It is a unifying doctrine in Nicene Christianity that man, after the Fall, is sinful by nature. Sin mars the Imago Dei, resulting in man’s inability to please God by his own character. Calvinism, following the philosophical currents of Augustine and predestination, espouses what is arguably the most vicious view of human nature: the unregenerate are “totally depraved,” not even possessing the free will to choose good in any spiritual capacity. 

Calvinists viewed total depravity as especially manifest in economic life and the market, where the human competition over resources, wealth, and opportunity brought out the worst in human nature. Avarice, oppression, opportunism and injustice were magnified, flowing from the highly pessimistic—if not realist—Calvinist anthropology of homo avaris, or “avaricious man.”(They did not call it as such, but the term sufficiently captures the dominant Calvinist view of human social and economic behavior.) Consequently, wherever Calvinist religiosity was the dominant ideological and cultural force, civil government and religious institutions sought to regulate and restrict homo avaris in whichever way necessary to prevent moral degeneracy, maintain commercial justice, and cultivate godly society. This article will explore what this market regulation looked like in Early Puritan New England, one of the bastions of institutional Calvinism in modern history.

Price and Wage Controls

We often speak of American Puritans as proto-capitalists, and not entirely without reason. Certainly, there were many affinities between the Puritan ethos of industry, thrift, and moral responsibility and rationalized, acquisitive enterprise. But the market regulations imposed by government and church in early New England—perhaps surprisingly to some—more often than were more consonant with comparatively socialist economic thought. A primary example is price controls.

Price controls are legal maximums and minimums for select goods instated by the government, made to ensure both affordability for consumers and sufficient revenue for producers. The governing bodies of 17th-century New England instituted many such controls, particularly on essential goods such as corn and bread. A 1646 legislation from the Massachusetts General Court, for example, enumerated the just, fixed prices for breads of 8 different combinations of white and wheat.

More commonly, since the bureaucratic determination of prices was an ostensibly difficult process, the General and local Courts in the New England colonies would decide on appropriate profit margins, not prices. This, at least in theory, effectively restrained the vice of oppression, defined by Harvard President and minister Benjamin Wadsworth as “extortion” and charging an “excessive, unreasonable” price to maximize one’s own gain at the expense of the buyer. At first, the Puritan establishment introduced concrete rules on markups, such as a 1633 law placing 133% of the equivalent London price as the ceiling for all goods traded by merchants. But fluctuating market forces rendered the intention behind this obsolete quickly. Thereafter the law was repealed, and instead the Court opted to establish committees to examine charges of oppression, and meted out punishment to those guilty of violating the spirit of the law—a vague standard that, as Gary North noted in The Puritan Experiment with Price Controls, was bound to inject further chaos, ambiguity, and dissatisfaction into the exchange. Indeed it did, for many a merchant and artisan met the force, and sometimes irony, of the price laws. Robert Keayne, Boston merchant and devout Puritan, was fined 100lbs and nearly excommunicated in 1639 for selling nails at 50%, 67%, and 100% margins. Edward Palmer, in the same year, was sentenced to sit in the very stocks which he had overcharged on. 

The market for labor was also subject to wage controls, for labor also constituted a good. A 1633 law in Connecticut offered perhaps the most ambitious attempt at central wage regulation. North provides an adequate summary of its complexity (and perhaps insanity!).

“Skilled craftsmen were not to accept more than 20 pence a day (12 pence to a shilling) from March 10 through October 11, nor above 18 pence for work on any other day during the year. This included carpenters, masons, coopers, smiths, and wheelwrights. All other handicraft workers were prohibited from taking more than 18 pence per day for the first half of the year, nor more than 12 pence during the remainder of the year. Workers were obligated to work an eleven-hour day in the summer, in addition to eating and sleeping, and nine hours in the winter. Price controls were placed on sawed boards. This jumbled mass of legislation was repealed within a decade.”

As one might expect, these price and wage controls seldom produced the desired results, if at all. Shortages and surpluses, black markets, and worker dissatisfaction almost immediately set in. And the regulations’ inefficacy was evident from the start, even to their most vocal advocates, like John Winthrop. But then why were they enacted at all?

It turns out that price controls were inspired by the mediæval idea of the just price, a scholastic concept which entailed a context-dependent yet quasi-objective value behind goods and commodities. This corresponded largely with the prevailing market price of the time and place—or, as Puritan ministers preferred to define it, what disinterested, pious, and experienced individuals would estimate as the true value of an item. In practice, this amounted to a basic “cost-plus” calculation. Only with the central regulation of profit margins could homo avaris, producers intent more on maximizing profit rather than selling goods at appropriate prices, be restrained from degrading society’s moral goodness. 

Throughout the 18th century, price controls were largely discarded by the colonial governments, for a variety of reasons: the sociopolitical ascendancy and lobbying of merchants; the rise of a transatlantic market; and the evident inefficiency of the price controls. Ministers themselves became cognizant of price controls’ drawbacks, such as Wadsworth who noted that the just price was greatly elusive:

“It’s no easy matter exactly to state the case, and to say, how much profit is justly to be allow’d to the Seller. The nature of the Commodities, the trouble of the business, and other considerations may alter the case very much; and render it allowable to take more profit (proportionably to the worth or price of the thing) in one case; than in another. Many circumstances should be seriously weigh’d by those, who would approve their Consciences to God in these matters.”

It was clearly difficult for ministers and the civil establishment to restrain homo avaris by way of central price determination, especially since it tried to fit dynamic free market forces into a rigid bureaucratic framework. Nonetheless, price controls were a perennial feature of political economy in 17th-century New England.

Usury

Another way by which Puritanism’s homo avaris could be shamelessly opportunistic, and thus another behavior that required stringent regulation, was lending—specifically, charging excessive interest, or usury. Interest, or the percentage return on a loan, was never itself the issue; it had its appropriate uses, particularly when used as a risk-premium to finance overseas ventures. Nevertheless, to charge a predatory rate to anyone, let alone to the poor, was prohibited entirely. 

English immigrant John Greere, when dictating his will in 1637, gravely renounced his old lifestyle of usurious lending—whether it was “6 or 8 percent” interest—and ordered his executors to restore those he had transgressed. This decision was informed by the preaching of orthodox ministers and magistrates, like John Cotton. The 8% ceiling on interest was the typical maximum rate both in Old and New England, but Greere, under the preaching of stalwart anti-usury clergy, repented even of this. All except merchants, who reasonably required higher interest rates to account for the elevated risk of distant ventures, were expected to submit to this rule. In another instance, Thomas Dudley—in fact the governor of Massachusetts Bay at the time—was indicted for selling bushels of wheat to poorer citizens with the expectation of a usurious return of some 140% afterwards, an act for which he was harshly reprimanded by Winthrop and other divines. As the devotional John Edwards would write in 1725, 

“In short, let us be firmly persuaded of this, that it is absolutely Unlawful & Sinful to retrieve Increase for money lent if there be any Injustice & Extortion used in it. This is Biting and Oppressing Usury, and may well be ranked with Stealing and Thieving.”

Colonial records contain many other instances punished for excessive interest; but, as with price controls, the condemnation of usury gradually eroded under the pressure of the expanding credit economy.

Anti-Monopoly Regulation

While regulations of comparatively socialist nature were present in the Puritan economic regiment, the government was also keen to encourage a competitive market in different goods. Each person was entitled to fair opportunity to market and sell their produce. Consequently, legislation enshrined basic anti-monopolization laws. A 1641 law in Massachusetts declared the following:

“That there shall be no Monopolies granted or allowed amongst us, but of such new inventions that are profitable to the Country, and that for a short time.”

Key exceptions were in mining and ironworks, for these provided scarce resources essential to New England’s coinage and industry.

Conclusion

We have spoken here at length of some of Puritan economic regulation’s connections to socialist thought, especially in price controls. What separated Puritan regulations from later socialist policies, however, was the reason for their existence. For the 20th-century Marxist or Communist bureaucrat, it was for the sake of social efficiency, which the free market could not easily achieve. For the Puritan, a visceral repulsion to the unrestrained behaviors of avaricious market actors compelled economic controls. By nature humans, even pious Christian individuals, were homo avaris, a reality that demanded strict constraints on economic activity. 

By and large, modern Christians have moved away from so pessimistic a view of human nature.  At the same time, the “market” has expanded from localized exchange to globalized, depersonalized, and infinitesimally complex. 

It appears in this context infeasible to adopt the same sort of policies that restricted economic activity in early Puritan America. The free market has assumed precedence; usury has been legitimated and institutionalized in credit culture, predatory loan practices, and expensive mortgages; and the rise of multinational corporatist groups has constricted the ways in which free and fair competition is conducted today. Have we anything to learn from the Puritans, their anthropology, or their political economy? Indeed, is there any way in which their regulations may be applicable in our day and age? However one answers these questions, the study of Puritan market regulation poses poignant reflections on the state of modern human economic thought.