HISTORY OF IDEAS - Capitalism

Today,

pretty much every economy in the world is organized along capitalist lines

but at the same time, capitalism is almost everywhere regarded

with disappointment, frustration and suspicion.

Interestingly, none of the criticisms are new. They've been dogging capitalism

since its inception. So let's look back in time

to figure out how capitalism got its bad name and what might be done

to improve it. Padua, Italy, 1304.

0n the wall of a church in Padua near Venice, the painter Giotto makes a

fresco:

Jesus and the Money Lenders. It restates for his own times

an idea that had by then already been well established for centuries in the West:

the notion that a good spiritual life and the pursuit of business

and money are sworn enemies. Jesus goes to the temple in Jerusalem,

sees merchants and small-time bankers crowding the forecourt and gets furious.

This sacred place is not a fitting arena for the polluting activities

of buying and selling. The Christian attack on the immorality of money

is deeply influential and severely holds back the development of capitalism

for centuries. Venice, 1450.

A Franciscan friar, Luca Pacioli, publishes the first ever book on

accounting:

Summa de arithmetica. It's the single most important capitalist invention

until the birth of the joint stock company and the modern factory.

In the book Pacioli introduces the principle of double-entry bookkeeping

which gradually become standard practice in all companies.

Pacioli's textbook proposes that dealing well with money

doesn't depend on faith anymore. Money isn't a divine punishment or reward;

it's a kind of science that can be learnt through patience,

reason and hard work.

Geneva, 1555. In powerful sermons to his congregations in Geneva,

the Protestant theologian John Calvin emphasizes to his Swiss

audiences the importance of what have become known as the Protestant

virtues: hard work, self-denial, patience,

honesty and duty. These will turn out to be extremely useful qualities

for capitalism. Calvin along with many other preachers who share his

outlook explains that you must never indulge yourself not spend money having

a lavish life.

You must simply put any surplus income back into your business

as an investment. Calvin adds that being good at business