Research Notes #2: Calvinism, Scholasticism, and Value Theory

Today I stumbled upon a very interesting footnote by Rothbard in his magnum opus “Man, Economy and State” on Alfred Marshall’s misguided approach to value theory which pointed to an interesting paper by one Emil Kauder (“The Retarded Acceptance of the Marginal Utility Theory”) from 1953 which proposes the thesis that the economists who originally elaborated the labor theory of value (Locke, Smith, etc.) were seriously influenced by Protestantism (and Calvinism in particular).

The main subject of the paper is why virtually all of the British classical economists, starting with Adam Smith, were so stubbornly fixed on a fallacious ‘objective’ labor theory of value, instead of adopting the much more accurate in comparison, prototypes of a marginal utility theory developed by their continental counterparts in Italy and France (e.g. Turgot).

It turns out, there was an obvious religious divide between the English and the French and Italian economists of the 17th and 18th centuries. Both Locke and Smith, the most prominent early adopters of the labor theory of value were Protestants, or had gone through protestant education, while economists like Turgot (in France) and Galiani (Italy) were Catholics or had received a catholic (i.e. a Thomistic-Aristotelian) education. Now, some of these economists, like for example Smith, were deists in their religious beliefs, but Kauder emphasizes on the difference in the education they received in their adolescence which, to quote him:

leaves its permanent impresdon on our minds, regardless of how we may change our convictions at a later date. These indelible fundamentals created spedfic social outiooks which separated the two camps.

He then gives a brief summary of the Calvinist view of the importance of labor – Calvin and his followers placed labor at the very center of their social theology, thus:

Any social philosopher or economist exposed to Calvinism will be tempted to give labor an exalted podtion in his social or economic treatise, and no better way of extolling labor can be found than by combining work with value theory, traditionally the very basis of an economic system.

John Locke wrote that God had commanded man to labor and Smith despite being a deist did show a considerable sympathy for Presbyterianism, notes Kauder. And of course Adam Smith’s metaphor of the ‘invisible hand’ is most definitely inspired by the concept of the ‘hand of providence’.

Now, this is not to say that the British economists were not influenced by the Thomistic-Aristotelian scholastic economic theory. Both the British and the continental French and Italian economists were influenced by that theory but the latter were not influenced by Puritanism. The result of this difference in religious and thus, at the time, educational background, led them to emphasize different aspects of scholastic economics. For example, Locke and Smith focused on the ‘fair-price’ concept of the scholastic economic tradition and combined it with the Calvinist glorification of labor, while for authors like Turgot and Galiani labor did not have the same importance. In the scholastic education that they got, labor was not at the center of economics life, but instead moderate pleasure seeking and happiness were. As everyone familiar with Aristotle knows, for him, moderate pleasure seeking was an important part of the good life. This Aristotelian approach of the scholastics, uncontaminated with any Calvinist exaltation of labor, had a profound influence on the direction which economic thought took in France and Italy in the 18th century:

If pleasure in a moderate form is the purpose of economics, then following the Aristotdian concept of the final cause, all prindples of economics including valuation must be derived from it. In this pattem of Aristotelian and Thomistic thinking, valuation has the function of showing how much pleasuro can be derived from economic goods.

Kauder notes that later in the 19th century the intellectual conditions are quite different and the acceptance or non-acceptance of the marginal theory of value, as fully developed in the early 1870’s by economists like Carl Menger, William Stanley Jevons and Leon Walras, cannot be explained merely by such a religious divide. However, it does help explain Alfred Marshall’s unwillingness to accept the marginal theory in full and his desire to combine it with some form of the ‘objective’ labor theory.

Marshall’s father was a devout Evangelical and Evangelicalism was basically a Calvinist revival in America and Britain in the 19th century. Marshall was himself agnostic, but, as Moldbug has convincingly argued, one can be a devout protestant without believing in a personal God. Kauder provides this quote by Marshall:

Work in its best sense, the healthy energetic exercise of faculties is the aim of life, is life itself,” comfort is “a mere increase of artificial wants

Kauder further remarks:

On the one hand, Marahall was one of the independent discoverers of marginal utility. On the other hand, his glorification of labor attracted him to the cost problem. The result was the unbalanced character of his price and value theory. He failed to make fullest use of the marginal utility theory, and he defended valiantly Ricardo’s objective value theory.”

Reading this paper made me check Rothbard’s section on Calvinism in the first volume of his “Austrian Perspective on the History of Economic Thought” which I hadn’t looked into up until now. There he notes (following Kauder’s thesis) the contrast between the catholic-scholastic and the Calvinist views of economic life:

“The Scholastic focus was on consumption, the consumer, as the goal of labor and production. In contrast, a rather grim emphasis on work and on saving began to be stressed in Calvinist culture. This de-emphasis on leisure of course fitted with the iconoclasm that reached its height in Calvinism — the condemnation of the enjoyment of the senses as a means of expressing religious devotion. One of the expressions of this conflict came over religious holidays, which Catholic countries enjoyed in abundance. To the Puritans, this was idolatry; even Christmas was not supposed to be an occasion for sensate enjoyment.

He also emphasizes the importance of Aristotle with regards to Scholastic theories:

The Aristotelian balance, or golden mean, was considered a requisite of the good life, a life leading to happiness in keeping with the nature of man. And that balanced life emphasized the joys of consumption, as well as of leisure, in addition to the importance of productive effort.

He builds upon Kauder’s thesis (and references it extensively) and agrees that the fundamental difference between the French/Italian and British approaches to economics was the result of the religious divide between scholastic Catholicism and Calvinist Protestantism, respectively.

It is hardly surprising of course, that leftist economics, just like leftist politics, is likely massively influenced by some form of Protestantism. Modbug himself traced the origins of modern anglo- leftism through Unitarianism, colonial Puritanism, all the way back to Calvinism. The most leftist modern economic theory, Marxism, is of course based on the labor theory of value. You would think that modern mainstream economists have fully abandoned any sort of an objective cost/labor theories of value, proven fallacious a century and a half ago, but that is not entirely true. Actually one of the main criticisms that any contemporary Austrian Economist will levy against a large chunk of the modern mainstream academic economists is their reluctance to let go of objective cost/labor theories completely (Alfred Marshall is after all considered one of the fathers of modern economics). Although all Keynesians and Neoclassicals do broadly accept the marginal theory of value, some traces of an objective cost/labor approaches to value theory are still (sometimes) found in their thought.

7 responses to “Research Notes #2: Calvinism, Scholasticism, and Value Theory

  1. Pingback: Research Notes #2: Calvinism, Scholasticism, and Value Theory | Neoreactive

  2. Alrenous February 19, 2015 at 5:10 pm

    Ah, I now (probably) understand the anti-homo-economicus people. Their articulation sucked.

    The final cause of the economy will be, on average, the final cause of its citizens. Ultimately what the economy does will be determined by what the consumers think it is for. However, as per Hume, these values are pre-rational or arational. Homo economicus appears to elide this step. (Doesn’t, though, it simply admits it can’t analyze that far & what consumers think it’s for will usually be whatever they’re told to think it’s for.)

    Ironically, in an efficient market economy, the labour theory of value is sort of true. Competition drives prices down to the risk-adjusted capital cost. The limiting resource for any good ultimately reduces to human attention, which means the cost of any good is a series sum of the input labours.


  3. Pingback: This Week in Reaction (2015/02/20) | The Reactivity Place

  4. rebelbill March 6, 2015 at 12:19 am

    I really find the ignorance of Protestantism in NRx circles bothersome. Yes, you are all correct in how New England Puritanism became Unitarianism and then Post-Christian Neo-Puritanism. But y’all have conflated Fundamentalism and Evangelicalism, which don’t even have common roots at all. Both began as Southern phenomena. However, Fundamentalism grew out of Scots-Irish Presbyterianism in Appalachia. Covenant Theology came out of this thread.

    Evangelicalism came from a Arminian Baptist perspective and is hardly compatible with any sort of Calvinism. Evangelicalism is mostly Premillenialist and Dispensationalist. The modern examplars of these two schools of Protestant Christianity would be Bob Jones University in Greenville SC for the Fundamentalists and Southern Baptist Theological Seminary in Louisville KY for the Evangelicals (also Billy Graham Evangelical Association of Charlotte NC)

    Both Evangelicalism and Fundamentalism are REACTIONARY responses to the corruption of the mainline Protestant denominations, just as the Protestant Reformation was a REACTIONARY response to the growth and acceptance of Humanism and Classical Paganism in the Roman Catholic Church of the so-called “Renaissance”.

    Liked by 1 person

    • Hurlock March 6, 2015 at 12:51 am

      Hmm, I guess I will have to look into this a bit more.
      Thanks for the informative comment!


    • Orthodox Laissez-fairist March 12, 2015 at 6:25 pm

      No, (re)formation was inherently a lefty movement, a spiritual egalitarianism, it doesn’t really matter if it was Calvin, Luther or Zwingli, it’s demotic at the heart of it. I mean, taking the magisterial powers from bishops and giving it to everyone, and furthermore, replacing hierarchical structure of the church with a democratic one can hardly be called reactionary. Not to mention the early protestant socialist communes. And of course, last but not the least, calling out Vatican for alleged acceptance of Humanism and Hellenism (something that never actually happened) is in itself puritanism par excellence, it’s something Cromwell would do. Certainly there were gross deviations and distortions of The Faith by Vatican (like, for example, that entire thing with Purgatory and Indulgences, and that was just a ‘tip of the iceberg’), but Protestant deviations and distortions were both more numerous and more severe, so much so, in fact, that Neoreaction is mostly right when it blames the Leftism on Protestant (re)formation.


  5. Steve Finnell March 16, 2015 at 10:32 am


    THE QUESTION: Do you believe the Bible to be the inerrant word of God?

    THE ANSWER: Far too many believers in Christ say they believe the Bible is God’s word, however, they believe parts of it have been mistranslated and they assert that there any many contradictions and errors.


    THEY BELIEVE: God created the heavens and the earth. (Genesis 1)

    THEY DON’T BELIEVE: That God is smart enough to guide men to accurately translate the Bible.

    THEY BELIEVE: The Word became flesh, and dwelt among us. (John14)

    THEY DON’T BELIEVE: The Word when He said, “Has been baptized shall be saved.” (Mark 16:16)

    THEY BELIEVE: Naaman had his leprosy washed away by dipping in the water of the Jordan river, seven times. (2Kings 5:1-14)

    THEY DON’T BELIEVE: That Saul had his sins washed away by being baptized in water, one time. (Acts 22:16)

    THEY BELIEVE: That Jesus walked on water. (Mark 6:45-48)

    THEY DON’T BELIEVE: That Jesus washed the church using water and the word, sanctifying , cleansing her, making her holy and blameless. (Ephesians 5:25-27)

    THE BELIEVE: That God destroyed all flesh on the earth with the waters of the great flood; except for Noah and his family. (Genesis Chapters 7&8)

    THE DON’T BELIEVE: That God saves men with the waters of baptism. (1Peter 3:20-21)

    THEY BELIEVE: That God made an axe head of iron float in water. (2 Kings 6:1-7)

    THEY DON’T BELIEVE: That being baptized into Christ refers to water baptism. (Galatians 3:26-27)

    THEY BELIEVE : That the Lord parted the waters of the sea so the sons of Israel could cross on dry land. (Exodus 14:21-22)

    THEY DON’T BELIEVE: That believers were crucified with Christ when they were buried in the watery grave of baptism. They don’t believe that the body of sin was done away with at the point of water baptism. (Roman 6:3-11)

    THEY BELIEVE: That Jesus performed a miracle by turning the water into wine. (John 2:1-11)

    THEY DON’BELIEVE: Jesus when He spoke of water baptism as being part of the new birth. (John3:5)

    THEY BELIEVE: God gave the power to Moses to strike the rock at Horeb to make water flow from the rock. (Exodus 17:1-6)

    THEY DON’T BELIEVE: Being buried with Christ in water baptism results in forgiveness of all transgressions. (Colossians 2:12-13)

    THEY BELIEVE: That God split the hollow place that is in Lehi so that water came out and Samson could drink. (Judges 15:16-19)

    THEY DON’BELIEVE: That three thousand, on the Day of Pentecost, were baptized in water in order to have their sins forgiven. (Acts 2:37-38)

    THE BELIEVE: That the Lord provided water without rain for Jehoshaphat. (1 Kings 3:16-17)

    THEY DON’T BELIEVE: That God uses water for the washing of regeneration (Titus 3:5)

    THEY BELIEVE: That all Scripture is inspired by God. (2 Timothy 3:16-17)

    THEY DON’T BELIEVE: That God’s word endures forever as recorded in the Bible. (1 Peter 1:23-25)

    THEY BELIEVE: That man shall live by every word that proceeds from the mouth of God. (Matthew 4:4)

    THEY DON’T BELIEVE: That man should live by every word in the Bible because it is filled with errors, contradictions, and has been corrupted by man’s biases in various translations.

    You can either trust God to provide an inerrant translation of His word or you can trust none of the Bible.




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