The ‘Spiritual’ Pre-History of Adam Smith’s Market Philosophy
In the hierarchical order of medieval Europe, everyone and everything had an appointed place. Economic life, apart from famine, plague or plunder, was essentially static; the seasons governed agriculture, and the notion of unlimited economic growth would have been regarded as madness.
The economic problem was conceived not in terms of expanding production but rather in terms of safeguarding the right to life in tenuous circumstances. This meant that distribution of the social product was a central issue. In the thirteenth century, St. Thomas Aquinas reconciled Christian theology with the teachings of Aristotle, writing that ‘man is naturally a social animal’,[89] with the consequence that ‘the good of one man is not a final end but is directed toward the common good, and the good of a single household is ordered to the good of the state that is a perfect community’.[90] Aristotle had said that ‘Friends’ goods are goods in common’,[91] to which Aquinas added that ‘a man should not possess external things as his alone but for the community, so that he is ready to share them with others in case of necessity. Thus the Apostle Paul says in ιTimothy, “Command the rich of the world to be ready to share and to give” ’.[92]Aquinas taught that the good of the community circumscribed the individual right of property. Since each had the God-given right to life, it followed that ‘when a person is in imminent danger and cannot be helped in any other way - then a person may legitimately supply his need from the property of someone else, whether openly or secretly. Strictly speaking such a case is not theft or robbery’.[93] The rich had a Christian duty of charity to the poor as a condition of their own salvation, and the doctrine of the ‘just price’ rationalised regulation of local markets in order to stabilise food prices.
Church doctrine treated markets as a threat to social order, and Aquinas specifically condemned both usury and money-making trade as morally corrupting, for their sole end was ‘greed for money which has no limit’.[94] Describing the practical effect upon commerce in the fourteenth century, the economic historian Henri Pirenne wrote that ‘The liberty of the individual was ruthlessly curtailed, and the sale of foodstuffs [was] subjected to a regulation almost as despotic and inquisitorial as that which was applied. to small-scale industry’.[95] [96] [97] [98] While St. Thomas condemned usury, Pirenne also noted that the Church was in fact the indispensable moneylender of the medieval world. Without credit, society could not survive the periodic disaster of famine. The Churchpossessed a liquid capital which made it a financial power of the first order. Chronicles are full of details about the wealth of the monastic shrines, teeming with reliquaries, candlesticks, censers and sacred vessels made of the precious metals, offerings both great and small, which the piety of the faithful lavished on the earthly representatives of those allpowerful saints, whose intervention was most surely to be obtained by generosity to their servants. Every church of any reputation had thus at its disposal treasures, which not only increased the pomp of its services, but were an abundant hoard of capital.n
Since the Church claimed to mediate between God and man, there was an obvious temptation for its adherents to attempt to purchase the remission of sin. Thomas Gascoigne (Chancellor of Cambridge University from 1443-5) complained that sinners say: ‘I care not how many evils I do in God’s sight, for I can easily get plenary remission of all guilt and penalty by an absolution and indulgence granted me by the Pope, whose written grant I can have for four or six pence...'.12 The involvement of the Church in financing the growth of mercantile capitalism, which was accelerated in the sixteenth century by Europe’s colonial expansion and the influx of gold from the Americas, intensified the contradictions between medieval doctrine and commercial development, provoking Martin Luther’s charge in 1517 that the Church itself was guilty of avarice and the sale of salvation.
Luther initiated the Protestant Reformation, but John Calvin provided the new world of commerce with its most coherent rationalisation. While the radical Anabaptists practised communism, in his Institutes of the Christian Religion (1536) Calvin reconciled business with theology by articulating what Max Weber called ‘the spirit of capitalism’?3 Aquinas had spoken of the responsibility of Church and state for the common good, but for Calvin a major purpose of civil authority was to ensure ‘that the public tranquillity may not be disturbed; that every person may enjoy his property without molestation; that men may transact their business together without fraud or injustice’.[99] [100] [101] [102] Private property, including inheritance, was a blessing from God: ‘Though some seem to enrich themselves by vigilance it is nevertheless God who blesses and cares for them. Though others are rich before they are born and their fathers have acquired great possessions, this is nevertheless not by accident but the providence of God rules over it'd5 Just as ‘gifts of the Spirit’ were variously distributed, Calvin believed that civil authorities must secure to every individual ‘the exclusive enjoyment of his property, as it is necessary for the preservation of the peace of society that men should have peculiar and distinct posses- sions’.i6 If a principal responsibility of civil government was to protect property and commerce, money-making and the pursuit of wealth likewise had to be reinterpreted as part of the Divine plan, which for Calvin included the doctrine of pre-destination. If God was all-knowing, Calvin reasoned that He must have known from the beginning of time who would be saved and who was condemned. God could not be persuaded either by prayer or by gifts to the Church to change His mind. Some had been ‘elected’ for glory, others for damnation. God said to Moses: ‘I will have mercy on whom I have mercy, and I will have compassion on whom I have compassion’ (Romans 9:15, 21). With the separation of personal salvation from institutionalised mediation through the priesthood, Hegel saw in Calvinism the spiritual birthplace of the modern principle of ‘subjective freedom’. In the Protestant view, a one-to-one relationship with God meant each was responsible for his own soul, and God speaks directly to each through the voice of conscience. Hegel wrote: ... there is no longer a distinction between priests and laymen; we no longer find one class in possession of the substance of the Truth, as of all the spiritual and temporal treasures of the Church. Each has to accomplish the work of reconciliation in his own soul. - Subjective Spirit has to receive the Spirit of Truth into itself, and give it a dwelling place there. Thus Christian Freedom is actualized.[103] The problem was: How could one know one's place in the Divine plan? Lack of faith was clear evidence that one was not predestined for salvation, but economic success helped to confirm faith and implicitly linked wealth with grace. Max Weber concluded that, by pursuing wealth, the Protestant Christian ‘creates his own salvation, or, as would be more correct, the conviction of it'.1[104] In Calvinist theology, each was responsible for multiplying God's assets in his particular calling. But God's assets could not be squandered in selfindulgence. The moral opprobrium attached to ostentatious consumption lent spiritual significance to self-denial and the accumulation of capital. In his Contrtbutlon to the Critique of Political Economy, Marx later wrote that the hoarder of money is ‘intrinsically a Protestant by religion and still more a Puritan'.[105] [106] [107] [108] Marx described the hoarder as a ‘martyr to exchange-value' and a ‘holy ascetic',21 although he added that the ‘monetary soul'22 of a hoard demanded its reinvestment for continuous accumulation. Max Weber came to the same conclusion: ... the religious valuation of restless, continuous, systematic work in a worldly calling, as. the surest and most evident proof of rebirth and genuine faith, must have been the most powerful conceivable lever for the expansion of that attitude toward life which we have. called the spirit of capitalism. When the limitation of consumption is combined with this release of acquisitive energy, the inevitable practical result is obvious: accumulation of capital through ascetic compulsion to save.23 The Reformation reflected in social consciousness the beginnings of what Marx called the ‘primitive' accumulation of capital, which was accompanied from the late fifteenth century onwards by the growing commercialisation of agriculture and separation of peasants from the soil. In Capital, Marx began his chapter on primitive accumulation with this comment: The proletariat created by the breaking-up of the bands of feudal retainers and by the forcible expropriation of the people from the soil, this free and rightless proletariat could not possibly be absorbed by the nascent manufactures as fast as it was thrown upon the world. On the other hand, these men, suddenly dragged from their accustomed mode of life, could not immediately adapt themselves to the discipline of their new condition. They were turned... into beggars, robbers and vagabonds, partly from inclination, in most cases under the force of circumstances. Hence at the end of the fifteenth and during the whole of the sixteenth centuries, a bloody legislation against vagabondage was enforced throughout Western Europe. The fathers of the present working class were chastised for their enforced transformation into vagabonds and paupers. Legislation treated them as ‘voluntary’ criminals, and assumed that it was entirely within their powers to go on working under the old conditions which in fact no longer existed.[109] [110] [111] The dissolution of manorial life was reflected in an individualistic view of the world that eventually penetrated every dimension of social consciousness.