Quakers and Capitalism

At the World Conference of Friends held at Guilford College in North Carolina in 1967, some young Friends crossed over from a concurrently running young Friends conference to raise a concern that became known as Right Sharing of World Resources. The new concern recognized poverty in the world economic system as in part a systemic problem, and as a legacy of colonialism. In doing so, Right Sharing went beyond the venerable concern Quakers have always had for their relationship with money, as individuals and as meetings.

In this way, Right Sharing also echoed the key testimonial innovation of the first Friends World Conference, held in London in 1920—the Foundations of a True Social Order. London Yearly Meeting had brought these eight principles to the Conference from their own landmark sessions of 1918, when the yearly meeting had deliberated over the report of its War and the Social Order Committee. Convened in 1915 to explore the causes of the Great War, the committee had concluded that colonial capitalism was in large part responsible for the horrors they had just been through.

They seem rather mild and general today (and in fact, the original proposal from the committee had been more radical), but the Foundations represented a momentous break with the past 250 years of Quaker testimony on the economy when they were approved. Not since the 1650s had Friends corporately addressed economics as a system so clearly and deliberately. Even in the 1650s, early Friends saw the complete restructuring of the social order as part of the Lamb’s War and what Doug Gwyn has called the "apocalypse of the word"—the feeling that they were witnesses for the Second Coming of Christ. They expected that all social institutions would be transformed along with the church when the "war" had been "won."

But with the restoration of the monarchy in 1661, the onset of the persecutions shortly after (lasting until the 1690s), and the imprisonment and death of most of their leadership, Friends gave up their apocalyptic expectations of seeing all things (including the social order) made new, and their zeal for shaking things to their roots. George Fox brought Gospel Order to Quaker meetings, remaking Quaker institutional life with an innovative approach to Spirit-led discipline. And, as Doug Gwyn has described in The Covenant Crucified, Quakers struck a deal with the system: religious toleration from the state, privatization of faith by the Church. The state gave up control over private worship; and religious communities, including Friends, gave up radical claims on the social order.

So began what I like to call the "double culture" period in Quaker history. On the one hand, Friends withdrew from the world into quietism and their "distinctives"; on the other hand, they engaged with the world with incredible energy and creativity as innovators in business, science, and technology. They almost single-handedly launched the industrial revolution, developing all the key technologies that made it possible, creating whole new industries and the leading companies in those industries, and reshaping the economy to its roots.

They revived the iron industry, invented coke as a fuel, and perfected cast iron; then moved into steel, inventing cast steel; then the railroad, interchangeable parts, household goods as consumer commodities, the department store, English porcelain, hot chocolate, the coffee house, and more. They built whole new industries besides iron, steel, and porcelain: lead, zinc, and silver mining; confections; soap; pharmaceuticals; watch and clock making; canal and rail transport. They dominated the textile industry (woolens, anyway) and became major players in shipping and finance (Barclays, Lloyds, and the Bank of Norwich, to name three banks). The key breakthroughs were high-quality steel and steel casting, which made it possible to mass-produce machine parts, the piece necessary for the industrial revolution to take off.

And they did all this with a surprising lack of reflection and theory about the creature to which they were midwives.

Three individual Quakers stand out as notable exceptions—John Bellers in the early 1700s, David Ricardo in the early 1800s, and Seebohm Rowntree at the turn of the 20th century.

In contrast to John Woolman (a true quietist in that he mostly directed his energies in A Plea for the Poor and other writings inward, toward his own community and toward the Christ within his readers), John Bellers (1654-1725) sent his ideas to Parliament. Bellers was the first to propose institutional remedies for the terrible plight of the newly emerging social class of industrial workers: colleges of art and industry. These institutions combined workhouses for the poor with vocational-technical schools, for-profit businesses, and industrial research institutes. He is quoted verbatim in Karl Marx’s Das Kapital and was required reading in the Soviet Union, which makes him perhaps the third-best-known Friend in history, after William Penn and Herbert Hoover (I’m not counting Richard Nixon).

A hundred years later, David Ricardo (1772-1823) founded the classical school of economics with his landmark 1815 essay On Profits. Born Jewish, Ricardo emigrated to England from Holland and became a Friend when he married his Quaker wife. After making a fortune in the stock market, he retired and turned his extraordinary mind to the problems of governing the emerging new economy. Classical economists like Ricardo, Adam Smith (the first economist), and John Stuart Mill held chairs in moral philosophy, but their approach to political economy was a secular counterweight to the evangelical political economists like Thomas Robert Malthus (1766-1834) and Thomas Chalmers (1780-1847), who dominated the new field until at least the mid-19th century. Joseph John Gurney wrote a book about Chalmers and helped him lobby against the Poor Laws in Ireland.

As evangelicals, these men saw the economy as one aspect of God’s providential governance of the world. Market downturns and bankruptcies were God’s chastisements for corporate and individual sins. Poverty was the result of moral character and thus the cure for poverty was repentance and conversion. They supported laissez faire (deregulation) because they believed humans had no business interfering with God’s judgment. They opposed state-sponsored, tax-based welfare because they thought it encouraged idleness and the other bad moral character traits that were the cause of poverty in the first place, and because it interfered with individual responsibility for one’s own soul, both as giver and receiver of moral exhortation. They believed that voluntary personal philanthropy, not reform of the system, more effectively served the real (spiritual) needs of both the philanthropist and the pauper. Evangelical moral philosophy dominated political economic thinking, public policy, and popular social attitudes in Great Britain until the terrible suffering of the Irish famine of 1846-1852 made people question its assumptions about God’s invisible hand in the economy. Philanthropy remained the characteristic response to the harshness of industrial capitalism throughout the Victorian period.

In the 1890s, Seebohm Rowntree helped to decisively overthrow this conservative evangelical emphasis on individual responsibility and private philanthropy with his book Poverty: A Study of Town Life (1901). A statistical sociological study of his hometown, York, the book proved scientifically that most poor people actually worked—and that low wages, not bad character (that is, sin), were the cause of their poverty. (The irony was that, along with the railroad, his own family’s chocolate company was the only employer of note in the city.) A young Winston Churchill called it "a book which has fairly made my hair stand on end." David Lloyd George brandished the book before large crowds all over Great Britain campaigning for the New Liberalism that had been inaugurated in 1906. Poverty helped pave the way for Britain’s revolutionary general welfare programs—for the modern welfare state—and, among Friends, for the work of the War and Social Order Committee, the Foundations of a True Social Order, and the social witness theme for the first Friends World Conference. Rowntree himself had a long career in the Liberal government as a protagonist of land reform, and his work reached deep into the 20th century to help shape President Lyndon Johnson’s "war on poverty," which used his methods to define the poverty line and eligibility for Head Start and other anti-poverty programs under the newly formed Office of Equal Opportunity.

Kenneth Boulding (1910-1993), who reintegrated economic thinking with ethical, religious, and ecological concerns in the 20th century, should also be mentioned. Anticipating the rise of eco-economics by decades, Boulding questioned economic assumptions on ecological grounds in 1958. He was one of the first analysts of the knowledge economy, and he worked tirelessly to integrate all the social sciences into one conversation about social betterment. One might also include Herbert Hoover, who botched the response to the crash of 1929, and Jack Powelson, who is an ardent defender of globalization and of economic development on the Western model.

All of these people were political economists. That is, they pondered the relationships between the economy, politics, and public policy, and they proposed policies, government measures, and market innovations that they believed would best serve the public good. And these people were Quakers whose faith informed their practice of the "dismal science."

So, Friends have quite a rich history of both faith and practice regarding capitalism as a system. With Rowntree and his fellow reformers, including a small but influential group of socialists centered in Manchester, British Friends caught up with Marx (and Bellers), recognizing the structural economic inequities (if not oppression) of capitalism, and responding with government programs. I’ve not yet discovered much political economic thinking among American Friends at the turn of the century. This reflects, I think, the enormous economic power of British Friends going into the 20th century compared to a much smaller minority of U.S. Friends, who had never played a similar role in the development of the U.S. economy.

Then came World War I, and Friends Service Council, American Friends Service Committee, and Friends World Conference. With the Great War as background, the Foundations of a True Social Order articulated a new vision for the capitalist system—what its motivations, goals, and methods should be—and they expressed a yearning for justice, peace, and the relief of suffering. England’s welfare state, Roosevelt’s New Deal, the New Society, and the War on Poverty of the 1960s all continued in the vein of compassionate political economics as defined by Rowntree.

However, beginning with the Reagan administration and intensifying with the George W. Bush administration, the political economics of poverty have retreated again to the conservative evangelical worldview that favors faith-based programs very like the ones Thomas Chalmers developed in the 1820s, and a moral economic ideology that stresses personal responsibility and the transformation of character as the cure for poverty. And the political economics of business has taken the simple laissez faire philosophy of Ricardo and other early classical economists to a new extreme: radical deregulation of virtually every industry and privatization of even such traditional government functions as public education, incarceration, and warfare.

So where are we as Friends today?

I would like us to build on the legacy of the apocalyptic Friends of the 1650s, and of Bellers, Rowntree, and Boulding. I would have us strive for an integrated social testimony that fuses our religious witness into a coherent, comprehensive vision for complete social transformation.

I am hoping for modern radical Quaker political economists—because the world needs a compassionate counterbalance to the thinking that dominates both corporate practice and government policy. It needs Quakers to get involved because political economics since the 1980s has been a creature, in part, of religion: conservative evangelical Christian theological assumptions, especially about the causes of poverty and its solutions, have become political ideology and public policy. We already know what conservative economics leads to from its history in the 1800s and from the changes visible today: the Corn Laws and Poor Laws of the 1820s, and the initial response to the Irish famine in the 1840s were disastrous for the poor. Today we have the assault on the dispossessed victims of Hurricanes Katrina and Rita as the authors of their own suffering and the gutting of the very programs that would minister to their needs. This calls for engagement by religious people who have a more perceptive and faithful knowledge of the Gospel of Jesus and a more universal understanding of grace and the role of religious community.

Finally, Quakers should become political economists because capitalism—especially industrial capitalism—is itself partly our responsibility. Just as we helped to create the modern prison system with the innovation of the penitentiary, so Quakers were the driving force behind the industries and economic structures that shaped emerging industrial capitalism. Industrial capitalism would have happened without Friends—but it didn’t. Just as we feel called to reform a penal system that has lost its way, so I hope we will be called to reform an economic system we did much to create and which has become carcinomic, an engine of unlimited consumption and growth, not to mention the blood on its hands, from the Western Front in World War I to the streets of Baghdad.

The problem is daunting to the point of paralysis. How do you change an entire economic system the way Quakers and other industrialists did 300 years ago?

First, of course, you pray and seek God’s guidance. We believe that any one of us may be called into ministry—to do something good for the world. Some among us, I pray, will be called into economic ministry, as Kenneth Boulding was. Beyond this, I have three more ideas that meetings might take up.

To begin with, we could start with our comfort zone, the Peace Testimony. Let’s develop a testimony on economic sanctions as a tool of foreign policy. We know how devastating they have been to the people of nations we are punishing, and we know they often fail to meet their political goals. Economic sanctions have been around for quite a while and there is a lot of research to inform our work. Sanctions may be useful in some circumstances, but they desperately require informed and conscience-led reform.

Second, again inside our comfort zone—but not for long—is the problem of secure retirement. Friends already have a track record of successful innovation with retirement communities, assisted living, hospices, and long-term care. But our institutions on the model of Medford Leas are beyond the means of most people, including most Quakers. And a lot of people of means will soon be outliving the means that make these places affordable to them now. In the next 20 years, many of us are going to fall into poverty in our old age. Let’s start thinking, planning, experimenting with ways to meet this looming need.

Third, a simple way to restructure the problem, especially for religious communities, is to start by redefining "the good life." The "American Dream" turns into a nightmare when extrapolated into the future, especially if it’s adopted by China, India, and the rest of the developing world. The planet just cannot support billions of people living as we do. That means we have to live with less. It means radical change and sacrifice.

The question then becomes: are we Quakers like the rich young man in the Gospels who asks Jesus, "What must I do to enter the kingdom of heaven?" Jesus answers with the essentials of the law, stressing the Ten Commandments. The young man says he already does these things. "One thing remains," says Jesus. "You must sell all that you own and give it to the poor, and come follow me." And the man went away, very sad, because he was a man of great wealth. Will we walk away, sad, but unable to take the last radical step?

Right now, few of us know the one-third of U.S. children now living in poverty. But that may be about to change. Friends have gone through three stages of social status. We started out as yeoman farmers and small family tradespeople in the 1650s. By the mid-1700s, most British Quakers were in the upper and upper middle classes. U.S. Friends were more generally distributed on the social landscape and have remained so ever since, but they were not usually poor. Then, in Great Britain during the 20th century, the great Quaker fortunes dissolved as privately owned companies went public and their Quaker owners became managers. Demographically, we Quakers have converged on the middle-middle class from both ends throughout the past 100 years. This trend accelerated in the period following World War II, as new, more suburban meetings have sprung up in and near university towns.

Now I believe we may be on the cusp of a fourth stage, one of descent into poverty through the cracks in the floor of the middle class. The knowledge economy will increasingly leave behind those of us who are "stuck" in the service, education, and social service sectors—the so-called secular church. Our real incomes have been stagnant for two decades already. And many of us are about to retire. Baby boomers (I am one) are very likely to outlive our savings and our safety net is fraying.

This will bring a new challenge to our meetings—a potential for intergenerational conflict. Retiring boomers will leave behind in our meetings younger families struggling to keep afloat with both parents working. As the ranks of the long-lived elderly swell, these younger people may come to resent our incredible wastefulness, imprudence, selfishness, and our political power as a voting bloc, not to mention the economic burden of supporting both us and the debt we have amassed.

What are we going to do about that? And about all the people who are poor or over-extended already?

Steven Dale Davison

Steven Dale Davison, a member of Yardley (Pa.) Meeting, is currently working on two books: a new reading of the Gospel with a focus on ecological issues, and an economic history of Friends and a history of Quaker economics, with some thoughts toward a Quaker economic testimony.

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