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Origins and Implications of the Liberal Capitalist Market Theory

Capitalism, like the Enlightenment, is thought to have bloomed around the middle ages and, like the Enlightenment, resulted in the decline of organized religion. In fact, the Catholic Church of the Middle Ages was the epicenter of capitalism’s early blooming. Max Weber traced capitalism’s beginnings to contemporary Protestant towns, although historians today find it much earlier in rural places, where monasteries, particularly those of the Cistercians, attempted to systematize economic life. According to Weber, the church established the preconditions for capitalism: the rule of law and an organization for rationally resolving disputes; a specialized labor force; institutional stability that allows for transgenerational investment and continual intellectual and physical endeavors, as well as the acquisition of long-term capital; and a desire for enterprise, discovery, wealth building, and new initiatives. The adoption of the liberal capitalism market theory from the traditional medieval Christian approaches to morality and behavior can hugely be attributed to the Reformation, which was a rebellion against the Catholic Church’s ecclesiastical authority and temporal power that would soon split Europe (Tawney, 1998). This reorganization of the continent marked the start of a political and economic process (capitalism) that has shaped the contemporary world.

In the Middle Ages, the church was a powerful force. Following the fall of the Roman Empire, Christianity, primarily Catholicism, became the only acknowledged religion. After Emperor Constantine ascended to the throne, the Roman Empire crumbled. The persecution of Christians came to an end as a result of this, and the Christin society arose. The Christian morals were followed by everyone, rich and poor alike. Priests and preachers, for example, who were members of the church, rose to positions of power and wealth. They rose to prominence as the most powerful people in medieval Europe. As a result, Christianity influenced morals and behavior throughout Medieval Europe (Rowland, 2011). This made it possible for Christianity to have control over people and led to the oppression of people who had no power. It was used as a tool to oppress these people and was a blindfold put over people to make them believe that it was for a better life which was not the case. There was therefore a huge need for reform and this where the reformation came leading to the development of Capitalism.

Before the Reformation, the Church was seen as the gatekeeper to salvation in Catholic theology. Because a divine right was so important to monarchy, it was also the most powerful source of political legitimacy in Europe. Monopolies were corrupt; the Church was no exception. The Reformation grew on royal endowments, tithes, and taxation privileges (Tawney 2570. The Church’s kings earned fortunes equal to those of secular princes; monasteries and cathedrals possessed vast wealth. The penitential system that underpinned the Church’s gatekeeper position was endangered by Protestant theology’s emphasis on faith rather than actions. To assess the level of post-Reformation secularization in early modern Germany, Davide Cantoni, Jeremiah Dittmar, and Noam Yuchtman used historical data from the Holy Roman Empire (HRE). Secular monarchs could now negotiate with multiple sources of political legitimacy and get better deals. This reduced their expenses and improved resource allocation in the economy. After 1517, the construction sector changed from religious to secular construction, such as palaces and administrative structures.

The religious competition also improved human capital in Europe, boosting the economy. While the traditional elite stuck to the Church in some areas, the anti-corruption message of Protestantism drew rising merchant and commerce classes. As the Reformation gained root, their political power grew, changing public expenditure patterns and increasing their reliance on public goods like education (Chapter 4, The Science of Selfishness). This fueled the rapid rise of the printing sector. Pamphlets and pamphlets disseminated Reformation ideas across the continent, while vernacular bibles liberated the Church from Latin-only scripture. Cities like Wittenberg and Geneva benefited from the new industry. The industry’s growth fueled public education. After the Reformation, university degrees switched dramatically from religious fields to secular fields like law and the arts. These developments are not relics of their era. The Reformation developed concepts that are still crucial for economic progress today. By releasing Europe’s economic potential, the post-Reformation era shaped power relations that lasted well into the twentieth century. The Enlightenment —Europe’s great leap forward — gave the contemporary world liberal democracy, the secular state, and free markets. This era entrenched the European countries’ dominance and enabled most of the world’s exploitation. But its values are global and still empower developing nations.

Only Protestantism, of all the world’s religions, produced a moral perspective that prompted people to limit their material consumption while pursuing wealth. Prior to the Reformation, Weber contended, consumption limitation was inextricably tied to asceticism and, as a result, to condemnations of commerce. The pursuit for wealth, on the other hand, was associated with excessive consumption. Both cultural patterns were anti-capitalist. According to Weber, the Protestant ethic disrupted those old ties, resulting in a culture of thrifty entrepreneurs willing to methodically reinvest gains in order to achieve ever greater wealth, and this, according to Weber, is the key to capitalism and the West’s dominance (Tawney 139).

Therefore, it can be seen that the rise of capitalism led to economic advancement and the rise of various forms of inventions and the industrial revolution of the Middle Ages. Following the Reformation, new inventions such as windmills, water mills, mechanical clocks, wagons and carts, shoulder harnesses for farm animals, ironwork, eyeglasses and magnifying glasses, stone cutting, and new architectural designs were made. Such scientific breakthroughs, would have been a waste of time if capitalism had not grown. They would have been rare to find their way into the hands of ordinary people through easy trade. They would not have been studied, copied, and improved so quickly by eager competitors. All of this was made possible by the Catholic Church’s provision of freedom for business, markets, and competition. Workers could optimize their rewards by working more or more effectively than previously, hence free labor was critical to the growth of capitalism. Coerced workers, on the other hand, got nothing from performing more. To put it another way, despotism made a few individuals wealthy; capitalism has the potential to make everyone wealthy.


To conclude, the Reformation produced an attitude that has become so ingrained in modern political thought that both its weak philosophical foundation and the contrast it provides with prior generations’ beliefs are frequently overlooked. Its essence is a dualism that considers the secular and religious components of life as parallel and independent provinces, controlled by distinct laws, judged by different standards, and subject to various authorities rather than as stages within a wider whole. Despite the fact that the Catholic Church lost its medieval power, it remained influential and significant in the lives of many individuals throughout the early modern period. For a variety of causes, the Protestant Reformation initiated the conditions that led to the establishment of capitalism. As a result of distinct societal changes and revolutions, individuals’ liberation, as well as their mentalities, were compatible with such a system. As a result, it ushered in an unprecedented “new type of capitalism.” Protestantism emphasized just the materialism of the cosmos, but everything that could help in the formation and enrichment of new capitalist institutions for a new global paradigm was looked into. Thanks to the Reformation’s individual and internal incentives, the hidden side of capitalism was made to function according to a new state of order founded on religious freedom and political revolution. This new zeal for capitalism elevated the importance of reason, development, and any individual’s duty to fulfill his or her needs and responsibility to receive God’s sovereignty. Furthermore, the new individual had to break free from the restrictions of the Middle Ages.


Rowland, W. (2011). Greed, Inc: Why Corporations Rule Our World and why We Let it Happen. Thomas Allen Publishers.

Rowland, W. (2019). Morality by Design: Technology’s Challenge to Human Values. Intellect Books.

Tawney, R. H. (1998). Religion and the Rise of Capitalism. Transaction publishers.


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