The Moral Triumph of Western Civilization

Part 9 – The Dawn and Moral Foundations of Capitalism

(Part 9 of a multi-part series on The Moral Triumph of Western Civilization.)

Thomas Aquinas was born during the same time period that Genghis Khan was ravaging western Asia. Aquinas became one of the most important figures in the development of Western Civilization, especially in reconciling the brilliant (but pagan) philosophy of the ancient Greeks with historical Christian theology.

In his landmark book, Summa Theologica, Aquinas brought together Biblical revelation with human reason; in particular the philosophy of Aristotle, whom he considered the greatest of the newly rediscovered Greek philosophers. Recall that most of the works of the ancient Greeks had only been recently found mostly through cooperation with the Islamic world from about the mid-12th to the mid-13th centuries.

Aquinas is considered one of Western Civilization’s greatest philosophers for proclaiming that reason was a gift from God instilled in humans to be used to understand, explain and enjoy His creation.
Both Augustine and Aquinas applied reason to God’s Word. Aquinas argued that faith must precede reason which had to be used with humility — the understanding that our intelligence and knowledge as humans is limited.

Aquinas was a “Scholastic” whose writings epitomized the period of “High Scholasticism” in Christian Europe. The Scholastics had already begun the university system with the University of Bologna (the world’s oldest) in 1088 but the founding of these institutions accelerated during the 13th and 14th centuries.

University of Bologna (

Universities (from Latin universitas or “a whole”) were constructed in England, Italy, Spain, Portugal, Austria, Poland and Germany before 1400. There was nothing like this pursuit of a comprehensive education anywhere else in the world.

Before Aquinas, many Christian theologians advocated that reason should be completely subordinated to the spiritual experiences of faith alone. Reasoned interpretation and ultimate meaning took a back seat.

Judaism and Islam differ from Christianity in that Moses and Muhammad were themselves writers who transmitted doctrines directly. Such writings have obviously encouraged (demanded really) literalism in their respective faiths.

But Jesus recorded nothing. Everything He taught was written by others. So from the start, Christians were forced to use reason to collect, verify and unify His teachings into an anthology. By routinely teaching in parables, Christ forced His followers to reason out His messages. Aquinas maintained that God gave us that ability because He epitomized reason and rationality.

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Thomas Aquinas (Goodreads)

How did Europe progress so dramatically from German barbarism to the so-called “Age of Discovery” beginning in the 15th century? Why were European explorers stunned to find the enormous technological advantage they possessed compared to natives they encountered?

Surprisingly, the answer was provided by the fathers of economic socialism, Karl Marx and Friedrich Engels. They attributed this progress and competitive advantage enjoyed by the Europeans to (the economic system that Marx coined as) capitalism.

In the Communist Manifesto, they argued that before the rise of capitalism, people were predominantly “slothful,” and that capitalism showed what hard work and free market competition could achieve.1  To support their case, they said capitalism arose only in Europe and produced technological advances that far surpassed all historical cultures.

Capitalism or Free Enterprise only developed in the West as reason combined with Christian moral principles and the faith’s exhortations of optimism and progress were applied to commerce and trade.

Paramount was Judeo-Christianity’s moral elevation of private property. The moral reasoning goes like this: Since life is both unequivocally precious and finite, and since acquiring property requires a portion of a person’s limited life to produce, that individual has as much of a God-given right to that earned property as they have to their own life. The investment of a person’s time to produce something means part of one’s life has been transferred into that earned property. Quite simply, one has a right to harvest and keep that which one sows. It is one of the strongest arguments against slavery. No one can “own” other humans nor the fruits of their labors.

Aquinas wrote that “‘private ownership is both legitimate and necessary’”2 to best promote the common good. This is because people take better care of their own possessions than they do of public ones.

After the Magna Carta’s restrictions on English kings, scholastics like Aquinas and William of Ockham (Ockham’s or Occam’s razor fame) reinforced the notion that property rights supersede any laws dictated by a sovereign. It meant that no king could take property without a compelling collective interest.  This strongly reinforced the moral principle that private property rights were nearly sacrosanct.

Additionally, the civilizing of the continent resulted in a general confidence that private property could be retain (not stolen) for long-term benefit.

Monastery of Santa Scholastica (YouTube)

Many today would consider it ironic that Capitalism was born in the places known for their self-denial and repudiation of worldly goods. It began in the Catholic monasteries whose monks had altered their thinking slightly to achieve not just safety from harm (many were fortresses) but economic self sufficiency as well. Originally they dealt mostly with local agricultural produce and loans required prior to harvesting. But eventually these monasteries provided the business model and the moral underpinnings as ethical self-advancement in commerce became — free enterprise.3


Capitalism was born in Italy


In northern Italy, there were four medium-sized Italian towns where capitalism developed and flourished: Venice, Genoa, Florence and Milan. Venice was the largest with a population of about 30,000..

Italian banks were soon founded not just as secure money depositories but as sophisticated financial institutions. With barter no longer the primary means of exchange in trading, a system of payment had to be devised to facilitate long-distance commerce. Given the lack of overland trade-route security at this time in history, the back-and-forth transportation of cash was a major trade obstacle. These early banks devised a system to transfer funds from a distance based on paper and not actual currency. It caused trade to increase dramatically.

Newly created for-profit companies required written records of all transactions and accounts. By the end of the 13th century, double-entry bookkeeping had been invented and was widely used.

Capitalism requires the management of such activities to produce a “profit” (as there is no point in having one’s wealth diminished with “losses”). Managers were hired and promoted based on merit. Firms also needed skilled workers so it is no surprise that almost half of school-aged children in Florence in the early 1300s were attending schools.4  This at a time when many kings were still illiterate.

The word, ‘capital’ began to be used in the 14th century to denote money that would be invested to provide a return of income; i.e., for the production of wealth, not consumed or squandered. (Capital could also be defined as any asset employed in a productive activity: land, buildings, equipment, ships, etc.)

This was markedly different from any historical method of acquiring wealth. Previously it had been almost solely by unethical means: Conquest, theft, forced enslavement, government confiscation, etc. Not by risk. This was an entirely new way of thinking: To put one’s existing wealth (capital) at risk with the goal of increasing it (higher returns) commensurate with that risk; all for the prospect of a better life for the entrepreneur and his family.

By the mid-13th century the Riccardi Bank of Lucca had 11 bank branches with one in Dublin, Ireland. About 50 years later the Peruzzi Company of Florence had over a dozen branches including one in London and Tunis. During this century there were over 170 major Italian banks in operation (not including branches).5  Italian commercial power was far-reaching: From England to Southern Russia to the Sahara Desert to India and China.

It was history’s first great economic empire.6

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[Capitalists put more at risk than their capital. What many socialists fail to grasp is the irony that free-market entrepreneurs must invest of themselves – time, effort, reputations – before they receive one dollar of income. They must first have an idea: How to better serve their fellow man with something unique or superior, actually produce it and then get someone else, acting in his or her own best interest, to voluntarily pay for it. If a market is truly free, all this risk is undertaken with zero guarantee of success.

“Free” Enterprise means everyone involved in the commercial process is acting voluntarily. The initial risk-taker does so voluntarily; as does the lender of capital if necessary; the worker or laborer who performs the physical work does so voluntarily for an agreed upon wage and the purchaser also parts with his money of his own free will.

Virtually all of human prosperity, every life-enhancing advancement 21st century Americans have over those who lived in the 12th century is due to entrepreneurs who knowingly took extraordinary risks.]


1- Stark, Rodney. A Civil Religion: How Christianity Created Free and Prosperous Societies. The American Enterprise. May 1, 2006. P. 16.

2- Stark, Rodney. The Victory of Reason (How Christianity Led to Freedom, Capitalism, and Western Success). Random House Press.  New York. 2005.

3- ibid.

4- ibid.

5- ibid.

6- ibid.


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