Quakers & Capitalism—Friends and evangelical political economics

March 16, 2011 § 3 Comments

Joseph John Gurney and Thomas Chalmers

England has had three legal systems for taking care of the poor since Queen Elizabeth I reformed the punitive Tudor system, which was breaking down in the face of the decline of monasticism and the wider medieval social structure. Her reforms (1597 and 1601) created a national poor law system for England and Wales that used the parish as the administrative structure and supplied funds through a compulsory land tax levied at the parish level. It put people who couldn’t work into poorhouses, subsidized the labor of the able-bodied poor, put vagrants in a House of Correction, and arranged apprenticeships for pauper children. The British colonists brought this system with them to North America.

The assessment system itself began to break down in the face of industrialization, which drew large numbers of rural poor into the cities to work in the new factories, straining the urban parishes with heavy taxes and overwhelming responsibilities. By the time of the depression of 1825, which I mentioned in the previous post, the assessment system was ramping up to meet the growing demand and spreading on the heals of increased poverty to areas like Scotland, while its shortcomings were becoming more and more unacceptable. Thomas Malthus, the extremely influential evangelical minister and early political economist, had published his landmark work An Essay on the Principle of Population in 1798 and had added five more editions by 1825. David Ricardo, the classical economist, published his hugely influential Principles of Political Economy and Taxation in 1817, having been inspired to enter the field after reading Malthus.

The debate about how to care for the poor and reduce or eliminate poverty was on. Pressure was mounting to act and the nation was becoming ready to embrace radical reform. Many looked to greater state intervention because local resources were so inadequate, and many agreed that a national system was required to help smooth out the vagaries of local organization. Evangelical political economists like Malthus resisted this trend, however, believing that aid to the poor only encouraged the very sins that had made them poor in the first place—laziness, vices like gambling and drink, and sex—having more kids than they could support. They also felt that mandatory taxes and a state-sponsored distribution system undermined the moral character and opportunities of the rich. They insisted that the spiritual needs of the giver—that is, themselves—were at least as important as those of the receivers—the poor. Each act of charity, to be a genuine act of conscience, had to be voluntary, spontaneous and discriminating. You had to be involved for benefit to accrue. The real obligation was to God, not to the poor. Institutionalizing charity denied the rich the blessing they might receive and denied the poor the opportunity for the kind of personal contact that could ignite a conversion.

Into this exciting environment came the Reverend Thomas Chalmers, a brilliant, charismatic, innovative and energetic man who’d become a zealous evangelical after a personal conversion experience. Of his character, the Wikipedia entry says this: “He was transparent in character, chivalrous, kindly, firm, eloquent and sagacious; his purity of motive and unselfishness commanded absolute confidence; he had originality and initiative in dealing with new and difficult circumstances, and great aptitude for business details.”

Like Malthus and his other evangelical peers, Chalmers believed that poverty resulted from flawed moral character and that private voluntary charity was the solution. Already famous in Great Britain for his theological writings, he solidified his reputation as a political economist by testing his ideas in the field in what amounted to an early 19th century faith-based initiative. When the Scotsman took over the very poor parish of St. John in Glasgow in 1819 after four years at another church, the British system of compulsory tax assessment for the poor was gaining ground in Scotland. Chalmers believed that this approach actually made things worse and proposed a voluntary approach involving radically reorganizing the parish and applying a rigorous program of family visitation, counseling and monitoring to enforce moral rectitude. In four years, he reduced annual pauper relief in the parish from ₤1,400 to ₤280. The astounding success of his program greatly impressed the rest of the political and political economic elites, especially when they looked at the numbers rather than the huge organizational effort involved. Chalmers himself burned out from the work load and, in 1823, having ‘made the numbers,’ left his extremely demanding life running this operation and accepted a chair in moral philosophy at St. Andrews. This was the seventh academic offer made to him in his eight years in Glasgow. His lectures and writings influenced political economic thinking and policy for the next 25 years and beyond.

Where do Friends fit in all this? So far, my researches have found little to indicate specifically what Quakers, and especially, evangelical Quakers, thought of evangelical political economy. It seems that Friends shared their moral-economic worldview to a large extent, but not its harshness of tone or cold-heartedness in practice. Wealthy Friends were morally paternalistic themselves and they shared with these evangelical thinkers a commitment to personal and spontaneous giving. And I know that Chalmers became friends with the Gurneys and other Quakers, whom he called “the most serviceable philanthropists we met with.” [The Age of Atonement: The Influence of Evangelicalism on Social and Economic Thought, 1785-1865, Boyd Hilton, p. 59. This book is the source for much of my thinking in this area and is a great resource.] Gurney and his sister Elizabeth Fry accompanied Chalmers when he testified before a Select Committee on the State of the Poor in Ireland in 1830, presumably because they shared his views. Evangelical Friends also shared these men’s extreme nervousness about their own spiritual health and the moral dangers of wealth. J.J. Gurney claimed that the most “salutary chastisements” he had received from God had “arisen out of being . . . a ‘monied man,’” [Hilton, p. 116 n.3, quoting Gurney’s journal] and, as I said in the previous post, he reported “feeling the Lord to be near to us” during the severe economic crisis of 1825, expressing the belief that market collapses could be times of visitation.

The clearest evidence that Chalmers and his ideological brethren spoke to the evangelical Quaker condition that I’ve found is a book published in 1853 by Joseph John Gurney titled Chalmeriana, or, Colloquies with Dr. Chalmers (available from Google Books). Gurney speaks very glowingly of Chalmers in this little book, praising his modesty and religious humility, the earnestness of his faith, his stellar character as a man, the effectiveness of his poverty program, and, especially, the intellectual power and moral force of his extraordinary mind. They clearly had a deep regard for each other.

I think it’s fair to say that at least they shared many of the essentials of evangelical faith and its general implications for economic practice. And I don’t think it goes too far to say that Gurney represents in large degree his evangelical Quaker peers in these matters.

One crucial area of difference does peek through, however. Chalmers is preoccupied with judgment and with justice as the primary attribute of God, and he was a self-avowed predeterminist. Gurney gives equal weight to God’s goodness. Chalmers looks at the cross and the Atonement and sees God’s judgment.. Gurney sees a divine gift of love. In one section of the book, the two men are discussing the work of several other writers on the moral attributes of God. Chalmers is warning against reducing God’s character to the single quality of benevolence when justice (that is, judgment) is (to Chalmers) obviously more important. Gurney, though, argues: “Surely, that [the atonement of Christ; emphasis is Gurney’s] is where justice and benevolence meet; where God has displayed at once his abhorrence of sin and his mercy to the sinner.” In the dialog Gurney records, Chalmers veers away from Gurney’s point without responding to it.

To generalize, though acutely conscious of sin and of the sinner’s desperate need for Atonement, evangelical Friends remained more optimistic, more open to God’s goodness. Precisely in the Atonement did they see God’s goodness most clearly demonstrated. This, I think, made evangelical Friends much less willing to leave people in their suffering as the necessary road to contrition and conversion, and made them much more willing to minister to sufferers in their need. The work of Elizabeth Fry, J. J. Gurney’s sister, is instructive here. Once awakened from her life as a rich, unreligious, even frivolous (in her own eyes) ingénue, she ends up in the Newgate prison wards trying to help real people. Her tools are the classic evangelical ones: literacy, moral exhortation and the Bible. But her hands are dirty and her heart is burning with care.

Non-evangelical Friends, on the other hand, in their quietist passivity, had not the motivation of the missionary to get them into the world with the same fervor. Their inwardness tended to keep them out of philanthropy and movements for social reform. At the other extreme, super-evangelicals, especially leaders in America of the pre-millennialist holiness movement that emerged in the 1870s and ‘80s from the evangelical awakening of mid-century, these Friends saw relief work as the devil’s work and abandoned the poor to the wrath of God’s judgment. According to Professor Hamm in The Transformation of American Quakerism, this point of view was quite influential among American evangelical leaders for quite some time, though Friends in the benches tended to be more moderate in their theology and compassionate in their views.

Evangelical political economics dominated discourse and policy in England into the middle of the 19th century. By then, several factors had began to erode its influence over policy, with the horrible Irish famine as a crucial turning point. We will turn to this history in the next post. But the moral philosophy of evangelical political economic thinking has never disappeared and has periodically regained the allegiance of some politicians in America, as we well know. In the hands of Herbert Hoover (a Quaker), Ronald Reagan and George W. Bush, this moral economic philosophy has played a major role in American public policy.

Quakers & Capitalism — Evangelical Political Economy

March 9, 2011 § 2 Comments

How evangelicalism shaped 19th century Quaker economics – Part 1

In 1825, Great Britain entered an economic depression comparable in severity to the crash of 1929 in America. Hundreds of firms went bankrupt and the Bank of England itself came close. The collapse came out of the blue. Thomas Robert Malthus, of ‘Malthusian theory’ fame, an evangelical cleric and pioneer economist, had predicted cyclical collapses, but no one had seen this one coming. Theories about its causes and ideas for its cure buzzed in the parlors of the business and intellectual elites and occupied the journalists and pamphleteers.

In his journal, Joseph John Gurney recorded “feeling the Lord to be near to us” during that time. (Descended from Hugh de Gournay, one of the Norman nobleman who came to England with William the Conqueror, his family had started with huge land grants from William in Norwich and Suffolk. They founded the Bank of Norwich in 1770, which was for a time the second largest bank in England after the Bank of England. Around 1809, the family bought a large billbrokering business, a firm that either lends money or finds lenders for borrowers; for forty years, Overend, Gurney and Company was the largest broker of loans in the world. In 1896, Gurney’s Bank merged with Backhouse’s Bank and Barclays Bank of London and several other Quaker provincial banks to form what is now Barclays Bank.)

The two schools of political economy current at the time—classical and evangelical—approached these cyclical downturns differently, in terms of how they analyzed their causes, how they would manage the system in times of crisis, and how they treated those who suffered from their fallout. In 1825, evangelical thinkers dominated this economic discourse.

Gurney himself believed, along with his evangelical peers, in a providential God who watched human events and sometimes intervened according to a divine plan. Like them, mindful of judgment, he watched out for temptation and hoped for atonement. The financial crisis of 1825-26 was surely a moral test; but mostly it was seen as a judgment against those who had already surrendered to avarice and ambition. Gurney no doubt experienced God’s nearness as, first, the searing heat of financial losses, which naturally turned him inward to reflect on his own moral character; and then, when his fortune ultimately survived, as the cool refreshing draught of escape from ruin and at least partial reassurance of his moral uprightness. His fortune was saved; he was saved. Many of his fellow capitalists were not.

For moderate evangelicals like Gurney, God’s providence was systemic: both nature and markets ran according to God’s plan for the world’s government and for human judgment, but not every little event was an act of specific divine intervention. Adam Smith’s famous “invisible hand”—the natural tendency of markets to efficiently set prices on their own, without government interference—this was actually the invisible hand of God at work. The fact that the actions of individuals powered the mechanisms of the market and gave it direction made the system an inherently moral one. Market policy therefore required a moral philosophy and this evangelical philosophy required not only that you leave God’s mechanisms alone but also that you leave individuals to choose their actions and suffer their judgment.

Such a moral philosophy naturally encouraged moral speculation, especially when bad things happened: cholera epidemics and market downturns pointed toward sins as causes, so the evangelical economists would search for the culprit sins behind these events. As the system tended to be general in its chastising effects, hurting lots of people and society in general, so the more moderate evangelical political economists tended to be somewhat general in their attributions of moral cause and they tended to differ when they got down to specifics.

More radical evangelicals believed, however, that God micro-managed the system, intervening directly and with specific purpose in virtually all events. Thus, they saw every outbreak of cholera or market downturn as a deliberate visitation for some specific sin(s) and this emboldened them to get serious and specific with their condemnations and exhortations.

All evangelical political economists agreed, though, that, squirming under God’s plan, and always defying its purposes, lurked human sin. Every human problem had its ultimate root in sin. Social ills, like poverty and economic recessions, personal problems, like poverty and bankruptcy—you could trace them all back to sin, not just sinfulness in general, but often a particular act, trait or policy. Sin and its consequences for the immortal soul gave evangelical political economists a sense of emotional urgency that heated the discourse up far more than the rational theories of the classical economists.

The sins behind economic downturns were clear: greed, primarily, ambition, and pride. Bull markets encouraged borrowing and speculation. Encouraged by their winnings, investors got overextended. Then, when everyone realizes that they are sitting on a bubble, panic ensues, people start calling in their notes, and the system collapses. Chastised for a time, businessmen (sic) recommit themselves to prudence. But then they forget the pain, greed plants its seeds again, and the cycle starts over.

The sins behind poverty were also clear: improvidence and licentious habits—laziness, gambling, drinking, wantonness of all kinds—and, of course, sex. Sex led to overpopulation among the working classes, which led to poverty.

The cure for both poverty and what we now call the business cycle was moral tuition. The cure for economic depressions was collective repentance and a nation that hewed more closely to God’s law. The cure for poverty was personal repentance and strengthened moral character. The evangelical worldview rejected most practical approaches to poverty relief and turned instead to moral paternalism. Poor relief was actually cruel in its consequences because it encouraged idleness, and suffering was actually salutary, because it led to repentance. Far better to suppress vice and encourage industry, economy and discipline. Their material charity thus tended toward things like good clothing that could support self-respect, rather than grants of money. And, of course, Bibles, plus enough education to enable the poor to read their Bibles. One thinks immediately of Elizabeth Fry, Gurney’s sister, ministering to the inmates of Newgate Prison.

In the next post, we’ll return to Gurney and his friendship with the greatest evangelical political economist of the age, Thomas Chalmers, as a window into the distinctive evangelical mutation in the Quaker double culture of religious withdrawal and economic engagement—how it drew Friends back into the world of social and political action in crucial ways without seriously threatening the distinctives of Quaker culture.

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