How American Theologians and Merchants Abandoned Aristotle and Invented Capitalism

Why were the Middle Ages so poor? There are many reasons: a mini ice age suppressing crop yields, the rise of the Islamic empire cutting trade and shipping ties in half, ideologies which degraded commerce in contrast with ‘higher’ pursuits like church work are among them.

But for economists, what stands out most starkly is the flawed theory which held that there is a ‘just price’ for goods, currencies, and services, and that just prices should be enforced by ecclesiastical and civil law. This idea does not come from the Bible, but from “The Philosopher” (Aristotle), who was viewed as the ultimate authority on world matters.

While Aristotle made genuine advances in almost every field in comparison with what had come before him, his great genius became a kind of new authority, a dead hand of tradition which held Europe back from progress in many disciplines.

It was Aristotle, not the Bible, who created the scientific theory that the earth is the center of the solar system (which was then codified into Ptolemaic astronomy), and it was Aristotle, not the Bible, who created the theory that money is sterile and therefore that all interest should be forbidden.

The United States could never have risen to become the world’s financial center without moving past Aristotle, past just price laws, past capital controls. But it did not move past these by simply embracing ‘the enlightenment’ (whatever that is), but by detailed reexamination of the Scriptures and seeing that they were not hostile to financial innovation.

They did it by developing a doctrine of providence which gave the colonies a calling to transform the world spiritually by also transforming it economically. It did this by adopting a positive theology of wealth creation and putting it in the larger context of world evangelization and resistance to tyrannical government.

To learn more about this, you can read Professor Mark Valeri’s excellent book Heavenly Merchandize, listen to our interview here, or continue reading for a partial transcript and the final installment in this series.

Jerry: “You could also add that perhaps Protestant theology had a greater predilection to project Aristotle, who I think is a pretty key thinker in the scholastic school’s rejection of usury. They’re not necessarily part of the Thomistic synthesis, so they’re more ready to reject the Pagan philosopher Aristotle than maybe Roman Catholics would [be]. Do you see that–?”

Mark: “Yes. In fact, in 1699 a group of Boston-area ministers meet to debate lots of different policies, including usury, and they actually deconstruct the Aristotelian/Thomist1 argument against usury, that usury is perforce in medieval Catholic teaching, which they get from Aristotle. Usury is perforce deceitful because money is only a measure; it cannot increase; it’s like a ruler, and you use it for exchange but it itself cannot be a commodity. It cannot enhance in value, because once money enhances in value, it ruins its role as a stable measure of merely exchange, if you will, value. That’s the Aristotelian argument.”

Jerry: “And therefore, Aristotle said, ‘Money is sterile.’”

Aristotle (384–322 BC)

Mark: “Exactly. ‘It cannot increase.’ Well, the Puritans actually go at that argument and deconstruct it. They actually take it apart and show where it’s wrong, towards the end of the 17th century.”

Jerry: “Is there a document where they do this?”

Mark: “Yes.”

Jerry: “What’s the document?”

Mark: “It’s called 30 Cases. Not a very exciting title. There’s two places that I cite in the book: Cotton Mather was the recording secretary for this clerical meeting, it’s published in 1699 in Boston and it’s merely called 30 Cases. And then the theologian Samuel Willard gives an even fuller explanation behind it in his systematic theology, in his huge systematic theology, where he’s commenting on the 8th commandment (the commandment, ‘Thou shalt not steal’), and he gets into usury and then he has even a more thorough deconstruction of medieval arguments.”


Jerry Bowyer is a Forbes contributor, contributing editor of, and Senior Fellow in Business Economics at The Center for Cultural Leadership.
  1. “Thomism is the philosophical school that arose as a legacy of the work and thought of Saint Thomas Aquinas (1225-1274). []
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