Rodney Stark explains How Christianity (and Capitalism) Led to Science — and along the way he explains how Christianity led to Capitalism:
Capitalism was developed by the great monastic estates. Throughout the medieval era, the church was by far the largest landowner in Europe, and its liquid assets and annual income probably exceeded that of all of Europe’s nobility added together. Much of that wealth poured into the coffers of the religious orders, not only because they were the largest landowners, but also in payment for liturgical services — Henry VII of England paid a huge sum to have 10,000 masses said for his soul. As rapid innovation in agricultural technology began to yield large surpluses to the religious orders, the church not only began to reinvest profits to increase production, but diversified. Having substantial amounts of cash on hand, the religious orders began to lend money at interest. They soon evolved the mortgage (literally, ‘dead pledge’) to lend money with land for security, collecting all income from the land during the term of the loan, none of which was deducted from the amount owed. That practice often added to the monastery’s lands because the monks were not hesitant to foreclose. In addition, many monasteries began to rely on a hired labor force and to display an uncanny ability to adopt the latest technological advances. Capitalism had arrived.Still, like all of the world’s other major religions, for centuries Christianity took a dim view of commerce. As the many great Christian monastic orders maximized profits and lent money at whatever rate of interest the market would bear, they were increasingly subject to condemnations from more traditional members of the clergy who accused them of avarice.
Given the fundamental commitment of Christian theologians to reason and progress, what they did was rethink the traditional teachings. What is a just price for one’s goods, they asked? According to the immensely influential St. Albertus Magnus (1193-1280), the just price is simply what ‘goods are worth according to the estimate of the market at the time of sale.’ That is, a just price is not a function of the amount of profit, but is whatever uncoerced buyers are willing to pay. Adam Smith would have agreed — St. Thomas Aquinas (1225-74) did. As for usury, a host of leading theologians of the day remained opposed to it, but quickly defined it out of practical existence. For example, no usury was involved if the interest was paid to compensate the lender for the costs of not having the money available for other commercial opportunities, which was almost always easily demonstrated.