Capitalism is a term applied to economic systems in which individual persons or private corporations develop, own, and control much of a country's physical capital. Capitalism is also referred to as a Free-Market System, where individuals are free to decide what products to produce, how to produce them, whom to sell them to, and at what price to sell them. Thus, they have the chance to succeed - or fail - by their own efforts.

Capitalism owes its philosophical origins to eighteenth-century philosophers such as Adam Smith. According to Smith, in the ideal capitalist economy (pure capitalism) the market (an arrangement between buyer and seller to trade goods and services) serves as a self-correcting mechanism - an "invisible hand" to ensure the production of the goods that society wants in the quantities that society wants, without regulation of any kind (Business Today, 2001).

Though the dialectical concept of capitalism surfaced during the 1800's, the actual practice of capitalism began in the late 1400's - early 1500's during the time of the Protestant Reformation and the Catholic Counter-Reformation. While Martin Luther fought to split from the Roman Catholic Church, the Catholic Reformation supported the expansion of the economies of Europe throughout the world.

Within these historical developments many people can connect the discovery of America and the economic enterprise of slavery with the newfound Protestant religion and the worldwide expansion of Europe under Catholic rule. However, most modern day scholars of Europe and America will try hard to keep the two separate not wanting to afford the crime of human bondage to the religious values of the American founders or the eminence of the Roman Catholic Church.

Around 1900 the great German sociologist Max Weber, noticing that the economically advanced territories of England, Holland, and North America had all been Protestant, argued that Protestantism, particularly in its Calvinistic forms, was especially conducive to acquisitive economic enterprise. According to Weber, this was because Calvinism theology, as opposed to Catholicism, sanctified the ventures of profit-oriented traders and moneylenders, and gave an exalted place in its ethical system to the business ventures of thrift and diligence.

But historians have found shortcomings in Weber's thesis. Although Calvin did indeed praise diligence and acknowledge that merchants could be "sanctified in their calling," he no more approved of exorbitant interest rates than Catholics did. Moreover Calvin argued vehemently that people should put their excess wealth at the service of the poor rather than piling up capital for the sake of gain or subsequent investments. Thus it appears that the "work ethics" necessary for economic success in commercial ventures did have some Calvinistic roots, but that Calvin's ideal merchant would by no means have been a great speculator or maker of fortunes.

Bearing in mind that the European economy had already made great strides forward in the High Middle Ages and was advancing again in the early modern period, not least because of the overseas ventures initiated by the Catholic powers of Portugal and Spain. Calvinism thus was at most just one of the many contributory factors to the triumph of modern capitalism and the Industrial Revolution (Western Civilization, 1983).

In the above excerpt, it is clear that modern day scholars seek to disassociate either Euro-religious faction with slavery or Christian world colonialism. And it is no mere coincidence that this religious/economic triad occurred during and around the same historical periods. The fact is, the religious and royal elitist of those times proclaimed loudly of their dedication and communion to God yet at the same time capitalized on the world's resources including the use of human-slave labor.

It was by the funding of the Roman Empire that Portugal and Spain set sail to new lands (particularly the gold coast of Africa) and the Americas, and by the exploratory ventures of the Calvinist religious rebels who escaped Europe and settled in North America. Under the indoctrination of the "Protestant work ethic" did American capitalism come about. Afterward the collaboration of capitalism and Christianity came about, by which America lives now.

Study the concept of Communism

© 2003 by C.R. Hamilton