This review, written by John Boersema, is one of our series of reviews of chapters of David W. Hall & Marvin Padgett, Calvin and Culture: Exploring a Worldview (P&R, 2010). We welcome your engagement and responses.
The author of this chapter, Timothy D. Terrell, is associate professor of economics at Wofford College in Spartanburg, South Carolina.
In introducing this chapter, Terrell argues that it would be difficult to envision the development of Western market-oriented civilization without Calvin and his followers. Recognizing that while Calvin “certainly retained some errors of his time, his work improved economic theory and policy and led to enduring moral defenses of liberty.” Terrell, obviously a free-market enthusiast, argues that Calvin’s work enhanced the case for economic freedom in three main ways, namely by (1) his defense of the occupations of merchants and industrialists (as part of his general view of occupation as “calling”), (2) his stance on interest and usury, and (3) his recognition of limits on the civil magistrates.
Terrell begins the exposition of his first point by drawing on the Weber thesis that “Protestantism led to capitalism by elevating ascetic stewardship to a virtue for all Christians in their callings, not just monks.” Calvin’s idea of a calling in all lines of work led Protestants to be more focused on the practical aspects of this world than was the case in other religions. While recognizing exceptions, he mentions the relative economic success of nations with Calvinistic backgrounds (e.g. Britain and its colonies) as opposed to that of Catholic Spain and Portugal (and their Central and South American colonies). Terrell rightly deals with some critics of Weber; he cautiously concludes that “Calvinism may have encouraged the accumulation of capital” (an essential element for modern economics) since it praises diligent, purposeful labour while de-emphasizing consumption. Accumulation of capital, Terrell argues, generated a group of capital owners who had an interest in protecting property rights over against thieves and the state, thus emphasizing individual rights (which Calvin explicitly supported) instead of a coercive state. Terrell further cites with approbation authors who attribute economic growth to the Protestant/Calvinist form of worship with fewer resources devoted to churches and less productive work lost through church-sanctioned holidays. In fact, the removal of the all-encompassing authority of the Roman Catholic Church created room for more experimentation and initiative.
Terrell explains that although Calvin did criticize the activities of businessmen, he, unlike others of his time, e.g., Luther, did accept merchant activity as a vocation. He affirmed the exchange of money and goods; money was an institution God had provided for the good of humanity. Calvin’s Geneva showed a remarkable increase in the numbers of merchants. While Calvin believed that wealth must be used to benefit the poor, this was to remain a voluntary act. Nevertheless, Calvin saw ample scope for governments to intervene in the economy by regulation – even of prices. In fact, Terrell notes there is much in Calvin’s work to provide ammunition for the Christian Left and interventionism. Terrell, however, attributes this to Calvin’s continuing immersion in the milieu of sixteenth-century Christian social thought — “the substantial burden of remaining error in Calvin.”
While Terrell recognizes that Calvin was not the first to attack the medieval church’s usury prohibitions, he supports the view of others that Calvin’s criticism of this “unbiblical and socially destructive” ban contributed to a “lasting advance in economic thought.” Calvin, according to Terrell, appealed to people’s conscience, asserting that the government could not restrict the terms of a lending agreement. He further contradicted the argument of the time that money as such was “sterile” but that use of money would allow the borrower the ability to buy and sell at a profit. Calvin recognized that the interest prohibition in Mosaic law was not applicable today except that interest should not be charged to the poor. Terrell does point out some lingering inconsistencies in Calvin’s view, e.g. his objection to professional money lenders.
In his final point, Terrell argues that Calvin’s belief in a limited role of the civil magistrate “may have been one his most important and lasting contributions.” Calvin (though somewhat inconsistently) recognized some of the dangers inherent in unlimited government power, which Terrell sees as “providing the groundwork for Western society’s institutional bulwark against central planning.”
Overall, Terrell has made an important contribution by showing that Calvin’s work has much wider implications than his theology alone, particularly since these contributions are not frequently recognized by students of economics. His chapter should encourage others to study the area further. In one sense, the chapter is limited. Rather than “contributions to economic theory and policy,” the focus appears to be on the implication of the work of Calvin, his followers and his critics to the development of the free market. Terrell’s own free market position is quite evident in this treatment. Given the nature of the book, it is not surprising that a large section is based primarily on secondary sources; it would have been more helpful to see more references to Calvin’s own work, but Calvin’s language makes that difficult. In any case, the chapter provides important food for thought.
John Boersema, a professor emeritus at Redeemer University College, holds a Ph.D. in Business and Applied Economics from the University of Pennsylvania and is a member of the Ancaster Canadian Reformed Church. He is the author of Political-Economic Activity to the Honour of God (Premier, 1999).