Tuesday, March 8, 2011

“John Calvin’s Impact on Business” by Richard Chewning (Ch. 9)

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, Richard Chewning, is emeritus professor of business at Baylor University in Waco, Texas. He is a major contributor to the development of the integration of faith and business, being co-author of Business Through the Eyes of Faith (HarperOne, 1990), and editor of the seminal four-volume series Christian in the Marketplace (NavPress, 1989).

Chewning begins his chapter by sketching the practice of business between the end of the Roman Empire and A.D. 1600. “The breakup of the Roman Empire was followed by…instability…city states, feudal holdings and the divided lands of kings.” Safety and security disappeared, trade became hazardous, and common currencies and the rule of law disappeared. Survival through self-sufficiency within manorial estates and scattered towns became the norm. Economics was concerned with subsistence. The Church was the great pillar of stability, with economics subsidiary to the real business of life — salvation. Economic motives were suspect and needed to be repressed. Profits were considered sinful and lending money at interest was illegal. While over time, many forces necessary for a free market system had already been at work before Calvin, Chewning (similar to Terrell in Ch. 4) argues that Calvin made especially significant contributions to the flowering of capitalism. He focuses on Calvin’s pronouncements on (1) the value of work, (2) the payment of interest, and (3) a positive understanding of profits. [1]

Although both Luther and Calvin, according to Chewning, popularized the notion that work is a calling from God, Luther did not include the activities of merchants, bankers, and other business types in the category of “work,” because he “hated commerce and capitalism.” Calvin, however, also applied this Scriptural calling to the latter groups. Calvin argued that we should simply “work hard” in order to glorify God. Chewning makes it clear, however, that Calvin would not have agreed with the extension made subsequently by some of his followers that the wealth thus created was proof of salvation — an early form the “prosperity theology.” In any case, the focus on ordinary hard work was a major step forward from medieval Roman Catholicism. [2]

Chewning also makes the point that Calvin, in contravention of church doctrine at the time, “birthed the idea that charging interest could carry with it a sense of moral legitimacy.” The payment of interest for the use of capital was as reasonable as the payment of rent for the use of land (as long as it did not exceed the amount dictated by natural justice and the golden rule). Chewning makes the interesting suggestion that Calvin’s message possibly succeeded while earlier efforts had failed because (1) the time was ripe, (2) his thinking was logical and reflected common sense, and (3) Calvin’s overall teachings created the movement of “Calvinism” which carried his teaching throughout Europe and the New World.

Chewning further notes that although “profit is to business what a healthy blood count is to the body,” until the time of Calvin profit was most often considered to be sinful — “neither necessary nor the Christian thing to do.” Calvin, however, taught that profits were the fruit of one’s labour — a person’s good work. His teachings were transforming, setting people free to work hard and reap the benefits that followed from it. Business people influenced by Calvin thus accepted wealth from diligence but also promoted the morality of thrift. Investing one’s savings for productive purposes became an “instrument of piety.” In this way, the old medieval “‘ideal’ of economic and social stability was replaced by the acceptance of economic growth and material improvement for everyone.” Chewning is, no doubt, correct in concluding that Calvin by “nurturing such basic values as work, wealth accumulation, thrift, investment, risk assumption, competition, and productivity…had a profound impact on the formulation and acceptance of a new worldview regarding commerce.”

Chewning concludes his chapter by recognizing that although Calvin’s economic thoughts still influence us today, they have frequently been perverted and misinterpreted. Hard work and its fruits (wealth) became the “self-assuring measure of one’s right standing with God. The work ethic has been transformed into “workaholism” with entrepreneurs, particularly, developing a faith in their own efforts — the worldview of the secular humanists. The heart and soul of Calvin’s teaching that works are “for the glory of God” has been lost. Concerning interest, Chewning makes some useful comments about current disclosure requirements. He further stresses that whereas in Calvin’s days the issue concerned the paying of interest for money borrowed for productive purposes, today’s society accepts the paying of interest by consumers “for the purpose of consuming tomorrow’s income today” — “clearly poor stewardship of one’s resources.” He further points out that Calvin’s idea of “profits meeting the needs of the poor” has been lost in today’s marketplace.

Terrell and Chewning tend to agree on the basic contribution that Calvin has made to the field of economics and business. They do so, however, in quite different ways. Both are strongly recommended.

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.

1. It is not surprising that these three points have similarities to those of Terrell. After all, economics is the theoretical underpinning of business.
2. In this, Chewning agrees with Terrell although Chewning does not explicitly deal with the Weber thesis.

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