Moralizing the Market Economy
WAS AMERICA BORN capitalist? it is often asked. Ever since Max Weber proposed a causal relationship between early Protestants’ longing for order and rational control and the spirit of modern capitalism, the question has consumed the attention of generations of sociologists and historians. Weber’s ideal types were too abstract, it is now clear. The careful accounting and control of the self that the Puritans so conspicuously valued was only one of the cultural traits on which capitalist economies have thrived. Others, like the risk-taking and labor exploitation on which the tobacco and slave economy of early Virginia was founded, could be successfully capital-generative as well. Capitalism’s identifying features lie as much in its institutions of trade, property law, and labor as in the inner ethos that captured Weber’s imagination.
Measured in these ways, there can be no doubt that Puritan New England was a by-product of capitalism in its expansive, early modern phase. John Winthrop’s settlement arose within one of the great commercial empires of the early modern world. Unlike the Spanish conquest a century earlier, in which arms, expropriation of easily obtained wealth, and missionary zeal took the vanguard roles, the English colonization of the Americas was a merchants’ endeavor. Trading corporations — the Virginia Company, the Massachusetts Bay Company, the Providence Island Company, the Plymouth Company — undertook the work of settlement throughout British America, capitalized by investors’ purchase of their joint stock.
Economic transactions saturated the daily life of Winthrop’s New England as well. Private property in land was relatively easily sold and purchased. Production was primarily for markets: local markets for most New England farmers, long-distance markets in timber, fish, and grain for others. Debt, too, left its mark all across these money-scarce economies. Debt cases pervade the early records of the Massachusetts General Court, just as they saturated early modern English society, etching the economy with complex lines of trust, reputation, and obligation. The rules of lending, repayment, and loan forgiveness that Winthrop outlined in the long second section of his “A Model of Christian Charity” were, in the context of New England’s everyday economic life, anything but abstract.
Finally, the world the New England Puritans made was not only a world of trade and commerce but a world in which wealth was a sign of value. Wealthier men like Winthrop played a vastly outsized role in public affairs in the Massachusetts colony. Land distribution was sharply skewed in favor of the wealthy as well. A society without ranks and order, as the “Model” made clear, was no dream of the New England Puritans.
And yet, deep as their immersion in market institutions and presumptions was, early New England Puritans did not accept market morals whole. “A Model of Christian Charity” itself was born at a moment of high tension between commercial interests and social ends, when an investors’ quarrel over risk and lending had threatened to undo the Massachusetts settlement project before it had truly begun. Disputes over buying and selling erupted aboard the ships during the ocean voyage, and they did not go away thereafter. The concerns with self-love that Winthrop poured into his model of charity spilled over into every aspect of colonial New England life. To the extent that the “Model” stands at one of the foundation points of the American story, Winthrop’s concern to establish the proper place of markets within the moral imperatives of charity must be recognized to stand there, just as prominently, too.
Matters of price and commerce weighed heavily on John Winthrop in the winter and spring of 1629–’30 as many of the key phrases that he would rework in “A Model of Christian Charity” began to crystallize in his mind. Recruited as the Massachusetts Bay Company’s governor in late October as the head of a yet-unfunded expedition scheduled to sail on the first of March, he was immediately sucked into a whirlwind of business concerns. There were emigrants to be recruited if the project was to realize its envisioned scale. There were ministers who had to be persuaded to leave their settled parishes for a church order that was, as yet, anything but clearly defined. Artisans of many different sorts were needed. There were persons of wealth to recruit as well. There were ships to be hired and stocked with the beer, water, biscuits, and dried meat that the ocean voyage would require. Arrangements for the sale of his own lands had to be made.
“Our business comes so fast upon us here” in London, Winthrop found himself apologizing to his wife Margaret all through the winter, that he could scarcely predict when the occasions for the trips home that he longed for would arise. “In regard of business, which so take up my time and thoughts,” he wrote, he could not express his love “so largely to thee as I was wont to do.” He had six more letters to write that evening, he apologized to his “most sweet wife” on another occasion.
The most pressing point of business was the challenge of finding adequate capital for the enterprise. Like all the other English colonization ventures in the Americas, the Massachusetts Bay Company was organized as an investment corporation. Merchants with wealth and a special degree of tolerance for risk, both for God’s sake and for their own, had invested sums on which they anticipated return. For the first two years after its organization in 1628, the company had managed the work of a small community of settlers at Salem, supplying them with clothing, tools, provisions, arms, and the services of a resident governor, minister, and doctor, in expectation that trade in fish, timber, and beaver skins would repay their investments and allow the settlement to prosper.
But the first two years’ trial had not been a success. By the time that serious consideration began of reorganizing the company as a self-governing colony in New England, managed by its emigrants rather than its London-based investors, its capital stock was deeply in debt. Some of the supplies and cattle sent over had miscarried. Many of the servants (transported at extraordinary charge, a company report complained) had not proved as useful as expected. Trade had not been as profitable as expected. Not all those who had pledged to participate in the share offerings had actually done so. Altogether, an accounting in late 1629 concluded, fully one-third of the initial capital had been lost. The company’s governor alone was owed 1,200 pounds; other primary investors were in similar straits. Before the seat of the company’s government could move to New England, separating its English investors from the management of their investments, some sort of reckoning would have to be made.
To read the minutes of the company’s meetings through the fall and winter of 1629–’30 is to find oneself tugged into a deeply contentious debate over what the initial investors were owed and how those debts might be made whole. A “labyrinth,” Winthrop would call it, that “infolded” them all. “The further we waded, the more difficulties we encountered.” Committees appointed to represent the interest of the company’s initial investors and the interest of those intending to emigrate wrote up position papers and debated at length. Tickets were sent to those who had fallen behind in their stock subscriptions imploring them to send their payments in. Panels of ministers were recruited as arbiters.
Finally, with the matter at a standstill, three options were placed before the company’s members. The first was that every shareholder agree to double his original investment — a fantastical scheme, given the risks, that was quickly rejected. The second was that the company fold up its affairs, selling off all its property, distributing what it could realize among its shareholders, and essentially abandoning the colony project. The third proposal was more realistic than the other two, but to many individual investors it was much more painful. It proposed that the capital stock of the company be reorganized, that the value of all existing shares be written down by two-thirds, and that a smaller group of undertakers assume control, pledging to pay the original shareholders back on their now sharply reduced value at the end of seven years. Without that debt forgiveness, without some act of self-sacrifice, the settlement venture would not move forward.
The matter was judged too weighty for an immediate decision. Three trusted ministers were summoned to the next meeting to help bring clarity to the deliberations. Finally on December 1, after “long debate,” the write-down of the shareholders’ stock values was approved. There would be more contentions and modifications before the fleet sailed in March. Land grants were authorized to help defray some of the losses of the original investors; wrangles over the claims of particularly aggrieved shareholders were given over to arbitration after yet another “large discussion” in the company as a whole. But the agreement of December 1 was the turning point, when the investors agreed to forgive a significant part of the sums they had pledged for the sake of the larger good.
It fell to Winthrop, as the company’s new governor, to introduce the compromise proposal and, with it, the key phrases he would use again at the core of “A Model of Christian Charity.” He knew the debt-satisfaction proposal would “startle” some of those present, as Moses himself (Winthrop said) had sometimes been startled by things proposed to him. But he urged the reluctant investors that in sacrificing their claims to full repayment they would reenact, in modern time, the part that God himself had taken when he had fed and clothed the people of Israel as they journeyed into Canaan. You are the “root” of this project, the “family” from which it was derived, Winthrop urged. You are “the City, the greatest Church, etc.” The emigrants were only a “hopeful plantation.” But with this sacrifice on the investors’ part, the two would be “knit together in a most firm bond of love” and “affection.”
You have already given your money to God, Winthrop counseled the company’s members in his December 1 address. Of what advantage would it be to haggle over 100 pence or 50 pounds? For the sake of God’s glory and the plantation’s welfare, you should be ready “not only [to] lend it, but lose it.” And then came the line that Winthrop would rework just after the “city upon a hill” sentence in “A Model of Christian Charity”: “Consider your reputation, the eyes of all the godly are upon you, what can you do more honorable for this City, and the Gospel which you profess, than to deny your own profit, that we may say Londoners can be willing to lose that the Gospel etc.” This pattern of reuses from Winthrop’s appeal to the colony’s investors gives no clear-cut answer as to when Winthrop found the time for the “Model’s” final composition, but it leaves no doubt about the moral issue that initially stood at its center. Whatever else the “Model” would become, its initial occasion was commerce and, more pointedly, the pyramids of debt and obligation that a market economy opened up. Triggered by a deeply fraught meeting in London, its subject was the labyrinth where commerce and morality cut across, blurred, and confronted each another.
Winthrop’s fellow voyagers carried all these concerns with markets and morals, self-interest and the public good, directly into their new settlement. They absorbed the energy of the colony from the beginning. The prices men began to ask for labor were a particularly tender issue. From the beginning, the colony’s governing bodies followed their fluctuations with concern. Alarmed that carpenters, sawyers, bricklayers, and thatchers were taking advantage of the first summer’s building boom by inflating their wage expectations, the colony’s General Court ordered a ceiling on house builders’ charges in August 1630; it set them free again the next March, only to reimpose a maximum price per board on sawyers again in September. When wages surged once more in the fall of 1633, the General Court imposed a general scale of wages on artisans, agricultural workers, and common laborers before letting this, too, lapse when the demand for labor subsided.
Unexpected fluctuations in the prices of goods brought a similar response. Price legislation was a repeated reaction to sharp swings from the norm. Corn and beer were subject to price controls from time to time. In 1638 a committee of 29 of the colony’s leading figures was tasked with sorting out the general problem of “oppression” in wages and prices, though it failed to bring in the report it had been mandated to make. A more pointed order in 1640, when the emigration stream from England suddenly came to a halt and cash dried up in response, decreed that corn, wheat, and rye might pass as money at specified rates until accustomed conditions returned. In the meantime, when debts were to be satisfied, their no longer realistic nominal values would be subject to third-party arbitration, lest “a great part of the people in the country be undone.”
The arrival of ships with goods to sell, like the arrival of new emigrants with shelter and goods to contract for, added to the economic instability. In the general clamor of purchasers, prices inevitably shot far beyond their norms. At one point the General Court proposed that ship masters be required to lie at anchor until their goods were inspected and put up for sale to the local authorities as they were “judged to be useful for the country” before the rest were offered to the public. At yet another point, one of the colony’s prominent ministers raised the capital to purchase the entire provision load of an incoming ship for resale to the towns and thereby circumvent excessive profit-taking. John White, the prominent Puritan minister at Dorchester, urged Winthrop to make the practice general. Even though resistance from the merchants and ship masters frustrated most of these proposals, public concern with unfairly inflated prices persisted.
The notion that each good had a “just price” — a value divorced from the commercial relations in which it was embedded — was rarely enunciated in these debates. Even John Cotton, the most prominent of the early settlement’s clergy, thought the issue was not the abstract value of the thing but the sale of a good “above the current price, i.e. such price as is usual in the time and place.” But distortion of the customary price by uneven market power or distress posed a deep and pressing concern. A General Court decision on the proper rules for appraising cattle in 1641 made it clear that value was not to be judged by the “market price” by “which some are forced by urgent necessity to sell a beast for.” The source of a cow’s value lay in the expected return from the milk or calves she might produce minus the cost of hay “etc.” To charge more than that in the face of one party’s necessity or weaker market power, as we might now put it, was not exchange but “oppression” and “extortion.” “Covetousness” and “self-love,” Winthrop fumed in his journal, were being allowed to rule the terms of trade.
Buying, selling, and lending that trespassed into self-love were hardly distant matters for Winthrop. The second year of settlement was not over before Winthrop accused his deputy governor, Thomas Dudley, of “oppressing usury” by selling seven and a half bushels of corn to some of his poorer co-settlers in exchange for 10 bushels to be received after the fall harvest. Three years later, Winthrop himself was accused of mixing up his own goods and profits with the commodities he had received as governor from the common stock. Winthrop successfully defended his accounts, but in 1638 the General Court was still lamenting “novelties, oppression, atheism, excess, superfluity, idleness, contempt of authority, and troubles in other parts to be remembered.”
The most celebrated case of commercial oppression in the early years of the Puritan colony was that of Robert Keayne. A London merchant tailor who had settled in the new colony as a general trader in 1635, Keayne was not a man whom many of his Boston neighbors liked. He was a prodigiously pious Puritan. At his death he left behind not only the copious records of a lifetime of sermon note-taking but also his own four “great writing books” intended as an exposition of the whole of the Bible and its prophecies. He also left behind a considerable fortune, made in commercial trades of all sorts that many thought skirted the edge of oppression.
Indeed in 1639 Keayne was formally charged in court with over-pricing, taking a 50 percent markup on one sale and a 75 percent markup on another. He had not done more than others, Keayne protested. He had never forced a purchaser to pay more than she or he agreed to. If he had sometimes set off losses he faced on some trades by higher margins on others, if he had bought the button or bridle in question himself for far less than he sold it for, was that not the custom of trade? Was selling six penny nails for eight pennies a pound “such a crying and oppressing sin” that he should have been censored by the Boston church and fined the stupendous sum of 200 pounds by the General Court?
Winthrop took the side of leniency toward Keayne. Because some others had done as much as he did and because, “though much labor had been bestowed upon it,” the General Court had not been able to construct a clear and certain rule on the matter, an admonition against covetousness would have been the wiser course, Winthrop thought. But Winthrop meticulously recorded the rules of commerce that John Cotton laid out in the public sermon that Cotton preached in the immediate aftermath of Keayne’s trial. A person must not sell above the customary price; that is, “such a price as is usual in the time and place,” Cotton admonished. If there were no specific regulation against it, merchants could raise their prices in the face of scarcity, Cotton admitted, for scarcity must necessarily come from the providence of God. But if a merchant faced losses due to his own clumsiness in trade, or because he had not turned a profit on other transactions, he could not charge beyond an item’s current worth without stepping over the line from a shrewd bargain into usury. That “a man might sell as dear as he can, and buy as cheap as he can” — the maxim that would become fixed centuries later in the idea of efficient, self-balancing markets — was a “false principle.” Adam’s sin, his temptation “to love and seek himself only,” as Winthrop put it in “A Model of Christian Charity,” cast its shadow all across the Puritans’ efforts to deal with the practical ethics of their economic life.
Facilitated by men like Robert Keayne, commercial exchange formed a vital part of early New England economic life. Buying, selling, and lending were everyday actions. Puritans did not resist these. But deep as their immersion in market institutions and presumptions was, they did not accept market morals whole. They refused to accept that trade should run along any natural course it took, that voluntary exchange was always an ethical act regardless of the power relations that stood behind it. By fixing prices and then, when the results disappointed, setting them free again; by looking to custom to unknot questions of price and excessive profit-taking; by exhorting their fellows against usury and oppression; and by scapegoating an unpopular trader like Keayne, they kept up a running quarrel with the market relations in which they lived.
Over the course of the 17th century, these efforts to set moral bounds on economic relations weakened. Suits against economic oppression grew rarer in New England courts in the second half of that century. Looking farther outward for markets, Boston’s merchants immersed themselves more and more deeply in the Atlantic economy. Many proved highly successful overseas traders, whose ships fanned out across the North American coast, the Caribbean Islands, Africa, and Europe carrying goods and, in time, highly profitable cargos of human slaves. Boston’s learned ministers gradually softened their censorship of money lent purely for a contracted amount of interest without any productive object at its base. By the 19th century, to those outside New England, the term “Yankee” was more likely to denote an especially shrewd and clever trader than an honest and socially minded one.
But, attenuated though they were, the injunctions against covetousness and economic oppression did not wholly disappear. Nor, hemmed in and qualified though they became, did the demands of charity that had preoccupied Winthrop in 1630. To read “A Model of Christian Charity” seriously is to see it as rooted in an effort to enlist the power of capital in a venture for which profit, alone, was not incentive enough. It is to find self-interest in constant tension with the demands of the larger social good. It is to find oneself in a culture in which market relations, though they impinged on every aspect of life, were not to be fully trusted. Finally, it is to see within the lines of Winthrop’s “Model” not only early New England’s familiar characters, its merchants and farmers, ministers and church members, but others: the poor who lived among them.
Daniel T. Rodgers is the Henry Charles Lea Professor of History Emeritus at Princeton University.