God is a Capitalist

by Roger McKinney

  Plato made the same mistake as the Plutarch and all socialists, communists, Nazis, fascists and Fabians. While admitting that the notion of private property is an aspect of mankind’s nature, he was under the delusion that changing human nature was such a trivial matter that the elimination of property could perfect it. Aristotle shared Plato’s belief that inequality in wealth led to social strife, but argued for creating an enlightened nature through education rather than a propertyless society. He saw the positive force of property and defended it on utilitarian grounds: people take better care of their own property and abuse common property. Because people reap the rewards of private property, they work harder and more efficiently, thereby producing more and creating an abundance of goods. As for social discord, he saw that people fight more over common property than over private property, whereas private property encourages ethical behavior by allowing the owners to be generous through charity.

  The real differences between Plato and Aristotle lay in their views of human nature. Plato wanted to change the nature of mankind and so designed the society that he thought could manage it. Aristotle was much wiser, which may be why Christians favored him over Plato for centuries. Aristotle did not try to change human nature but adapted society to it in a way that would allow for the greatest cooperation and least conflict. The ignorance of socialists in the early nineteenth century freed them to imagine they had invented a new way of organizing society and perfecting human nature, but they had done nothing more than resurrect Plato’s ancient republic based on Sparta. Capitalism championed Aristotle. There is nothing new under the sun.

  The first money was barley for small transactions, such as buying eggs, and cattle for more expensive ones, such as buying a wife. Early in human history people discovered the benefits of silver and rapidly replaced barley and cattle with the metal as money. But barley continued to influence money because prices had been set in terms of the weight of barley grains. So the new money, silver, continued to be measured in barley grains. The Biblical shekel, for example, was the amount of silver that equaled about 28 barley grains.

  The Lydians created the first coins around 700 BC, as far as historians know. The coin producer weighed the metal, shaped it into a coin and stamped the actual weight on it along with other symbols to give it authority. The uniform size and stamp informed merchants of the metal’s purity and weight of the coins without them having to assay or weigh the metal. Coins reduced transaction costs and offered a major benefit to markets, but it did not take long for states to grasp the power of coined money and grab a monopoly on its issue.

  In 594, little more than a century after the invention of coins, Greece conducted one of the first coin debasements known in history. Solon, leader of Athens, figured out that he could reduce the content of the precious metal in each coin by adding base metals to the silver then stamping the coins with the same weight as if they contained the original amount of silver. In other words, the kings committed fraud by stamping a false weight on the coins. Solon reduced the silver content of Athenian coins by 25 percent. Then he forced merchants to accept the coin at face value instead of on the basis of the real weight of the silver in the coins. The king had expanded his money supply and was able to pay off his debts without having gathered any more gold or silver through taxes. Many philosophers at the time considered Solon a genius, but he was nothing more than a gangster and fraud.

  Producers and retailers caught on very quickly to the fraud and raised their prices enough to ensure they received the same weight of silver for their goods as they had before the debasement. If the coins had been debased by adding 25 percent base metals, merchants raised prices by at least 25 percent. Price inflations, in turn, tended to anger citizens and spark riots, but the rioters rarely connected higher prices with the monarch’s fraud and, instead, blamed businessmen for their greed.

  Other Greeks cities imitated Solon’s debasement, leading Demosthenes to write, “The majority of states are quite open in using silver coins diluted with copper and lead.” Athens learned from the experience and maintained the purity of its currency after Solon. As a result, Athenian coins traded at a premium to others and contributed to the extension of Athenian commercial and political power over the rest of Greece.

  In spite of the contempt Aristotle and other Greeks had for commerce, democracy created the fertile ground of freedom in which businesses could grow and people become wealthier. Archeological evidence shows that, due to better nutrition, Greek men in the golden age were taller on average than recruits in the army of Greece in 1949. Even as the Greek city-states increased their populations, food consumption among peasants probably increased 50 percent according to Baylor University historian Rodney Stark in How the West Won: The Neglected Story of the Triumph of Modernity. And the size of housing expanded from fifty-three square meters in the eighth century to 325 square meters in the fifth century. Greeks excelled at games, literature, art, philosophy and government, activities that require enough wealth to give a significant part of the population the leisure to pursue them.

  Greek progress lasted only until the Macedonians conquered the Middle East, after which the rulers again adopted the ancient Oriental philosophy that all the land belonged to the king who regulated every detail of the economy. The Hellenistic successors to Alexander the Great perpetuated the absolute rule of monarchs over land and the economy, thereby destroying all of the progress made by Athens in previous centuries.

  Though Greece never regained the wealth and status of its golden age, Greek culture lived on as the Romans welcomed and perpetuated it. But its most lasting influence may have come from the impact on Judaism and Christianity from Greek philosophy. Alexander the Great incorporated Palestine into his sprawling empire, which led to the establishment of twenty-nine Greek towns. By 200 BC, six times as many Jews lived in Hellenized cities than in Palestine. The Greek language became so common that scholars translated the Hebrew Scriptures into the language and the book became the family Bible for most Jews even in Palestine. The Israeli King Herod built a Greek theatre, amphitheater and hippodrome near Jerusalem. Stark wrote in How the West Won that Jewish theologians beginning with Philo of Alexandria interpreted the Torah through their knowledge of Greek philosophy and corrected philosophy using the Torah.

  Since most early Christians were also Jews, the Greek influence flowed into the new sect as well. The Apostle Paul quoted from the Stoic Greek poet Aratus in a sermon at Mars Hill in Athens (Acts 17:28). Several of the Church fathers were trained in Greek philosophy before their conversions and, like Philo, saw parallels between it and Christianity. For example, Stark quoted Clement of Alexandria (150-215) who attributed a similar role to philosophy for gentiles as the role that the apostle Paul gave to the Torah:

  Before the advent of the Lord, philosophy was necessary to the Greeks for righteousness...being a kind of preparatory training...Perchance, too, philosophy was given to the Greeks directly and primarily, till the Lord should call the Greeks. For this was a schoolmaster to bring “the Hellenic mind,” as the law, the Hebrews, “to Christ.” Philosophy, therefore, was a preparation, paving the way for him who is perfected in Christ.

  The Church continued to venerate Aristotle into the early modern period until the advance of science under Church scholars shredded his physics. Theologians did not accept Greek theology or morality, but embraced the culture’s commitment to reason and logic, which made Christianity and Judaism unique among the world’s religions. Modern atheists insist that Christianity is irrational and unscientific, but that is an invention of their own fevered imaginations because historians and philosophers of science have recognized the uniqueness of reason in Judaism/Christianity. For example, Stark quoted the great British philosopher Alfred North Whitehead in How the West Won:

  The greatest contribution of medievalism to the formation of the scientific movement [was] the inexpugnable belief that...there is a secret, a secret which can be unveiled. How has this conviction been so vivi
dly implanted in the European mind? ...It must come from the medieval insistence on the rationality of God, conceived as with the personal energy of Jehovah and with the rationality of a Greek philosopher. Every detail was supervised and ordered: the search into nature could only result in the vindication of the faith in rationality.

  The gods of other religions, including the ancient Greek gods, were either too irrational or too remote to inspire confidence in a rational world that could lead to the development of modern science.

  While the Greek resurrection of private property for a few helped Greece to prosper above its enemies, it failed to birth capitalism for several reasons, the most important of which was the crushing of individualism. As noted earlier, Siedentop demonstrated that property and freedom existed in Greece only for the patriarchs who owned their sons, daughters and slaves. Sons lived only to please the family heads while daughters were raised to please the patriarchs of their husband’s family. Though their status gave them citizenship in the cities, the patriarchs were free only in the sense that they did not pay taxes and could vote, for their lives were dedicated to the common good of the city, which meant they were virtual slaves of the ruling elite. Patriotism meant love of the city and those lacking in it were called idiots. Patriarchs could lose everything if the rest of the city elders considered them a threat or saw them as insufficiently devoted to the cause of the city. Individual rights for the patriarchs against the claims of the city did not exist, just as the rights of sons, daughters, merchants, and slaves did not exist in opposition to the demands of the patriarchs.

  Social mobility, becoming something other than a slave, for example, was impossible because everyone was born to their status in life. Philosophers like Plato believed that only a few, trained elites could learn to reason, which is why he promoted the idea of a philosopher king. Aristotle and his followers “did not doubt that the telos or ‘function’ in a hierarchy of being established that some humans were slaves ‘by nature,’” according to Siedentop. Benjamin Constant in “The Liberty of the Ancients Compared with that of the Moderns” described the lack of individual freedom this way:

  All private actions were strictly monitored. No room was allowed for individual independence of opinions, or of choice of work, or—especially—of religion. We moderns regard the right to choose one’s own religious affiliation as one of the most precious, but to the ancients this would have seemed criminal and sacrilegious. In all the matters that seem to us the most important, the authority of the collective interposed itself and obstructed the will of individuals. The Spartan Therpandrus can’t add a string to his lyre without offending the magistrates. In the most domestic of relations the public authority again intervene: a young Spartan isn’t free to visit his new bride whenever he wants to. In Rome, the searching eye of the censors penetrate into family life. The laws regulate moeurs, and as moeurs touch on everything, there’s nothing that the laws don’t regulate.

  Among the ancients, therefore, the individual is nearly always sovereign in public affairs but a slave in all his private relations. As a citizen he decides on peace and war; as a private individual he is constrained, watched and repressed in all his movements; as a member of the collective body he interrogates, dismisses, condemns, impoverishes, exiles or sentences to death his magistrates and superiors; as a subject of the collective body he can himself be deprived of his status, stripped of his privileges, banished, put to death, by the free choice of the whole of which he is a part.

  And capitalism did not rise among the Greeks because of the contempt the patriarchs had for commerce. The primacy of the needs of the city revolved around its defense, so military service and glory in battle were held in the highest esteem. Farming came second. The character traits and skills needed for combat and farming differed a great deal from those needed in the market place. Siedentop wrote,

  Thus, commerce became associated with ‘giving in’ to appetites – with refinements, sensual pleasures and a narcissism that subverted civic spirit. Commerce became the enemy of simplicity. It became almost a synonym for decadence. Commerce, along with the taste for luxury it promoted, turned men into quasi-women.

  The market, then, threatened the city’s existence by robbing it of warriors. Again, Constant wrote,

  I don’t mean that amongst the ancients there were no trading peoples. There were, but they were somehow an exception to the general rule...If only I had time I would show you—through the details of the ancient traders’ moeurs, habits, ways of going about trading with other peoples—that their commerce was so to speak impregnated by the spirit of the age, by the atmosphere of war and hostility surrounding it. Commerce then was a lucky accident...

  Rome

  Roman law went beyond that of Greece with its establishment of absolute property in land, but that existed only on the Italian peninsula and only for wealthy citizens. Roman law did not recognize the power of eminent domain for the state; such was the respect for property in land for citizens in Rome. As in early Greece, yeoman farmers aided by slaves prevailed, although the emperors and nobility owned vast tracks of land.

  Roman law protected property in theory; the practice was very different. The wealthy held all of the power and could bend the law to serve them. As a result, the middle class – the merchants, small farmers and artisans – felt very insecure it what property it held. They considered themselves to be poor even if they enjoyed more wealth than others in their class because they were at the mercy of the powerful rich who could easily ruin them financially. They lived in fear of impoverishment. Patronage decided their fate. Peter Brown in Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 AD quoted Augustine:

  Brethren, you know how people boast of their patrons. To those who threaten him, the client of a greater patron answers: “By the head of so-and-so, my patron, you can do nothing against me...But perhaps you have been made utterly poor and destitute. You had some little family property that had supported you, which was taken away from you by the tricky dealing of a rival...Yesterday, this person was groaning that he had lost his property. Today, backed by a greater patron, he is grabbing the property of others.

  Patrons were the wealthy and politically powerful elite of the town. The middle class enjoyed some security as long as they kept a low profile and had the support of a powerful patron. But if they became an opponent of a more powerful patron, a simple lawsuit from him could cause them to lose everything. Under that level of insecurity, most successful manufacturers and merchants will try to hide their wealth rather than invest it in expanding their businesses or improving productivity.

  Rome did not fall because barbarians invaded; barbarian tribes merely took advantage of the military weakness of Rome that followed from its economic weakness and it was economically weak mainly because it had expanded its borders to the limit possible at the time. Rome had conquered and looted as much as it could. The Persians held them off in the east, the German tribes in the north and the desert to the south in Africa. With no new wealth to plunder, Rome consumed the loot from past conquests and grew poorer.

  As with all ancient empires, the Roman state controlled the price of food. City officials regularly searched for violators and punished profiteering. Keeping the peace concerned officials the most and nothing would motivate the mob to riot as quickly as rising prices for grain, oil and wine. But officials kept prices too low for farmers to earn a profit comparable to that in other industries so, in addition to low levels of productivity, food supplies were almost always tight. By the fourth century the emperors had pushed taxation beyond the optimum of the Laffer curve for their day so that taxes did not generate enough revenue to meet the need for bread and circuses to pacify the masses while feeding and arming a military of 650,000 men that surrounded the Mediterranean Sea. Farmers in North Africa paid up to two thirds of their harvest in taxes according to Brown. Rather than cut spending, the emperors debased the coins to increase the money
supply, the same principle used by Solon in Greece six centuries earlier and by Ben Bernanke, Chairman of the Federal Reserve after the 2008 crisis, but using different means.

  Roman emperors had begun debasing coins as early as the reign of Nero, but rising price inflation, shrinking tax revenue and people hoarding gold and silver made emperors desperate and reckless with the practice in the third and fourth centuries AD. As a result, they collided with city officials who strove to keep food prices at the official maximum. The food merchants lost the battle, but instead of accepting the official price for their goods, they simply abandoned their businesses, as did many farmers who could not sell their produce for enough to cover the costs of production. Eventually, the government refused to accept its own debased coins for tax payments and insisted on payment in kind according to George Reisman in Capitalism: A Treatise on Economics.

  As a result, city residents became desperate for food. The scarcity became so severe that, to avoid starving they left their homes in the cities for abandoned fields in rural areas in order to grow food for themselves. Untilled land existed in abundance because many farmers had deserted their land for more profitable ventures, such as banditry, begging and piracy. Those who remained restricted their production to just the needs of the family since they could not sell the surplus for a reasonable price. No longer having cash from the sale of their produce in the cities, they could not buy manufactured goods, such as pots, dishes and farming implements, so they made them at home.