As Amintore Fanfani noted a hundred years ago, a change of theological doctrine will inevitably be accompanied by a change in norms governing behavior . Two novel theological concepts dating from the Reformation, sola fides—salvation by faith alone—and sola scriptura—the only source of theological doctrine is the individual interpretation of scripture—acted as a solvent to transform the moral and legal consensus of over a millennium that the substance of human economic activity was subject to moral and legal norms.
A corollary to sola fides is that actions (other than the act of faith itself) in this life have no effect upon the next life. The elimination of works from the plan of salvation leads to a segmentation of human life, separating religion from everything else (this was reinforced by Luther’s doctrine of the two kingdoms). Since works, including economic, have no effect on salvation or merit in the next life, they should be evaluated solely in light of their usefulness to the earthly kingdom. Such compartmentalization was unthinkable when every act in this life had direct implications for the life to come. As Fanfani notes, “A man convinced that wealth is a means for the attainment of his individual, natural ends, which are not and cannot be divorced from his individual, supernatural ends ... will choose such means of acquiring wealth as will not lead him away from his ultimate end or ends related to it” .
Second, the exaltation of the individual, subjective interpretation of scripture as the only source of theological knowledge tended toward the triumph of individualism and radical autonomy in the economic realm. If individuals could be relied on to interpret scripture for themselves, they were also best suited to apply scriptural texts to their own economic activity. This in turn led to a policy favoring deregulation of economic activity. Fanfani explains:
In substance what was required was that the state should no longer impose a special rhythm on economic life with a view to the attainment of certain ends, but should leave the individual free to realize his own ideals for himself, and should confine itself to ensuring that he should not be impeded in so doing .
As a result, laws “are passed to safeguard an individualistic conception of property and the complete autonomy of the individual in economic matters and to defend economic freedom even against the power of the state itself” . The individual’s freedom of choice becomes the test of justice, just as individual interpretation of scripture becomes the touchstone of doctrine, leading to the radical conclusion that “[a]ll profit is just when there is full freedom” . If economic activity has a moral implication, the application of any moral norms should be left to individuals, and the civil government’s role in economic activity is limited either to maximizing the scope for individual freedom (classical liberalism) or intervening to maximize wealth creation for the nation (mercantilism).
Prior to the Reformation moral theology and even Church law was intimately involved in formulating and applying detailed rules restraining economic activity. Two primary casualties of this shift spurred on by these theological doctrines were the moral and legal norms prohibiting contracting at an unjust price and earning a profit from the loan of money (usury). Once activity that resulted in economic injustice was seen as having no effect on eternal salvation and a matter of individual interpretation, arguments for the relaxation of these norms gained momentum on the theory that it would increase economic efficiency and prosperity.
This shift in paradigm resulted in the rise of the fundamental theory of freedom and autonomy of parties to contract at an unjust price or for excessive usury. The law’s role gradually came to be restricted to facilitating bargains and at most to ensuring that the bargains were made free of compulsion or deception. If parties freely chose an unjust or usurious bargain after providing mandatory disclosure documents that nobody reads (i.e., terms of credit cards), it was not the place of the law to interfere. This result was in direct contrast to centuries of secular and ecclesiastical courts who understood their role as adjusting bargains to achieve justice. That could not be done without examining and questioning the fairness of bargains (even if made freely). Except only in rare cases, we have come to think that any freely made bargain must be enforced.
- Amintore Fanfani, Catholicism, Protestantism, and Capitalism (New York: Sheed & Ward, 1955), 3.
- Ibid, 24-25.
- Ibid., 88.
- Ibid., 103.
- Abbé Baudeau, quoted in Fanfani, 101.