Culture Wars Feature Article

The Weber Thesis: Capitalism and its Myths of Origin

by E. Michael Jones




“a thing of immortal make, not human, lion-fronted and snake behind, a goat in the middle and snorting out the breath of the terrible flame of bright fire.”

Homer on the Chimera, The Iliad


The origin is what really needs explanation.

Max Weber, The Protestant Ethic and the Spirit of Capitalism


No area of contemporary life, with the possible exception of sexuality, is as surrounded by myth as economics. When it comes to Capitalism, the great mythmaker of our day is Michael Novak. After beginning his career as a Christian socialist and promoter of sexual liberation, Novak joined the staff of the American Enterprise Institute in 1978, just as the neoconservative movement was gaining steam and moving from Trotskyite to Reaganite politics.


In 1982 Novak wrote The Spirit of Democratic Capitalism, which attempted to come up with a theological justification for Catholics wishing to abandon the Democratic Party and support the Reagan Administration’s crusade against Communism.  Supporting the Reagan agenda had other sequelae less congenial to the Catholic mind, like the assault on unions that began with the firing of the air traffic controllers, but those and other negative consequences of the Reagan era, like opening up the American auto market to the Japanese in exchange for the purchase of Treasury bills, did not seem apparent at the time.


One of the main reasons they did not seem apparent at the time was Michael Novak. Professor Stephen M. Bainbridge referred to Novak as “the foremost Christian thinker on the economy,” and to The Spirit of Democratic Capitalism as “undoubtedly his magnum opus.” The Spirit of Democratic Capitalism, Bainbridge continues, “appeared in a samizdat . . . edition in Poland during the 1980s and had an obvious impact on the Solidarity movement. Its reasoned defense of democratic capitalism as being grounded in the humane values of the Judeo-Christian tradition also helped give a moral center to the neoconservative movement”—or at least the appearance of a moral center.


Text Box: Michael Novak
Less sanguine in their evaluation of the effect that Novak’s magnum opus had on discourse about economics, especially among Catholics, are the editors of the I H S Press edition of Amintore Fanfani’s classic Catholicism, Protestantism and Capitalism. If Fanfani’s contention that “there is an unbridgeable gulf between the Catholic and the capitalistic conception of life” falls on deaf ears these days, especially among Catholics, the main reason for that deafness is Michael Novak, “the man,” according to the editors, “who has come to represent all that Catholic thought has to say on economic subjects.”[1]  If there is one man responsible for ignorance of and hostility toward Catholic social teaching, especially among Catholics, it is Michael Novak. If most Catholics think that Quadragesimo Anno is a hunchback who lives in the bell tower of Notre Dame Cathedral in Paris, the main reason for that misunderstanding is Michael Novak.  


How is it then that Catholic thinkers can come to such contradictory conclusions about Novak’s magnum opus, The Spirit of Democratic Capitalism? Well, it may be because the book itself is based on a contradiction.


At the heart of Novak’s book we find a mythological creature, not unlike Homer’s chimera, known as “democratic capitalism.” This creature is an incoherent composite which purportedly has the powers attributable to the animals out of which it was made, powers hitherto unknown in the realm of economic thought. According to Novak’s economic theory:


“political democracy is compatible in practice only with a market economy”[2]


(In reality democracy and capitalism, like liberty and equality of French Revolution fame, are antithetical. Capitalism always concentrates wealth—and, therefore, power—into fewer and fewer hands. Has Michael Novak ever heard of China?)


“Modern democracy and modern capitalism proceed from identical historical impulses”[3]


(As in Elizabethan England?  Revolutionary France? Florence under Savonarola? Each of these instances had either capitalism or democracy but not both. Plato reminds us that democracy follows plutocracy as its antithesis when the younger generation realizes that their elders had sold their birthright. The thesis of Kevin Phillips book Wealth and Democracy is that American history is a contest between wealth and democracy. In other words, the two are antithetical not complementary.)


“the natural logic of capitalism leads to democracy”[4]


(This statement is true in a certain sense. As Plato pointed out in The Republic, aristocracy leads to plutocracy, which leads to revolutionary democracy, which leads to tyranny.)


“Except in Adam Smith’s book, the concept of development did not exist. In 1800, a judgment like that of Ecclesiastes, ‘There is nothing new under the sun,’ blanketed a mostly torpid world. In most regions, economic enterprises stagnated.”[5]


(All of the economic advances upon which modern Capitalism is based—including double entry book-keeping, bills of exchange, and fractional reserve banking—were all in place in the city-states of northern Italy by the beginning of the 15th century, which is to say 400 years before Novak says they appeared in England.)


“The invention of the market economy in Great Britain and the United States more profoundly revolutionized the world between 1800 and the present than any other single force.  After five millennia of blundering human beings finally found out how wealth may be produced in a sustained systematic way.”[6]


Text Box: Capitalism was the social counterpart of Calvinist theology.(The market economy was not invented in either Great Britain or the United States. During the last two decades of the 20th century and the first decade of the 21st century, Capitalism was responsible for the destruction of billions of dollars of wealth in American through thinly veiled looting schemes like leveraged buy-outs. During the last decade of the 20th century, Russia was looted in an even more rapacious fashion under the oversight of Jeffrey Sachs and Lawrence Summers, then president of Harvard University. The looting of Russia was so obscene that Harvard ended up being sued by the United States government and paying the biggest fine in its history, which led to the resignation of Summers as Harvard’s president. Summers is now director of the National Economic Council for the Obama administration.)


“The churches did not understand the new economics. . . . Latin Culture did not understand Economics.”[7]


(Does Mr. Novak consider Italy as part of “Latin Culture”? Is the Roman Catholic Church part of “Latin Culture.” Is the headquarters of the Roman Catholic Church in Rome? Is Rome in Italy? In order to maintain his thesis—England created modern economics, the Church is ignorant of economic principle—Novak has to claim that Italy was an economic backwater, when in fact the exact opposite was true. Italy was the financial center of Europe for centuries. During the high middle ages, when Italy was establishing banking houses in Bruges, dominating commerce in Europe, and coming up with the financial advances that would revolutionize commerce, England’s main export was raw wool.)


“The Catholic Church . . . has tended, particularly because of the Vatican’s location within Italy . . . to rest uncomfortably in the past with only a tenuous connection to liberal societies. In a word, it has stood outside of and has, I think, misread the liberal democratic capitalist revolution.”[8]


(Novak’s framing of the issue is so tendentious that it needs to be unpacked a bit before it can be refuted. Does Novak consider Florence under Savonarola a “liberal society.” Savonarola certainly promoted democracy, but he opposed plutocracy, which is another word for Capitalism, as manifested at the time by the Medici banking interests. Faced with an unprecedented expansion of commerce in Italy during the 13th, 14th, and 15th centuries, the Church was deeply and intimately involved in sorting out which economic developments were beneficial to society and which were not.)


“North and South America were founded upon two radically different ideas of political economy. The one attempted to recreate the political-economic structure of feudal and mercantilist Spain. The other attempted to establish a novus ordo seculorum, a new order, around ideas never before realized in human history.”[9]


(North and South America were founded under exactly the same system. It was known as Mercantilism. Novak ignores the fact that that system found acceptance by all of the colonial powers in North America—England, France, Spain, and Holland. Novak attempts to draw deep theological conclusions from the fact that the United States has a larger economy than individual South American countries, even though for much of the 20th century Argentina was not far behind. The outcome of colonial conquest in North America was not decided by the triumph of a superior idea. In terms of economics, all of the colonial powers had the same idea. The conquest was brought about by force of arms.  Mercantilism was another name for economic warfare. All of the mercantilist powers fought wars over the exclusive economic privileges which went with the right to colonize North America. In these wars, England defeated both France and Holland. What theological/economic lesson does Mr. Novak derive from England’s defeat of Holland, a country more Calvinistic than England?)


“Latin Americans do not value the same moral qualities North Americans do.”[10]


(Statements like this may make sense to the Neoconservatives who were Novak’s employers at the American Enterprise Institute at the time he wrote The Spirit of Democratic Capitalism, but they are incomprehensible to Catholics, including those who live in North and South America. Catholicism is the target of Novak’s book precisely because the Catholic Church is the main institution which claims that economic policy should be subordinated to the moral law.)


“Now that the secrets of sustained material progress have been decoded, the responsibility for reducing hunger and misery is no longer God’s but ours.”[11]


(Have these secrets reached Detroit?)


“No region of the United States is poorer that it was in 1900.”[12]


(See above.)




“John Locke once wrote that the inventors of new economic processes and products—quinine, for example—were greater benefactors of mankind than earlier givers of charity. ... It may have been John Locke (1632-1704) who first articulated a new possibility for economic organization. Locke observed that a field of, say, strawberries, highly favored by nature, left to itself might produce what seemed to be an abundance of strawberries. Subject to cultivation and care by practical intelligence, however, such a field might be made to produce not simply twice but tenfold as much strawberries. In short, Locke concluded, nature is far wealthier in possibility than human beings had drawn attention to before.”[13]


Novak’s invocation of the name of John Locke is the infallible sign that the chimera of “democratic capitalism” resides in a mythical realm known as Whig History. One of the heroic figures of Whig history is John Locke. Since Novak is writing Whig history, he needs to drag statements about Locke, no matter how preposterous, into his narrative, and give them an importance which their banality does not deserve.


Whig history is based on the ability to draw grand theological conclusions from dubious historical premises. We’re talking about things like Locke’s discovery of the theological significance of strawberries. Or Novak attributing to Locke statements that were either commonplaces of Catholic thought for centuries, e.g. “Locke’s vision of a novel and invigorating sense of the human vocation.”[14] Or statements that were flat out wrong, as when he claims that, “History was no longer to be regarded as cyclical.”[15] What man living in Europe at any time after the birth and crucifixion of Our Lord and Savior Jesus Christ and familiar with a Bible which begins with the creation of the world and concludes with a description of the end of the world believed that history was cyclical? Determined to pile Pelion on Ossa, Novak goes on to claim Locke’s influence was so great that it affected our perception of the way God works on history:


After Locke, reflection on God’s ways with the world—theodicy—was altered.  The way God works in history was now thought of as progressive, open, subject to human liberty and diligence.  The vocation of the human being came to seem ennobled. No longer were humans to imagine their lot as passive, long-suffering, submissive. They were called upon to inventive, prudent, far-seeing, hardworking—in order to realize by their obedience to God’s call the building up and perfecting of God’s kingdom on earth.[16]


Text Box: If most Catholics think that Quadragesimo Anno is a hunchback who lives in the bell tower of Notre Dame Cathedral in Paris, the main reason for that misunderstanding is Michael Novak.Michael Novak’s sense of timing was uncanny. In the realm of popular thought he both anticipated and facilitated the neoconservative takeover of American foreign policy. In the realm of serious ideas, however, his book was uncannily wrong. It was based on an intellectual foundation which had just collapsed. The Spirit of Democratic Capitalism attempted to revive the Black Legend for the benefit of the Reagan administration at the very moment when the final nail was being hammered into the coffin of Whig History with the publication of Eamonn Duffy’s Stripping of the Altars. Novak based his appropriation of Whig History on the writings of H.R. Trevor-Roper, a notorious Catholic basher whose credentials as a historian took a significant hit when he staked his reputation as a historian on the authenticity of Hitler’s diaries. Trevor-Roper, known among his students as Professor Clever-Groper claims that the “secret techniques of capitalism were carried away to other cities,” and then wonders “Why?”[17] [H.R. Trevor-Roper, “Religion, the Reformation and Social Change,” in The European Witch-Craze of the Sixteenth and Seventeenth Centuries and Other Essays (New York: Harper & Row, 1969), p. 21].


Whig history is notorious for taking an historical fact, in this instance the decline of commerce in the Mediterranean when compared with the rise of commerce in the Atlantic which followed from the discovery of the New World, and then loading it down with theological significance, all of which is to show the superiority of English Protestant culture in the wake of the Glorious Revolution. Novak further loads the dice by referring to those nations engaged in the Mediterranean trade as “strongholds of the Counter-Reformation,”[18] making it all but certain that the reader will ascribe any change in economic fortune to their Catholicism. Sure enough, Novak uses Trevor-Roper’s tendentious resurrection of the Black Legend as a stick with which he proceeds to beat the Church, as when he writes, 


For Trevor-Roper, the decisive fact [in the development of Capitalism] was a new alliance of church and state, more intolerable with each passing year, which drove the new class of Catholic businessmen in some cases out of their church but in many more cases out of their native cities and homelands. They sought out cities no longer under the control of princes and bishops; they sought self-governing cities of a republican character.”[19]  


This is because:


The Counter-Reformation state impugned the religious value of commerce. It banned or restricted enterprise in the private sector. It licensed certain entrepeneurs to develop state monopolies; it favored state mercantilism over private mercantilism.[20]


To begin with, there is no such thing as private mercantilism. Mercantilism is, by definition, government-sponsored economic activity. Secondly, when it comes to an intolerable alliance of Church and State was any government more repressive than Elizabethan England? Is Novak claiming that there was no alliance of Church and State in England during the 16th century? Is he claiming that Elizabeth did not grant state monopolies? Is he claiming that Elizabeth did not favor the pleonasm known as “state mercantilism”? Finally, where were the “self-governing cities of a republican character”[21] which Novak praises? Were they in England? Was London one of them? No, “self governing cities of a republican character,” places like Venice, Milan, Florence, Siena were to be found in Italy, where they had been in the forefront of economic advance for centuries.


In Novak’s attempt to resurrect of the Black Legend, all of history becomes a morality play in which English forces triumph over their Catholic opponents because of the innate superiority of their ideas, all of which revolve around the emancipation of economic life from moral supervision. According to Novak, the failure is all on the Catholic side, i.e. in “the failure of Catholic thinking to grasp the creative potential of democratic capitalism.”[22]


Amintore Fanfani, who was familiar with the claim that the development of capitalism was more intense in Protestant than in Catholic countries, was reluctant to conclude that the rise of England as an economic power came about because of the superiority of English ideas, specifically the English idea later espoused as Capitalism. More important from Fanfani’s point of view was “the displacement of trade from the Mediterranean to the Atlantic”[23] as well as the disadvantages which arose from the fact that Italy was “economically divided into innumerable markets,”[24] while “the national state of England is already making giant strides toward unification, of which it enjoys full benefit at a time when in Italy there are but a few individuals who dimly realize the advantages to be derived from agreements between the various Italian states with a view to definite economic and political results.  The capitalistic importance of a vast and unified market—which is far greater than the form of religion—can be seen by summary of the economic history of France and Germany.”[25] There is, Fanfani concluded, “no need to seek for mysterious influences.”[26]


Novak’s thesis rests on a particular explanation of the origins of Capitalism known as the Weber Thesis.


In 1904 and 1905 the German Sociologist Max Weber wrote two articles on the origins of Capitalism which were later published posthumously, after Weber’s death in 1920, under the title, The Protestant Ethic and the Spirit of Capitalism. The heart of the Weber thesis is the contention that Capitalism was created by pious Protestants in the 17th century: “The force which produced it was the creed associated with the name of Calvin. Capitalism was the social counterpart of Calvinist theology.” This explains why the “business leaders and owners of capital . . . are overwhelmingly Protestant.”[27]


If Novak goes out of his way to confer the aura of “sanctity” (his term) on economic dealings which the Catholic Church had always considered sinful, it is because he got the idea from Weber. The Reformation (and the way it is  viewed in residually Protestant countries like the United  States) is the term which makes this transvaluation of values intellectually plausible, as when Novak writes:


To the Calvinist, Weber argues, the calling is not a condition into which the individual is born, but a strenuous and exacting enterprise to be chosen by himself, and to be pursued with a sense of religious responsibility. Baptized in the bracing, if icy, waters of Calvinist theology, the life of business once regarded as perilous to the soul—summe periculosa est emptionis et venditionis negotiatio—acquires a new sanctity.[28]


Text Box: Max Weber
In 1934, the first extensive Catholic critique of the Weber thesis appeared with the publication of Amintore Fanfani’s book Catholicism, Protestantism, and Capitalism. Amintore Fanfani was a student of Giuseppe Torniolo who worked closely with Pope Pius XI, who issued Quadragesimo Anno, the sequel to Rerum Novarum and one of the pillars of the Church’s social teaching in the same year. Fanfani characterized what he called “Weber’s far-reaching hypothesis” as “ill formulated.”[29] According to Fanfani’s analysis,  “Weber’s solution is unacceptable ... because it does not admit that the capitalist spirit existed before the Protestant idea of vocation.”[30]


“Is it possible,” Fanfani wonders, “for the essence of the thing—and for Weber the capitalist spirit constitutes the essence of capitalism—to come into existence long after the thing itself?” Weber’s thesis ignores the capitalistic “facts” which had been established long before Protestantism came into existence, and, Fanfani continues:


if we admit that they could not be capitalistic unless they were produced by the capitalistic spirit, we must conclude that the capitalist spirit existed before Protestantism. If we reason logically from the data with which Weber supplies us, we cannot fail to reach this conclusion.  Therefore, we cannot accept the idea of vocation as the origin of the capitalist spirit, or else we must say that it existed at an earlier time. ... Weber’s explanation is therefore inadequate.[31]


The real origin of capitalism was not England in the 17th century but Italy in the 15th century. The new, “capitalistic” mentality appeared at a point further back in time—between the 14th and 15th centuries—in regions such as Tuscany, Lombardy, and Flanders. This mentality, according to Fanfani, “guided the late medieval economy of the merchants and their first clever and unscrupulous entrepreneurs and traders; a mentality which Weber had identified as occurring much later in regions chiefly influenced by Protestantism.”[32]


As the editors of the I H S edition of Fanfani’s book point out:


In substance, Capitalism was born, at least as a mentality if not a fully developed economic structure, in the merchant world of Florence, Flanders, and the Hanseatic ports, particularly in the 14th century, as a secularized form  of that Christian activism that aimed to transform the world.  That Christian activity traced its roots to the “Prayer and Work” of the Benedictine Rule.[33]


It wasn’t virtuous Puritans who gave us Capitalism; it was decadent Catholics. Fanfani “saw in this very same spirit not a development but an inversion, almost a degeneration, of the ethics of the gospel” which entailed “the weakening of influence of the social conception proposed and supported by medieval Catholicism. That and not Protestantism “is the circumstance which explains the manifestation and growth of the capitalistic spirit in a Catholic world.” Capitalism came about because of “the growing distance, especially of the entrepreneurial and mercantile classes, from Catholic ethics. . . . The decrease in influence exercised by the church, following the breakup of Christendom incident to the birth of Protestantism, had ultimately accelerated a process which, nevertheless, was not born of the Reformation, but had its origins further back in time.”[34]


Contemplating this historical background leads Fanfani to his most fundamental conclusion, and the premise upon which he builds his economic theory, namely, that the Catholic ethos is anti-capitalistic. Catholicism


is the system that places other criteria above the economic that is the adversary of capitalism. . . . Catholic theology and philosophy posit a religious criterion as the supreme rationalizing principle of life, even in its economic aspects, and again Catholic philosophy subordinates economic rationalization to political rationalization in that it relates the material well-being of the individual to the material well being of his neighbor and subordinates purely economic well-being to individual and social well-being in the widest sense of the word.[35]


As Fanfani says at another point in the same book, “there is an unbridgeable gap between the Catholic and the capitalistic conception of life.”[36] The reason for this unbridgeable gap is the moral law. Catholicism sees all purposeful human activity as governed by the moral law. Economics is nothing if not purposeful human activity; therefore, economic activity must be governed by the moral  law.


Capitalism, on the other hand, means nothing if not the exclusion of moral considerations form the field of economic endeavor. It purports to be a science similar to physics or mathematics as a way of covering over Capitalism’s essence, which is the barring of any moral criticism from a science which is based, not on physical motion, but on the vagaries of human choice.


Because it is based on human choice, economics is inexorably bound up with ethics. Ethical considerations are built into its grammar, both in the form of the institutional constraints on individual action which it presupposes, but also in the model of individual conduct—of profit-seeking and the absence of any true altruism—on which it is founded. Furthermore, the telos of economic policies and even legal-economic regimes is based on a conception of what is good for society. In these ways, morality is as intimately related to economics as mathematics is to physics. This is precisely the link which the ideology of Capitalism suppresses.


Fanfani’s critique exposes the “new sanctity” of the Weber thesis as ultimately little more than a rationalization which lends moral credibility to behavior that was hitherto considered sinful. But the repression of economic reality and moral reality which Weber’s appropriation of religion attempts never quite succeeds. The repressed always returns. The more Novak tries to explain the “new sanctity” of Capitalism, the more the repressed returns unbidden to his explanation, as when Novak claims that:


the notion that the sustained application of practical intelligence to economic activities could open up new and unprecedented horizons awaited the capitalist spirit. Weber distinguishes the spirit of sustained incremental effort from adventure, piracy, luck, a windfall.[37] 


Novak mentions piracy repeatedly.


The new capitalism is not a matter of adventure or piracy but of continuous enterprise, planned and organized, evaluated for profit and loss.  Without the invention of double-entry bookkeeping, without mathematical sophistication, without the techniques of analysis made possible by modern science, continuous calculation would not be possible.[38]


Novak gives the impression that only the English genius could come up with something this advanced. The only trouble is that the English, in spite of Locke’s profound statements about strawberries, had virtually nothing to do with the invention of the economic advances upon which capitalism was based. Double-entry book-keeping was invented by the Italians, as were bills of exchange, and fractional reserve banking.  So much for Latin incapacity when it comes to economic science.




The English, on the other hand, were notorious promoters of piracy. This fact finds its way inadvertently into the best exposition of the Weber thesis in the English-speaking world, R. H. Tawney’s Religion and the Rise of Capitalism. Tawney writes: “Weber, in a celebrated essay, expounded the thesis that Calvinism in its English version was the parent of capitalism.” According to Weber, “religious radicalism . . . went hand in hand with an economic radicalism.”[39]


In attempting to substantiate the Weber thesis, however, Tawney unwittingly refutes it. Every instance of Puritan thought which Tawney cites to show the transition from Puritanism to Capitalism goes awry. Richard Baxter, the Puritan divine whom both Tawney and Weber cite as a thinker in the new Capitalist mode, is thoroughly Scholastic in his economic theories, as when he writes that a man “must not secure a good price for his own wares ‘by extortion working upon men’s ignorance, error, or necessity.’” Or when he writes that “no man may secure pecuniary gain for himself by injuring his neighbor.”[40] Or when he writes that “He must not improve (i.e., enclose) his land without considering the effect on the tenants, or evict his tenants without compensating them, and in such a way as to cause depopulation.”[41] The Christian, Baxter concludes, “must so manage his business as to ‘avoid sin rather than loss,’ and seek first to keep his conscience in peace.”[42]


Oblivious to the fact that he has just disproved Weber’s thesis, Tawney writes:


The first characteristic to strike the modern reader in all this teaching is its conservatism. In spite of the economic and political revolutions of the past two centuries, how small, after all, the change in the presentation of the social ethics of the Christian faith![43]


Tawney then goes on to make the same point in an even stronger fashion when he writes that:


Baxter . . . discourses of equity in bargaining, of just prices, of reasonable rents, of the sin of usury, in the same tone, if not with quite the same conclusions as a medieval Schoolman, and he differs from one of the later Doctors, like St. Antonino, hardly more than St. Antonino himself differed from Aquinas.[44]


Religion, in other words, did not bring about the rise of Capitalism. The Puritans were as conservative as the Schoolmen when it came to economic thought, especially if we take into account the conclusions of the later Schoolmen at the Lateran Council of 1515. The conclusion to be drawn from Tawney’s sources is inescapable. The source of the great change in the course of Western Civilization known as Capitalism was clearly not religion.


Text Box: Religion didn’t bring about the rise of Capitalism; Capitalism brought about the corruption of religion.In fact when Tawney gets around to examining the turmoil in English life during the crucial first half of the 16th century, all of the evidence points away from religion. To begin with, the great upheaval in English life took place 100 years before the time when Tawney/Weber claimed that the doctrine changed and 200 years before it actually changed. The real cause of the upheaval in England wasn’t a change in religious doctrine; it was the theft of Church property and the enclosure of the land and subsequent evictions which followed from this orgy of “privatization.” It wasn’t religion which caused the upheaval. As Tawney himself says, “it was agrarian plunder which principally stirred the cupidity of the age, and agrarian grievances which were the most important ground of the social question.”[45] The “new sanctity,” upon closer examination, turns out to be the old vices known as avarice, theft, and looting.


One hundred years before Puritans like Baxter and Ames put pen to paper, the acts of Henry VIII and Parliament, severing the connection between England and the Church of Rome, “produced a sweeping redistribution of wealth, carried out by an unscrupulous minority using the weapons of violence, intimidation and fraud and succeeded by an orgy of interested misgovernment on the part of its principal beneficiaries, it aggravated every problem and gave a new turn to the screw which was squeezing peasant and craftsman.”[46]


Tawney is, if anything, more eloquent that Weber in describing what actually happened in England at the real birth of the Capitalist era:


Lords, no longer petty sovereigns, but astute businessmen were leasing their demesnes to capitalist farmers, quick to grasp the profits to be won by sheep-grazing, and eager to clear away the network of communal restrictions which impeded its extension.[47]


The revolution in prices . . . after 1540 . . . injected a virus of hitherto unsuspected potency, at once a stimulant to feverish enterprise and an acid dissolving all customary relationships.[48]


The aim of the great landowner was no longer to hold at his call an army of retainers, but to exploit his estates as a judicious investment.[49]


The haunting insecurity of a growing, though still small, proletariat, [was] detached from their narrow niche in village or borough, [and became] the sport of social forces which they could neither understand, nor arrest, nor control.[50]


If, however, the problem was acute long before the confiscation of the monastic estates, its aggravation by the fury of spoliation let loose by Henry and Cromwell is not open to serious question.[51] … Estates with a capital value (in terms of modern money) of 15 to 20 million pounds changed hands. To the abbey lands which came into the market after 1536 were added those of the gilds and chantries in 1547.[52]


The magnitude of what happened in England in the middle decades of the 16th century was comparable to the “privatization” which took place in Russia during the 1990s, and in the historical continuity which connects those two events we can come to the true definition of Capitalism. Far from being an expression of some vague  “new sanctity,” Capitalism was always the rationalization and promotion of looting. The only thing that changed over the 500 years of its history was the sophistication of the instruments which enabled the theft. Tawney is nothing if not eloquent in describing both the theft and the thieves. Henry VIII shared the loot because the Government “required a party to carry through a revolution.” The looting even begat a financial genius to carry it out, Sir Richard Gresham, father of Gresham’s law, a man who could hold his own in sophistication with the leveraged buy-outs of the Boesky era or the Ponzi schemes of Bernie Madoff. In fact the so-called “Reformation” had more to do with real estate than theology and had much more in common with the securitization of subprime mortgages than—pace, Messers. Weber, Tawney, and Novak—predestination or any other theological issue. As Tawney himself put it, the net result of the English Reformation


was to alienate most of the land almost immediately and to spend the capital as income.  For a decade there was a mania of land speculation. Much of the property was bough by needy courtiers at a ridiculously low figure. Much of it passed to sharp businessmen, who brought to bear on its management the methods learned in the financial school of the City; the largest single grantee was Sir Richard Gresham.[53]


Before long the opportunistic plundering of Church property had morphed into an economic system:


In London, groups of tradesmen . . . formed actual syndicates to exploit the market. Rack-renting, evictions, and the conversions of arable land to pasture were the natural result, for the surveyors wrote up values at each transfer, and unless the purchaser squeezed his tenants, the transaction would not pay.[54]


If religion played a role in the rise of Capitalism it did so primarily as a pretext for looting. In spite of his desire to substantiate the Weber Thesis, Tawney gives the best description of the relationship between religion and the rise of Capitalism when he writes that, “The upstart aristocracy of the future had their teeth in the carcass, and, having tasted blood, they were not to be whipped off by a sermon.”[55] Still trying to save the appearances of the Weber Thesis, Tawney writes nonetheless that “Puritanism, not the Tudor secession from Rome, was the true English Reformation, and it is from this struggle against the old order that an England which is unmistakably modern emerges.”[56]


This may be true of the Reformation, but the exact opposite is true of Capitalism. Capitalism began in England with the looting of the monasteries. It was the systematic rationalization of that looting which came to be known as Whig History, and not the Puritan religion, which gave birth to the creed “that the individual is absolute master of his own, and within the limits set by positive law may exploit it with a single eye to his pecuniary advantage, unrestrained by any obligation to postpone his own profit to the well-being of his neighbors, or to give account of this actions to a higher authority. It was, in short, the theory of property which was later to be accepted by all civilized communities”[57] and came to be known as Capitalism.


Looting—not religion, and certainly not Puritanism—brought about the rise of Capitalism. Tawney’s own testimony stands the Weber thesis on its head, when he tells us,


the most representative thinkers of the Church of England had no intention of breaking with traditional doctrines. . . . The utterances of men of religion in the reign of Elizabeth . . . had more affinity with the doctrines of the Schoolmen than with those which were to be fashionable after the Reformation. . . . In its insistence that buying and selling, letting and hiring, lending and borrowing are to be controlled by a moral law, of which the Church is the guardian, religious opinion after the Reformation did not differ from religious opinion before it.[58]


Religion didn’t change economics, as Weber claims; on the contrary, economics changed religion. The so-called Reformation in England made use of a religious pretext to move a huge amount of wealth out of the hands of the Catholic Church and into the hands of the looters. That the newly established Church of England benefited from this transfer of wealth is undeniable, and that that windfall caused resentment among the free churches, i.e., the Puritans, who were cut out of dividing up the loot, is equally undeniable.  The issue was not religious theory; the issue was theft and its religious justification. The crucial figure in all this was not some doddering Puritan divine whose economic doctrines were indistinguishable from St. Antonino of Florence but rather capitalists like “Sir Thomas Gresham, who managed the Government business in Antwerp.”[59] For people like Gresham, the idea of Divines prohibiting the lucrative returns on usurious loans was nothing but so much foolishness, because they construed all transactions from an economic point of view which ipso facto excluded moral considerations. The name of that economic point of view was Capitalism. The same truth applies today, suppression of the moral law in the economic sphere is the infallible sign of Capitalism. That along with looting, which is the praxis of Capitalism, are the constants which will accompany the progress of the “new sanctity” through the next 500 years of history, to our present day.


Both Weber and Tawney as well as epigoni like Michael Novak, in other words, got it exactly wrong. Religion didn’t bring about the rise of Capitalism; Capitalism brought about the corruption of religion. The real situation was Weber’s thesis turned upside down.CW


E. Michael Jones, the editor of Culture Wars, is writing a book on Capitalism. This piece is an excerpt from a lengthy feature article published in the February 2010 issue of Culture Wars, which may be purchased here.

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[1] Amintore Fanfani, Catholicism, Protestantism, and Capitalism (Norfolk, VA: I H S Press, 2003), p.7.

[2] Michael Novak, The Spirit of Democratic Capitalism (New York: American Enterprise Institute/Simon &  Schuster, 1982), p. 14.

[3] Novak, p. 14.

[4] Novak, p. 15.

[5] Novak, p. 17.

[6] Ibid.

[7] Ibid.

[8] Novak, p. 25.

[9] Novak, p. 22.

[10] Novak, p. 302.

[11] Novak, p. 28.

[12] Novak, p. 283.

[13] Novak, p. 27.

[14] Novak, p. 39.

[15] Ibid.

[16] Ibid.

[17] Novak, p. 276.

[18] Novak, p. 277.

[19] Ibid.

[20] Ibid.

[21] Ibid.

[22] Novak, p. 278.

[23] Fanfani, p. 154.

[24] Fanfani, p. 155

[25] Fanfani, p. 155.

[26] Fanfani, p. 156.

[27] Novak, p. 38.

[28] Ibid.

[29] Fanfani, p. 147.

[30] Fanfani, p. 148.

[31] Fanfani, p. 151.

[32] Fanfani, p. 38.

[33] Ibid.

[34] Fanfani, pp. 38-9.

[35] Fanfani, p. 93.

[36] Fanfani, p. 118.

[37] Novak, p. 39.

[38] Novak, p. 44.

[39] R. H. Tawney, Religion and the Rise of Capitalism: a Historical Study (Holland Memorial Lectures, 1922) (Gloucester, Mass: Peter Smith, 1962), p. 232.

[40] Tawney, p. 224.

[41] Ibid.

[42] Ibid.

[43] Ibid.

[44] Tawney, p. 225.

[45] Tawney, p. 138.

[46] Ibid.

[47] Tawney, p. 136.

[48] Ibid.

[49] Ibid.

[50] Ibid.

[51] Tawney, p. 138.

[52] Ibid.

[53] Ibid.

[54] Tawney, p. 140.

[55] Tawney, p. 143.

[56] Tawney, pp. 198-9.

[57] Tawney, p. 147.

[58] Tawney, pp. 155, 157.

[59] Tawney, p. 178.




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