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John Calvin capitalism and moneylending in 16th century Europe
Just read Calvin's letter on usury. He permits Christian to borrow money but forbids them to be usurers. His argument in favor of lending is generally utilitarian. He has one odd proviso. Christians should only borrow if the profit they can make on the borrowed money is equal to or greater than the amount borrowed.
Anyone have any idea why he would require such a large profit. I have no idea what interest rates were in his day or how lending actually worked but the rule struck me as very odd and I'm trying to make sense of it in the context of early capitalism.
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Another thing. There was no curfew. Kids can do whatever they want. Oh, the bus system shut down at midnight and taxis were at double time then. Curfew but no curfew unlike the Americans who seem to champion freedom but have curfews. Same principle. You can borrow but you have to be able to make a highly improbable sum of money from that borrowing. So I am not saying you cannot borrow. You just have to be able to justify it.
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Interesting. A lot of ink has been spent on explaining the relationship of Calvinism to the rise of capitalism If what you say is correct, and people took the rule seriously, it would mean that only the shrewdest of business ventures could be pursued. Did this have any effect on the rapid growth of capitalism in Europe, pushing modest business ventures to the margins and encouraging only the most profitable business plans? In other words, concentrating capital in the most profitable businesses?
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1977 300d 70k--sold 08 1985 300TD 185k+ 1984 307d 126k--sold 8/03 1985 409d 65k--sold 06 1984 300SD 315k--daughter's car 1979 300SD 122k--sold 2/11 1999 Fuso FG Expedition Camper 1993 GMC Sierra 6.5 TD 4x4 1982 Bluebird Wanderlodge CAT 3208--Sold 2/13 |
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Some will take the rule seriously and the smarter ones will pay it lip service. One of my fav stories was that Nam was poor and grew just about enough to feed the people. One bad harvest, they had to import broken rice (cheap stuff. Kinda like rejects) to feed the people. The govt couldn't afford it so they told the farmers they could keep what they made. THE NEXT YEAR, the exported a few tons of rice. Since then, they have been exporting rice. Govt did the same with aquaculture and they are #4 or #3 exporters of shrimp in the Asia region. After all, if you must make $1000 because you borrowed $1000, few, if any businesses could guarantee such an ROI except with illegal drugs. The best I can say is that it discouraged the less capable and confident but not much else. After all, if people can be that soft in the head as to listen to some bozo on a pedestal about profit when that guy hasn't made a dime himself, what good are they in the business world?
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1977 300d 70k--sold 08 1985 300TD 185k+ 1984 307d 126k--sold 8/03 1985 409d 65k--sold 06 1984 300SD 315k--daughter's car 1979 300SD 122k--sold 2/11 1999 Fuso FG Expedition Camper 1993 GMC Sierra 6.5 TD 4x4 1982 Bluebird Wanderlodge CAT 3208--Sold 2/13 |
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01 Ford Excursion Powerstroke 99 E300 Turbodiesel 91 Vette with 383 motor 05 Polaris Sportsman 800 EFI 06 Polaris Sportsman 500 EFI 03 SeaDoo GTX SC Red 03 SeaDoo GTX SC Yellow 04 Tailgator 21 ft Toy Hauler 11 Harley Davidson 883 SuperLow |
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The US small business failure rate in the first 3 years is around 70% the last time I read about it. Not sure exactly what percentage of change in those numbers would have a substantial effect in a couple of generations, but forbidding investment in marginal enterprises would seem to be good for the economy. I would imagine this is one reason why an authoritarian country like China has been so good in competing in the world market. Capital is not wasted on millions of small stupid unsuccessful business ventures and is concentrated in closely analyzed large ventures.
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1977 300d 70k--sold 08 1985 300TD 185k+ 1984 307d 126k--sold 8/03 1985 409d 65k--sold 06 1984 300SD 315k--daughter's car 1979 300SD 122k--sold 2/11 1999 Fuso FG Expedition Camper 1993 GMC Sierra 6.5 TD 4x4 1982 Bluebird Wanderlodge CAT 3208--Sold 2/13 |
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01 Ford Excursion Powerstroke 99 E300 Turbodiesel 91 Vette with 383 motor 05 Polaris Sportsman 800 EFI 06 Polaris Sportsman 500 EFI 03 SeaDoo GTX SC Red 03 SeaDoo GTX SC Yellow 04 Tailgator 21 ft Toy Hauler 11 Harley Davidson 883 SuperLow |
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There's a longstanding argument that Calvinism taught people to think that they weren't really entitled to anything, causing the rise of capitalism. If you combine that argument with this apparently odd requirement of high return on borrowed money and the cultural principles for the expansion of capitalism begin to come together.
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1977 300d 70k--sold 08 1985 300TD 185k+ 1984 307d 126k--sold 8/03 1985 409d 65k--sold 06 1984 300SD 315k--daughter's car 1979 300SD 122k--sold 2/11 1999 Fuso FG Expedition Camper 1993 GMC Sierra 6.5 TD 4x4 1982 Bluebird Wanderlodge CAT 3208--Sold 2/13 |
#10
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In theory, it would weed out the non hackers but in practice, would it be different?
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Well, something in Northern European culture caused capitalism to take off between 1500 and 1850. Obviously access to natural resources in the new world had something to do with it but there also must have been cultural reasons. Calvinist countries like Scotland and Holland were really successful so it seems reasonable to look for some cultural causes in Calvinism. I'm pretty sure that at the time Calvin wrote down his ideas about usury and rate of return on borrowed money the Catholic church was still opposed to usury. I'll have to check into that. That would account for why Protestant cultures had a leg up in capitalist expansion over Catholic cultures.
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1977 300d 70k--sold 08 1985 300TD 185k+ 1984 307d 126k--sold 8/03 1985 409d 65k--sold 06 1984 300SD 315k--daughter's car 1979 300SD 122k--sold 2/11 1999 Fuso FG Expedition Camper 1993 GMC Sierra 6.5 TD 4x4 1982 Bluebird Wanderlodge CAT 3208--Sold 2/13 |
#12
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01 Ford Excursion Powerstroke 99 E300 Turbodiesel 91 Vette with 383 motor 05 Polaris Sportsman 800 EFI 06 Polaris Sportsman 500 EFI 03 SeaDoo GTX SC Red 03 SeaDoo GTX SC Yellow 04 Tailgator 21 ft Toy Hauler 11 Harley Davidson 883 SuperLow |
#13
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Consider also that the only people in many countries who made really big money were the ones in the trading companies who fought pirates, stole land and gold from natives, worked them to death, and/or sold them as slaves. What's a measly 100% ROI when you can throw out the rules and do what you want in the guise of "enlightening the savages and bringing them civilization and Christianity?"
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