economy
unit of weight and currency related, for instance, to a mass of barley. Gold
and silver coins are introduced by the Lydians, according to the Greek
historian Herodotus. Even into the Middle Ages in the West, exchange of
goods occurs within social groups. The first banks are founded by Jakob
Fugger (1459–1525) and Giovanni di Bicci de’Medici (1360–1428), who
are former merchants. Global discoveries beyond Europe open the world
to a global economy characterized by trading in goods. The first stock
exchange is founded in Antwerp in 1513. Within the context of colonialism
and the rise of nation states, mercantilism attempts to bridge the gap
between private wealth and national economies. During the Industrial
Revolution, Adam Smith (1723–1790), a Scotsman, states that the basis for
free trade is self-interest and the prices of products are due to the law of
supply and demand along with the division of labor. This notion of supply
and demand relates to the problem of overpopulation by Thomas Malthus
(1766–1834). By the end of the eighteenth century, the concept of “econ-
omy” becomes an autonomous aspect of human life, and is perceived to
accompany the secularization and subsequent decline of religion, accord-
ing to some theorists, and to operate according to its own natural laws.
Recognizing the fundamental nature of economy to society, Karl Marx
perceives that religion, a definitive form of alienation, is being driven from
human life by capitalistic materialism, but other scholars take a different
perspective about the potential of economy to undermine religion.
In his The Protestant Ethic and the Spirit of Capitalism (1904–1905),
Max Weber argues that the origins of capitalism can be found in the
intrinsic character of Christian religious beliefs, especially Protestant
convictions. The notion of a religious calling in Lutheranism gives a
dignity to all work and reinforces a belief that the religious life can be
pursued within the world and that worldly success confirms that one is
an instrument of God’s will. Calvinism gives a person, according to
Weber, an opportunity to prove oneself within the context of a belief in
predestination, a doctrine that motivates people to look for signs of being
chosen and saved. Salvational status is associated with worldly success
as a sign that one is favored by God. Not only does Protestantism encour-
age dedication to industrial labor, but it also contributes to the develop-
ment of the entrepreneurial spirit so necessary for taking risks.
Besides the Marxist reactions to capitalism, there arises in America the
Social Gospel Movement and in Britain the Christian socialist move-
ments, as a response to problems surrounding issues of poverty and
exploitation inherent in capitalism, and from which emerges the modern
welfare state. This suggests that religious beliefs not only help to foster
economics, but these beliefs also paradoxically challenge economic
excess. During the 1980s, governments are forced to intervene because