There is a concept loose in the U.S. and emphasized in our educational system that the Puritans arrived in the U.S. believing in capitalism and went straight to economic prosperity.
Well, capitalism will definitely do that, but the Puritans made a few stops before getting to prosperity. Those included socialism, price controls, and severe caps on finance & trade under the guise of opposing usury. All of those policies will suppress economic development.
Jerry Bowyer explores this journey through false ideas is a series of articles, which summarize his interview with Mark Valeri, author of Heavenly Merchandize.
To encourage you to check out the full articles, I’ll try to summarize some key ideas.
7/30 – Forbes – Jerry Bowyer – Puritans vs. Capitalism: How A Theological Error Led To Financial Stagnation – In the 17th century, pastors and religious leaders were opposed to usury which included even discounting letters of credit more than a small amount. If you can’t use paper (bills of credit) to facilitate long-distance trading, there won’t be much trading.
As is explained throughout the three articles, these ideas came from Aristotle, not the Bible. In my tradition, this would be called syncretism. In one phrase, that means adding someone else’s bad idea to your doctrine instead of using just the Bible. That is a really, really bad thing to do.
Essentially, that error in medieval Europe looked outside the bible (i.e. Aristotle) to define theological beliefs.
The expected result was stagnation and an overall poor economy. Article explains why this false concept of opposing ‘usury’ inhibited trade.
Only when the non-biblical ideas were dumped did the U.S. economy thrive.
8/6 – Forbes – How Early American Pastors Learned To Embrace Capitalism By (Eventually) Listening to Their Members – Article mentions the tendency of our otherwise well-trained and spiritually mature pastors to teach about economics and other areas where they have no training or special knowledge.
This especially happened in Puritan New England when pastors rebuked and corrected merchants for using bills of credit to facilitate international trade.
A series of crises in the late 1600s led to financial innovations that allowed for the risk of a transaction to be reflected in pricing. Interest rate adjustments, in other words – discounting a bill of credit for the realistic chances of losing an entire shipment – came into common use.
That knowledge in the merchant and banking classes eventually filtered to the clergy.
The article says that by the time of the American Revolution clergy in New England were active supporters of the trading and financing systems.
8/25 – Forbes – The End of Medieval Economics: How American Theologians and Merchants Abandoned Aristotle and Invented Capitalism – The economic destruction from Aristotle’s non-biblical ideas goes beyond allowing a financier to adjust transactions for risk.
The Medieval Church also bought into his false teaching that there is a ‘just price’ for all goods and services, even the price of money (interest). In addition, the church can identify that price and enforce it through civil and church law. In addition to being a false idea and non-biblical, that reveals an amazing level of arrogance.
Mr. Bowyer asserts that is one in a long list of reasons why the middle ages were so uniformly poor for so long.
When merchants and then eventually the clergy dropped the false teachings around the mid-1700s, the U.S. economy took off. As Mr. Bowyer mentioned several times in his articles, the U.S. went on to become the economic powerhouse of the world. But only after we dropped a few deadly, non-biblical concepts.
Check out the three articles. Even better would be to check out the book.