The effect of capitalism is to steer human selfishness so that, through the invisible hand of competition, the energies of the capitalist produce the abundance from which the whole society benefits. Moreover, capitalism encourages entrepreneurs to act with consid- eration for others even when their ultimate motive is to benefit themselves. So while profit remains the final goal, entrepreneurs spend the better part of each day figuring out how better to serve the needs of their actual and potential customers. They are opera- tionally, if not intentionally, altruistic. As Samuel Johnson once put it, “There are few ways in which a man can be more innocently occupied than in getting money.” One may say that capitalism civilizes greed in much the same way that marriage civilizes lust. Both institutions seek to domesticate wayward or fallen human impulses in socially beneficial ways.
And when it came to capitalism, Christian civilization created the basic rules of modern economics. In the Middle Ages, Rodney Stark shows, people first realized that prices should be determined through supply and demand. In the past, prices had been set by law or custom. But Albertus Magnus, a thirteenth-century Dominican friar, explained that prices reflect “what goods are worth according to the estimate of the market at the time of sale.” And this of course is what we believe now
In his classic work The Protestant Ethic and the Spirit of Capitalism, Max Weber traces the rise of capitalism to a spirit of calling or election introduced by Calvinism. But as in the case of market pricing, the core elements of capitalism all predate the Reformation. Some scholars have traced them to the monastery communities of the early Christian era, in which bandsof monks demonstrated a strong work ethic, practiced specialization and division of labor, borrowed and lent money, and engaged in long-distance trade involving a fairly wide range of foodstuffs and other commodities. Stark argues that “all of the essential features of capitalism … are to be found from the twelfth century on, in the city republicans of Italy, such as Venice, Genoa, or Florence.”