Is Capitalism Catholic?

That's the question Richard Bastien poses in this thoughtful essay on the topic. In it he argues that many of the economic theories posited by John Locke, Adam Smith et al and those generally associated with the so called protestant work ethic can be traced back to medieval theologians and city states from as far back as the 12th century where . . .

capitalism existed in Italian city-states during the late Middle Ages, a period not of obscurantism and darkness but of progress and intellectual vibrancy that established the foundations of what eventually became modernity. Shortly after the publication of Weber's theory, economic historian Henri Pirenne produced a vast documentation showing that "all of the essential features of capitalism -- individual enterprise, advances in credit, commercial profits, speculation, etc. -- are to be found from the twelfth century on, in the city republics of Italy -- Venice, Genoa, or Florence"

The essay also suggests that Catholic theologians and academics outlined and supported the early capitalist systems:

nearly all the ingredients of modern value and price theory can be found in the writings of medieval thinkers. They developed price and value theories remarkably similar to neoclassical models and rejected the labor theory of value on which Marxist and socialist theories are based. Moreover, they acknowledged the legitimacy of profits and interest charges as early as the 13th century. . .

The best illustration of this is St. Bernardino of Siena, a Franciscan missionary and reformer active in the first half of the 15th century who systematized scholastic economics and was one of the first theologians to write an entire work dealing solely with economics.

Titled 'On Contracts and Usury', it provides a justification of private property, the ethics of trade, the determination of value and price, and the usury question. Bernardino described the entrepreneur as being endowed by God with a special combination of four entrepreneurial gifts -- efficiency, responsibility, hard work, and
risk-taking -- and argued that the latter two legitimized the notion of profit. In short, profit was understood as the valid remuneration of the entrepreneur.

It's a convincing case that capitalism had a well established roots before protestant and secular intellectuals began taking the lead in capitalist economic theory. Today the Church continues to endorse the kind of regulated capitalism that is present in North America. Bastien supports this assertion by referencing John Paul the Great's encyclical, Centesimus Annus. The encyclical answers the question of whether capitalism is the model that countries seeking true economic and civil progress should follow, like this:

If by capitalism is meant the positive role of business, the market, private property and responsibility for the means of production as well as free creativity in the economic sector, the answer is in the affirmative . . . . But if by capitalism is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom nor is seen as a particular aspect of freedom, the core of which is ethical and religious, then the reply is certainly negative.

Fascinating stuff.