Religion and the rise of capitalism

by R. H. Tawney

“A bishop,” observed Laud, in answer to the attack of Lord Saye and Sele, “may preach the Gospel more publicly and to far greater edification in a court of judicature, or at a Council-table, where great men are met together to draw things to an issue, than many preachers in their several charges can.”[[75]] The Church, which had abandoned the pretension itself to control society, found some compensation in the reflection that its doctrines were not wholly without influence in impressing the principles which were applied by the State. The history of the rise of individual liberty—to use a question-begging phrase—in economic affairs follows somewhat the same course as does its growth in the more important sphere of religion, and is not unconnected with it. The conception of religion as a thing private and individual does not emerge until after a century in which religious freedom normally means the freedom of the State to prescribe religion, not the freedom of the individual to worship God as he pleases. The assertion of economic liberty as a natural right comes at the close of a period in which, while a religious phraseology was retained and a religious interpretation of social institutions was often sincerely held, the supernatural sanction had been increasingly merged in doctrines based on reasons of state and public expediency. “Jerusalem ... stands not for the City and the State only ... nor for the Temple and the Church only, but jointly for both.”[[76]] In identifying the maintenance of public morality with the spasmodic activities of an incompetent Government, the Church had built its house upon the sand. It did not require prophetic gifts to foresee that the fall of the City would be followed by the destruction of the Temple.

III. THE GROWTH OF INDIVIDUALISM

Though the assertion of the traditional economic ethics continued to be made by one school of churchmen down to the meeting of the Long Parliament, it was increasingly the voice of the past appealing to an alien generation. The expression of a theory of society which had made religion supreme over all secular affairs, it had outlived the synthesis in which it had been an element, and survived, an archaic fragment, into an age to whose increasing individualism the idea of corporate morality was as objectionable as that of ecclesiastical discipline by bishops and archdeacons was becoming to its religion. The collision between the prevalent practice, and what still purported to be the teaching of the Church, is almost the commonest theme of the economic literature of the period from 1550 to 1640; of much of it, indeed, it is the occasion. Whatever the Church might say, men had asked interest for loans, and charged what prices the market would stand, at the very zenith of the Age of Faith. But then, except in the great commercial centers and in the high finance of the Papacy and of secular Governments, their transactions had been petty and individual, an occasional shift to meet an emergency or seize an opportunity. The new thing in the England of the sixteenth century was that devices that had formerly been occasional were now woven into the very texture of the industrial and commercial civilization which was developing in the later years of Elizabeth, and whose subsequent enormous expansion was to give English society its characteristic quality and tone. Fifty years later, Harrington, in a famous passage, described how the ruin of the feudal nobility by the Tudors, by democratizing the ownership of land, had prepared the way for the bourgeois republic.[[77]] His hint of the economic changes which preceded the Civil War might be given a wider application. The age of Elizabeth saw a steady growth of capitalism in textiles and mining, a great increase of foreign trade and an outburst of joint-stock enterprise in connection with it, the beginnings of something like deposit banking in the hands of the scriveners, and the growth, aided by the fall of Antwerp and the Government’s own financial necessities, of a money-market with an almost modern technique—speculation, futures and arbitrage transactions—in London. The future lay with the classes who sprang to wealth and influence with the expansion of commerce in the later years of the century, and whose religious and political aspirations were, two generations later, to overthrow the monarchy.

An organized money-market has many advantages. But it is not a school of social ethics or of political responsibility. Finance, being essentially impersonal, a matter of opportunities, security and risks, acted among other causes as a solvent of the sentiment, fostered both by the teaching of the Church and the decencies of social intercourse among neighbors, which regarded keen bargaining as “sharp practice.” In the half-century which followed the Reformation, thanks to the collapse of sterling on the international market, as a result of a depreciated currency, war, and a foreign debt contracted on ruinous terms, the state of the foreign exchanges was the obsession of publicists and politicians. Problems of currency and credit lend themselves more readily than most economic questions to discussion in terms of mechanical causation. It was in the long debate provoked by the rise in prices and the condition of the exchanges, that the psychological assumptions, which were afterwards to be treated by economists as of self-evident and universal validity, were first hammered out.

“We see,” wrote Malynes, “how one thing driveth or enforceth another, like as in a clock where there are many wheels, the first wheel being stirred driveth the next and that the third and so forth, till the last that moveth the instrument that striketh the clock; or like as in a press going in a strait, where the foremost is driven by him that is next to him, and the next by him that followeth him.”[[78]] The spirit of modern business could hardly be more aptly described. Conservative writers denounced it as fostering a soulless individualism, but, needless to say, their denunciations were as futile as they were justified. It might be possible to put fear into the heart of the village dealer who bought cheap and sold dear, or of the pawnbroker who took a hundred quarters of wheat when he had lent ninety, with the warning that “the devices of men cannot be concealed from Almighty God.” To a great clothier, or to a capitalist like Pallavicino, Spinola, or Thomas Gresham, who managed the Government business in Antwerp, such sentiments were foolishness, and usurious interest appeared, not bad morals, but bad business. Moving, as they did, in a world where loans were made, not to meet the temporary difficulty of an unfortunate neighbor, but as a profitable investment on the part of not too scrupulous business men, who looked after themselves and expected others to do the same, they had scanty sympathy with doctrines which reflected the spirit of mutual aid not unnatural in the small circle of neighbors who formed the ordinary village or borough in rural England.

It was a natural result of their experience that, without the formal enunciation of any theory of economic individualism, they should throw their weight against the traditional restrictions, resent the attempts made by preachers and popular movements to apply doctrines of charity and “good conscience” to the impersonal mechanism of large-scale transactions, and seek to bring public policy more into accordance with their economic practice. The opposition to the Statutes against depopulation offered by the self-interest of the gentry was being supported in the latter years of Elizabeth by free-trade arguments in the House of Commons, and the last Act, which was passed in 1597, expressly allowed land to be laid down to pasture for the purpose of giving it a rest.[[79]] From at any rate the middle of the century, the fixing of prices by municipal authorities and by the Government was regarded with skepticism by the more advanced economic theorists, and towards the end of the century it produced complaints that, since it weakened the farmer’s incentive to grow corn, its results were the precise opposite of those intended.[[80]] As markets widened, the control of the middleman who dealt in wool and grain, though strictly enforced in theory, showed unmistakable signs of breaking down in practice. Gresham attacked the prohibition of usury, and normally stipulated that financiers who subscribed on his inducement to public loans should be indemnified against legal proceedings.[[81]] Nor could he well have done otherwise, for the sentiment of the City was that of the merchant in Wilson’s Dialogue: “What man is so madde to deliver his moneye out of his owne possession for naughte? or whoe is he that will not make of his owne the best he can?”[[82]] With such a wind of doctrine in their sails men were not far from the days of complete freedom of contract.

Most significant of all, economic interests were already appealing to the political theory which, when finally systematized by Locke, was to prove that the State which interferes with property and business destroys its own title to exist. “All free subjects,” declared a Committee of the House of Commons in 1604, “are born inheritable, as to their land, so also to the free exercise of their industry, in those trades whereto they apply themselves and whereby they are to live. Merchandise being the chief and richest of all other, and of greater extent and importance than all the rest, it is against the natural right and liberty of the subjects of England to restrain it into the hands of some few.”[[83]] The process by which natural justice, imperfectly embodied in positive law, was replaced as the source of authority by positive law which might or might not be the expression of natural justice, had its analogy in the rejection by social theory of the whole conception of an objective standard of economic equity. The law of nature had been invoked by medieval writers as a moral restraint upon economic self-interest. By the seventeenth century, a significant revolution had taken place. “Nature” had come to connote, not divine ordinance, but human appetites, and natural rights were invoked by the individualism of the age as a reason why self-interest should be given free play.

The effect of these practical exigencies and intellectual changes was seen in a reversal of policy on the part of the State. In 1571 the Act of 1552, which had prohibited all interest as “a vyce moste odyous and detestable, as in dyvers places of the hollie Scripture it is evydent to be seen,” had been repealed, after a debate in the House which revealed the revolt of the plain man against the theorists who had triumphed twenty years before, and his determination that the law should not impose on business a utopian morality.[[84]] The exaction of interest ceased to be a criminal offence, provided that the rate did not exceed ten per cent., though it still remained open to a debtor, in the improbable event of his thinking it expedient to jeopardize his chance of future advances, to take civil proceedings to recover any payment made in excess of the principal. This qualified condonation of usury on the part of the State naturally reacted upon religious opinion. The Crown was supreme ruler of the Church of Christ, and it was not easy for a loyal Church to be more fastidious than its head. Moderate interest, if without legal protection, was at any rate not unlawful, and it is difficult to damn with conviction vices of which the degrees have been adjusted on a sliding scale by an Act of Parliament. Objective economic science was beginning its disillusioning career, in the form of discussions on the rise in prices, the mechanism of the money-market, and the balance of trade, by publicists concerned, not to point a moral, but to analyze forces so productive of profit to those interested in their operation. Since Calvin’s indulgence to interest, critics of the traditional doctrine could argue that religion itself spoke with an uncertain voice.

Such developments inevitably affected the tone in which the discussion of economic ethics was carried on by the divines, and even before the end of the sixteenth century, though they did not dream of abandoning the denunciation of unconscionable bargains, they were surrounding it with qualifications. The Decades of Bullinger, of which three English translations were made in the ten years following his death, and which Convocation in 1586 required to be obtained and studied by all the inferior clergy, indicated a via media. As uncompromising as any medieval writer in his hatred of the sin of covetousness, he denounces with all the old fervor oppressive contracts which grind the poor. But he is less intolerant of economic motives than most of his predecessors, and concedes, with Calvin, that, before interest is condemned as usury, it is necessary to consider both the terms of the loan and the position of borrower and lender.

The stricter school of religious opinion continued to cling to the traditional theory down to the Civil War. Conservative divines took advantage of the section in the Act of 1571 declaring that “all usurie being forbydden by the lawe of God is synne and detestable,” to argue that the Statute had in reality altered nothing, and that the State left it to the Church to prevent bargains which, for reasons of practical expediency, it did not think fit to prohibit, but which it did not encourage and declined to enforce. It is in obedience to such doctrines that a scrupulous parson refuses a cure until he is assured that the money which will be paid to him comes from the rent of land, not from interest on capital.[[85]] But, even so, there are difficulties. The parson of Kingham bequeaths a cow to the poor of Burford, which is “set to hire for a year or two for four shillings a year,” the money being used for their assistance. But the arrangement has its inconveniences. Cows are mortal, and this communal cow is “very like to have perished through casualty and ill-keeping.”[[86]] Will not the poor be surer of their money if the cow is disposed of for cash down? So it is sold to the man who previously hired it, and the interest spent on the poor instead. Is this usury? Is it usury to invest money in business in order to provide an income for those, like widows and orphans, who cannot trade with it themselves? If it is lawful to buy a rent-charge or to share in trading profits, what is the particular criminality of charging a price for a loan? Why should a creditor, who may himself be poor, make a loan gratis, in order to put money into the pocket of a wealthy capitalist, who uses the advance to corner the wool crop or to speculate on the exchanges?