We all know how capitalism came to be. Thrifty Reformed Protestants planted seeds in the Sixteenth Century. The much-touted "Protestant Work Ethic" sanctioned hard work, frugality, and wise investment. As these thrifty Protestants became successful and the secularizing effects of the Enlightenment took place, capitalism began to enter full bloom. This thesis has been taught about economic systems by theologians, historians, and social scientists for generations. Max Weber's Protestant Ethic and the Spirit of Capitalism from a century ago is still used as a text at some institutions. The problem is Weber was wrong!
Rodney Stark is one of the most highly regarded sociology of religion scholars alive today. He recently published The Victory of Reason: How Christianity Led to Freedom, Capitalism, and Western Success. Rather than viewing capitalism as a product of a secularized Protestant work ethic in the past few centuries, Stark's thesis is that capitalism is a direct extension of Christian thinking that first emerged in the Ninth Century, six hundred years before the Reformation!
Stark examines the achievements of past cultures, including Chinese, Greek, Roman, and Muslim. He shows how each made significant advances in technology and the accumulation of knowledge but never translated these advances into widely shared prosperity and freedom. Western Europe also made technological advances, but unlike other cultures, widespread freedom and democracy did emerge. Why? Stark says the answer is found in Christians' intellectual worldview as they interact with their world.
Ancient cultures had a cyclical view of time and believed matter was eternal. The idea of progress was a foreign concept. When the Jews came on the scene, they introduced the idea of linear time; that is, history has a beginning and is moving toward an end. However, Judaism did not envision progress per se, only the coming of a future messiah who would restore Israel. Christianity envisions history culminating in the "Millennium." Judaism is about procession through time, while Christianity is about progress through time.
Judaism and Islam have a basis for doing theology, but it is backward-looking. They look to the past and aim to conform to precedent. Christianity looks to the future but has no explicit roadmap. The challenge for Christians is that Jesus left no personal writings or strategic plan for what to do. Consequently, from the start, Christians have had to infer from scripture to find guidance. Christians quickly developed the idea of a rational God who had created an ordered universe that could be understood and appropriated for various ends. This notion of progress and a devotion to reason is unique among world religions.
Stark shows that Greece and Rome actually hindered human freedom and progress in important ways. Greek and Roman philosophers wrote extensively about the state or the polis. Still, the idea of individuals with individual rights was mostly foreign to them, just as it was to every other ancient civilization. Christianity believes the individual is created in God's image and has intrinsic value. Combined with scriptural teaching, this began to spawn concerns for personal property rights. Communion was extended to slaves by the Church, and then the Church abolished slavery among Christians, effectively ending slavery by the end of the Eleventh Century.
Rome's economy was based on the extraction of taxes and tribute to a centralized authority. The fall of Rome left Europe with no central authority. Millions were freed from crushing obligations to the Empire. Not long after the collapse of Rome, entrepreneurial innovation began. At some point in the 700s C.E., the three-field crop rotation system was developed in Europe and quickly spread throughout the continent. The Roman two-field rotation system let half of the arable land lie fallow at any given time. The new model kept only one-third of the land out of production, and the rotation system made the land more fertile. A broad-based agricultural surplus became a reality. Other innovations, including the invention of the horse harness, durable plows, and wagons with swiveling axels, added even more.
Interestingly, Stark locates the first instances of true capitalism within the monasteries. The monasteries were by far the largest landholders in Europe. The surplus production from agricultural innovations reduced the number of people needed to work the fields. This freed people to concentrate on other specialized forms of labor. Eventually, monasteries became centers of commerce, and some European towns grew out of the marketplaces created by the monasteries.
By the Eleventh century, cash had come into existence to facilitate trade, and credit was not far behind. The numerical concept of "zero" entered Europe early in the Thirteenth Century. By the end of the Thirteenth Century, in what is modern-day Italy, some partnerships functioned much like modern corporations, complete with share ownership, profit distribution based on share ownership, corporate by-laws, and double-entry bookkeeping with charts of accounts. Merchant banking families began to emerge in places like Florence and Venice. The Riccardi Bank and the Peruzzi Company had branches ranging from modern-day locations like Portugal, England, the Low Countries, Northern Germany, and even Tunis in the Thirteenth Century. Capitalism quickly spread throughout the continent. These were anything but the "backward times of the Middle Ages," a pejorative characterization created by Enlightenment thinkers.
A major turning point in capitalism occurred in Europe during the Fifteenth Century with the rise of despotic monarchies in Spain and France. Spain reintroduced slavery when they colonized the Canary Islands in the 1430s, despite threats of ex-communication from the Pope. The discovery of the New World in 1492 created a headlong dash to extract as much wealth as possible. France and other European Powers quickly followed suit. Despite denouncements by a continuous string of Popes, these powers enslaved Indians and later Africans. France and Spain had been able to negotiate terms that allowed their monarchs to appoint the archbishops and the higher positions in the Church, and they were thus able to limit and control the influence of the Church on their empires. The Reformation arose partly in response to the corruption sown by these events. When the Protestant nations broke for Rome, they continued with their economic traditions put in play centuries before. The despotism of France and Spain and their domination of the Italian states weakened the capitalist impulses in most of Southern and Western Europe. The Counter-Reformation added more devastation.
Stark closes his book by tracing the legacy of these developments to recent times. However, I found the book's real value to be its lucid presentation of how capitalism is a natural extension of Christian thought and values extending back to the Bible. Capitalism was not an invention of the Enlightenment.
The Victory of Reason is a must-read for anyone who wants to make informed decisions about the relationship between Christianity, economics, and public policy. I continue to be astounded by the denunciations made by religious institutions and theologians about free markets, property rights, and rational inquiry from people who evidence little comprehension of basic economic realities. This book is a powerful corrective to the widespread misrepresentations of capitalism and its origins.
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