How Christianity Shapes Capitalism: Christian Wealth and Power Then and Now

By Paul Kivel

The Catholic church was all powerful in Europe between the 11th and 17th centuries so it is not surprising that its economic impact was huge and long lasting. Yet this is easily overlooked today because most people understand capitalism as an economic system and view Christianity as a religion located in a separate sphere of society with limited impact on economic development. The reality is far more complicated. It may be surprising to learn how extensively the Church fueled and shaped the development of capitalism. This article describes how the Church built the infrastructure, organized the systems, and accumulated the capital to propel a new form of international finance across Christendom. Understanding the roots of capitalism in Christianity is important because they laid the foundation for the white Christian male elite who still dominate our society and profits from and justifies the devastating economic inequality that exists today.

Capitalism’s origin story begins in the Middle Ages with the powerful Christian monastic orders. As Catholic historian Michael Novak describes1, capitalism first emerged in rural areas, where monasteries, especially those of the Cistercians2, began to rationalize economic life. “The Cistercians, for example, became famous as entrepreneurs. They mastered rational cost accounting, plowed all profits back into new ventures, and moved capital around from one venue to another, cutting losses where necessary, and pursuing new opportunities when feasible. They dominated iron production in central France and wool production (for export) in England. …Their monasteries were the most economically effective units that had ever existed in Europe, and perhaps in the world, before that time.”3 In the early thirteenth century, The Cistercians, along with the Benedictines, Dominicans and Franciscans, built their economic systems on the exploited labor of monks, nuns and local farmers. This provided the first model of diligent workers subsuming their needs and interests and offering their energy and talents to the common tasks of large scale proto corporate enterprises.

Beyond the innovations of particular monastic orders, as Novak notes, “The extended Church provided a framework for such [monastic] economic activities. It owned nearly a third of all the land of Europe. To administer those vast holdings, it established a continent-wide system of canon law that tied together multiple jurisdictions of empire, nation, barony, bishopric, religious order, chartered city, guild, confraternity, merchants, entrepreneurs, and traders.”4

Novak concludes his analysis by describing how foundational the early church was to the economic system we know today as capitalism “The church had established the preconditions and building blocks for capitalism: the rule of law and a bureaucracy for resolving disputes rationally; a specialized labor force; the institutional permanence that allows for transgenerational investment and sustained intellectual and physical efforts, together with the accumulation of long-term capital for reinvestment; and a zeal for wealth creation all under the missionary guise of spreading the word of God.”5 The new code of canon law at the time enshrined as a legal principle that communities, like cathedral chapters and monasteries could act as legal individuals. It defined a new set of terms such as corporation, insurance, foundation, will, trust and beneficiary, and the laws and policies which defined their use. It also provided local and regional administrative bureaucracies of arbitrators, jurists, negotiators, and judges, along with an international language, “canon law Latin.” As historian Harold Berman has written about these developments, formulated and promoted by the Church, “Without constitutional law, corporation law, contract law, property law, and the other fields of law that developed in Western Europe from the twelfth to the fifteenth centuries, the economic and political change of the seventeenth to the nineteenth centuries, which contemporary social theorists have identified with capitalism, could not have taken place.” 6

Enhancing this system were the European-wide structures of accounting, record keeping, surveillance and punishment set up by the Inquisitions; and the emerging bureaucracies of Christian states in Italy, Spain, Portugal, France and England.

The Church, eventually joined by new northern European Anglican and Protestant elites, continued to have major impacts on the emerging capitalist, colonizing economies. The centuries-long Inquisitions (1184-1834) and 250 years of Christian fueled witch burnings (1450—1700) forced women out of public spaces and into their homes while labeling them a danger to individual men and to male-dominated society.7
In the late 15th century, Europeans began to colonize Africa and the newly discovered Americas under the banner of Divine approval from Papal Bulls that sanctioned and even demanded invasion, conquest, and dominion over pagan and indigenous land coupled with enslavement, dispossession and death to non-Christians.8 The papal statements (“bulls”) establishing this framework are known collectively as the Doctrine of Christian Discovery and are still foundational to western, including U.S. law.

The Church was a central, foundational player in the exploitation of land, women, and colonized people throughout the world. It did not just provide an ideological and material framework for capitalism. The Church also provided essential political power and economic capital and gave divine sanction to the enslavement of Africans and Indigenous peoples throughout the Americas and other parts of the world, and to the exploitation of land and minerals that propelled Western industrialization.

The industrialization of Europe was based on three crucial factors that follow directly from the Doctrine of Christian Discovery. First was the invasion, appropriation and development of indigenous land that resulted in the near elimination of indigenous peoples in the Americas. Second was the incredible accumulation of wealth from gold and silver stolen from Africa and the Americas that provided the capital used to invest in new industrial ventures. Third was the plentiful cheap labor procured by enslaving Africans. Slavery allowed for the development of a previously unheard-of large-scale plantation system contributing to European wealth and fueling new industries, technologies, and forms of social organization. In brief, stolen land, plundered minerals and enslaved labor allowed agriculture to develop monocropping systems of sugar, cotton, tobacco, cocoa and coffee. This development led to new bureaucracies for control, financial systems of banking and insurance, global systems of trade and markets, and cultural and political changes that we now describe as capitalism and modernity.9
The incredible profits produced by slave labor from mining and agriculture led to a new, rising capitalist class with the wealth and power to challenge the monarchical control of the economies of Europe, stimulating new forms of political organization.10 In addition, European industrial development was directly based on a slave-based extractive economy. The exploitation of the working class in England and other countries was amplified by the increase calories and stimulants that were available to workers from widespread sugar, coffee, and tea consumption11; and the textile and other industries that fueled these economies were based on the increased availability of low-cost cotton for an international trade in cloth in exchange for slaves, as well as the need to supply clothes for enslaved people.
Dominant Christianity did more than provide an ideological justification and legal system for this new capitalist structure. The Catholic and Anglican churches, other denominations, churches, monastic orders and, of course, tens of thousands of individual Christians owned slaves and/or were investors in the trading companies, businesses, factories, and newly acquired lands resulting from colonization.12 This Christian economic system also provided a continually refined set of values and ideas that provided further support for capitalism as described below.

A key Christian concept contributing to the rise of capitalism was the belief that humans (for Christians, only Christians counted as human) had been given dominion over the earth and therefore, they could do anything they wanted to it. For centuries societies dominated by Christianity had destroyed sacred sites and persecuted the Indigenous peoples who lived in balance and interdependence with the natural environment. As this emerging capitalist culture of destruction spread its tentacles through the world, it replaced the cultures of peoples who cared for the earth with an ethic promoting the exploitation and destruction of everything standing in the way of Christian expansion and colonization.

The Church and emerging Protestant denominations provided not only an ideological justification for exploiting land but also one for exploiting people. As historian Sarah Butler points out,13 in the 14th century, the Church declared there were two kinds of deserving (of charity) poor. One category consisted of those who voluntarily renounced wealth to become poor such as monks and nuns and occasional nobles. The Church declared that renunciation of wealth was a sign of a person’s rejection of the comforts and temptations of the material world and of their humility before God. The other group of deserving poor were those who could not support themselves because they were disabled, children, pregnant, or widowed. The undeserving poor included everyone else who was just poor. They were undeserving because a benevolent God necessarily rewards those who work hard, so the poor must be lazy and morally suspect. This moral economy was considered natural law–an unregulated (capitalist) economy would automatically move society toward a more perfect state in which moral Christians would be rewarded and the sinful punished. The concept of the “deserving poor,” was used to deny most people any form of social support. There was no longer any moral reason for individual Christians or civil institutions to feel obligated to take care of those in need and it became easy to blame people for their poverty as an excuse for not assisting them.
The Christian contrast between the deserving and undeserving poor became a mainstay of Western economic thinking. Starting in the early 17thd century, when the Christian European ruling classes were ravaging the peasantry with enclosures, driving people off the land into towns and cities, there was little opportunity for former farmers except for poverty waged work in emerging capitalist factories. In reluctant response to peasant starvation and protest, poor laws had been passed in England and elsewhere to provide basic subsistence. One example of Christian reasoning on the topic of poverty in this period is Joseph Townsend’s argument against the poor laws in England, written in 1786. Townsend, one of the strongest proponents of eliminating the poor laws wrote, “The Poor Law regime should be removed …because it tends to destroy the harmony and beauty, the symmetry and order of that system, which God and nature have established in the world.”14 In other words, God’s economy provided a natural incentive for people to work—hunger—and any intervention would only undermine its beauty and purpose. If the government provided food for the hungry it would hinder the development of the virtues of hard work, frugality, and abstinence, and promote sloth and immorality (sin). Protestantism further entrenched these beliefs by emphasizing personal choice and the assumption that God rewarded hard work and moral behavior (and the more one worked the less time one had for immoral behavior).
A major Christian ideological underpinning of capitalism was the idea that a just and benevolent God or, as professor of natural theology and economist Adam Smith put it in 1759, an “invisible hand” guaranteed an unregulated economy would lead to human progress. Smith described this benevolent god as variously, “that great, benevolent and all-wise Being, the Great Director of the universe, the great Conductor of the universe.”15 He writes that “the ultimate cause of our action in reality is the wisdom of God.” In other words, since God set up capitalism to regulate the human economy, all human interference with His regulations was sinful and counterproductive.
The combination of a belief in an unregulated market system (an impossibility in reality) coupled with the view that a moral economy rewards the virtuous (a sign of God’s presence), and punishes the sinful (a sign of God’s absence) has since guided Christian rooted capitalist economic and popular thinking. The core idea, stated concisely by popular 19th century Protestant lecturer Reverend Russell H. Conwell, was “To sympathize with a man whom God has punished for his sins, thus to help him when God would still continue a just punishment, is to do wrong, no doubt about it.”16
Today, despite massive evidence that unregulated economies lead to systematic and widespread poverty, harsh working conditions, consolidation of wealth and power in an elite few, and increasingly severe levels of environmental degradation and destruction, faith in a “free market” capitalism continues to be championed by many as a natural and progressive system benefiting society and anyone who works hard. Corporate and political leaders, and the media they control, strongly reinforce these beliefs by blaming those who are poor, extolling the virtues of those with money (as hardworking job creators), and misrepresenting our society as a system which grants everyone equal opportunity. This Christian economic framework has been so long standing and deeply entrenched that one poll found 60% of people in the United States believe the poor are poor because they are lazy. Another poll found that 61% agree with the statement “Most people who want to get ahead can make it if they’re willing to work hard.”17

Another piece of our Christian/capitalist economic framework is the theory of the rational economic actor. Based on a white Christian male who is assumed to make “rational” choices in the marketplace, this model is used to decide and justify economic policies. This fictional economic man is the same as dominant Christianity’s moral actor, completely independent and self-centered. If he makes bad choices, the fault lies only with him, not with the socially and economically constructed choices he may face. And since he is white and male, the actual lives of white women and Black, Indigenous and people of color are rarely factored into economic policies. Women’s unpaid work, parental responsibilities, and social obligations are not accounted for and generally considered not productive because they don’t contribute directly to profits. The racial, cultural, language exploitation, discrimination and other constraints many people of color face are not taken into account by corporate and political leaders (except as objects of possible exploitation) when judging their work and social contributions.

Alongside secular multinational corporations, Christian individuals and institutions are still a major economic force in the 21st century U.S. Christian denominations such as the Catholic, Mormon, Presbyterian, Methodist and Baptist churches, individual megachurches, parachurch organizations, and individual Christians own tremendous amounts of land, businesses and other assets. They wield substantial political influence on domestic and foreign policy at the national level as well as specific legislation and public policy at the local and state level. For example, they strive to set the agenda on issues of reproductive rights, LGBTQ+ equality, educational and health policy, U.S. foreign policy, and the interpretation of laws on religious freedom and the separation of religion and government.

Today, large numbers of poor, working- and middle-class people continue to vote for social and economic policies that primarily benefit the rich and punish the poor because they believe in this dominant Christian world view. Much of the support for Christian rooted capitalism is based on a misunderstanding of how the economic system actually operates: Ruling class economic policies tend to punish the poor, who work hard, and reward the inheritors of wealth.

In the United States, we live in a vast, interdependent economic system in which the concentration of wealth among the few produces environmental destruction, shorter life spans and deteriorating health for rich and poor, Black, Indigenous, people of color and white. This vast inequality produces a quality of life that lags considerably behind almost all other over-developed countries. Part of challenging Christian-rooted capitalism is envisioning and working for an economic system that eliminates exploitation and redistributes wealth based on mutual support, cooperation, and meeting people’s basic needs; a society that relinquishes the hold of a corrupt Christian moral calculus of good and bad, sin and salvation and instead values people for who they are and distributes our collective wealth to provide them what they need to thrive.

Sources

Africa and the World. “Christian and Slavery: the Role of the Church” at AfricaW: Africa and the World, https://www.africaw.com/christianity-and-slavery-the-role-of-the-church

Berman, Howard J. Law and Revolution: The Formation of the Western Legal Tradition. Harvard University Press, 1983

Bruenig, Elizabeth. “Gods and Profits: How Capitalism and Christianity-aligned-America” April 20, 2015. The New Republic. https://newrepublic.com/article/121564/gods-and-profits-how-capitalism-and-christianity-aligned-america.

Butler, Sara M. “Labor History Miscellany: When Did the Poor Become Deserving or Undeserving?” 20 February 2017. https://legalhistorymiscellany.com/2017/02/20/when-did-the-poor-become-deserving-or-undeserving/

Federici, Silvia. Caliban and the Witch: Women, the Body, and Primitive Accumulation. Autonomedia, 2004.

French, Howard W. Born in Blackness: African, Africans, and the Making of the Modern World, 1471 to the Second World War. Liveright Publishing, 2021

Friedman, Benjamin M. Religion and the Rise of Capitalism. Alfred A. Knopf, 2021.

Mintz, Sidney W. Sweetness and Power: The Place of Sugar in Modern History. Viking, 1985.

Noble, David F. Beyond the Promised Land: The Movement and the Myth. Toronto: Between the Lines, 2005.

Novak, Michael. “How Christianity Created Capitalism” July 20, 2010. Acton Institute, Religion & Liberty: Volume 10, Number 3 https://www.acton.org/pub/religion-liberty/volume-10-number-3/how-christianity-created-capitalism.

Pomeranz, Kenneth. The Great Divergence: China, Europe, and the Making of the Modern World Economy. Princeton, 2000.

Rizvi, Sa’eed Acktar. “Churches Participate in Slave Trade” in Slavery from Islamic and Christian Perspectives at Al-Islam.org 1987. https://www.al-islam.org/slavery-islamic-and-christian-perspectives-sayyid-saeed-akhtar-rizvi/christianity-and-slavery.

Smith, Adam. Theory of Moral Sentiment. Chapter III “On Universal Benevolence.”

Footnotes

1 “How Christianity Created Capitalism” by Michael Novak • July 20, 2010 in Religion & Liberty: Volume 10, Number 3. https://www.acton.org/pub/religion-liberty/volume-10-number-3/how-christianity-created-capitalism.

2 The Order of Cistercians branched off from the Benedictines in 1098 and over the next hundred years established monasteries throughout Europe.

3 Novak, ibid.

4 Novak, ibid.

5 Novak, ibid.

6 Berman, Howard J. Law and Revolution: The Formation of the Western Legal Tradition. Harvard University Press, 1983. P. 43.

7 A good description and overview of interconnections of these processes can be found in Silvia Federici’s Caliban and the Witch: Women, the Body, and Primitive Accumulation.

8 The Papal Bull Dum Diversas, granted among other things “free and ample faculty to … invade, search out, capture, vanquish, and subdue all Saracens and pagans whatsoever, and other enemies of Christ wheresoever placed, and the kingdoms, dukedoms, principalities, dominions, possessions, and all movable and immovable goods whatsoever held and possessed by them and to reduce their persons to perpetual slavery, and to apply and appropriate to himself and his successors the kingdoms, dukedoms, counties, principalities, dominions, possessions, and goods, and to convert them to his and their use and profit.” Pope Nicholas V, 1453. For full text see https://jimmorgan.wordpress.com/2012/06/07/the-text-of-dum-diversas/.

9 For a detailed account of this process see Howard W. French, Born in Blackness: Africa, Africans, and the Making of the Modern World, 1471 to the Second World War. Liveright Publications, 2021 pp 212-224.

10 Ibid. pp 220-1.

11 See Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy. Princeton, 2000, p 4 and Sidney W. Mintz, Sweetness and Power: The Place of Sugar in Modern History. Viking, 1985, p 133.

12 See, for example “Christian and Slavery: the Role of the Church” at AfricaW: Africa and the World at https://www.africaw.com/christianity-and-slavery-the-role-of-the-church [viewed 2-19-22] and the chapter “Churches Participate in Slave Trade” by Sayyid Sa’eed Acktar Rizvi in Slavery from Islamic and Christian Perspectives at Al-Islam.org 1987. https://www.al-islam.org/slavery-islamic-and-christian-perspectives-sayyid-saeed-akhtar-rizvi/christianity-and-slavery. [Viewed 2-20-2022]

13 This change in attitude towards poverty developed over the course of the 14th century as described in “Labor History Miscellany: When Did the Poor Become Deserving or Undeserving?” Sara M. Butler; 20 February 2017.

https://legalhistorymiscellany.com/2017/02/20/when-did-the-poor-become-deserving-or-undeserving/

14 Quoted in Noble, David F. Beyond the Promised Land: The Movement and the Myth. Toronto: Between the Lines, 2005. p. 100.

15 Adam Smith. Theory of Moral Sentiment chapter III “on Universal Benevolence.” Viewed on 9-4-21 at http://knarf.english.upenn.edu/Smith/tms623.html.

16 Quoted in Religion and the Rise of Capitalism by Benjamin M. Friedman

Alfred A. Knopf, 2021. P. 299

17 Quoted in Religion and the Rise of Capitalism by Benjamin M. Friedman

Alfred A. Knopf, 2021 pp 403-4.

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