Tuesday 3 May 2011

Christian Capitalism

Thankfulness to God

In his remarkable book, The Victory of Reason Rodney Stark documents the rise of nascent capitalism in Italy in the 13th century. This was not planned: it happened.

A pejorative distortion of free market economies is that they bring out the worst impulses in human beings--particularly greed and a disdain for fellow human being. "Get all you can; can all you get; poison the rest" is purported to be the motto of free-market enterprise. Ironically, the motto only becomes accurate in a private enterprise economy when it becomes "mixed": that is, free marketeering is combined with the monopolistic power of the state. Corrupt, venal merchants and business people always stand ready to support rules and regulations that would be an advantage to themselves and an impediment to their competitors, or at the very least would force the public to use their particular goods and services.

If one were a manufacturer of children's car seats, one's commercial success is far more assured if the government can be successfully persuaded to promulgate a regulation making them mandatory. Sadly, the modern "mixed" economic model frequently facilitates rapacious activity. Capitalism nurtured in a humanist womb all too often deserves its pejorative press.

Historically, capitalism nurtured in a Christian womb proved to be quite different in some respects.
It would be inappropriate to conclude discussion of the financial affairs of Italian capitalist firms [in the 13th century] without noting their commitment to charity. "Each time they drew up or revised a budget, a fund for the poor was created with some of the capital of the company. These funds were entered in the books in the name of 'our Good Lord God' as representing the poor, who in this way, were made partners in the company. When dividends were paid, a proportional part went to the poor."

In fact, when a company was liquidated the poor were always included among the creditors in proportion to their share of the capital. Most companies also maintained a petty cash box from which the apprentices were assigned to distribute money to any beggars who showed up asking for alms. All of this was in keeping with the frequent asides offering thanks to God made in the ledgers and account books of these companies.

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