Rodney Stark on Capitalism

Rodney Stark's The Victory of Reason: How Christianity Led to Freedom, Capitalism and Western Success is an interesting read. His thesis is that Christianity is the factor that made science, capitalism and progress possible in the West. He argues against Weber's protestant ethic being the key to the rise of capitalism and locates the origins of capitalism in the medieval period. He scorns the biased Enlightenment denigration of the 5th-9th centuries as the "Dark Ages" and sees the origins of all that is distinctive and admirable in Western culture in those centuries in which the Church worked out a culture of freedom that never prevailed in Islamic lands, China, India or anywhere else.

Stark's definition of capitalism is as follows:

"Capitalism is an economic system wherein privately owned, relatively well organized, and stable firms pursue complex commercial activities within a relatively free (unregulated) market, taking a systematic, long-term approach to investing and reinvesting wealth (directly or indirectly) in productive activities involving a hired workforce, and guided by anticipated and actual returns." (p. 56)

He claims that three main conditions have to be in place in order for capitalism to work: (1) free markets, (2) secure property rights and (3) uncoerced labour. (p. 57) He admits that capitalism could have emerged elsewhere but did not and gives a fascinating example of the tenth century iron industry in northern China.

By 1018, an estimated 35,000 tons of iron per year were being produced and sixty years later it may have gone over 100,000 tons. This was a private, not a government operation and it involved accessible coal and a network of canals and rivers that served for transportation to market. China was developing capitalism and entering into an industrial revolution as huge profits were reinvested into the concern. But by the end of the 11th century only tiny amounts of iron were being produced and the smelters and factories were abandoned ruins.

What happened was that Mandarins at the imperial court had noticed that commoners were getting rich and hiring peasants at high wages. Such activities were deemed a threat to "Confucian values and social tranquility." (p. 72) Only the elite should be wealthy. So they declared a state monopoly and seized everything, thus putting an end to China's nascent industrial revolution. What a difference this action made to the future development of world history!

In 18-19th century England, by contrast, the existence of the rule of law, private property rights and freedom ensured that the industrial revolution happened there and the British Empire was one of the results. How different the world would look today if there had been a Chinese Empire instead of a British Empire.

Stark writes:

"The modern world arose only in Christian societies. Not in Islam. Not in Asia. Not in a 'secular' society - there having been none. Adn all the modernization that that since occurred outside Christendom was imported from the West, often brought by colonizers and missionaries. Even so, many apostles of modernization assume that, given the existing Western example, similar progress can be achieved today not only without Christianity but even without freedom and capitalism - that globalization will fully spread scientific, technical, and commercial knowledge without any need to re-create the social or cultural conditions that first produced it." (p. 233)

Stark's conclusion is that this assumption is a mistake. His book provides a lot of evidence for his point of view and history provides no significant counter examples.