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Religion and the Rise of Capitalism

Jonathan Cornford

Christianity versus Capitalism (Part 2)

In the previous edition of Manna Matters (Oct 2016) we began the process of challenging the long-standing accommodation between capitalism and Christianity. Although, on the face of it, it should seem quite clear that the gospel represents a polar opposite from the spirit of capitalism, in actual life and in history there is a lot of complexity to be unravelled and a lot of questions to be explained. The first task was to try and define what we mean by the word ‘capitalism’ and to explore its origins. In this edition we will be looking for the historical roots of the association between Christianity and capitalism.

But before embarking on today’s question, it is worth re-capping the main points from the previous article, as the general confusion about capitalism warrants some repetition of what has already been discussed.

We saw that, contrary to many claims otherwise, capitalism is not merely a word that describes natural and universal human economic behaviour. Rather, it is a word that describes a very particular form of economic organisation, an economic system, that has very particular historical origins in the complex changes that took place in Europe in the fifteenth and sixteenth centuries.

Similarly, we saw that capitalism is not merely a synonym for trade, commerce, profit or finance. These things are as old as civilisation itself and in no way unique to capitalist societies; what is unique in capitalism is the form that trade, commerce, profit and finance take, and the role that they play in the broader economic and social structure. Importantly, capitalism should not be confused with the existence of a market that is determining prices and allocating resources. Although ‘the market’ plays a particularly central role in capitalism, market mechanisms have existed in a wide range of other economic systems throughout history.

Likewise, capitalism cannot be equated with economic freedom - whilst capitalism has generally been premised on the economic freedom of certain groups of people, it has also generally required or resulted in various forms of economic coercion for much larger groups of people.

So what is it? At heart, capitalism describes an economic system that is driven by two core impulses:

  1. The process of endless accumulation: the re-investment of capital to produce more capital;
  2. The commodification of all things: the extension of property rights and market mechanisms into all spheres of life.

What is more, capitalism represents an economic system that from its very birth was an internationalised system. It has been, and remains to this day, beyond the power of any nation to control or determine its course. Rather, a capitalist economic system has itself set the parameters of what nation-states are, and are not, able to do - it has governed governments. Which brings us to the core of what makes capitalism unique: in all other human systems in history, the economy has been embedded within social and political structures and has served the particular purposes of that structure. With the rise of capitalism a historic inversion occurred: social and political structures have become embedded within an economy and have come to serve economic ends.

This economic system that began five hundred years ago on the European peninsular now extends over the whole planet and reaches into virtually every social and ecological space upon it. Our need to become clearer about the nature of capitalism is therefore not merely an abstract or philosophical question; it is one of the most pressing questions facing humanity.

While we are dwelling on the history of capitalism, it is important to confront a particularly troubling observation: it was Christian Europe that gave birth to capitalism. So was the rise of this unique economic system in any way a product of the religious faith that defined Europe?

Did Christianity give birth to capitalism?

John Calvin, 1590-1564.

In 1904 the German sociologist, Max Weber, published a landmark essay, The Protestant Ethic and the Spirit of Capitalism, in which he argued that the spiritual forces unleased by the Reformation, and Calvinism in particular, played a major role in the genesis of capitalism. Weber thought that the new “Protestant asceticism” - that is, a dour rejection of luxury and frivolous expenditure - naturally inclined Calvinists to re-invest any surpluses (capital) back into their businesses rather than spending it on pleasure, thus endorsing the process of capital accumulation that is central to capitalism. What is more, Weber thought, the psychological angst created by the doctrine of predestination led Calvinist to work harder than most– the so-called ‘Protestant work-ethic’ - striving after worldly success in their business “calling” in search of some sort of verification that they were part of ‘the elect’. Weber has been widely misunderstood as arguing that Calvinism caused capitalism, which was not his intention; as an economic historian Weber was well-versed in the economic forces driving the emergence of capitalism. Rather, his primary interest was to explore how religious ideas could come to justify certain sorts of social and economic structures, which is certainly a laudable and necessary project.

Nevertheless, whatever Weber’s intentions, the hypothesis of The Protestant Ethic has now been largely refuted in scholarly circles – it simply fails to match up to the details of how the history of capitalism, Calvinism, or even Catholicism, for that matter, actually played out. Even so, Weber’s ideas still remain vastly influential in linking capitalism and Christianity in the popular imagination and seem to periodically re-surface, even amongst people who have never heard of Max Weber. This can take two forms: amongst those who are critical of capitalism (as was Weber), it is Christianity that is blamed for blighting the world with this monstrosity; amongst those who celebrate capitalism, Weber’s ideas have been turned on their head to give Christianity the credit for blessing the world with such a beneficent economic system. Michael Novak, an American political philosopher, has taken up this last position with a twist - in The Catholic Ethic and the Spirit of Capitalism (1993) he argues that it was the breakthroughs of the Catholic mediaeval economy that eventually flowered into full blown capitalism.

All of these positions are barking up the wrong tree. A much better account of the relationship of Christianity and capitalism was given by the British economic historian RH Tawney in his 1926 classic, Religion and the Rise of Capitalism. For Tawney, the story that needs to be told is not how Christianity gave rise to capitalism (which he rejects), but how the rise of capitalism changed Christianity.

He begins his story with describing the mediaeval background of Scholastic theology. Now largely forgotten, one of the great achievements of Christendom was a sophisticated theological articulation of economics which attempted to apply the gospel to the complexities of the everyday life of markets, commerce, trade and finance. At the heart of this theological economics was the conception that all economic life should support and express the common good of society as a whole, not merely the self-interest of individuals, and that greed (the sin of avarice) was not only bad for one’s soul, but also for the social fabric.

The twin pillars of mediaeval Christian economic ethics were: (i) the Theory of Just Price - the idea that the price of goods should represent a full accounting of all the costs involved in production of that good, including a just wage; and (ii) the Prohibition on Usury - the rejection of profiting from other’s people’s need through charging interest on loans. How this teaching actually took shape in Mediaeval society is complicated and no doubt full of blind spots and hypocrisy, but that should not cause us to lose sight of the fact up until the close of the Mediaeval period there was almost universal agreement that Christian faith, if it is authentic, must be translated into the ethics of everyday economic life. The question, then, is how did this all unravel?

This year is the 500th Anniversary of Martin Luther nailing his famous 95 Theses to the church door in Wittenberg, and so launching (unwittingly) the Protestant Reformation. The historical record shows that it was precisely while Europe was in the midst of that profound economic revolution we now call the birth of capitalism that it also underwent the massive religious and political upheaval of the Reformation. While there are indeed deep links between these two revolutions, which I will return to later, it was not the simple conclusion to which Weber leapt that links Protestantism (and especially Calvinism) directly with capitalism. On the contrary, as Tawney and many following him have shown, both Luther and Calvin in their own way insisted on economic ethics that were hardly conducive to capitalism. Luther’s economic ideas were more in line with the traditional mediaeval scholastic conception while Calvin’s represented a more sophisticated urban economics, but both insisted that the economic sphere posed dire spiritual and social dangers if it was not subject to powerful moral restraint. Certainly the idea of endless accumulation was inimical to both.

It must be admitted that it was Calvin who effectively brought about the end of the church’s 1500 year ban on usury, and allowed interest to be charged on loans. However, the significance of this too has been overstated, as the severe strictures that Calvin placed on lending at interest would exclude 90% of the modern use of credit, including much of what was already going on in his own day in Florence, Genoa and Antwerp. Indeed, early Calvinism and its variant in English Puritanism promoted remarkable personal disciplines in economic ethics that we would do well to learn more about.


RH Tawney (1880-1962) was Britain's most influential economic historian and perhaps the leading 'Christian Socialist' of his time. He has largely been forgotten today. It is time he was rediscovered. 

Nevertheless, the Reformation did set forces in motion which, as they worked themselves out over a couple of hundred years, resulted in consequences that the Reformers never intended. As Tawney strikingly put it, ‘So little do those who shoot the arrows of the spirit know where they will light.’ The first and most obvious of these unintended consequences was that the Reformation everywhere served to massively undermine the moral authority of the church while also destroying its direct social and political authority. Morally and theologically, this was perhaps well-deserved and a long time coming, however the social effect was that when the church did choose to speak out in defence of the poor against the excesses of ‘capitalism’ (they didn’t use that word then), fewer and fewer people felt compelled to listen.

But for Tawney, it was the inherent individualism in the movements unleashed by the Reformation, and Puritanism in particular, that, distilled and strained over a couple of hundred years of social change and conflict, had the most damaging and distorting effect upon Christian faith:

Individualism in religion led insensibly, if not quite logically, to an individualist morality, and an individualist morality to a disparagement of the significance of the social fabric as compared with personal character.

By the 1700s, Tawney concludes, Puritanism had ‘enthroned religion in the privacy of the individual soul, not without some sighs of sober satisfaction at its abdication from society’. And in the process it had also made its peace with Mammon. From around 1700 onwards the church fell silent on economic matters, whether personal or public, giving free moral license to the spirit of capitalism as it gained momentum transforming society, economy and landscape, tearing apart the lives of generations of the common people. (I will discuss the social and ecological effects of capitalism in a later article.) It was not until the first stirrings of the Christian Socialists in the middle of the Industrial Revolution that the church started tentatively to reclaim an economic conscience, and to this day, Christian conceptions of economic ethics are only shallow and fragmentary compared to what they once were.

There is one more addendum to add to this brief historical survey, and it comes from later scholarship that has built on Tawney’s work. Whereas both Tawney and Weber focussed on the Protestant Reformation, subsequent historians have addressed the fact that capitalism first took root in Catholic countries, and that the Catholic church also underwent its own transformation in relation to the economic sphere. This brings us back to explore the deep links between the rise of capitalism, the Protestant Reformation and the changes in Catholicism.

The one thing common to all of these great historical movements is that, in different ways, they each reflect a deeper movement in European civilisation, which was the waning of faith altogether. As the spiritual contradictions of a thousand years in which the Christian church had wed itself to power and luxury worked towards their inevitable conclusion, Christian faith increasingly became an adornment rather than a conviction on which one staked their life. The Reformation (and the Catholic Counter-Reformation) was in large part a drive for spiritual renewal, which, as we have seen, was only partially successful. As Winthrop Hudson puts it:

The chief factor in the triumph of the spirit of capitalism would seem to be this: when the faith, which hitherto had served as a check to the acquisitive spirit, became more and more nominal, the adherents of that faith refused to be bound any longer by what they considered to be the antiquated rules imposed by that faith. In other words, a rising class of self-made men found the attraction of a free world of business much greater than that of a waning religious ideal.

Contrary to Weber, it was not that Calvinism strengthened or fostered the spirit of capitalism, but that:

Calvinism was itself suffering defeat as a prelude to being reshaped and altered and transformed by the development of the busy commercial spirit which it sought to restrain. What the record makes clear is that the Calvinist churches lost the power before they lost the will “to bind business within the discipline of Christian justice and charity”.

Lacking a fundamental critique of economic life, and long ago having sacrificed any conception of Christian faith as distinct from European civilisation, Christians were led step by step through the transformations of society wrought by capitalism until we woke up at the beginning of the twenty-first century and found ourselves wrapped up in a soulless and nihilistic consumer culture that is destroying the planet.


In conclusion, the accommodation between Christianity and capitalism is not because of any symbiosis between the two; rather, it is because the church surrendered a central thread of the gospel, and it has been paying for it ever since. As I have argued elsewhere, the present day crisis of Christianity in the West is largely the product of the hollowness of a spiritualised and individualised faith that has little to do with the material life that dominates our existence.

This is the place we find ourselves in now and the pressing question is, what to do about it? We shall come to this question in time, but before we can begin to form a positive response to capitalism there is one more major obstacle we must clear away. Again and again we hear it argued that, like it or lump it, capitalism is the most effective way to lift people out of poverty. If you care about the poor then you must support capitalism. But is it this really true? It is to this question we will turn in the next article …

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