needs that
religion should step in to purify and strengthen it; but religion can
do her work there without dishonor or sacrifice, and when she can,
it becomes her bounden duty to do so.
Essay III.
Catholicism, Protestantism, And Philosophy In
France.
Catholicism, Protestantism, And Philosophy In
France.
(July, 1838.)
It is of Catholicism and Protestantism, not of religion or even
Christianity in general, that I wish to speak.
I regret that I cannot find a word to suit me better than
Philosophy. The nature of things forbids it. But in order to make
myself at once and clearly understood, I hasten to say that I here
call Philosophy every opinion which disclaims, under whatever
name or shape, any faith as restrictive of human thought, and
which leaves thought, in religious matters as in all others, free to
believe or not to believe, and guide itself by its own authority.
It is also of France, and France alone, that I speak. The condition
of Catholicism, Protestantism, and Philosophy is not the same in
France and elsewhere, after our moral and social revolutions, as it
is in countries which have not undergone such changes. I wish to
say nothing but that which results from and applies to precise facts.
The time has arrived in such matters for dealing with real facts,
and setting aside general terms which avoid the questions they
affect to settle.
I am convinced that Catholicism, Protestantism, and Philosophy, in
the bosom of the novel state of society in France under the Charter,
can live peaceably, both as regards themselves and society; in
peace not only material but moral, not only obligatory but
voluntary,—without submission, without abasement,—both with
truth and with honor.
I wish to prove it.
I repeat my first position. This peace must be established; it is
necessary.
Look at the state of things.
Catholicism, Protestantism, Philosophy, and modern French society
can neither destroy one another, nor change nor remodel
themselves as they wish.
They are facts, old, powerful, living, and indestructible from the
remotest times. They have resisted the longest and most severe
trials, ages of order and days of chaos.
For ages has new France, the France of the Charter, been forming
itself and increasing. Every thing has opposed it, yet everything has
contributed to its triumph, the church, nobility, royalty, the court,
the greatness of Louis XIV., the inactivity of Louis XV., the wars of
the empire, the peace after the restoration. She has surmounted
even her own faults, as well as the efforts of her enemies.
Catholicism was born at the same time and in the same cradle as
modern Europe. It has associated itself with all the labours of
European civilization. It has survived all its transformations. In our
own days it has sustained the most terrible shock that has ever
been encountered by a creed and a church. It has been raised up
again by the hands of the very destroyers themselves. It appears
again. Enter the family circle, traverse the country, then will be
seen what the power of Catholicism is, in spite of the
lukewarmness of many of the faithful members—even of many of
the priests.
The lot of Protestantism in France has been hard. It has had
against it the king and the people, the literati of the seventeenth,
the philosophers of the eighteenth century; at one time it appeared
as if extirpated by Catholicism, at another as absorbed by
philosophy. It has yielded neither to persecution nor ridicule. It still
exists, and is no sooner restored to liberty than it exhibits all its
ancient fervour.
As for Philosophy, she has sustained many checks amidst her
triumphs. It is easy to set forth her follies and mistakes. She has
much to amend in what is past, but nothing to fear for the future.
Most of the principles which she proclaimed have become rights.
The rights have become facts. The new social condition to which
philosophy has given rise will not be more averse to her than the
old one which she has overcome.
These are all clearly powers full of life, and which a long futurity
awaits. They have struggled roughly but in vain. They have been
unable to destroy each other.
They will neither change or perish. No doubt they will modify
themselves according to their new position. They will listen to
reason. They will bow to necessity, but without renouncing their
principles or sacrificing their nature. They can make no such
concession. What characteristics and vitality they have must
remain. To renounce this would be to die.
Thus, without metamorphosis and as God and time have made
them, are these powers called to dwell side by side under the same
social roof.
What will happen if they do not live in peace, sincere peace?
Shall we again see the old wars which our fathers have seen?
War between Catholicism and Protestantism? Between religious
creeds and philosophy? Between the Church and the new-modelled
State? Shall we see a revival of every fanaticism, lay and clerical,
philosophic and religious?
It is not likely. Here and there, indeed, in books, in newspapers,
even in the gravest publications, hints are given of such a
restoration of things: attacks by Catholics on Protestant impiety, by
Protestants against popish idolatry, by devotees against reason and
its lights, by philosophers against faith and the clergy. A war of
words, often sincere, frequently cold, always powerless. Doubtless,
the old leaven of hatred and war, deep laid in every human heart,
still exists, but it will no more arouse society. Customs as well as
laws will prevent this. Even the inclination will soon fail those most
anxious for it. The voices which still preach this strife, passionate,
radical, and mortal, either of Christian communities between
themselves, or of Philosophy against Christianity, are the voices of
dying men, already deserted on the battle-field where they persist
in staying. This is rather what will happen.
Living neither in peace nor at war, forced to admit vicinity without
friendship, and distrust without violence, Catholicism, Protestantism,
Philosophy, and in their train society in general, will descend, grow
cold, and languish. The dignity and power which spring from truly
moral communications will be equally wanting in all. A dry and
barren spirit will prevail in relations which are purely official and
matters of routine; and we should see spreading and strengthening
itself, becoming permanent and in some sort legally consecrated,
that spirit of indifference at the same time disdainful yet
subordinate, cold yet insecure. This is the lot of societies which are
kept together by the bond of administrative regulations alone, void
of moral life, that is, of faith and devotion.
Was it then to arrive at this state of things, that for ages human
genius displayed itself so gloriously in our country? Was it to end at
last in this degradation that all the great creeds, all the moral
forces, have contended with so much eagerness and glory for the
empire of our society?
They must save it and themselves from this disgraceful peril. They
must accept, respect, and loyally serve the new social state; they
must learn to live amicably together in its bosom.
I say they must! It is an immense point in a great work to look
upon success as indispensable and vital. The feeling of necessity
gives to those whom that necessity pleases, much power; to the
opposite party much resignation. A passionate desire supports even
more than it deceives. And here there is indeed room for such a
desire; for, during a long future, the honor and moral repose of
society are at stake. It cannot remain in this state of apathy and
uneasiness in which the mind languishes and exhausts itself. Man
desires for his soul more activity and more security, a firmer
ground, a higher flight. The true agreement of the great intellectual
powers can alone grant him these.
How can this be accomplished?
I grapple at once with the more notorious and serious of the
difficulties,—the nature of Catholicism and the conditions of its
agreement with the new state of society which has attacked it, and
been in its turn so roughly attacked.
I set aside, too, without hesitation, the questions of religion,
properly so called; questions which concern the dealings of God
with man, questions about the safety of the human soul.
Not that I look on them with indifference, or that their importance
is not now as it has always been, overwhelming and immense. It
ought, on the contrary, to be frequently repeated, for in our day it
has been too much forgotten, and it is the real object, and
substance, nay, the essence of religion. The moral quality, the rule
of conduct for man in his relations with man, is important. The
mental calm and resignation of men in the trials of life is important.
The Christian religion teaches these, and thence its great position
upon earth and in society. But it does more, it goes far beyond
human society and this world. It binds man to God, it reveals to
him the secret of this awful tie, it teaches him what he ought to
believe and do in respect to his relation to God and his prospect of
eternity. Imperishable things from which man may turn aside his
gaze, but which do not disappear from his nature; sublime wants
from which he cannot free himself, though he may mistake and
deny them—the law of these things, the satisfying of these wants,
that is to say, the dogma and its consequences, constitute the
Christian religion, the first which has really understood and
embraced its object.
But in these questions and in the dogmas which reply to them,
nothing can now arouse between Catholicism and civil society
either conflict or embarrassment. In this matter, the State proclaims
not only the liberty but the right of the church, and declares itself
absolutely incompetent to interfere. And here lies whatever truth
exists in that deplorable and confused saying which has excited so
much comment, "The law is atheistical." Surely not so. The law
is not atheistical. How should it be so? Is the law a real living
being, a being with a soul which approaches to or recedes from
God, which may be lost or saved? "Human societies," says M. Royer
Collard, "live and die on the earth, there they fulfil their destinies."
But they do not comprehend man as an entire. After he has bound
himself to society there still remains to him the noblest part of
himself, the high faculties by which he raises himself to God, to a
future life, to unknown good in an invisible world. We, as
individuals, as beings endowed with immortality, have a different
destiny from states.
And it is on this account that the State should not interfere with
that other destiny. As its nature and aim are different from her
own, as the two have nothing in common, to interfere must
produce confusion and usurpation.
That which the state now proclaims was taught to it by the Church,
the Catholic Church. During centuries when the state wished to
interfere in matters of opinion and salvation, did not the Church
distinctly reject such pretensions. And how did she do so? By the
distinction of temporal and spiritual, of terrestrial and eternal life,
that is, by the incompetence of the state to deal with the relations
of the soul with God.
And the Catholic Church was right in sustaining this principle, the
forgetfulness of which has cost her much. How did she lose a
portion of her empire? How came Henry VIII. amongst others to
separate from her? By proclaiming the temporal power competent
to matters of faith and salvation. Let Catholicism go back to the
sixteenth century, to the history of the reformation. It is by the
confusion of the two powers, by this religious competence of the
state, that she has suffered the rudest shocks. The Catholic Church
has no more dangerous enemies than lay theologians, whether
princes or doctors.
They are the more dangerous foes because religious motives are
not those which alone may animate them, and lay usurpations in
matters of faith have often served as a veil to the most worldly
interests. Had the religious incompetence of the state always been
acknowledged, the church would not so often have seen her
property as well as her power in danger or lost.
She has henceforth nothing similar to fear. Usurpation is on both
sides forbidden. Her kingdom belongs to herself alone; she
possesses it completely and securely.
On this side, the great side of Christian religion in this world, peace
is easy and may be sincere between Catholicism and the new social
state.
Let us see where the real difficulty exists.
The government of the Catholic Church is a power invested in her
own domain, and in matters of faith and salvation, with the
character of infallibility.
I put aside, great as they are, all secondary questions, such as the
knowledge of the conditions and limits in which infallibility exists, to
whom it belongs, to the Holy Seat or to Councils, or to the Holy
Seat and Councils united. I look to the one principle which is found
in every combination and form of Catholic belief.
The principle itself is founded on the perpetuity of divine revelation,
faithfully preserved in the church by means of tradition, and
renewed when needful by the inspiration of the Holy Spirit, which
ceases not to descend on the successor of St. Peter who was
placed at the head of the church by Jesus Christ himself.
This is the essential and vital principle, the base and summit, the
Alpha and Omega of Catholicism.
Against a power of such a nature and origin, where it really
manifests itself, all discussion, resistance, and separation are
unlawful.
The new state of society and constitutional France has its principle
also, which has become that of its government.
All human power is fallible, and must be controlled and limited.
Every human society has the right of controlling and limiting,
directly and indirectly, in such and such measures, and under such
or such form, the power which it obeys.
I do not soften the problem. I set forth the two principles. They are
essentially different; they are said to be hostile.
They would be so indeed, could they meet and display themselves
in the same sphere. But here I find the remedy I sought.
When ages ago the church so loudly and vehemently insisted on
the distinction of the spiritual and temporal, she was acting in the
interest of her own dignity and founding her own liberty. She was
doing more. She thereby maintained the dignity of man, and laid
the foundations of liberty of conscience.
The separation of spiritual from temporal, the doctrine of the
church; and the separation of the religious and civil state, the
doctrine of our constitutional regime; the independence of religious
society in matters of faith, conquered by the church in the earlier
days of modern Europe; and liberty of conscience, a victory
achieved by modern society,—have one and the same principle at
the root. The application and form may be different, the origin and
moral signification entirely agree.
Hence the means of peace and harmony between Catholicism and
our new society.
Suppose that the two principles, the separation of spiritual and
temporal, of the religious and civil state, were (and it is possible,
since at the root they agree) sincerely and completely allowed,
respected and practised by church and state; whence would the
conflict spring?
The Catholic church would loudly maintain her infallibility in the
religious sphere, that is, as regards the connexion between spiritual
power and the faithful. The state would insist upon liberty of
conscience and thought in the social sphere, that is, in the relations
of the temporal power with the citizens. Each power would advance
according to its principles, parallel, and without collision.
What then is the obstacle?
It is rather historical than reasonable. It arises from the passed
deeds and ancient life of the two powers, rather than from their
essential principles and actual relations.
The separation of the spiritual and temporal originates in the chaos
of the middle ages. It sprung from thence, as the sun appears
through a dark and stormy sky. Principles and powers, ideas and
situations, all have been in our Europe wonderfully obscure,
confused, incoherent, incomplete. There has long been a depth of
temporal affairs mixed with spiritual, spiritual with temporal, in the
existence and constitution of the church and state. Hence the
temptations and attempts, both frequent and terrible, at reciprocal
usurpation. The confusion of facts and violence of passions
struggled incessantly against the principle which strove to restrain
them.
That is the lot of truth here. It is boasted of but disdained, invoked
yet rejected, at once admitted and proscribed; here supreme, there
powerless. Man deserves no better, the world fares no better than
that.
However, after many efforts on certain memorable days some truth
does detach itself, and rises so high that she shines brightly and
commands respect.
The separation of the spiritual and temporal has had this fortune.
Church and state, bishops and philosophers, opinion and law have
contributed in turn to secure it for her. It is a principle now so well
established amongst us, that neither persons nor things, neither
mind nor art, could be kept long clear from its influence.
Since the great ambitions which have disturbed the world be but
foolish pretensions, it behoves them carefully to avoid the last risk
they can run, that of becoming ridiculous squabbles. Let the two
powers, instead of painfully lowering themselves to seize though
but for a few days, some fragments from the past confusion, admit
fully both as regards right and deed their mutual incompetence; let
each establish itself firmly in its special sphere, let each loudly
proclaim its principle—the Catholic church, its infallibility in religious
orders; the State, the liberty of thought in social concerns. Not only
will they then live in peace, but they will respect and serve
themselves really in spirit and in truth, and not in a superficial
appearance which is unworthy of both.
I say they will respect each other in spirit and in truth, and I regret
that I can but glance at the subject. Certainly, setting aside all faith
and law, the vital principle of Catholicism, the religious infallibility of
the church,—and the vital principle of our civil society, the liberty of
conscience and thought,—have a right to the respect, the former of
the boldest thinkers, the latter of the most pious and the strictest
minds. But I have not room here to enter suitably on such a
question; I may attempt it some day.
As to the practical benefits of a true pacification to the Catholic
Church and to constitutional France, they are immense. What is the
prevailing ill of our temporal society?
The weakening of authority. I do not allude to that strength which
insists on being obeyed. Never had power greater command of it;
never perhaps so much. I allude to that authority recognized
beforehand on principle in a general way, received and felt as a
right which is not obliged to resort to force; that authority before
which the spirit bows without abasement of heart, and which
speaks from on high with the influence not of constraint, but
nevertheless of necessity.
That is truly authority. It is not the only principle of the social state.
It does not suffice for the government of men. But without it
nothing will suffice; neither argument unceasingly persevered in,
nor well-understood interest, nor the material preponderance of
numbers. Where authority is wanting, whatever the force,
obedience is precarious or mean, even near the extreme of
rebellion or of servility. Catholicism has the essence of authority; it
is authority itself, systematically conceived and organised. It lays it
down in principle, and puts it in practice with great firmness of
teaching, and a rare intelligence of human nature.
Did this spirit prevail in our society, or did it lean towards it, there
would be need to seek elsewhere counterbalances and limits. But
the danger is clearly not there; and whilst our institutions and
manners cherish in us the spirit of individual independence in
thought as well as life, it is a great blessing to society, to its
morality as well as its repose, that other causes, other methods of
teaching maintain the principle of authority and the spirit of internal
submission.
"I learnt in the army what one learns no where else—respect;" said
an old retired non-commissioned officer of the Imperial Guard, in
1820.
Catholicism is the greatest, the most holy school of respect that the
world has ever seen. France was brought up in this school, in spite
of the ill use which human passions have often made of her
precepts. The abuse is now little formidable; the benefit ought to
be great, for we have great need of it.
Catholicism itself is suffering at present from a grievous malady.
This is the prevailing coldness and routine, the predominance of
form over foundation, of external practice over internal feelings.
This arises from the often hypocritical incredulity of the eighteenth
century, not very distant from the nineteenth; and also from the
preponderance, which has long been excessive, in the church, of
the government over the vital principle, of ecclesiastical authority
over religious life.
Some analogy existed in this respect between the church and state
in the last century. On both sides power was afoot with its old
organization, in the hands of its former possessors; but amongst
the subjects there was little faith and little love.
What is it, nevertheless, that has saved Catholicism from
shipwreck? It is that it was a popular religion and faith. The
Catholic government yielded, the Catholic people survived. M. de
Monlosier was right; in our days, too, it was the cross of wood
which saved the world.
The safety is yet incomplete. The church has risen, but many a soul
languishes. Catholicism needs faith, a more inward and lively faith.
It is the vague and ill-regulated feeling of this want, which has for
some time inspired those dreams of absolute independence, of
rupture between church and state, those shiverings of the fever of
democracy, which, under the name of M. l'Abbé de Lamennais,
have scandalised the faithful and made the indifferent smile.
Mad, shameful dreams which urge Catholicism to abjure her
principles and history, to hand herself over to the contagion of
modern evil and to dishonour while she destroys herself.
It is not in such devious ways that Catholicism will find religious
life. This will, on the contrary, be found by her remaining faithful to
herself in the new position frankly accepted. This position is worthy,
strong, favorable to the progress of faith and fervour. It possesses
towards the state a fair measure of liberty and alliance, towards the
faithful the suitable independence as well as the needful intimacy;
no evil hopes, no worldly distractions, nothing which can render
zeal impure or even suspected; but nothing, on the other hand,
which attacks the traditions or customs of the Church, nothing
which tends to deprive it of the august character of elevation and
stability. The Catholic Church is thus placed in constitutional France;
and success, religious and social, belong to the use of proper
measures, as by proper measures success is certain.
The situation of Protestantism is more simple: some persons even
affect to consider it more favourable. The general feeling which
prevails in our days, our political and domestic alliances, the
analogy of principle between constitutional France and Protestant
England, all seem to say that Protestantism is in favour. There are
some even who pretend to the discovery of a plot to make France
Protestant.
This does not deserve even a passing remark.
There was a time, not very distant, when Protestantism did not
seem so well placed in France. I do not speak of the Restoration;
even under the empire it was often said that Protestantism had a
republican tendency, that her maxims were contrary to stability and
power. The spirits of Protestantism and revolution were considered
as related.
This is still repeated. It has become a party theme; and
Protestantism is perseveringly represented as incompatible with
social order, peaceful dispositions, and monarchy.
Happily, Protestantism is not a thing of yesterday in Europe; it
appeals to history and facts for a reply.
If there be any where three countries which, for fifty years, amidst
the overthrow of ideas, states, and dynasties have given striking
proofs of affection for their institutions and princes, for the
conservative and monarchical spirit, they are assuredly England,
Holland, Prussia—three Protestant countries, the three Protestant
countries par excellence in Europe; countries, too, wonderful for
order, for industry, and for prosperity; countries which greatly
conduce to the power and glory of modern civilization. There can
be no more decisive answer to the worn out declamations of
ancient party spirit, nor do they deserve more ample discussion.
French Protestantism is peculiarly free from this ridiculous reproach.
It has not been remarkable for receiving too much protection or
justice. It enjoys them as a new acquisition, with modesty and
gratitude. Never was a religious society disposed to evince towards
the civil power greater deference and respect.
Protestantism, by a singular amalgamation, has been blamed for
too much deference even in this respect. It has been accused of
lowering religion, and making the church subservient to the state.
This, it is said, is the consequence of the fall of the ecclesiastical
hierarchy, the great governing power of the Catholic church, which
Protestantism has attacked. Thus the division between spiritual and
temporal has disappeared; the spiritual has fallen under the yoke of
the civil power.
I have already said sufficient of the separation of spiritual and
temporal, to avoid the suspicion of thinking ill of it. It is one of the
most glorious forms which, in modern Europe, the independence of
thought and faith has assumed. It is the principle in virtue of which
Catholicism must, in the midst of modern institutions and ideas,
assume a worthy and secure place.
But in spiritual as in temporal order, it is necessary that liberty have
but one aspect and be exclusively attached to this or that
combination. Religion has more than one method of preserving her
dignity and independence; God plants it and causes it to prosper in
more than one soil, in more than one climate.
In fact, taking things together, faith has been strong, and
conscience has displayed itself with energy in Protestant countries,
in spite of the doubtful lines of demarcation between the two
domains, and the too frequent intervention of the civil power in
religious matters.
This is because the civil power has never made religious matters its
chief concern. Politics, governments, properly so called, have
absorbed its attention and power. Sooner or later, it has ended by
leaving consciences to themselves; it has, at all events, left the
reins more loose and the field more free than has been the case in
Catholic countries, where there has been a power devoted to the
sole task of ruling spiritual society.
Thus, too, there is in every society, political or religious, a certain
intimate and permanent tendency which gets the better of all forms
of organization and all accidents of situation. Protestantism sprang
from free enquiry. It is her standard. It has never been abandoned
by her, whatever share she may have taken in the civil rule; I will
go so far as to say, the civil despotism. In short, human thought, in
religion as in every other matter, has displayed itself with infinite
activity and freedom in Protestant countries.
Do we forget, besides, the first and most powerful cause of
spiritual independence? It is that Protestantism,—she cannot avoid
it,—admits into her bosom great differences of faith and practice,
dissents, separations, sects in short. She may have often
condemned and persecuted them, but she has never deemed
herself obliged to curse and extirpate them. They have lived and
multiplied under Protestantism, in the teeth of the national church;
ill-treated, humiliated, but never forced from some last retreat;
always, to a certain degree, protected by the spirit of free enquiry,
its examples and recollections. This affords a strong pledge for
liberty of conscience, and opens an asylum to all who may have
been attacked or vexed on account of their faith by the civil power.
If the Anglican church has, with some justice, though much
exaggeration, been accused of complaisance towards the temporal
sovereign, the English dissenters have, on the other hand,
unceasingly proclaimed their haughty independence of her. The
shield which the Catholic church has found in the separation of the
spiritual and temporal, has been found by Protestantism in the
freedom, even though incomplete, of religious dissent and the
multiplicity of sects.
And as a just reward for this dawn of liberty, the Protestant sects
are not so widely severed as they appear to be from the national
Church and the State. Persecuted, irritated, even rebellious, they
have nevertheless strongly adhered, with hidden yet deep feeling,
to the common centre of belief and the public destiny. An ardent
Puritan was, under Queen Elizabeth, sent to the pillory and
condemned to have his hand cut off. The hand falls; with his left,
he raises his large hat, crying "God save the Queen!" Almost
invariably in critical circumstances, when the vital interests of the
national religion or of the country appeared to be compromised, the
English dissenters have rallied round the state, and though
forsaking her religious banner, have still served her with exemplary
devotion.
I have little taste for sectarian spirit, but never should
Protestantism when in power set up as a national church, and treat
dissenters with rigour or disdain; for it owes in part to them the
maintenance of its dignity, as well as the fervour of faith and the
progress of liberty of conscience. Above all, never should our
constitutional monarchy trouble itself about dissent, should it one
day arise, in French Protestantism. It could not possess political
importance, or tend to weaken the tie which binds the Protestants
of France to the new social condition and its governing power.
Protestantism, while free from political danger, has, in a purely
religious point of view, much good to do in France; not by drawing
France to her standard, by converting her, to use the customary
phrase. Conversions on either side are and will henceforward be
few, and the importance which some persons attach to them as a
matter of joy or regret is somewhat puerile. It is a step and a most
important step for the individuals, but one of no social moment.
France will not become Protestant. Protestantism will not become
extinct in France. One reason among many is decisive. The struggle
of these days of ideas and empire is not between Catholicism and
Protestantism. Impiety and immorality are the enemies which both
have to resist. To restore the spirit of religion is the work to which
both are called. The work, like the evil, is immense. A slight
probing of the wound, a short but serious glance at the moral state
of the masses of men, whose minds are so fluctuating, whose
hearts so empty, who desire so much and hope so little, who pass
so rapidly from the excitement of fever to mental torpor,—and the
observer will be penetrated with sadness and alarm. Catholics or
Protestants, priests or laymen, be ye whom ye may, do not, if
believers, be uneasy about each other; reserve that for those who
believe not. There is the field for work, there the harvest. The field
is open to Protestantism as to Catholicism; work will not be wanting
to either; each has the aptitude and peculiar qualities to enable it
to labour with success.
We suffer from very different moral complaints.
Some are above all things wearied and disgusted with the
uncertainty and disorder of men's minds. They need a harbour
sheltered from every point, a light which is ever steady, a guiding
hand which never trembles. They ask from religion rather support
to weakness than aliment for activity. They require her, while
elevating, to sustain them; while touching their hearts, to keep
down their understandings; while animating their inward life, to
give them at the same time, and above all else, a deep sense of
security.
Catholicism is wonderfully adapted to this frame of mind, now so
common. She has gratifications for desires, remedies for suffering.
She knows how at once to subdue and to please. Her grasp is
strong, her prospects full of charm for the imagination. She excels
in occupying while soothing the soul, which she suits after periods
of great fatigue; for without leaving it cold or idle, she saves it
much trouble, and undertakes for it the burden of responsibility.
For another class of minds, though also suffering and separated
from religion, more intellectual and physical activity is required.
They too feel the need of returning to God and the faith; but they
are used to examine everything themselves, and only to receive
that which they acquire by their own labour. They wish to shun
incredulity, but liberty is dear to them; there is in their religious
tendency more thirst than lassitude. To such, Protestantism may
gain access, for while it speaks to them of piety and faith, it
encourages and invites them to make use of their reason and
liberty. It has been accused of coldness. That is a mistake. In
ceaselessly appealing to free and personal examination it takes
deep root in the soul, and becomes easily an inward faith, in which
the activity of the understanding keeps up instead of extinguishing
the fervour of the heart. And hence its connexion with the modern
spirit, which formerly in its youth was at the same time reasoning
and enthusiastic, eager for conviction as for liberty, and which,
despite its momentary quiescence, has retained its old nature and
will infallibly resume its double character.
Catholicism and Protestantism must never lose sight of our system
of society, for it is on this that they must work. Let each of them
appeal to it in its own way, looking for and attending to the wounds
or wants for the cure or satisfaction of which they are best
calculated. That is their true, their efficacious and disinterested
mission, not looking at each other and seeking a renewal of
controversy.
In general, I believe controversy is but of little use, and has little
religious effect. In every age it has taken but a small part in the
triumph of great moral truths. They establish themselves, especially
at their first appearing, by direct and dogmatic exposition. We have
in the gospels the most remarkable and august example. From their
earliest day, neither motive or occasion of controversy was wanting
with Jew or pagan. Yet we scarcely meet with it in the preaching
either of Jesus Christ or of the apostles. They lay down their rule of
faith, their precepts; they knock without ceasing at the doors of the
hearts which they desire to enter. They do not trouble themselves
to argue with their adversaries. Controversy arises later, and when
it does, it soon disfigures the truth, for it distributes it in fragments
among parties, sects, men; and each holds fast, with the
intractable blindness of self-love, to the fragment which has fallen
to his lot, in which he wishes to see, and that others should see,
truth in her entirety.
Let them keep clear of controversy; let them attend little to each
other, much to themselves and their task. Catholicism and
Protestantism will then dwell peaceably, not only within its new
state, but together.
I know that this peace will not be that spiritual unity which has
been so talked of. Spiritual unity, beautiful in itself, is in this world
chimerical; and from chimerical it becomes tyrannical.
As finite and free beings, that is to say, incomplete and fallible,
unity escapes us, and we constantly miss it.
Harmony in liberty is the only unity to which men here below can
pretend. Or, rather, it is for them the best, the only mode of
elevation towards that true unity which all violence, all constraint,—
that is, every invasion of spiritual by material order,—throws back
and obscures, under the pretext of attaining it.
Harmony in liberty is the spirit of Christianity. It is charity united
with zeal. It is also the object of philosophy, for it is the true, the
moral sense of the principle of toleration and equal protection of
the rites of worship; a principle which impiety has violated by trying
to set it up as the standard of indifference and contempt for
religion, but which allies itself wondrously with zeal and faith, for
on their right it is itself founded.
The alliance must be ratified. I say must in concluding, as I did
when beginning. Peace between religious creeds is now imposed on
all alike by our social condition. Harmony in liberty is their legal
condition, their charter. Let them yield to it in spirit as in act; let
them love it while obeying it. I fear not the fate of a false prophet,
when I predict that religion will be thereby as great a gainer as
society.
As to Philosophy, she has in our days the glory of not having
remained a Utopia. From discoveries she has proceeded to
conquests. She has metamorphosed her ideas into facts and
institutions; a formidable change, as it reveals not only the errors
of the first thought, but for a time misleads and corrupts it by
plunging it into the vortex of human passions; nevertheless a great
glory, and one which assigns to philosophy a high position in the
new social state.
It is a rare privilege to be able, without embarrassment, worthily to
acknowledge and abjure error. Philosophy can do this, for, politically
speaking, victory belongs to her, and not only victory but power.
Though much self-deceived, she has done much. She has reason
for pride as well as for modesty. She can afford to show herself
just, benevolent, and respectful to her former adversaries. She
cannot be charged with weakness or cowardice.
Practically, experience has enlightened her. She knows better than
she did the true condition of morality and human society. She
knows that she herself is not all-sufficient, that she suffices not
entirely for souls or nations, that in human nature and in the
general course of affairs the share due to religion is immense, and
that philosophy should not contest it with her.
To go still deeper, philosophy herself is about to become seriously
and sincerely religious. Like Catholicism, like Protestantism, she
cannot change her nature, she must remain philosophy, that is to
say free and independant thought, whatever her field of action. But
as regards religious questions, she sees that she has often been
short-sighted and hasty, that neither impiety nor indifference
constitutes true knowledge, that the proudest spirit may humble
itself before God, and that there is philosophy in faith itself.
All this is still very vague, and I speak but vaguely of it. However,
so it is. It is on this slope that philosophy is now placed, and along
it that she must hereafter advance. Her future must be great in the
midst of that society which she has formed. The future must be
great for spiritual order as a whole, religious and philosophical. May
this destiny be accomplished! May spiritual order recover her
activity and renown, with a peace and harmony hitherto unknown.
Therein consists the dignity of man! therein the strength of society.
End.
[Transcriber's note: The following text is not part of the originals
book, but seems worthy of inclusion.
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  • 5. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 101 Chapter 10 ENTERING FOREIGN MARKETS Learning Objectives After studying this chapter, you should be able to: 1. Identify ways in which institutions and resources affect liability of foreignness. 2. match the quest for location-specific advantages with strategic goals. 3. compare and contrast first-mover and late-mover advantages. 4. list the steps in the comprehensive model of foreign market entries. 5. participate in three leading debates on foreign market entries. 6. draw implications for action. General Teaching Suggestions As will be brought out in this chapter, answers to the When, Where, and How questions are vital to successful entry into foreign markets. It may be useful for students to recognize that they do not have to go overseas to see first hand how companies have successfully entered foreign markets. After all, the U.S. is a foreign market to companies based in Europe and Asia but some have been very successful in the U.S. Ask students to identify such companies and have them relate chapter contents to those companies. Opening Case Discussion Guide Pearl Rives Goes Abroad: Exports, Green-fields, Acquisitions covers a piano producer that has been successful in China but has been almost unknown outside the country. As a result, it sought to expand into the US but was unable to attract customers by using a famous brand. Instead, it focused on low price. In order to offer a product that would be better known, it acquired a German piano company. Ask students what they would do if they were in charge of the Pearl River organization. Make the German brand in China? Merge the brand names so that the German name is beside the Pearl River name? Use the German distribution network to promote the product from China? _______________________________________________________________________ CHAPTER OUTLINE: KEY CONCEPTS AND TERMS Sections I through VI of Chapter 10 _______________________________________________________________________ I. OVERCOMING LIABILITY OF FOREIGNNESS 1. Key Concept When entering foreign markets, firms confront liability of foreignness. Both institution- and resource-based views cover how to overcome such liability. II. WHERE TO ENTER? 1. Key Concept This depends on location-specific advantages and firms’ strategic goals, such as seeking (1) natural resources, (2) market, (3) efficiency, and (4) innovation. 2. Key Terms
  • 6. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 102 • Agglomeration: beyond geographic advantages, location-specific advantages also arise from the clustering of economic activities in certain locations. • Cultural distance: the difference between two cultures along some identifiable dimensions. • Efficiency seeking firms often single out the most efficient locations featuring a combination of scale economies and low-cost factors. • Innovation seeking firms target countries and regions renowned for generating world-class innovations. • Institutional distance: the extent of similarity or dissimilarity between the regulatory, normative, and cognitive institutions of two countries. • Location-specific advantages: favorable locations in certain countries may give firms operating there an advantage. • Market seeking firms go after countries that offer strong demand for their products and services. • Natural resource seeking: certain resources are tied to particular foreign locations. • Stage models: a school of thought that believes that firms will enter culturally similar countries during their first stage of internationalization and that they may gain more confidence to enter culturally distant countries in later stages. III. WHEN TO ENTER? 1. Key Concepts In regards to first- and late-mover advantages (when to enter), each has pros and cons, and there is no conclusive evidence pointing in one direction. 2. Key Terms • First-mover advantages: defined as the advantages that first movers obtain and that later movers do not enjoy. • Late-mover advantages include free ride on first mover investments, resolution of technical and market uncertainty, and exploit first mover difficulties. IV. HOW TO ENTER 1. Key Concept How to enter depends on the scale of entry: large-scale versus small-scale entries. A comprehensive model of foreign market entries first focuses on the equity (ownership) issue. The second step focuses on making the actual selection, such as exports, contractual agreements, JVs, or wholly owned subsidiaries. 2. Key Terms • Acquisition: a wholly owned subsidiary is created through direct foreign investment. • Build-operate-transfer (BOT) agreement: a nonequity mode of entry used to build a longer-term presence. • Co-marketing: refers to efforts among a number of firms to jointly market their products and services.
  • 7. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 103 • Direct export: represents the most basic mode of entry, which capitalizes on economies of scale in production concentrated in the home country and affording better control over distribution. • Equity mode: a mode of entry (JVs and wholly owned subsidiaries) that is indicative of relatively larger, harder to reverse commitments. • Green-field operation: a wholly owned subsidiary is created by building new factories and offices from scratch. • Indirect export: a strategy of exporting through domestically based export intermediaries. • Joint venture: a new corporate entity given birth and jointly owned by two or more parent companies. • Licensing/franchising: an agreement in which the licensor/franchisor sells the rights to intellectual property such as patents and know-how to the licensee/franchisee for a royalty fee. • Modes of entry are the format of foreign market entries. Among numerous modes of entry, managers are unlikely to consider all of them at the same time. • Nonequity mode: a mode of entry (exports and contractual agreements) that tends to reflect relatively smaller commitments to overseas markets. • R&D contract: refers to outsourcing agreements in R&D between firms. • Scale of entry involves the decision as to whether it should be large or small scale. • Turnkey project: refers to projects in which clients pay contractors to design and construct new facilities and train personnel. • Wholly owned subsidiaries (WOS): overseas business operations totally owned and obtained by either starting from scratch or acquiring a local company. V. DEBATES AND EXTENSIONS 1. Key Concepts The three leading debates are (1) liability versus asset of foreignness, (2) global versus regional geographic diversification, and (3) cyberspace versus conventional entries. 2. Key Terms Country-of-origin effect: The positive or negative perception of firms and products from a certain country. VI. MANAGEMENT SAVVY 1. Key Concepts From an institution-based view, managers need to understand the rules of the game, both formal and informal, governing competition in foreign markets. From a resource-based view, managers need to develop overwhelming capabilities to offset the liability of foreignness. Managers must learn to match pre- and post-entry efforts with the firm’s strategic goals. _______________________________________________________________________
  • 8. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 104 END-OF-CHAPTER GUIDE *Review Question Answers *Critical Discussion Question Answers *Global Action *Video Case *Closing Case REVIEW QUESTION ANSWERS 1. How might foreign firms suffer from liability of foreignness? • First, there are numerous differences in formal and informal institutions governing the rules of the game in different countries. • Second, although customers in this age of globalization supposedly no longer discriminate against foreign firms, the reality is that foreign firms are often still discriminated against, sometimes formally and other times informally. In government procurement, “buy national” is often required. 2. What does the institution-based view suggest about how a firm should deal with the liability of foreignness? What does the resource-based view advise? The institution-based view suggests that firms need to undertake actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries. The resource-based view argues that foreign firms need to deploy overwhelming resources and capabilities so that, after offsetting the liability of foreignness, there is still some competitive advantage. 3. What are some of the location-specific advantages found in agglomeration? Countries may give firms operating there some of the following advantages. • Efficiency seeking firms often single out the most efficient locations featuring a combination of scale economies and low-cost factors. • Innovation seeking firms target countries and regions renowned for generating world-class innovations. • Market seeking firms go after countries that offer strong demand for their products and services. • Natural resource seeking: certain resources are tied to particular foreign locations. 4. Describe how four strategic goals may affect the decision of where to enter. Four strategic goals include natural resources, markets, efficiency, and innovations. In discussing this question, it might be good to point out that the specific industry will affect the amount of weight put on each of these goals. It is possible that a given location may compare unfavorably on a specific goal but that goal may be relatively unimportant compared to the other three and perhaps the location excels on those three. 5. Summarize the advantages of being a first mover. • First movers may gain advantage through proprietary technology.
  • 9. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 105 • First movers may make preemptive investments. • First movers may erect significant entry barriers for late entrants, such as customer switching costs. • Intense domestic competition may drive some nondominant firms to seek fortunes abroad so as to avoid clashing with dominant firms head on in their home market. • First movers may build precious relationships with key stakeholders such as customers and governments. 6. What are the possible benefits of being a late mover? Late-mover advantages include free ride on first mover investments, resolution of technical and market uncertainty, and exploit first mover difficulties. 7. How does a large-scale entry differ from a small-scale entry? There are two primary strategies: (1) currency hedging and (2) strategic hedging. • Currency hedging: a transaction that protects traders and investors from exposure to the fluctuations of the spot rate, it involves the transactions discussed in question eight in which the intent is to transfer risk from the hedgers to speculators. • Strategic hedging: spreading out activities in a number of countries in different currency zones to offset the currency losses in certain regions through gains in other regions. 8. What are some of the hallmarks of each type of equity mode? • Acquisition: a wholly owned subsidiary is created through direct foreign investment. • Joint venture: a new corporate entity given birth and jointly owned by two or more parent companies. • Wholly owned subsidiaries (WOS): overseas business operations totally owned and obtained by either starting from scratch or acquiring a local company. 9. How might the country-of-origin effect change for a firm over time? Over time, the country-of-origin effect may shift and affect the use of that country’s name as part of the corporate name. Foreignness can either be a liability or an asset and changes are possible. 10. Devise your own example of how a firm might use its capabilities to overwhelmingly offset the liability of foreignness as it moves into a new foreign market. In regards to the examples, the important thing is not so much the answer as the extent to which the student demonstrates thought in providing the answer. Students should address such factors as where to enter, how to enter, and when to enter, and attempt to explain how to use these factors to turn the liability into an asset.
  • 10. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 106 11. If you were a manager charged with choosing a new location for your firm’s business, how would you go about matching the location options with your firm’s strategic goals? The important thing is not so much the answer as the extent to which the student demonstrates thought in providing the answer. There may be instances in which no location would be ideal and the strategic goals may thus need to be modified. 12. Compare Maps 3.1 and 3.4 a. To what extent are the richest countries also among the easiest to do business? Are any of the richest countries among the most difficult in which to do business? Indicate whether you think the relationship is coincidental or causal and why you think that way. The countries that are the richest are among those that are easiest to do business but none of the richest are among those countries which are the most difficult to do business. Since making it easier to be creative and to do things that will add to employment and income creates growth, the relationship is most likely not coincidental. b. If you were thinking of expanding your firm’s operations, you would probably wish to go where it is easier to do business and where income is higher. Furthermore, at least some of the poorest countries might like to have our firm expand into them to help lift income. If such is the case, why don’t they simply make it easier to do business? What do you think? Explanations may vary but the values prevailing within countries and cultures may be a factor. Countries may forego economic growth by placing more restraints on firms if the pursuit of wealth is viewed with disdain, free markets are not trusted, and the potential negatives of business operations are of greater concern than the positive outcomes. CRITICAL DISCUSSION QUESTION ANSWERS 1. Pick an internationally active industry in your country. What are the top five most favorite markets for firms in this industry? Why? The specific choices will depend on the student’s home country. Even students from the same country who have picked the same choices may disagree as to the “why?” part of the question, but their answers should reflect their understanding of location advantages. 2. From institution- and resource-based views, identify the obstacles confronting MNEs from emerging economies interested in expanding overseas. How can such firms overcome them? This is a question in which the answer is not as important as the thought process and the ability to clearly articulate. Responses may include the possibility that a company in an emerging economy may not be given the same level of respect as a comparable company in an advanced economy. One way such a company could gain greater respect would be to acquire an existing company in an advanced economy.
  • 11. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 107 3. ON ETHICS: Entering foreign markets, by definition, means not investing in a firm’s home country. For example, Nissan closed factories in Japan and added a new factory in the United States. GM shut down factories in the United States but kept them open in Europe. What are the ethical dilemmas here? What are your recommendations? You should first start out by asking students whether there is truly an ethical dilemma. Within the United States firms will sometimes shut down an operation in one part of the country and expand in another part of the country. Ask students as to the reasons for the actions of Nissan. After discussing why such actions might make sense, encourage them to explore for relocation actions that might be unethical: examples might include using relocation as example of what a company will do if it does not get its way regarding a labor contract or proposed legislation. GLOBAL ACTION 1. The most important element of your company’s success in its domestic market thus far has been its electronic readiness and competitiveness. This has allowed the organization to develop very stringent internal processes and controls that are the envy of the industry. As such, entering a foreign market requires a sufficient level of technological prowess among possible target locations. An evaluation of the “e-readiness” of specific locations can provide considerable insight for your company’s anticipated internationalization in Asia. Gather information and provide an overview of the five most technologically ready Asian locations. Exercise 1 Answers One resource which can be used is “EIU: E-readiness Rankings 2009”. This website can be found by entering the search term “e-readiness” at the globalEDGE™ Resource Desk search box located at http://globaledge.msu.edu/resourceDesk/. Once at the website, follow the link to download the briefing paper (found at the bottom). Then, scroll to page 5 of the report where Singapore, Hong Kong, Taiwan, South Korea, and Japan are found to have the highest e-readiness among Asian locations. On page 4 of the report, it is discovered that consumer and business adoption is the most important element of this ranking while legal environment is the category with the lowest importance. Search Term: “e-readiness” Resource Name: EIU: E-readiness Rankings 2009 Website: http://www.eiu.com/site_info.asp?info_name=ereadiness&page=noads&rf=0 globalEDGE™ Tag: Rankings 2. Global competition is determined in part by both efficiency and innovation. To develop a foreign market entry strategy for your company, a colleague informed you of a competitiveness report that is published periodically to evaluate the standing of each specific economy worldwide. Locate this report for assessment. Which countries rank highest on both measures of efficiency
  • 12. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 108 and innovation? Which regions of the world appear to rank well for each category? What conclusions may be drawn from this information? Exercise 2 Answers One resource which can be used is “World Economic Forum: Global Competitiveness Report”. This website can be found by entering the search term “competitiveness report” at the globalEDGE™ Resource Desk search box located at http://globaledge.msu.edu/resourceDesk/. Once at the World Economic Forum: Global Competitiveness Report website, click on the “Download the Full Report” link (located in the middle). After accessing the data available, the top 5 most efficient countries are: the U.S., Singapore, Switzerland, Canada, and Hong Kong. In addition, the top 5 most innovative countries are: the U.S., Japan, Switzerland, Sweden, and Germany. For efficiency, a more equal global distribution appears to be present (2 North American, 2 Asian, and 1 European entity) than with innovation (3 European, 1 North American, and 1 Asian entity). While student answers may vary, the notion of efficiency could be related to implementation capabilities while innovation could be linked to creative capabilities in each national entity. Search Term: “competitiveness report” Resource Name: World Economic Forum: Global Competitiveness Report Website: http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Repor t/index.htm globalEDGE™ Tag: Country Level VIDEO CASE Watch “Researching and Understanding Markets” by Luke Johnson of Channel 4 Television. In the following questions, imagine that your company is seeking to expand into another country through the use of an acquisition or at least a major equity position in a local firm. 4. Which would be better, to gain control of a small firm that you then seek to expand, or to acquire a company that is among the top five in its industry? Why? According to Johnson, when expanding into an industry that is dominated by a few players, it is better to acquire one of those big players who can crush the smaller players than to be one of the smaller players who can be crushed. 2. What would be the benefit of expanding in an industry that is fragmented? An industry that is fragmented is not dominated by any big firm capable of crushing others thus such an industry may offer a better chance of survival and even growth. 3. Johnson indicates that sometimes instead of investing in a given industry, it may be best to expand into one that can benefit from that industry. How does he use FedEx and UPS as an example of that concept? Evaluate the pros and cons of that approach. When online retailing first began to develop, some companies directly involved commanded high prices for their stock so Johnson instead chose to invest in companies that would benefit from the success of the online retailers – i.e. those
  • 13. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 109 involved in delivering the goods bought online. One “pro” of that approach is that it avoids buying the stock of companies directly involved in a growth industry that may be selling at such a high price that they would have to enjoy a huge amount of growth to ever justify that high price. On the other hand, the stock of a company benefiting from the growth industry may have received less investor attention and thus sell at a lower price - a price which will go up as the growth industry expands. 4. Johnson points out the benefit of looking for a niche. Do you think there is more or less risk in entering a niche overseas market through acquisitions? Johnson points to the value of a niche but he also points out that a niche in itself does not assure success – good management is still needed. He illustrates that point with a personal story of how he hoped to benefit from delivery firms that support online retailing in Europe but instead invested in a loser organization. 5. Pick a specific firm or industry and show how you would use Johnson’s advice in entering a foreign market. This is not a question with a right or wrong answer. However, students’ answers should demonstrate that they have determined who the bigger players in their chosen industry/market are, and should reflect a thoughtful analysis behind their choices and plans. CLOSING CASE • Closing Case Discussion Guide When considering entering a foreign market, there may be laws and customs that would seem to eliminate any incentive to enter that market. The case provides an excellent example in which a barrier continues to exist but the firm uses creativity to avoid the barrier and achieve success. • Closing Case Discussion Question Answers 1. What resources and capabilities does Naver have that Google does not? Naver has gone beyond simply being a search engine and has been creative in providing a variety of other services that its customers find to be useful. 2. Why are the top two search engine providers in Japan foreign entrants, while in South Korea and China, it is a domestic incumbent that dominates the industry? The foreign firms in Japan were pioneers and Japanese firms have found themselves continually playing catch up. 3. Does Naver have what it takes to succeed in overseas markets, such as Japan and the United States? Naver has a very effective approach that may enable it to be successful in new markets. The firm studies it markets and targets its services in a way that deals with the unique elements of a given market.
  • 14. GLOBAL BUSINESS 2e Chapter 10: Entering Foreign Markets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 110
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  • 16. I prefer congratulating the authors of l'Université Catholique on the firmness and fidelity with which they have remained faithful to their name and standard. In their excellent design, and on account of the conciliatory spirit which pervaded it, they encountered a shoal under their prow. They ran the danger of being induced to become effeminate and enervated, to pervert their own doctrines, the Catholic doctrines and spirit, in order to render their accommodation more in accordance with the ideas and spirit of the age. More than once analogous attempts, conceived in the best intentions, have split on this rock. It is thus that we have heard applied to natural religion and the general spirit of religion; these maxims that the dogma is of little consequence, the moral only being of importance, that various creeds must be brought back to those portions which they hold in common, and formulas and prayers be drawn up which may suit all alike: thence the desire to transform the great principles and facts of Christianity into symbols left to the interpretations of philosophy; those strange efforts also to unite the revolutionary with the religious spirit; or, lastly, those attempts to deny, or at least consign to oblivion the past of the Catholic church, her traditions, her customs, which ages and events have united with her, and substitute, under the name of Primitive, a newly invented Catholicism. False conceptions, vain endeavours, from which pious feeling and a certain knowledge of our social state have not always been free, but which denote little knowledge of human nature or religion, and a superficial appreciation of the means by which great institutions, whether religious or civil, are founded and endure. No doubt but that Catholicism has something, has much to do in order to adapt itself to all that is new in the world, and to take in our social system the place and part suitable to it. But let it be true to itself, let it not deny its origin, its history, its doctrine, its law; let it not stoop to cowardice or hypocrisy. It would lose its dignity which is essential to its strength, it would fail in obtaining the new strength which it needs. Were I not convinced that harmony may be re-established between the old religion and modern society with truth and honor to both, I would not counsel
  • 17. the attempt. God does not admit of the possibility of falsehood in such high positions for such great objects. Let, then, l'Université Catholique proceed in its course of exact and scrupulous orthodoxy. It is said, I hope truly, that she has many of the clergy for readers. They should be on their guard against attacks on these points. Sometimes, despite appearances of moderation, the attempts succeed, and strike a blow on the vital conditions of their existence. By others they are drawn into the very passions and pursuits from which their mission is mainly intended to keep mankind. Generally such have hitherto had but little success. The most recent example, that of M. l'Abbé de Lamennais, has eventuated in one of the most melancholy spectacles of error and fall that man can present. Surely there are here just reasons for distrust and hesitation. The authors of l'Université Catholique are clearly aware of it themselves; for they have been careful to keep themselves clear of these unhappy flights, and to remain, in their own words, "immovably attached to the rock of the Church." They doubtless are so from conviction and duty. They should also be so from prudence, and attend to all the sentiments, scruples, and susceptibilities of the Catholic portion of the public. It is this public especially whom they address, it is the public whom they wish to enlighten, satisfy, reassure, and reconcile with the true progress, the accomplished facts and necessities of our time. That is really the great service wanted by modern society. Let them never lose sight of this essential end. And as to that part of the public which is ruled by the spirit of the age, no doubt their language should reassure and quiet it also, and draw it back to religion, for it has very justly its own susceptibilities and distrusts. But let not the authors of l'Université Catholique deceive themselves; they will inspire the public with the greater respect and confidence according as they are themselves found serious and faithful. The public will be the more easily attracted to religion, as she presents herself stable and lofty; for, in the uneasiness which is now prevalent, the public aspire to something fixed and elevated, despite of the passions which still keep it wavering and abased.
  • 18. Whilst in Catholicism this new religious and social movement, of which l'Université Catholique appears to be the most serious manifestation, is beginning, an analogous work is going on in the other Christian communions, and reveals itself by remarkable signs. For many years something fruitful and active has been at work in French Protestantism. Almost immediately after the establishment of peace and international relations in 1814, the English dissenters, struck by the languid state of religion in France, and animated by faith and a strong desire for proselytism, undertook the task of awaking amidst their continental co-religionists the religious spirit, or, more precisely, Protestant Christian feelings. Journeys, correspondence, publications, sermons, pious associations—of which some, as the Bible Society, the Society for the Propagation of the Gospel, the Religious Tract Society, possess extent and notoriety —were the instruments used to forward their design; a design which excited and still excites in French Protestantism some trouble and embarrassment. The established Protestant church was moved. Indifference took offence. Toleration and reason felt some alarm. Impressions not altogether at first void of reason; facts which deserve observation and watchfulness, but of which the importance in our society, and with the guarantees of our laws and customs, is, in my opinion, much less than that of the religious feeling which roused them, and its character and results. The Christian faith, the real and profound faith in the constituent dogmas of Christianity, is springing up again amidst Protestants, but accompanied by that liberty and assiduous search which alter the form of unity but keep up religious vitality; which cares less for the government of men's minds than for the internal life of their souls. This life has its instincts, its imperious and everlasting wants. There is no indifference, no authority, which does or can abolish or cause to be long forgotten the essential and eternal problems of our nature and destiny. Whence does evil spring in the world and in ourselves? How is it to be escaped? Is our own liberty sufficient? Is God's power over and in us needed? What are the relations here below and hereafter between God and our souls? What lot awaits us beyond this life, and how far do our resolutions and actions
  • 19. influence it? This is the definite and practical object of religion. These the questions to which mankind has, through all ages, in all the earth, in every condition, in the confusion of controversy, in the secret heart desired and asked an answer. This is promised to him by Christianity. The dogmas of that faith are replies to these questions, so vital to man generally and individually. These replies are contained in Christian books, and are succeeded by the precepts, the consolation, and the hopes which flow from them. To seek them there, to read them, to draw continually from that spring the means of opposing the evil inclinations, the passions, the weaknesses, the disquiet, the langour of the soul, thereby sustaining it in this world and regenerating it for eternity; such is the Christian Protestant spirit, the spirit which is again animating the French Protestants; the spirit which has had and may again have its faults, like all great ambitions and all great aspirations of the human soul, but which is nevertheless a spirit of true piety and true morality; which suffices for our most exalted intellects, and exercises for all, in all, the most salutary influence over our inward dispositions and outward actions. Many periodical works, amongst them the Semeur, [Footnote 3] and the Archives of Christianity in the XIX. Century, are devoted to this spirit, and seek to satisfy and spread it. [Footnote 3: The Semeur has ceased to appear.] In them all publications, all the incidents which belong at home or abroad to Christian life, are examined, commented on, debated with a reality and earnestness of conviction always rare, but now especially so. Men of rare ability, too, and first of all M. Vinet, professor of French literature at Lausanne, write for the Semeur, and often with the most distinguished talent. I might find in these works, even without going very deeply into the question of their doctrines, some traces of political radicalism, very injurious to religion; and also, in matters of religion, traces of a severe and somewhat exclusive spirit, which, when dominant, tends to
  • 20. sectarianism and fanaticism. But clearly here as elsewhere the good spirit of the age, the spirit of light, of justice, and universal benevolence will every day make its way; will clothe the religious spirit of ideas and sentiments in words which will suit them admirably, but which they have not always worn. And thus here as elsewhere I prefer dwelling on what is good to what is evil. When the movement which is good preponderates, I believe in its power; I trust to it, strenuous as may be the opposition, tardy as its progress may appear. Have we not besides, in liberty, liberty of conscience and speech, the most certain and efficacious of guarantees against fanaticism and religious despotism. L'Université Catholique maintains, and will unceasingly uphold the maxims, traditions, and laws of Catholicism. At her side, the spirit of Protestantism reveals herself full of faith and vigour. And as in the bosom of Protestantism the Semeur and the Archives of Christianity do not express the feelings of all, other collections—the Protestant Review, the Free Enquiry, the Evangelist—labour to make clear and nourish another idea, more scientific, more attached to modern notions and a national church, more occupied in enlightening than deeply stirring the mind. I do not doubt but that, in this fresh springing up of different beliefs, men interested in their success, and the different sections of the public whom they address, reciprocally inspire but little mistrust or disquiet; that the remembrance of ancient dislikes, ancient animosity still lurk in many a heart, and may break out afresh. It may be occasionally discerned, with all its want of reflection and its harshness. However, take it altogether, the spirit of antipathy and contest, which has so long prevailed in the religious sphere, is becoming weaker and less common. Each creed is more occupied about itself than about others; more anxious to impress the hearts that are inclined to its reception or have received it, than quarrel with those who maintain their own belief. This is the natural result of liberty, and the check imposed on every
  • 21. belief by the civil power which sustains it. It is also the most favourable condition for the very creeds themselves, as obliging them to proceed directly towards their true object, and prevents them from turning aside to alter or lower themselves in despotism or rebellion. The spirit of religion comes again into the world to conquer but not to usurp. Religious creeds rise and increase together, at once free and contented; free to elevate themselves, to elevate souls to heaven, restrained by their mental liberty and by the independence of the civil power. Let us honor the community in the bosom of which such a sight is possible! It needs, it absolutely needs that religion should step in to purify and strengthen it; but religion can do her work there without dishonor or sacrifice, and when she can, it becomes her bounden duty to do so.
  • 22. Essay III. Catholicism, Protestantism, And Philosophy In France.
  • 23. Catholicism, Protestantism, And Philosophy In France. (July, 1838.) It is of Catholicism and Protestantism, not of religion or even Christianity in general, that I wish to speak. I regret that I cannot find a word to suit me better than Philosophy. The nature of things forbids it. But in order to make myself at once and clearly understood, I hasten to say that I here call Philosophy every opinion which disclaims, under whatever name or shape, any faith as restrictive of human thought, and which leaves thought, in religious matters as in all others, free to believe or not to believe, and guide itself by its own authority. It is also of France, and France alone, that I speak. The condition of Catholicism, Protestantism, and Philosophy is not the same in France and elsewhere, after our moral and social revolutions, as it is in countries which have not undergone such changes. I wish to say nothing but that which results from and applies to precise facts. The time has arrived in such matters for dealing with real facts, and setting aside general terms which avoid the questions they affect to settle. I am convinced that Catholicism, Protestantism, and Philosophy, in the bosom of the novel state of society in France under the Charter, can live peaceably, both as regards themselves and society; in peace not only material but moral, not only obligatory but voluntary,—without submission, without abasement,—both with truth and with honor.
  • 24. I wish to prove it. I repeat my first position. This peace must be established; it is necessary. Look at the state of things. Catholicism, Protestantism, Philosophy, and modern French society can neither destroy one another, nor change nor remodel themselves as they wish. They are facts, old, powerful, living, and indestructible from the remotest times. They have resisted the longest and most severe trials, ages of order and days of chaos. For ages has new France, the France of the Charter, been forming itself and increasing. Every thing has opposed it, yet everything has contributed to its triumph, the church, nobility, royalty, the court, the greatness of Louis XIV., the inactivity of Louis XV., the wars of the empire, the peace after the restoration. She has surmounted even her own faults, as well as the efforts of her enemies. Catholicism was born at the same time and in the same cradle as modern Europe. It has associated itself with all the labours of European civilization. It has survived all its transformations. In our own days it has sustained the most terrible shock that has ever been encountered by a creed and a church. It has been raised up again by the hands of the very destroyers themselves. It appears again. Enter the family circle, traverse the country, then will be seen what the power of Catholicism is, in spite of the lukewarmness of many of the faithful members—even of many of the priests. The lot of Protestantism in France has been hard. It has had against it the king and the people, the literati of the seventeenth, the philosophers of the eighteenth century; at one time it appeared as if extirpated by Catholicism, at another as absorbed by
  • 25. philosophy. It has yielded neither to persecution nor ridicule. It still exists, and is no sooner restored to liberty than it exhibits all its ancient fervour. As for Philosophy, she has sustained many checks amidst her triumphs. It is easy to set forth her follies and mistakes. She has much to amend in what is past, but nothing to fear for the future. Most of the principles which she proclaimed have become rights. The rights have become facts. The new social condition to which philosophy has given rise will not be more averse to her than the old one which she has overcome. These are all clearly powers full of life, and which a long futurity awaits. They have struggled roughly but in vain. They have been unable to destroy each other. They will neither change or perish. No doubt they will modify themselves according to their new position. They will listen to reason. They will bow to necessity, but without renouncing their principles or sacrificing their nature. They can make no such concession. What characteristics and vitality they have must remain. To renounce this would be to die. Thus, without metamorphosis and as God and time have made them, are these powers called to dwell side by side under the same social roof. What will happen if they do not live in peace, sincere peace? Shall we again see the old wars which our fathers have seen? War between Catholicism and Protestantism? Between religious creeds and philosophy? Between the Church and the new-modelled State? Shall we see a revival of every fanaticism, lay and clerical, philosophic and religious?
  • 26. It is not likely. Here and there, indeed, in books, in newspapers, even in the gravest publications, hints are given of such a restoration of things: attacks by Catholics on Protestant impiety, by Protestants against popish idolatry, by devotees against reason and its lights, by philosophers against faith and the clergy. A war of words, often sincere, frequently cold, always powerless. Doubtless, the old leaven of hatred and war, deep laid in every human heart, still exists, but it will no more arouse society. Customs as well as laws will prevent this. Even the inclination will soon fail those most anxious for it. The voices which still preach this strife, passionate, radical, and mortal, either of Christian communities between themselves, or of Philosophy against Christianity, are the voices of dying men, already deserted on the battle-field where they persist in staying. This is rather what will happen. Living neither in peace nor at war, forced to admit vicinity without friendship, and distrust without violence, Catholicism, Protestantism, Philosophy, and in their train society in general, will descend, grow cold, and languish. The dignity and power which spring from truly moral communications will be equally wanting in all. A dry and barren spirit will prevail in relations which are purely official and matters of routine; and we should see spreading and strengthening itself, becoming permanent and in some sort legally consecrated, that spirit of indifference at the same time disdainful yet subordinate, cold yet insecure. This is the lot of societies which are kept together by the bond of administrative regulations alone, void of moral life, that is, of faith and devotion. Was it then to arrive at this state of things, that for ages human genius displayed itself so gloriously in our country? Was it to end at last in this degradation that all the great creeds, all the moral forces, have contended with so much eagerness and glory for the empire of our society? They must save it and themselves from this disgraceful peril. They must accept, respect, and loyally serve the new social state; they
  • 27. must learn to live amicably together in its bosom. I say they must! It is an immense point in a great work to look upon success as indispensable and vital. The feeling of necessity gives to those whom that necessity pleases, much power; to the opposite party much resignation. A passionate desire supports even more than it deceives. And here there is indeed room for such a desire; for, during a long future, the honor and moral repose of society are at stake. It cannot remain in this state of apathy and uneasiness in which the mind languishes and exhausts itself. Man desires for his soul more activity and more security, a firmer ground, a higher flight. The true agreement of the great intellectual powers can alone grant him these. How can this be accomplished? I grapple at once with the more notorious and serious of the difficulties,—the nature of Catholicism and the conditions of its agreement with the new state of society which has attacked it, and been in its turn so roughly attacked. I set aside, too, without hesitation, the questions of religion, properly so called; questions which concern the dealings of God with man, questions about the safety of the human soul. Not that I look on them with indifference, or that their importance is not now as it has always been, overwhelming and immense. It ought, on the contrary, to be frequently repeated, for in our day it has been too much forgotten, and it is the real object, and substance, nay, the essence of religion. The moral quality, the rule of conduct for man in his relations with man, is important. The mental calm and resignation of men in the trials of life is important. The Christian religion teaches these, and thence its great position upon earth and in society. But it does more, it goes far beyond human society and this world. It binds man to God, it reveals to him the secret of this awful tie, it teaches him what he ought to
  • 28. believe and do in respect to his relation to God and his prospect of eternity. Imperishable things from which man may turn aside his gaze, but which do not disappear from his nature; sublime wants from which he cannot free himself, though he may mistake and deny them—the law of these things, the satisfying of these wants, that is to say, the dogma and its consequences, constitute the Christian religion, the first which has really understood and embraced its object. But in these questions and in the dogmas which reply to them, nothing can now arouse between Catholicism and civil society either conflict or embarrassment. In this matter, the State proclaims not only the liberty but the right of the church, and declares itself absolutely incompetent to interfere. And here lies whatever truth exists in that deplorable and confused saying which has excited so much comment, "The law is atheistical." Surely not so. The law is not atheistical. How should it be so? Is the law a real living being, a being with a soul which approaches to or recedes from God, which may be lost or saved? "Human societies," says M. Royer Collard, "live and die on the earth, there they fulfil their destinies." But they do not comprehend man as an entire. After he has bound himself to society there still remains to him the noblest part of himself, the high faculties by which he raises himself to God, to a future life, to unknown good in an invisible world. We, as individuals, as beings endowed with immortality, have a different destiny from states. And it is on this account that the State should not interfere with that other destiny. As its nature and aim are different from her own, as the two have nothing in common, to interfere must produce confusion and usurpation. That which the state now proclaims was taught to it by the Church, the Catholic Church. During centuries when the state wished to interfere in matters of opinion and salvation, did not the Church distinctly reject such pretensions. And how did she do so? By the
  • 29. distinction of temporal and spiritual, of terrestrial and eternal life, that is, by the incompetence of the state to deal with the relations of the soul with God. And the Catholic Church was right in sustaining this principle, the forgetfulness of which has cost her much. How did she lose a portion of her empire? How came Henry VIII. amongst others to separate from her? By proclaiming the temporal power competent to matters of faith and salvation. Let Catholicism go back to the sixteenth century, to the history of the reformation. It is by the confusion of the two powers, by this religious competence of the state, that she has suffered the rudest shocks. The Catholic Church has no more dangerous enemies than lay theologians, whether princes or doctors. They are the more dangerous foes because religious motives are not those which alone may animate them, and lay usurpations in matters of faith have often served as a veil to the most worldly interests. Had the religious incompetence of the state always been acknowledged, the church would not so often have seen her property as well as her power in danger or lost. She has henceforth nothing similar to fear. Usurpation is on both sides forbidden. Her kingdom belongs to herself alone; she possesses it completely and securely. On this side, the great side of Christian religion in this world, peace is easy and may be sincere between Catholicism and the new social state. Let us see where the real difficulty exists. The government of the Catholic Church is a power invested in her own domain, and in matters of faith and salvation, with the character of infallibility.
  • 30. I put aside, great as they are, all secondary questions, such as the knowledge of the conditions and limits in which infallibility exists, to whom it belongs, to the Holy Seat or to Councils, or to the Holy Seat and Councils united. I look to the one principle which is found in every combination and form of Catholic belief. The principle itself is founded on the perpetuity of divine revelation, faithfully preserved in the church by means of tradition, and renewed when needful by the inspiration of the Holy Spirit, which ceases not to descend on the successor of St. Peter who was placed at the head of the church by Jesus Christ himself. This is the essential and vital principle, the base and summit, the Alpha and Omega of Catholicism. Against a power of such a nature and origin, where it really manifests itself, all discussion, resistance, and separation are unlawful. The new state of society and constitutional France has its principle also, which has become that of its government. All human power is fallible, and must be controlled and limited. Every human society has the right of controlling and limiting, directly and indirectly, in such and such measures, and under such or such form, the power which it obeys. I do not soften the problem. I set forth the two principles. They are essentially different; they are said to be hostile. They would be so indeed, could they meet and display themselves in the same sphere. But here I find the remedy I sought. When ages ago the church so loudly and vehemently insisted on the distinction of the spiritual and temporal, she was acting in the interest of her own dignity and founding her own liberty. She was
  • 31. doing more. She thereby maintained the dignity of man, and laid the foundations of liberty of conscience. The separation of spiritual from temporal, the doctrine of the church; and the separation of the religious and civil state, the doctrine of our constitutional regime; the independence of religious society in matters of faith, conquered by the church in the earlier days of modern Europe; and liberty of conscience, a victory achieved by modern society,—have one and the same principle at the root. The application and form may be different, the origin and moral signification entirely agree. Hence the means of peace and harmony between Catholicism and our new society. Suppose that the two principles, the separation of spiritual and temporal, of the religious and civil state, were (and it is possible, since at the root they agree) sincerely and completely allowed, respected and practised by church and state; whence would the conflict spring? The Catholic church would loudly maintain her infallibility in the religious sphere, that is, as regards the connexion between spiritual power and the faithful. The state would insist upon liberty of conscience and thought in the social sphere, that is, in the relations of the temporal power with the citizens. Each power would advance according to its principles, parallel, and without collision. What then is the obstacle? It is rather historical than reasonable. It arises from the passed deeds and ancient life of the two powers, rather than from their essential principles and actual relations. The separation of the spiritual and temporal originates in the chaos of the middle ages. It sprung from thence, as the sun appears through a dark and stormy sky. Principles and powers, ideas and
  • 32. situations, all have been in our Europe wonderfully obscure, confused, incoherent, incomplete. There has long been a depth of temporal affairs mixed with spiritual, spiritual with temporal, in the existence and constitution of the church and state. Hence the temptations and attempts, both frequent and terrible, at reciprocal usurpation. The confusion of facts and violence of passions struggled incessantly against the principle which strove to restrain them. That is the lot of truth here. It is boasted of but disdained, invoked yet rejected, at once admitted and proscribed; here supreme, there powerless. Man deserves no better, the world fares no better than that. However, after many efforts on certain memorable days some truth does detach itself, and rises so high that she shines brightly and commands respect. The separation of the spiritual and temporal has had this fortune. Church and state, bishops and philosophers, opinion and law have contributed in turn to secure it for her. It is a principle now so well established amongst us, that neither persons nor things, neither mind nor art, could be kept long clear from its influence. Since the great ambitions which have disturbed the world be but foolish pretensions, it behoves them carefully to avoid the last risk they can run, that of becoming ridiculous squabbles. Let the two powers, instead of painfully lowering themselves to seize though but for a few days, some fragments from the past confusion, admit fully both as regards right and deed their mutual incompetence; let each establish itself firmly in its special sphere, let each loudly proclaim its principle—the Catholic church, its infallibility in religious orders; the State, the liberty of thought in social concerns. Not only will they then live in peace, but they will respect and serve themselves really in spirit and in truth, and not in a superficial appearance which is unworthy of both.
  • 33. I say they will respect each other in spirit and in truth, and I regret that I can but glance at the subject. Certainly, setting aside all faith and law, the vital principle of Catholicism, the religious infallibility of the church,—and the vital principle of our civil society, the liberty of conscience and thought,—have a right to the respect, the former of the boldest thinkers, the latter of the most pious and the strictest minds. But I have not room here to enter suitably on such a question; I may attempt it some day. As to the practical benefits of a true pacification to the Catholic Church and to constitutional France, they are immense. What is the prevailing ill of our temporal society? The weakening of authority. I do not allude to that strength which insists on being obeyed. Never had power greater command of it; never perhaps so much. I allude to that authority recognized beforehand on principle in a general way, received and felt as a right which is not obliged to resort to force; that authority before which the spirit bows without abasement of heart, and which speaks from on high with the influence not of constraint, but nevertheless of necessity. That is truly authority. It is not the only principle of the social state. It does not suffice for the government of men. But without it nothing will suffice; neither argument unceasingly persevered in, nor well-understood interest, nor the material preponderance of numbers. Where authority is wanting, whatever the force, obedience is precarious or mean, even near the extreme of rebellion or of servility. Catholicism has the essence of authority; it is authority itself, systematically conceived and organised. It lays it down in principle, and puts it in practice with great firmness of teaching, and a rare intelligence of human nature. Did this spirit prevail in our society, or did it lean towards it, there would be need to seek elsewhere counterbalances and limits. But the danger is clearly not there; and whilst our institutions and
  • 34. manners cherish in us the spirit of individual independence in thought as well as life, it is a great blessing to society, to its morality as well as its repose, that other causes, other methods of teaching maintain the principle of authority and the spirit of internal submission. "I learnt in the army what one learns no where else—respect;" said an old retired non-commissioned officer of the Imperial Guard, in 1820. Catholicism is the greatest, the most holy school of respect that the world has ever seen. France was brought up in this school, in spite of the ill use which human passions have often made of her precepts. The abuse is now little formidable; the benefit ought to be great, for we have great need of it. Catholicism itself is suffering at present from a grievous malady. This is the prevailing coldness and routine, the predominance of form over foundation, of external practice over internal feelings. This arises from the often hypocritical incredulity of the eighteenth century, not very distant from the nineteenth; and also from the preponderance, which has long been excessive, in the church, of the government over the vital principle, of ecclesiastical authority over religious life. Some analogy existed in this respect between the church and state in the last century. On both sides power was afoot with its old organization, in the hands of its former possessors; but amongst the subjects there was little faith and little love. What is it, nevertheless, that has saved Catholicism from shipwreck? It is that it was a popular religion and faith. The Catholic government yielded, the Catholic people survived. M. de Monlosier was right; in our days, too, it was the cross of wood which saved the world.
  • 35. The safety is yet incomplete. The church has risen, but many a soul languishes. Catholicism needs faith, a more inward and lively faith. It is the vague and ill-regulated feeling of this want, which has for some time inspired those dreams of absolute independence, of rupture between church and state, those shiverings of the fever of democracy, which, under the name of M. l'Abbé de Lamennais, have scandalised the faithful and made the indifferent smile. Mad, shameful dreams which urge Catholicism to abjure her principles and history, to hand herself over to the contagion of modern evil and to dishonour while she destroys herself. It is not in such devious ways that Catholicism will find religious life. This will, on the contrary, be found by her remaining faithful to herself in the new position frankly accepted. This position is worthy, strong, favorable to the progress of faith and fervour. It possesses towards the state a fair measure of liberty and alliance, towards the faithful the suitable independence as well as the needful intimacy; no evil hopes, no worldly distractions, nothing which can render zeal impure or even suspected; but nothing, on the other hand, which attacks the traditions or customs of the Church, nothing which tends to deprive it of the august character of elevation and stability. The Catholic Church is thus placed in constitutional France; and success, religious and social, belong to the use of proper measures, as by proper measures success is certain. The situation of Protestantism is more simple: some persons even affect to consider it more favourable. The general feeling which prevails in our days, our political and domestic alliances, the analogy of principle between constitutional France and Protestant England, all seem to say that Protestantism is in favour. There are some even who pretend to the discovery of a plot to make France Protestant. This does not deserve even a passing remark.
  • 36. There was a time, not very distant, when Protestantism did not seem so well placed in France. I do not speak of the Restoration; even under the empire it was often said that Protestantism had a republican tendency, that her maxims were contrary to stability and power. The spirits of Protestantism and revolution were considered as related. This is still repeated. It has become a party theme; and Protestantism is perseveringly represented as incompatible with social order, peaceful dispositions, and monarchy. Happily, Protestantism is not a thing of yesterday in Europe; it appeals to history and facts for a reply. If there be any where three countries which, for fifty years, amidst the overthrow of ideas, states, and dynasties have given striking proofs of affection for their institutions and princes, for the conservative and monarchical spirit, they are assuredly England, Holland, Prussia—three Protestant countries, the three Protestant countries par excellence in Europe; countries, too, wonderful for order, for industry, and for prosperity; countries which greatly conduce to the power and glory of modern civilization. There can be no more decisive answer to the worn out declamations of ancient party spirit, nor do they deserve more ample discussion. French Protestantism is peculiarly free from this ridiculous reproach. It has not been remarkable for receiving too much protection or justice. It enjoys them as a new acquisition, with modesty and gratitude. Never was a religious society disposed to evince towards the civil power greater deference and respect. Protestantism, by a singular amalgamation, has been blamed for too much deference even in this respect. It has been accused of lowering religion, and making the church subservient to the state. This, it is said, is the consequence of the fall of the ecclesiastical hierarchy, the great governing power of the Catholic church, which
  • 37. Protestantism has attacked. Thus the division between spiritual and temporal has disappeared; the spiritual has fallen under the yoke of the civil power. I have already said sufficient of the separation of spiritual and temporal, to avoid the suspicion of thinking ill of it. It is one of the most glorious forms which, in modern Europe, the independence of thought and faith has assumed. It is the principle in virtue of which Catholicism must, in the midst of modern institutions and ideas, assume a worthy and secure place. But in spiritual as in temporal order, it is necessary that liberty have but one aspect and be exclusively attached to this or that combination. Religion has more than one method of preserving her dignity and independence; God plants it and causes it to prosper in more than one soil, in more than one climate. In fact, taking things together, faith has been strong, and conscience has displayed itself with energy in Protestant countries, in spite of the doubtful lines of demarcation between the two domains, and the too frequent intervention of the civil power in religious matters. This is because the civil power has never made religious matters its chief concern. Politics, governments, properly so called, have absorbed its attention and power. Sooner or later, it has ended by leaving consciences to themselves; it has, at all events, left the reins more loose and the field more free than has been the case in Catholic countries, where there has been a power devoted to the sole task of ruling spiritual society. Thus, too, there is in every society, political or religious, a certain intimate and permanent tendency which gets the better of all forms of organization and all accidents of situation. Protestantism sprang from free enquiry. It is her standard. It has never been abandoned by her, whatever share she may have taken in the civil rule; I will
  • 38. go so far as to say, the civil despotism. In short, human thought, in religion as in every other matter, has displayed itself with infinite activity and freedom in Protestant countries.
  • 39. Do we forget, besides, the first and most powerful cause of spiritual independence? It is that Protestantism,—she cannot avoid it,—admits into her bosom great differences of faith and practice, dissents, separations, sects in short. She may have often condemned and persecuted them, but she has never deemed herself obliged to curse and extirpate them. They have lived and multiplied under Protestantism, in the teeth of the national church; ill-treated, humiliated, but never forced from some last retreat; always, to a certain degree, protected by the spirit of free enquiry, its examples and recollections. This affords a strong pledge for liberty of conscience, and opens an asylum to all who may have been attacked or vexed on account of their faith by the civil power. If the Anglican church has, with some justice, though much exaggeration, been accused of complaisance towards the temporal sovereign, the English dissenters have, on the other hand, unceasingly proclaimed their haughty independence of her. The shield which the Catholic church has found in the separation of the spiritual and temporal, has been found by Protestantism in the freedom, even though incomplete, of religious dissent and the multiplicity of sects. And as a just reward for this dawn of liberty, the Protestant sects are not so widely severed as they appear to be from the national Church and the State. Persecuted, irritated, even rebellious, they have nevertheless strongly adhered, with hidden yet deep feeling, to the common centre of belief and the public destiny. An ardent Puritan was, under Queen Elizabeth, sent to the pillory and condemned to have his hand cut off. The hand falls; with his left, he raises his large hat, crying "God save the Queen!" Almost invariably in critical circumstances, when the vital interests of the national religion or of the country appeared to be compromised, the English dissenters have rallied round the state, and though forsaking her religious banner, have still served her with exemplary devotion.
  • 40. I have little taste for sectarian spirit, but never should Protestantism when in power set up as a national church, and treat dissenters with rigour or disdain; for it owes in part to them the maintenance of its dignity, as well as the fervour of faith and the progress of liberty of conscience. Above all, never should our constitutional monarchy trouble itself about dissent, should it one day arise, in French Protestantism. It could not possess political importance, or tend to weaken the tie which binds the Protestants of France to the new social condition and its governing power. Protestantism, while free from political danger, has, in a purely religious point of view, much good to do in France; not by drawing France to her standard, by converting her, to use the customary phrase. Conversions on either side are and will henceforward be few, and the importance which some persons attach to them as a matter of joy or regret is somewhat puerile. It is a step and a most important step for the individuals, but one of no social moment. France will not become Protestant. Protestantism will not become extinct in France. One reason among many is decisive. The struggle of these days of ideas and empire is not between Catholicism and Protestantism. Impiety and immorality are the enemies which both have to resist. To restore the spirit of religion is the work to which both are called. The work, like the evil, is immense. A slight probing of the wound, a short but serious glance at the moral state of the masses of men, whose minds are so fluctuating, whose hearts so empty, who desire so much and hope so little, who pass so rapidly from the excitement of fever to mental torpor,—and the observer will be penetrated with sadness and alarm. Catholics or Protestants, priests or laymen, be ye whom ye may, do not, if believers, be uneasy about each other; reserve that for those who believe not. There is the field for work, there the harvest. The field is open to Protestantism as to Catholicism; work will not be wanting to either; each has the aptitude and peculiar qualities to enable it to labour with success. We suffer from very different moral complaints.
  • 41. Some are above all things wearied and disgusted with the uncertainty and disorder of men's minds. They need a harbour sheltered from every point, a light which is ever steady, a guiding hand which never trembles. They ask from religion rather support to weakness than aliment for activity. They require her, while elevating, to sustain them; while touching their hearts, to keep down their understandings; while animating their inward life, to give them at the same time, and above all else, a deep sense of security. Catholicism is wonderfully adapted to this frame of mind, now so common. She has gratifications for desires, remedies for suffering. She knows how at once to subdue and to please. Her grasp is strong, her prospects full of charm for the imagination. She excels in occupying while soothing the soul, which she suits after periods of great fatigue; for without leaving it cold or idle, she saves it much trouble, and undertakes for it the burden of responsibility. For another class of minds, though also suffering and separated from religion, more intellectual and physical activity is required. They too feel the need of returning to God and the faith; but they are used to examine everything themselves, and only to receive that which they acquire by their own labour. They wish to shun incredulity, but liberty is dear to them; there is in their religious tendency more thirst than lassitude. To such, Protestantism may gain access, for while it speaks to them of piety and faith, it encourages and invites them to make use of their reason and liberty. It has been accused of coldness. That is a mistake. In ceaselessly appealing to free and personal examination it takes deep root in the soul, and becomes easily an inward faith, in which the activity of the understanding keeps up instead of extinguishing the fervour of the heart. And hence its connexion with the modern spirit, which formerly in its youth was at the same time reasoning and enthusiastic, eager for conviction as for liberty, and which, despite its momentary quiescence, has retained its old nature and will infallibly resume its double character.
  • 42. Catholicism and Protestantism must never lose sight of our system of society, for it is on this that they must work. Let each of them appeal to it in its own way, looking for and attending to the wounds or wants for the cure or satisfaction of which they are best calculated. That is their true, their efficacious and disinterested mission, not looking at each other and seeking a renewal of controversy. In general, I believe controversy is but of little use, and has little religious effect. In every age it has taken but a small part in the triumph of great moral truths. They establish themselves, especially at their first appearing, by direct and dogmatic exposition. We have in the gospels the most remarkable and august example. From their earliest day, neither motive or occasion of controversy was wanting with Jew or pagan. Yet we scarcely meet with it in the preaching either of Jesus Christ or of the apostles. They lay down their rule of faith, their precepts; they knock without ceasing at the doors of the hearts which they desire to enter. They do not trouble themselves to argue with their adversaries. Controversy arises later, and when it does, it soon disfigures the truth, for it distributes it in fragments among parties, sects, men; and each holds fast, with the intractable blindness of self-love, to the fragment which has fallen to his lot, in which he wishes to see, and that others should see, truth in her entirety. Let them keep clear of controversy; let them attend little to each other, much to themselves and their task. Catholicism and Protestantism will then dwell peaceably, not only within its new state, but together. I know that this peace will not be that spiritual unity which has been so talked of. Spiritual unity, beautiful in itself, is in this world chimerical; and from chimerical it becomes tyrannical. As finite and free beings, that is to say, incomplete and fallible, unity escapes us, and we constantly miss it.
  • 43. Harmony in liberty is the only unity to which men here below can pretend. Or, rather, it is for them the best, the only mode of elevation towards that true unity which all violence, all constraint,— that is, every invasion of spiritual by material order,—throws back and obscures, under the pretext of attaining it. Harmony in liberty is the spirit of Christianity. It is charity united with zeal. It is also the object of philosophy, for it is the true, the moral sense of the principle of toleration and equal protection of the rites of worship; a principle which impiety has violated by trying to set it up as the standard of indifference and contempt for religion, but which allies itself wondrously with zeal and faith, for on their right it is itself founded. The alliance must be ratified. I say must in concluding, as I did when beginning. Peace between religious creeds is now imposed on all alike by our social condition. Harmony in liberty is their legal condition, their charter. Let them yield to it in spirit as in act; let them love it while obeying it. I fear not the fate of a false prophet, when I predict that religion will be thereby as great a gainer as society. As to Philosophy, she has in our days the glory of not having remained a Utopia. From discoveries she has proceeded to conquests. She has metamorphosed her ideas into facts and institutions; a formidable change, as it reveals not only the errors of the first thought, but for a time misleads and corrupts it by plunging it into the vortex of human passions; nevertheless a great glory, and one which assigns to philosophy a high position in the new social state. It is a rare privilege to be able, without embarrassment, worthily to acknowledge and abjure error. Philosophy can do this, for, politically speaking, victory belongs to her, and not only victory but power. Though much self-deceived, she has done much. She has reason for pride as well as for modesty. She can afford to show herself
  • 44. just, benevolent, and respectful to her former adversaries. She cannot be charged with weakness or cowardice. Practically, experience has enlightened her. She knows better than she did the true condition of morality and human society. She knows that she herself is not all-sufficient, that she suffices not entirely for souls or nations, that in human nature and in the general course of affairs the share due to religion is immense, and that philosophy should not contest it with her. To go still deeper, philosophy herself is about to become seriously and sincerely religious. Like Catholicism, like Protestantism, she cannot change her nature, she must remain philosophy, that is to say free and independant thought, whatever her field of action. But as regards religious questions, she sees that she has often been short-sighted and hasty, that neither impiety nor indifference constitutes true knowledge, that the proudest spirit may humble itself before God, and that there is philosophy in faith itself. All this is still very vague, and I speak but vaguely of it. However, so it is. It is on this slope that philosophy is now placed, and along it that she must hereafter advance. Her future must be great in the midst of that society which she has formed. The future must be great for spiritual order as a whole, religious and philosophical. May this destiny be accomplished! May spiritual order recover her activity and renown, with a peace and harmony hitherto unknown. Therein consists the dignity of man! therein the strength of society. End. [Transcriber's note: The following text is not part of the originals book, but seems worthy of inclusion.
  • 45. Deacidified using the Bookkeeper process. Neutralizing agent: Magnesium Oxide Treatment Date: April 2005 Preservation Technologies A World Leader In Paper Preservation 111 Thomson Park Drive Cranberry Township, PA 16066 (724) 779-2111]
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