Capitalism and Protestanism

Capitalism
 Capitalism
Theory/Principle:
• Capitalism is an economic system where private entities own the
factors of production. The four factors are entrepreneurship,
capital goods, natural resources, and labor.

• The owners of capital goods, natural resources, and

entrepreneurship exercise control through companies. The
individual owns his or her labor.
 Capitalism
Theory/Principle:
• Capitalistic ownership means two things. First, the owners control the factors of production.
Second, they derive their income from their ownership. That gives them the ability to operate
their companies efficiently. It also provides them with the incentive to maximize profit. This
incentive is why many capitalists say “ Greed is good. “

• Capitalism requires a free market economy to succeed. It distributes goods and services
according to the laws of supply and demand. The law of demand says that when demand
increases for a particular product, price rises. When competitors realize they can make a higher
profit, they increase production. The greater supply reduces prices to a level where only the best
competitors remain.
 Capitalism
Theory/Principle:
• The owners of supply compete against each other for the highest profit. They sell
their goods at the highest possible price while keeping their costs as low as
possible. Competition keeps prices moderate and production efficient.

• That means the laws of supply and demand set fair prices for stocks, bonds,
derivatives, currency, and commodities. Capital markets allow companies to raise
funds to expand. Companies distribute profits among the owners. They include
investors, stockholders, and private owners.
 Capitalism
Theory/Principle:
• Laissez-faire economic theory says the government should take a “
hands-off “ approach to capitalism. It should intervene only to
maintain a level playing field. The government role is to protect
the free market. It should prevent the unfair advantages obtained
by monopolies or oligarchies. It ought to prevent manipulation of
information, making sure it is distributed equitably.
 Capitalism
Proponents:
Adam Smith FRSA (16 June [O.S. 5 June] 1723– 17 July 1790) was
a Scottish economist, philosopher and author as well as a moral
philosopher, a pioneer of political economy and a key figure
during the Scottish Enlightenment, also known as ''The Father of
Economics'' or ''The Father of Capitalism‘’.

Smith wrote two classic works, The Theory of Moral Sentiments

(1759) and An Inquiry into the Nature and Causes of the Wealth of
Nations (1776). The latter, often abbreviated as The Wealth of
Nations, is considered his magnum opus and the first modern
work of economics. In his work, Adam Smith introduced his theory Adam Smith
of absolute advantage.[7]

“It Is not from the benevolence of the

butcher, the brewer, or the baker that we
expect our dinner, but from their regard to
theIr own Interest.”
 Capitalism
Historical Context:
Capitalism in its modern form can be traced to the emergence of agrarian capitalism and mercantilism in the early Renaissance, in
city states like Florence. The underlying theme of
capitalism is the use of wealth
to create more wealth. The
simplest form of this is
Capital has existed incipiently on a small scale for centuries in the form of merchant, renting and lending activities and occasionally
lending money at interest,
reviled in the Middle Ages as
as small-scale industry with some wage labor. Simple commodity exchange and consequently simple commodity production, which
the sin of usury. At a more
sophisticated level capitalism
are the initial basis for the growth of capital from trade, have a very long history.
involves investing money in a
project in return for a share of
the profit.

Classical Islam promulgated capitalist economic policiesInsuch

the caseas
of a free trade and banking. Their use of Indo-Arabic numerals
single owner
of an industrial enterprise
facilitated bookkeeping. These innovations migrated to Europe through
(such as a factory), the trade partners in cities such as Venice and Pisa. The Italian
system reveals a
mathematician Fibonacci traveled the Mediterranean talking to Arab
characteristic traders,
distinction. All and returned to popularize the use of Indo-Arabic
the profits go to one man,
numerals in Europe. though many others share the
work. Full-scale capitalism
results in an inevitable divide
between employer and
Capital and commercial trade thus existed for much of history, but it did not lead to industrialization or dominate the production
employed, or capital and
labour.
process of society. That required a set of conditions, including specific technologies of mass production, the ability to independently
and privately own and trade in means of production, a class of workers willing to sell their labor power for a living, a legal
framework promoting commerce, a physical infrastructure allowing
In the Middle Ages the
attitude of the church
the circulation of goods on a large scale and security for private
accumulation. Many of these conditions do not currentlyto exist in many
usury means that Third World countries, although there is plenty of capital and
capitalism has little chance of
labor. The obstacles for the development of capitalist markets
developing.are
Even therefore
so, this is
the period in which its roots
less technical and more social, cultural and political.
lie.
 Capitalism
Meaning/Definition:
The underlying theme of

an economic and political system in which a

capitalism is the use of wealth
to create more wealth. The
simplest form of this is
lending money at interest,

country's trade and industry are controlled by

reviled in the Middle Ages as
the sin of usury. At a more
sophisticated level capitalism

private owners for profit, rather than by the

involves investing money in a
project in return for a share of
the profit.

state. In the case of a single owner

of an industrial enterprise
(such as a factory), the
system reveals a
characteristic distinction. All
the profits go to one man,
though many others share the
work. Full-scale capitalism
results in an inevitable divide
between employer and
employed, or capital and
labour.

In the Middle Ages the

attitude of the church
to usury means that
capitalism has little chance of
developing. Even so, this is
the period in which its roots
lie.
 Capitalism
Assumptions:
1. Wage Labor. There has to be a large group of people dispossessed of the means of production
The underlying theme of
capitalism is the use of wealth

(property necessary to fulfill their needs).

to create more wealth. The
simplest form of this is
lending money at interest,
reviled in the Middle Ages as
the sin of usury. At a more

2. Production For Exchange. The purpose of production is not to fulfill people’s needs, but to create
sophisticated level capitalism
involves investing money in a
project in return for a share of
profit from exchange on the market. the profit.

In the case of a single owner

of an industrial enterprise
(such as a factory), the
3. Private Ownership of the Means of Production. Private ownership creates wage labor through
system reveals a
characteristic distinction. All

inequality. Without inequality, wage labor, thus capitalism, would be unthinkable.

the profits go to one man,
though many others share the
work. Full-scale capitalism
results in an inevitable divide
between employer and

4. Money/Credit. Money is a universal equivalent that makes all exchange values (commodities)
employed, or capital and
labour.

commensurable. Credit is necessary to keep anarchic capitalist market relations from constantly
crashing (i.e., more then they do now).In the Middle Ages the
attitude of the church
to usury means that
capitalism has little chance of
developing. Even so, this is
5. A State with a Monopoly on the Legitimate Use of Violence. Because inequality is necessary for
the period in which its roots
lie.

wage labor, violence (or the internalized threat thereof) is necessary to keep the dispossessed
dispossessed.
 Capitalism
Goal/Objectives:
Capitalism is often thought of as an economic system in which
The underlying theme of
capitalism is the use of wealth
to create more wealth. The
simplest form of this is

private actors own and control property in accord with their

lending money at interest,
reviled in the Middle Ages as
the sin of usury. At a more
sophisticated level capitalism

interests, and demand and supply freely set prices in markets in

involves investing money in a
project in return for a share of
the profit.

a way that can serve the best interests of society. The essential
In the case of a single owner
of an industrial enterprise
(such as a factory), the
system reveals a

feature of capitalism is the motive to make a profit.

characteristic distinction. All
the profits go to one man,
though many others share the
work. Full-scale capitalism
results in an inevitable divide
between employer and
employed, or capital and
labour.

In the Middle Ages the

attitude of the church
to usury means that
capitalism has little chance of
developing. Even so, this is
the period in which its roots
lie.
 Capitalism
Advantage The underlying theme of
capitalism is the use of wealth
Capitalism results in the best products for the best prices. That's because consumers will pay more for what they
to create more wealth. The
simplest form of this is
want the most. Businesses provide what customers want at the highest prices they’ll pay. Prices are kept low by
lending money at interest,
reviled in the Middle Ages as

competition among businesses. They make their products as efficient as possible to maximize profit.
the sin of usury. At a more
sophisticated level capitalism
involves investing money in a
project in return for a share of
the profit.
Most important for economic growth is capitalism's intrinsic reward for innovation. This includes innovation in more
In the case of a single owner
efficient production methods. It also means the innovation
(such as a factory), of
the new products. As Steve Jobs said, "You can't just ask
of an industrial enterprise

customers what they want and then try to give that to them.
system reveals a
characteristic By
distinction. All the time you get it built, they'll want something
the profits go to one man,

Disadvantage
new." though many others share the
work. Full-scale capitalism
results in an inevitable divide
between employer and
employed, or capital and
labour.

In the Middle Ages the

attitude of the church
to usury means that
capitalism has little chance of
developing. Even so, this is
the period in which its roots
lie.
 Capitalism
Disadvantage:
Capitalism doesn't provide for those who lack competitive skills. This includes the elderly, children, the
developmentally disabled, and caretakers. ToThe keep
underlyingsociety
theme of
capitalism is the use of wealth
functioning, capitalism requires government
policies that value the family unit. to create more wealth. The
simplest form of this is
lending money at interest,
Despite the idea of a “level playing field,” capitalism does
reviled in the Middle Ages asnot promote equality of opportunity. Those
the sin of usury. At a more

without good nutrition, support, and education involvesmay

investing never
money in a make it to the playing field.
sophisticated level capitalism

project in return for a share of

the profit.

In the short term, inequality may seem to be Inofinantheindustrial

the best
enterpriseinterest of capitalism's winners. They have
case of a single owner

(such as a factory), the

fewer competitive threats. They may also usesystemtheir power
reveals a
characteristic distinction. All
to "rig the system" by creating barriers to
entry. For example, they will donate to elected officials
the profits go to one man,
though who
many others share the sponsor laws that benefit their industry.
work. Full-scale capitalism
They could send their children to private schools
results in an while
inevitable supporting
between employer and
divide lower taxes for public schools.
employed, or capital and
labour.

In the long term, inequality limits diversity and the innovation it creates. For example, a diverse
business team is more able to identify marketInattitude
niches.
the It can understand the needs of society's
Middle Ages the
of the church

minorities, and target products to meet thosetocapitalism

needs.
usury means that
has little chance of
developing. Even so, this is
Capitalism ignores external costs, such as pollution and
the period in which
lie.
climate change. This makes goods cheaper and
its roots

more accessible in the short run. But over time, it depletes natural resources, lowers the quality of life in
the affected areas, and increases costs for everyone. The government should impose Pigouvian taxes to
Capitalism

The underlying theme of

capitalism is the use of wealth
to create more wealth. The
simplest form of this is
lending money at interest,
reviled in the Middle Ages as
the sin of usury. At a more
sophisticated level capitalism
involves investing money in a
project in return for a share of
the profit.

In the case of a single owner

of an industrial enterprise
(such as a factory), the
system reveals a
characteristic distinction. All
the profits go to one man,
though many others share the
work. Full-scale capitalism
results in an inevitable divide
between employer and
employed, or capital and
labour.

In the Middle Ages the

attitude of the church
to usury means that
capitalism has little chance of
developing. Even so, this is
the period in which its roots
lie.
Capitalism

The underlying theme of

capitalism is the use of wealth
to create more wealth. The
simplest form of this is
lending money at interest,
reviled in the Middle Ages as
the sin of usury. At a more
sophisticated level capitalism
involves investing money in a
project in return for a share of
the profit.

In the case of a single owner

of an industrial enterprise
(such as a factory), the
system reveals a
characteristic distinction. All
the profits go to one man,
though many others share the
work. Full-scale capitalism
results in an inevitable divide
between employer and
employed, or capital and
labour.

In the Middle Ages the

attitude of the church
to usury means that
capitalism has little chance of
developing. Even so, this is
the period in which its roots
lie.
Protestantism
Protestanism
 Protestanism

Theory/Principle:
The belief, emphasized by Luther, in the Bible as the
highest source of authority for the church. The early
churches of the Reformation believed in a critical, yet
serious, reading of scripture and holding the Bible as a
source of authority higher than that of church tradition.
 Protestanism

Proponents:

Martin Luther (10 November

1483– 18 February 1546) was a
German professor of theology,
composer, priest, monk, and a
seminal figure in the Protestant Martin Luther
Reformation.
 Protestanism
Historical Context
The name Protestant first appeared at the Diet of Speyer in 1529, when the Roman Catholic emperor of Germany,
Charles V, rescinded the provision of the Diet of Speyer in 1526 that had allowed each ruler to choose whether to
administer the Edict of Worms. On April 19, 1529, a protest against this decision was read on behalf of 14 free cities
of Germany and six Lutheran princes who declared that the majority decision did not bind them because they were
not a party to it and that if forced to choose between obedience to God and obedience to Caesar they must choose
obedience to God. They appealed either to a general council of all Christendom or to a synod of the whole German
nation. Those who made this protest became known to their opponents as Protestants, and gradually the label was
applied to all who adhered to the tenets of the Reformation, especially to those living outside Germany. In Germany
the adherents of the Reformation preferred the name evangelicals and in France Huguenots. The name was attached
not only to the disciples of Martin Luther (c. 1483–1546) but also to the Swiss disciples of Huldrych Zwingli (1484–
1531) and later of John Calvin (1509–64). The Swiss reformers and their followers in Holland, England, and Scotland,
especially after the 17th century, preferred the name Reformed.

In the 16th century Protestant referred primarily to the two great schools of thought that arose in the Reformation,
the Lutheran and the Reformed. In England in the early 17th century, the word was used to denote “orthodox”
Protestants as opposed to those who were regarded by Anglicans as unorthodox, such as the Baptists or the
Quakers. Roman Catholics, however, used it for all who claimed to be Christian but opposed Catholicism (except the
Eastern churches). They therefore included Baptists, Quakers, and Catholic-minded Anglicans under the term. Before
the year 1700 this broad usage was accepted, though the word was not yet applied to Unitarians. The English
 Protestanism

Goals of
TheProtestanism
ultimate goal: the "perfect man“ – In this world God honors Himself by making a certain kind of person who will
honor Him. His people will honor Him in their particular callings, in their homes, in the church where they contribute to
the welfare of their fellow saints, and in the world where their lives demonstrate the work of God in them. Church,
home, and school each have an appointed part to play in the development of this kind of person. Such a person is,
perhaps, best described in Ephesians 4:13: "Till we all come in the unity of the faith, and of the knowledge of the Son of
God unto a perfect man, unto the measure of the stature of the fullness of Christ." Although we strive to achieve this
goal, its full accomplishment is possible only in the new creation. Our education is for pilgrims who will pass through
this world on their way to the heavenly city.

Goal one: the love of God - The first and most important characteristic of this "perfect" man is that he loves God. "Thou
shalt love the Lord thy God with all thy heart, and with all thy soul, and with all thy mind" (Matt. 22:37). We must be
aware that the school cannot implant the love of God in any child that is the work of the Holy Spirit. The love of God
has already been implanted in children of the covenant. The goal of education is to promote and to encourage such
love of God in these children. Notice several things about the love of God as the goal of education. First, that pursuit of
such a goal excludes personal pride. In this pursuit we will teach the child to suppress his natural tendencies toward
self-love, self-promotion, and self-centeredness. Our educational practices will not promote any of these, but will
promote the Christian virtues that proceed from the love of God.Second, we observe that the education of the world
promotes scientism, secularism, and humanism all of which have goals that are antithetical to those of Christians. All of
 Protestanism
Goals of
Goal two: obedience– The second important goal of Christian education is obedience. Notice that obedience is closely
Protestanism
related to the love of God. In fact, Jesus, in Matthew 22:37, tells us the love of God is also obedience to the first and
greatest commandment. Love of God and obedience to His commandment go together inseparably. Obedience to
God's commands also requires obedience to parents and all those in authority over us. "What doth God require in the
fifth commandment? That I show all honor, love, and fidelity, to my father and mother, and all in authority over me, and
submit myself to their good instruction and correction, with due obedience; and also patiently bear with their
weaknesses and infirmities, since it pleases God to govern us by their hand" (Heidelberg Catechism, Lord's Day 39, Q &
A, 104).

Goal three: knowledge- The importance of the knowledge of God and obedience to His commandments is beautifully
described in Psalm 78:4-7, "We will not hide them from their children, shewing to the generation to come the praises of
the Lord, and his strength, and his wonderful works that he hath done. For he established a testimony in Jacob, and
appointed a law in Israel, which he commanded our fathers, that they should make them known to their children: That
the generation to come might know them, even the children which should be born; who should arise and declare them
to their children: That they might set their hope in God, and not forget the works of God, but keep his commandments.“

Goal four: reverence - A fourth goal of Protestant Reformed education is reverence for God and His works. There must
be in our love for God elements of awe, wonder, worship, and fear that I am here calling reverence. Proverbs 1:7, "The
fear of the Lord is the beginning of knowledge," expresses there elation between these two goals. This reverence is