Capitalism

Cultural depictions of capitalism are almost all negative. There’s the Monopoly guy with the top hat and cigar. There’s Gordon Gekko saying, “Greed is good.” And, most recently, there’s the hedonism of the “Wolf of Wall Street”. The message is clear: capitalism is selfish. Socialism, or something like it, is selfless. In fact, the opposite is true. Renown social critic George Gilder offers this startling insight: capitalism, at it’s core, is first an expression of altruism; that is, of giving. An entrepreneur can only succeed by satisfying a customer’s need. This is why capitalism, and only capitalism, can create the prosperity that all societies crave and why all other economic prescriptions are doomed to failure. The following review of Rodney Stark's book, The Victory of Reason, reveals the role that the Christian faith played in the historic development of capitalism.

Victory of Reason

In recent years, a number of important books have offered a counternarrative to the version of European history that has seared itself into the Western consciousness since the Enlightenment, in which religious obscurantism suppressed learning and progress until unfettered reason at last delivered us from the clutches of superstitious ecclesiastics. Works by David Lindberg, Edward Grant, A. C. Crombie, Stanley Jaki, and Thomas Goldstein have revised to one degree or another the received view that the Christian religion was nothing but a hindrance to the rise of science.

In The Victory of Reason, Rodney Stark attempts to carry this revision forward by extending it to the success of the West in more general terms: not only in science, but also in the growth of capitalism and the development of political freedom. He suggests that Western success in these areas was not inhibited but rather encouraged by Christian ideas, albeit ones that took some time to develop fully. The very possibility of the development of doctrine, whereby ideas first introduced in germ are elaborated upon with the passage of time, is likewise a strength of the Christian faith, according to Stark, and is one of many examples of its commitment to reason.

One development in particular that pleases Stark is the evolution away from condemnation and suspicion of commerce, trade, and merchants, and toward an appreciation of their value. An unfavorable ideological climate can stop the growth of capitalism in its tracks, as history amply reveals. Stark provides the example (among others) of iron production in eleventh-century China. The late tenth century saw the development of an iron industry in parts of northern China; by 1018, approximately thirty-five thousand tons were being produced every year. But by the end of the century, the industry was dead and its facilities abandoned. What happened, Stark explains, is that the imperial court came to the conclusion that the new industry-created wealth tended to undermine Confucian values as well as social harmony and stability because it implicitly challenged the view that commoners should be content with their state and should not seek after riches. “So, they declared a state monopoly on iron and seized everything” (p. 72).

Stark shows that the Christian West considered profit seeking to be morally licit and that it developed a conceptual apparatus friendly to market exchange. For a long time, scholars assumed that the medieval conception of the “just price” involved calculations of cost of production and other such measurable factors, but this conception was actually a minority view. The mainstream position was that of St. Albertus Magnus (and others), who held that the just price corresponded to what “goods are worth according to the estimation of the market at the time of sale” (p. 65). Stark likewise notes Aquinas’s point that a seller of grain, knowing that additional supplies are on their way, has no moral obligation to disclose this information to his customers (although it may be especially virtuous for him to do so).

Stark also discusses the vexed question of usury because the institution of credit is so important to modern economies. He is mistaken when he cites Luke 6:35 (“lend, hoping for nothing thereby”) as having been “taken to prohibit interest” (p. 64); that verse hardly appears in the medieval discussion of usury, and in any event it was interpreted as a general call to disinterested benevolence rather than as a specific condemnation of usury. What is important, though, is that medieval Christianity officially condemned the taking of any interest on a loan, and not just unusually high rates of interest, as usury.

Yet by the High Middle Ages, monastic orders, bishops, and even the Roman hierarchy had long been involved in borrowing and lending at interest; in 1229, the bishop of Limerick, who had failed to repay a loan to an Italian bank, was excommunicated until he agreed to a new arrangement whereby he paid 50 percent interest over the next eight years. The case of usury, according to Stark, is a useful example of the role of reason in the Christian faith because with a greater understanding of and familiarity with the phenomenon of interest came a more helpful and realistic approach to the subject. Although the evolution of the Christian view took time, it amounted to incremental, rational elaborations on the basic insight that good reasons can be cited for a lender to be compensated for his services.

Stark will have no truck with Weber’s theory of the Protestant origins of capitalism, noting that capitalism’s principal institutions were in place long before Protestantism emerged, both in the Italian city-states and even in the great monastic estates, many of which were dedicated to large-scale production of a variety of goods. In the twelfth century, nearly all of the 742 Cistercian monasteries had their own factories, using water power for crushing wheat, sieving flour, fulling cloth, and tanning. Stark cites Hugh Trevor-Roper’s point that “the idea that large-scale industrial capitalism was ideologically impossible before the Reformation is exploded by the simple fact that it existed” (p. xii).

Stark’s point about the (relatively unheralded) inventiveness and technical knowhow of the Middle Ages is indirectly related to his claim that science in the abstract enjoyed such success in the West largely because of, rather than in spite of, the Christian faith. Taking his lead from Stanley Jaki’s work, Stark suggests that the West’s success in the sciences is traceable to its belief in a God of order and reason, who designed a predictable, orderly universe intelligible to the human mind. His case could have been strengthened further by reference to Wisdom 11:21, one of the most frequently cited biblical verses of the Middle Ages, which describes God has having ordered all things “according to measure, number, weight”—a conception that gave rise to Augustine’s conception of God as a great geometer. In the hands of the celebrated School of Chartres, the verse lent itself to the idea of quantitative inquiry as a fundamental tool for understanding the universe.

In his zeal to overturn the popular view of religion as an enemy of progress, however defined, Stark has a habit of overstating his case. Though very much in sympathy with him and his task, even I cringed at passages such as this:

Had the followers of Jesus remained an obscure Jewish sect, most of you would not have learned to read and the rest of you would be reading from hand-copied scrolls. Without a theology committed to reason, progress, and moral equality, today the entire world would be about where non-European societies were in, say, 1800: A world with many astrologers and alchemists but no scientists. A world of despots, lacking universities, banks, factories, eyeglasses, chimneys, and pianos. A world where most infants do not live to the age of five and many women die in childbirth—a world truly living in “dark ages.” (p. 233)

For one thing, if the existence of Christianity possesses that kind of explanatory power, one is left to wonder why the same advances in technology and political freedom were not realized in the Byzantine east, where Orthodox Christianity reigned. This phenomenon is not impossible to explain, and it probably should have been dealt with in a book that purports to represent Christianity as the foundation of the good things of the West.

More than a quarter of the book is devoted to the history of the development of capitalism in various parts of western Europe. In these chapters, we find little if any mention of Christianity, and thus an entire section of the book seems remote from its provocative title. What we get instead is a fairly conventional narrative of the growth of capitalism and commerce in a great many places, from various parts of western Europe through Latin America—interesting, perhaps, but an anticlimactic conclusion in the wake of Stark’s provocative claims about the positive relationship between the Christian faith and the growth of the free market.

Stark does return to religion before his book draws to a close, and he makes useful observations about religious life in Latin America. A hostile book reviewer for the New Republic ridiculed Stark’s assertion that Latin America was never truly Catholic. Of course it was, came the reply. Doesn’t Stark know that Catholicism was the state-sanctioned religion of those societies? Stark is of course making the rather different point that the Catholic faith took only superficial hold in the souls of all but a small minority of the people. “In many places it wasn’t even Christianized— indigenous faiths persisted, and travelers often reported that many large areas seemed to be entirely without priests” (p. 205). The church’s privileged status encouraged complacency among the Latin American hierarchy: with all other sects banned, they could simply claim just about everyone as a Catholic and rest content.

Stark is making a useful point here: there were always very few priestly ordinations in Latin America, and to this day a majority, sometimes 75 percent or more, of the priests in some Latin American countries is foreign born. Yet because attendance at mass in Latin America has always been low, the small number of priests has not amounted to an actual shortage. David Martin estimates that perhaps only one-fifth of the population has been “regularly involved” in the church (cited on p. 206).

Much has been written about the growth of Protestantism in Latin America in recent decades, with the removal of restrictions on non-Catholic proselytism and worship. But as Stark points out, places with a greater proportional share of Protestants also exhibit higher Catholic mass attendance. For the first time ever, the number of seminarians is rising in many Latin American countries. Is it possible that this development is not merely fortuitous, but was made possible by the church’s decision to discontinue its reliance on the state?

Although Stark is at times too disparaging of the Greek and Roman worlds, and although his rhetoric and even his claims can be extravagant—the violin, surely, was not a medieval invention—he has much of importance to say in this useful if workmanlike book, his intemperate critics to the contrary notwithstanding.

Thomas E. Woods, Jr.

Ludwig von Mises Institute