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The well-known thesis of Max Weber regarding the intimate relationship between Calvinism and Capitalism has long been challenged by Western scholars yet has always found its proponents. The French historian of ideas and philosopher Henri Sée wrote in The Origins of Modern Capitalism (1926) that “the Reformation, particularly in the form of Calvinism, contributed greatly to the growth of capitalism.” Richard Henry Tawney, in his Religion and the Rise of Capitalism (1926), attributed the extraordinary prosperity of English Puritans and Dutch Calvinists--taking place at time when Catholic countries Spain, Italy and Portugal were hit with economic stagnation—to the stringent spiritual fervor on the part of the English and the sense of destiny with which their faith imbued them. Calvinists in particular, wrote Tawney, following the example of the much put-upon but savvy Huguenots, became known for their thrift and for their feeling of being “Called” to achieve worldly success. This created a compelling mythology later embodied in the ideal of Yankee frugality and ingenuity on these shores—a classic stereotype not entirely far-fetched.

Capitalism on a large scale first emerged in the Dutch Republic; banking or “banking” was invented by the northern Italians: such has been the classic view of the origins of modern markets. Yet the question of how much of this phenomenon was the product of religious faith—that is, how much was directly the outgrowth of a “Protestant ethic” at work, or of Florentine Catholic charity turned Pope bail-out programs turned the international loan business? In the case of the Dutch, it was, in fact, that republic’s moving away from the dictates of Calvinism that allowed for its rise of prosperity rather than specific adherence to specific religious principles, as shall be argued below. The trajectory of this Calvinism-to-Capitalism development between the 16th and 17th centuries is a fascinating one, one worthy of re-acquaintance in understanding the history of the emergence of modern capitalism.

To be sure, Weber’s work exerted a strong influence. In an oft-quoted passage he states: “[I]t is characteristic and in a certain sense typical that in French Huguenot Churches monks and businessmen (merchants, craftsmen) were particularly numerous among the proselytes, especially at the time of the persecution. Even the Spaniards knew that heresy (i.e. the Calvinism of the Dutch) promoted trade, and this coincides with the opinions which Sir William Petty expressed in his discussion of the reasons for the capitalistic development of the Netherlands. Gothein rightly calls the Calvinistic diaspora the seed-bed of capitalistic economy... Even Austria, not to speak of other countries, directly imported Protestant craftsmen”…Weber then expands his view to embrace all of Protestantism: “Montesquieu says (Esprit des Lois, Book XX, chap. 7) of the English that they ‘had progressed the farthest of all peoples of the world in three important things: in piety, in commerce, and in freedom.’ Is it not possible that their commercial superiority and their adaptation to free political institutions are connected in someway with that record of piety which Montesquieu ascribes to them?”

Yet the particular case of the parallel rise of Calvinism and capitalism has always been of interest to scholars because the Dutch Republic, as mentioned above, was the first country in which modern capitalism developed on a vast, country-wide scale. To be sure, great qualities of thrift, spartan living, suspicion of speculation were all a part of the fire-and-brimstone creed of that religion. However, at first glance, there appears a contradiction: the qualities of mind for the discipline of making money and keeping it versus a social structure and values-system in place that allowed for accumulation of wealth, of profit, and of lending was something else. In classic Calvinism, all possessions acquired beyond a reasonable form of subsistence were to be set aside for the poor and well into the 20th century churches in the Netherlands had one collection for the church and one for the poor. This was originally at odds with the unapologetic Huguenot attitude—marked as this latter group was by their persecuted status—about those “French heretics”’ belief in the critical importance of the accumulation of capital.

Instead, it appears the case that religion was not a factor in the rise of the great Dutch Republic’s wealth. One of the most interesting analyses of this came from the pen of Amintore Fanfani in his great Catholicism, Protestantism, and Capitalism (1935), who argued that the causes of the rapid growth of the Netherlands had specifically to do with the shifting of trade routes from the Mediterranean to the North in the 17th century. Capitalism in the Dutch Republic, as Fanfani explains, was best seen in the example of trade with the Baltic countries, which furnished the foundation of Dutch naval and commercial power during the 17th century (“a clear indication of the growth of the Baltic Sea, and when there were practically no Jews active in commerce in the Netherlands and there were no Protestants at all”, wrote Albert Hyma in his article “Calvinism and Capitalism in the Netherlands 1555-1700, in The Journal of Modern History, September 1938).

In fact, during the days of the greatest prosperity for the Dutch Republic, as a whole, the provinces in which Calvinism was the strongest shared the least in the process of capitalistic growth. “Calvinism in the Netherlands retarded the development of capitalism”, wrote Hyma. “Calvinism cannot possibly be held responsible for the rapid growth of capitalism in the Netherlands.” This argument, in turn, underscores the fact of the extraordinary trajectory through which the Dutch view of “the accumulation of capital” passed between the 16th and 17th centuries. What began as religious guidelines for charity would eventually allow for the secularization of wealth accumulation—and this by decree of the Church itself.

Seen in this light, the rise of Dutch prosperity at a time of the severe cultural observation of Calvinism is truly remarkable; indeed, it is astonishing that economic development happened at all. For example, in the provincial synod of South Holland, convoked at Dordrecht in 1574, the question came up whether a banker should be permitted to partake in religious feasts and celebrations. The answer was rather in the negative: “No”, was the verdict of the ecclesiastical court, “for he has been allowed by magistrates to operate his bank only because of the hardness and evil of men´s hearts and not because of God´s will. Hundreds of persons would be scandalized by the admittance of such a person to the communion service”. Yet, what was meant by the term ¨banker” in the Dutch language during the 16th century was a bit, shall we say, nuanced. In the period between 1500 and 1650, persons who loaned money on security at high rates of interest were generally referred to as ¨Lombardiers¨ partly because many of them migrated from Italy to the Netherlands to do business there, and partly because the banking business had originated in Italy. In a religious treatise published at Ghent in the year 1545, the name “Lombardiers” or “Lombaerds” already appears and the reader is warned against such persons as “usurers”. In the prevailing Calvinism of the time reacting to the rise of this foreign influence, an old fashioned attitude prevailed that “no person should acquire more worldly possessions than were absolutely necessary.”

Nonetheless, the rise of finance companies and banks in the Netherlands was unstoppable, the most important account of which, notes Hyman in his essay, was the “Res Judicanda” of Leyden published in 1658, which saw the gradual easing of religious restrictions against making profit. In a number of cities in the provinces of Holland and Utrecht, so called “loan banks” were instituted either by the magistrates themselves or by bankers licensed by the municipal governments in order to check the operations of the “Lombardiers” who charged 32 and half percent interest. As stated in the Res Judicanda, “Although it must be admitted that in these banks everything is not so equitable as in the Mountains of Charity [a loan system instituted by the Vatican to help the poor] and although profits are not used in the helping the poor with alms, nevertheless the interest charges have been reduced one half and they are intended to help pay the cost of government. Furthermore, since it is the duty of every man to continue to labor with his hands in order to improve his financial condition and so build up a surplus for the maintenance of the needy, I conclude that the magistrates by increasing the public funds are taking care that in times of depression, the poor may be aided through loans and alms.”

As Hayman writes, “the Res Judicanda indicates that by the year 1658 the official attitude of the clergy among Orthodox Calvinists in the Netherlands had finally become affected by the spirit of the new age, the age of modern capitalism.” He points out that the Japanese gladly welcomed the Dutch merchants during the second half of the 17th century “because the Dutch, who were less religious than the Portuguese came only to make money and not make Christians”. The lack of constraint was also instrumental in Dutch domination of early America. “Unlike New England, the individuals largely responsible for exploiting New Netherland's [parts of modern day New York, New Jersey, Pennsylvania and Delaware] resources were merchants of the home country. Secure in their Amsterdam countinghouses, the merchants grasped control of the colony's lifeline to Holland and held fast. Profits from their enterprises flowed into coffers in Amsterdam, thus depriving New Netherland of capital and the opportunity to develop a viable, colony-based merchant community”, wrote the scholar Oliver A. Rink, in Holland on the Hudson (1986). Hyma adds: “Where the great centers of industry and commerce were, Calvinism lost its pristine purity.”

And so, coming full circle from the decision of the Dordrecht synod of 1574 that bankers were evil, the estates of Holland declared in 1658 “that henceforth no church had the right to deprive any banker of participation in the communion service because he was a banker” as long as he kept interest rates low and helped communities give support to the poor. In due course, other provinces followed suit, the first banking regime was introduced in North Holland, where Amsterdam is located.

Here the chief offices of the great commercial companies were situated and here capitalism first caused the force of religion to cool down. Essentially, this was opposite of the process of Max Weber. To be fair, Calvin did help foster “the spirit” of modern capitalism, but the enormous wealth acquired by the Dutch people during the 17th century was solely that of enterprise. (And, after all, Martin Luther was the philosophical kin of Calvin yet Germany suffered a terrible bout of staggering poverty during that same period). “God cures, and the doctor gets the money”, goes an old, sly saying of the proud Dutch Republic, which so masterfully transformed the fervor of predestination into faith in personal destiny—and the singularly capitalistic means of getting there.