Christian Business Ethics: Examples from the
Puritans
A Paper for the Christian Business Faculty Association
Conference at Malone College October 5-8, 1995
by Virgil O. Smith, Ph.D. - Associate Professor, School of Business
Biola University
Abstract
If the social system of the market cannot
The most radical change in business
adequately control the behavior of people,
conditions probably came about in the
it becomes obvious that the church made
mid 1500’s. Prior to this time, commercial
a grave mistake when it gave up its voice
activities were largely conducted between
in the marketplace. To reclaim this loss,
neighbors. This changed with the
and to effectively prepare our Christian
advent of the market. These changes
students for their future roles in business,
also brought about a concern that the
it is important to consider the teachings
traditional requirement of a personal
of those Christians that did attempt to
biblical ethic in commerce no longer
grapple with the realities of the emerging
applied. Arguments were increasingly
market. Many of these Christians were
made that personal morality was
labeled ‘Puritans’ by secular society.
unnecessary in the modern marketplace,
The second part of this paper will look at
since the system of the market would
how one of the leading Puritan thinkers
control people’s actions and only allow
(Richard Baxter) carefully considered the
results that were for the public good.
changing realities of the marketplace. He
This idea has continued to the present
then faithfully searched, and found, what
day, and as a result, the church has little
the Bible has to say about these realities.
to say about economic matters. The
Baxter’s teachings are remarkably
argument to be pursued in this paper, is
insightful, and his manner of scriptural
that the notion of the market controlling
application remains immanently applicable
for the sin of man, is flawed. While the
today.
market has an important regulatory role to
play in governing the economic behavior
Introduction
of people, any social system becomes
The Puritans were a godly and a practical
ineffectual if not upheld through the
people, and as such, believed that all of
underlying ethic and trustworthiness of its
life was to be lived to the glory of God
participants.
(Packer, 1990; Ryken, 1986). Thus, they
attempted to integrate their saving faith in God with every
forces. . . . [The] struggle of individualism, in the face of
part of life, and since, in their day as in ours, work and the
restrictions imposed in the name of religion by the Church
pursuit of a living made up a major part of life, they had a
and of public policy by the State, [was] first denounced,
great deal to say about the ethics of commerce.
then palliated, then triumphantly justified in the name of
economic liberty. (Tawney, 1926:13)
Packer (1990) sets the age of English Puritanism
between the years of 1550 and 1700. This was also a
Today, such reasoning is a normal fixture in the day-to-
time when frame-breaking change was happening in the
day work life of modern business people, whether they
world of commerce. Commerce was expanding from a
are believers or unbelievers. A recent study of religion
community affair, participated in by individuals that had
and economic values by Robert Wuthnow shows how far
usually known each other most of their lives, to the much
we have bought into the beliefs described by Tawney.
more impersonal, increasingly complex, and radically
enlarged scope of commerce that was rapidly taking over
the known world.
Tawney explains it this way:
Wuthnow concludes from his study
that;
Most Americans do believe their faith is relevant to their
finances. Only 22 percent of those surveyed, for example,
No one can read the discussions which took place
agreed that, ‘God doesn’t care how I use my money.’
between 1500 and 1550 on three burning issues -- the
Nevertheless, the evidence suggests that faith makes
rise in prices, capital and interest, and the land question
little difference to the ways in which people actually
in England -- without being struck by the constant appeal
conduct their financial affairs. (Wuthnow, 1993:239)
from the new and clamorous economic interests of the
day to the traditional Christian morality, which in social
In essence, the problem that faced Christian business
organization, as in the relations of individuals is still
people in the mid 1500’s, and that still faces Christians
conceived to be the final authority. . . . By the middle
in business today, has to do with whether the Bible
of the seventeenth century all that is altered. After the
provides sufficient direction to adequately control
Restoration, we are in a new world of economic, as well
economic exchange, or whether the social systems
as of political, thought. (Tawney, 1926:9)
(the economic, legal, and monetary systems) are the
appropriate modern systems which should be used
Tawney goes on to say that the next two hundred
control economic exchange. If the principles found in
years was dominated by the “new science of Political
the Bible are not sufficiently complex to deal with the
Arithmetic” which asserted that there are no rules
business problems of today, or if the social systems have
to commerce beyond the letter of the law (Tawney,
an in-built ability to control the actions of the participants
1926:10). Over this time period, the predominating view
so that the end result is the betterment of all, the rules
changed from a view of economic activity which regarded
of Christian godly living, however much use they are
it as one among other kinds of moral conduct, to the view
to individual Christians, have little to offer the practical
of it as dependent upon impersonal and almost automatic
world of business. From a theological perspective, the
question is whether a social system can cause collective
finance, world-markets and a capitalist organization of
righteousness to result from individually selfish actions.
industry, its traditional social doctrines had no specific
to offer, and were merely repeated, when, in order to be
This issue has many practical considerations. If the
effective, they should have been thought out again from
rules of Christian Godly living are inappropriate to
the beginning and formulated in new and living terms.
the outside world of commerce, how can a Christian
(Tawney, 1926:184)
business person live by them and still survive in the
marketplace? A continuation of this reasoning has led
The Puritans were, arguably, the only Christian body
some Christian scholars to argue that Christians should
that took on the task of rethinking the scripture in light
remove themselves from the marketplace (how it is
of its application to the commercial realities of the day.
possible to do this, they do not say), since being involved
Present-day Christians in business are therefore well
in it is either to fail, or to sin. An alternate view, which
advised to consider the Puritan conceptions of living
has been put forth with considerable force in our modern
biblically in commercial settings. It is to this that I will turn
day, is that individuals, including those with a personal
in the last part of this paper.
Christian ethic, should maintain ethical standards in their
personal lives, but when they enter the place of business,
Can Private Sin Lead to Public Righteousness?
they should follow the predominating “rules of the game”
If the social system corrects for the individual behaviors
(Cadbury, 1987; Carr, 1970; Lodge, 1974).
of the participants in the system, then greed, envy, and
avarice can be allowed to run free in commercial life, with
In this paper, I would like to explore the issues of
no impairment of the economic system’s ability to provide
private versus public (commercial) morality, including
for the physical needs of the society. In a very practical
the question as to whether it is possible to successfully
sense though, individual sin run amok would necessarily
participate in the commercial world and still live by a
change the way commerce would have to be carried out.
biblical standard. To move ahead in the story, one of my
If, as a participant in the system, I know you are likely to
conclusions will be that it is possible for a Christian to
be motivated solely by your own cravings, the last thing
participate ethically in business. Once we have reached
I will do is trust you in our commercial dealings. Yet, I
that conclusion however, we are still left with a second
need to be able to trust you. As a simple example, many
problem. Specifically, how do we apply biblical principles
commercial transactions require an agreement today
of personal ethics to the complex world of intertwining
for actions which will not be carried out until later. For
fiduciary responsibilities which typify business life today?
instance, shares of stock are normally traded on a hand
signal, and the paperwork does not catch up for several
This second problem is discussed by Tawney (1926), who
days.
states that most of the medieval church writers,
had tried to moralize economic relations, by treating
If we feel we cannot fully trust those we are dealing
every transaction as a case of personal conduct,
with, we can turn to human systems to help out. In
involving personal responsibility. In an age of impersonal
the case of the stock transaction, we can create stock
exchanges with a limited and costly membership. The
stock exchange can police its own members by denying
System Trust Used Alone Will Fail.
The most perfect form of system trust, that all other
membership to any who abuse the privilege. In other
systems attempt to emulate, is purported to be the
words we, at least partially, substitute trust in a system
neoclassical market system -- the system that was
for trust in the individuals we face day to day in the
emerging in the Puritans’ day, and has, since that time,
marketplace. The question is whether systems can totally
been held to deny the necessity for personal morality
replace individual trust. This debate is alive and well in
in commercial situations. As Robert Heilbroner, an
the scholarly business literature today. Trust in persons
economic historian says; “What [Adam Smith explained]
has generally been termed ‘interpersonal trust’ while
was ‘the invisible hand,’ as he called it, whereby ‘the
a trust in the system can perhaps be best described
private interests and passions of men’ are led in the
(following Luhmann, 1979 and Zucker, 1986), as ‘system
direction ‘which is most agreeable to the interest of
trust.’ Interpersonal trust is essentially a choice by one
the whole society’” (Heilbroner, 1980:52, citing Smith,
person to trust another person based upon that person’s
1937[1776]:423).
perceived trustworthiness. System trust, on the other
hand, is not centered on an individual. Rather, it is
Yet, the idea of the market working to control the
centered on some aspect of a larger social system that
outcomes emanating from greed, envy, and avarice has
people are willing to put confidence in. Thus we can ‘trust
largely been accepted without question, and with no
in democracy,’ or ‘trust in the law,’ or, ‘trust in the market’
substantive empirical support (Barber, 1977; Mahoney,
to assure proper outcomes result from our interactions
Huff & Huff, 1993). In actuality, the market system cannot
with other people and organizations.
do away with the necessity for personal morality for the
Is Interpersonal Trust Needed?
Many scholars have argued that because the economic
world has become increasingly complex with the advent
of capitalism and the modern organization, it is too
difficult to create the kind of relationships necessary to
form, and to rely upon, interpersonal forms of trust (see
for instance, Hawthorn, 1988; Luhmann, 1979; Silver,
1985; and Zucker, 1986). They conclude that this is the
reason that there is a general decline in interpersonal
trust in the modern world. Many of these writers go on to
advocate abandoning interpersonal trust altogether, and
increasing our reliance on forms of system trust, because
it is much easier to ascertain ability than character, and
system trust reduces, or (they argue) eliminates the need
for character.
simple reason that the market system (as described
by Adam Smith) has never existed, and cannot exist in
anything like its pure form. This is also why its outcomes
have not been empirically verified.
Most introductory Economics texts begin by mentioning,
in a more or less complete form, the assumptions behind
the theory of the market. Those assumptions are, 1)
that there exists an almost infinite number of buyers, 2)
facing an equally large number of sellers, 3) all selling
an identical product, and 4) that there is free and perfect
information available to the buyers and sellers. These
books do not usually mention the more modern day
requirement, that the buyers and sellers have the ability
to process all of the information they freely and perfectly
receive. It is fairly obvious to see that these conditions do
not, and have never, existed in any actual economy.
The Need for Personal Ethics in the Market.
By the previous discussion, I am not attempting to argue
The conclusions reached here argue an overwhelming
that the market system is useless. It obviously does
need for those in the commercial system who hold forth
produce some pressures, and considerable pressures in
a Godly Virtue. With no sustaining example of biblical
some cases, in the directions indicated by Adam Smith.
ethics in business, interpersonal trust will inevitably
For this we should be thankful. It does not however, in
decline, and declining trust in the balance of the society’s
and of itself, truly control commercial actions. It must
systems will ensue, followed by the eventual breakup
rely upon other forces of control -- other systems, or,
of the society itself. Therefore, even if it were possible,
interpersonal trust -- to work.
Christians should not forsake the world of commerce.
Rather they should, as the Puritans believed, “show the
Mahoney, Huff and Huff argue that, in reality, Adam
world how to do it right” (Packer, 1995). It is just this sort
Smith’s concept of the invisible hand depended in his
of thinking, about Christianity’s application to every part of
day upon “human virtue and a common social ethic”
the world, which the Puritans excelled at.
(1993:6). Barber (1977) agrees with this assessment and
concludes that the market system only works because
I would now like to turn my attention to the Puritan
it is embedded within the social environment. It is to
application of scriptural principles to the commercial
a large extent then, the social environment, made up
world. The Puritans had a form of teaching which they
of all the individual human relationships which revolve
called ‘casuistry,’ by which they meant the ‘cases and
around interpersonal trust, in some form, that allows the
problems of conscience’ (Packer, 1995). We would
market to work in any meaningful way. Thus the market
probably call it ‘Christian ethics.’ It is in this body of
system can aid in the control of commerce, but cannot
literature that we find most of the Puritan views on
force control by itself, and moreover, depends upon the
business relationships. I have chosen the best known
underlying social ethic for its effect.
of these sources to look at briefly here. This was
Richard Baxter’s Christian Directory, or a Summ of
In actual practice, one can easily question the
Practical Theologie and Cases of Conscience, (Baxter,
sufficiency of the market to control its own outcomes. If
1990[1625]).
it were sufficient, it would have been unnecessary for
governments down through the centuries to regularly
Baxter’s work is a rethinking of scripture in its application
intervene in the market’s workings. For instance, in the
to the new situations in the workplace of the Christian.
United States today, we have substituted the government
While there is too much in Baxter’s writings to pursue
for the market in many areas, and by doing this, we
them in depth here, a recitation of some of the subjects
have substituted a specific guardian system for one
he dealt will indicate their scope: Must I in all cases do
which neoclassical economics held, needs no guardian.
as I would be done by? . . . Is one obliged by a contract
Therefore, if all systems in which we would trust, even the
made in ignorance or mistake of the matter? . . . Am I
market system, need a human ‘guardian,’ sooner or later,
obliged by covenanting words without a covenanting
the question becomes, who ‘guards’ the ‘guardians?’
intent? . . . Must I keep a promise which I was drawn into
by deceit? . . . Must I stand to a bargain made for me
honest terms,” for “it is a false rule of them that think their
by a friend or servant to my injury? . . . May I dispraise
commodity is worth as much as any one will give.”. . .If
another’s commodity to draw the buyer to my own? . . .
he is buying from the poor, “charity must be exercised as
May I buy as cheap as I can, or below the worth?
well as justice; “ the buyer must pay the full price that the
goods are worth to himself, and, rather than let the seller
Thus, Baxter dealt with many practical issues of his day
suffer because he cannot stand out for his price, should
and ours. In the rest of this paper, I want to provide two
offer him a loan or persuade some one else to do so. In
specific examples, the first short -- the second longer, to
no case may a man doctor his wares in order to get for
illustrate the applicability of Puritan thinking to their day,
them a higher price than they are really worth, and in no
and ours.
case may he conceal any defects of quality; if he was so
unlucky as to have bought an inferior article, he “may not
The Christian and Win-Win
Transactions.
repair [his] loss by doing as [he] was done by...Rivalry in
The Puritans would argue that it is necessary for the
not snatch a good bargain “out of greedy covetousness,
Christian to only participate in win-win market situations.
nor to the injury of the poor...nor...so as to disturb that
Baxter stated it this way; “It is not lawful to take up
due and civil order which should be among moderate
or keep up any oppressing monopoly or trade, which
men in trading.” On the contrary, if “a covetous oppressor”
tendeth to enrich you by the loss of the commonwealth or
offer a poor man less than his goods are worth, “it may be
of manyÓ (Baxter, 1990[1625]:827). Thus, occupations
a duty to offer the poor man the worth of his commodity
that are evil in and of themselves, publishing pornography
and save him from the oppressor.” (222-223)
trade, Baxter thinks, is inevitable. But the Christian must
for example, are not fitting places for Christians because
they hurt society in general. In other words, we would
A Recognition of Modern Commercial Complexities.
be participating in a zero-sum proposition, gaining at
Baxter explicitly recognized the biblical duties of the
society’s expense, whether we personally participate in
Christian, and yet also recognized the realities of the
the pornography or not.
marketplace within which his parishioners worked. One
aspect of this reality was the increasing complexity of
It is surprising how often this theme arises in Baxter’s
the marketplace. The impact of an economic action upon
work. For instance, consider the following from Tawney’s
employees, shareholders, debt-holders, suppliers, and
(1926) review of Baxter’s writings:
society at large had to be considered. No longer could
[The Christian in commerce] must not desire “to get
one only think about the individual transaction without
another’s goods or labour for less than it is worth.”
placing it in the larger web of activity.
He must not secure a good price for his own wares
“by extortion working upon men’s ignorance, error, or
The fact that Baxter recognized these complexities
necessity.”. . .If he finds a buyer who is willing to give
and distinctions of a modern marketplace can be most
more [than his wares are worth], he “must not make
easily seen in his instructions regarding the relationships
too great advantage of his convenience or desire, but
between landlords and tenants. Baxter recognized that
be glad that [he] can pleasure him upon equal, fair, and
this type of an association often was not a pure market
transaction in his day, but also encompassed a power
marketplace takes account of changing situations and
relationship. He said regarding this;
multiple parties affected by any decisions made. It also
It is too common a sort of oppression for the rich in all
considers the power relationships created treats them as
places to domineer too insolently over the poor, and force
responsibilities to be accounted for.
them to follow their wills and to serve their interest, be it
right or wrong. . . . Especially unmerciful landlords are the
Conclusion
common and sore oppressors of the countrymen. If a few
Since the time of the rise of the market system,
men can but get money enough to purchase all the land
arguments have been made that personal morality is
in a county, they think that they may do with their own as
unnecessary in the modern marketplace, since the
they list, and set such hard bargains of it to their tenants,
system of the market can control people’s actions and
that they are all but as their servants. . . . An oppressor is
only allow results that are for the public good. This idea is
an Anti
rarely questioned in the modern mind today.
hrist and Anti-God . . . not only the agent of the Devil, but
One result is that the church has had little to say about
his image. (Baxter, 1990[1625]:846)
economic matters since the 1600’s. The argument
pursued in this paper, is that the notion of the market, or
Since the landlords of the day were in the supreme power
any social system for that matter, controlling for the sin
position, the market rent tended to be held artificially high.
of man, is fundamentally flawed since every system of
Baxter said that the Christian landlord should therefore
man must have some men as ‘controllers’ of the system.
not rent at the going rate, but that;
If people generally become untrustworthy due to an
Ordinarily the common sort of tenants in England should
over-reliance upon social systems to control behavior,
have so much abated of the fullest worth that they may
this action will eventually affect the ‘controllers’ of the
comfortably live on [their land], and follow their labours
systems, with the result that the systems will fail.
with cheerfulness of mind and liberty to serve God in their
families, and to mind the matters of their salvation, and
To reclaim lost ground, it is important to consider the
not to be necessitated to such toil and care and pinching
teachings those Christians that did attempt to grapple
want, as shall make them liker slaves than free men,
with the realities of modern commercial settings. The
(Baxter, 1990[1625]:849)
second part of this paper briefly looked at how one of
the leading Puritan thinkers reapplied scripture to the
Likewise, the landlord should not improve his land
marketplace world of his day. These teachings are
without considering the effect on the tenants, or
remarkably insightful, and remain immanently applicable
discharge his tenants without compensating them. The
today.
landlord should not do things that would cause the rural
population to fall, and a new tenant must not take over
a tenancy over the existing tenant’s head by paying
more rent than the existing tenant can give or than the
landlord can justly ask for. Thus, a Christian ethic in the