Mercantilism in Spain

he seeming prosperity and glittering power of Spain in the sixteenth century proved a sham and an illusion in the long run. For it was fuelled almost completely by the influx of silver and gold from the Spanish colonies in the New World. In the short run, the influx of bullion provided a means by which the Spanish could purchase and enjoy the products of the rest of Europe and Asia; but in the long run price inflation wiped out this temporary advantage. The result was that when the influx of specie dried up, in the seventeenth century, little or nothing remained. Not only that: the bullion prosperity induced people and resources to move to southern Spain, particularly the port of Seville, where the new specie entered Europe. The result was malinvestment in Seville and the south of Spain, offset by the crippling of potential economic growth in the north.

But that was not all. At the end of the fifteenth century, the Spanish Crown cartellized the developing and promising Castilian textile industry by passing over 100 laws designed to freeze the industry at the current level of development. This freeze crippled the protected Castilian cloth industry and destroyed its efficiency in the long run, so that it could not become competitive in European markets.
Furthermore, royal action also managed to destroy the flourishing Spanish silk industry, which centred in southern Spain at Granada. Unfortunately, Granada was still a centre of Muslim or Moorish population, and so a series of vindictive acts by the Spanish Crown brought the silk industry to its virtual demise. First, several edicts drastically limited the domestic use and consumption of silk. Second, silks in the 1550s were prohibited from being exported, and a tremendous increase in taxes on the silk industry of Granada after 1561 finished the job.

Spanish agriculture in the sixteenth century was also crippled and laid waste by government intervention. The Castilian Crown had long made an alliance with the Mesta, the guild of sheep farmers, who received special privileges in return for heavy tax contributions to the monarchy. In the 1480s and 1490s, enclosures that had been made in previous years for grain farming were all disallowed, and sheepwalks (cañadas) were greatly expanded by government decree at the expense of the lands of grain farmers. The grain farmers were also hobbled by special legislation passed on behalf of the carters’ guild – roads being in all countries special favourites for military purposes. Carters were specially allowed free passage on all local roads, and heavy taxes were levied on grain farmers to build and maintain the roads benefiting the carters.

Grain prices rose throughout Europe beginning in the early sixteenth century. The Spanish Crown, worried that the rising prices might induce a shift of land from sheep to grain, levied maximum price control on grain, while landlords were allowed unilaterally to rescind leases and charge higher rates to grain farmers. The result of the consequent cost-price squeeze was massive farm bankruptcies, rural depopulation, and the shift of farmers to the towns or the military. The bizarre result was that, by the end of the sixteenth century, Castile suffered from periodic famines because imported Baltic grain could not easily be moved to the interior of Spain, while at the same time one-third of Castilian farm land had become uncultivated waste.

Meanwhile, shepherding, so heavily privileged by the Spanish Crown, flourished for the first half of the sixteenth century, but soon fell victim to financial and market dislocations. As a result, Spanish shepherding fell into a sharp decline.

Heavy royal expenditures and taxes on the middle classes also crippled the Spanish economy as a whole, and huge deficits misallocated capital. Three massive defaults by the Spanish king, Philip II – in 1557, 1575 and 1596 – destroyed capital and led to large-scale bankruptcies and credit stringencies in France and in Antwerp. The resultant failure to pay Spanish imperial troops in the Netherlands in 1575 led to a thoroughgoing sack of Antwerp by mutinying troops the following year in an orgy of looting and rapine known as the ‘Spanish Fury’. The name stuck even though these were largely German mercenaries.

The once free and enormously prosperous city of Antwerp was brought to its knees by a series of statist measures during the late sixteenth century. In addition to the defaults, the major problem was a massive attempt by the Spanish king, Philip II, to hold on to the Netherlands and to stamp out the Protestant and Anabaptist heresies. In 1562, the Spanish king forcibly closed Antwerp to its chief import – English woollen broadcloths. And, when the notorious duke of Alva assumed the governorship of the Netherlands in 1567, he instituted repression in the form of a ‘Council of Blood’, which had the power to torture, kill, and confiscate the property of heretics. Alva also levied a heavy value-added tax of 10 per cent, the alcabala, which served to cripple the sophisticated and interrelated Netherlands economy. Many skilled woollen craftsmen fled to a hospitable home in England.

Finally, the breakaway of the Dutch from Spain in the 1580s, and another Spanish royal default in 1607, led to a treaty with the Dutch two years later which finished Antwerp by cutting off its access to the sea and to the mouth of the River Scheldt, which was confirmed to be in Dutch hands. From then on, for the remainder of the seventeenth century, decentralized and free market Holland, and in particular the city of Amsterdam, replaced Flanders and Antwerp as the main commercial and financial centre in Europe.

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Mercantilism: serving the absolute state

By the beginning of the seventeenth century, royal absolutism had emerged victorious all over Europe. But a king (or, in the case of the Italian city-states, some lesser prince or ruler) cannot rule all by himself. He must rule through a hierarchical bureaucracy. And so the rule of absolutism was created through a series of alliances between the king, his nobles (who were mainly large feudal or post-feudal landlords), and various segments of large-scale merchants or traders. ‘Mercantilism’ is the name given by late nineteenth century historians to the politico-economic system of the absolute state from approximately the sixteenth to the eighteenth centuries. Mercantilism has been called by various historians or observers a ‘system of Power or State-building’ (Eli Heckscher), a system of systematic state privilege, particularly in restricting imports or subsidizing exports (Adam Smith), or a faulty set of economic theories, including protectionism and the alleged necessity for piling up bullion in a country. In fact, mercantilism was all of these things; it was a comprehensive system of state-building, state privilege, and what might be called ‘state monopoly capitalism’.
As the economic aspect of state absolutism, mercantilism was of necessity a system of state-building, of Big Government, of heavy royal expenditure, of high taxes, of (especially after the late seventeenth century) inflation and deficit finance, of war, imperialism, and the aggrandizing of the nation-state. In short, a politico-economic system very like that of the present day, with the unimportant exception that now large-scale industry rather than mercantile commerce is the main focus of the economy. But state absolutism means that the state must purchase and maintain allies among powerful groups in the economy, and it also provides a cockpit for lobbying for special privilege among such groups.
Jacob Viner put the case well:

The laws and proclamations were not all, as some modern admirers of the virtues of mercantilism would have us believe, the outcome of a noble zeal for a strong and glorious nation, directed against the selfishness of the profit-seeking merchant, but were the product of conflicting interests of varying degrees of respectability. Each group, economic, social, or religious, pressed constantly for legislation in conformity with its special interest. The fiscal needs of the crown were always an important and generally a determining influence on the course of trade legislation. Diplomatic considerations also played their part in influencing legislation, as did the desire of the crown to award special privileges, con amore, to its favorites, or to sell them, or to be bribed into giving them, to the highest bidders.1

In the area of state absolutism, grants of special privilege included the creation by grant or sale of privileged ‘monopolies’, i.e. the exclusive right granted by the Crown to produce or sell a given product or trade in a certain area. These ‘patents of monopoly’ were either sold or granted to allies of the Crown, or to those groups of merchants who would assist the king in the collection of taxes. The grants were either for trade in a certain region, such as the various East India companies, which acquired the monopoly right in each country to trade with the Far East, or were internal – such as the grant of a monopoly to one person to manufacture playing cards in England. The result was to privilege one set of businessmen at the expense of their potential competitors and of the mass of English consumers. Or, the state would cartellize craft production and industry and cement alliances by compelling all producers to join and obey the orders of privileged urban guilds.
It should be noted that the most prominent aspects of mercantilist policy – taxing or prohibiting imports or subsidizing exports – were part and parcel of this system of state monopoly privilege. Imports were subject to prohibition or protective tariff in order to confer privilege on domestic merchants or craftsmen; exports were subsidized for similar reasons. The focus in examining mercantilist thinkers and writers should not be the fallacies of their alleged economic ‘theories’. Theory was the last consideration in their minds. They were, as Schumpeter called them, ‘consultant administrators and pamphleteers’ – to which should be added lobbyists. Their ‘theories’ were any propaganda arguments, however faulty or contradictory, that could win them a slice of boodle from the state apparatus.
As Viner wrote:

The mercantilist literature... consisted in the main of writings by or on behalf of ‘merchants’ or businessmen, who had the usual capacity for identifying their own with the national welfare... The great bulk of the mercantilist literature consisted of tracts which were partly or wholly, frankly or disguisedly, special pleas for special economic interests. Freedom for themselves, restrictions for others, such was the essence of the usual program of legislation of the mercantilist tracts of merchant authorship.

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The roots of messianic communism

Anabaptist communism did not spring out of thin air at the advent of the Reformation. Its roots can be traced back to an extraordinarily influential late twelfth century Italian mystic, Joachim of Fiore (1145–1202). Joachim was an abbot and hermit in Calabria, in southern Italy. It was Joachim who launched the idea that hidden in the Bible for those who had the wit to see were prophecies foretelling world history. Concentrating on the murky Book of Revelation, Joachim decreed that history was destined to move through three successive ages, each of them ruled by one of the members of the Holy Trinity. The first age, the age of the Old Testament, was the era of the Father or the Law, the age of fear and servitude; the second age, the era of the Son, was the age of the New Testament, the era of faith and submission. Mystics generally think in threes; and Joachim was moved to herald the coming of the third and final age, the age of the Holy Spirit, the era of perfect joy, love and freedom, and the end of human history. It would be the age of the end of property, because everyone would live in voluntary poverty; and everyone could easily do so, because there would be no work, since people would be totally liberated from their physical bodies. Possessing only spiritual bodies, there would be no need to eat food or do much else either. The world would be, in the paraphrase of Norman Cohn, ‘one vast monastery, in which all men would be contemplative monks rapt continuously in mystical ecstasy until the day of the Last Judgment’. Joachim's vision already resonates with the later Marxian dialectic of the three allegedly inevitable stages of history: primitive communism, class society, and then finally the realm of perfect freedom, total communism and the withering away of the division of labour, and the end of human history.
As with so many chiliasts, Joachim was sure of the date of the advent of the final age and, typically, it was coming soon – in his view, sometime in the first half of the next, the thirteenth century.
The Joachite bizarreries quickly exerted enormous influence, particularly in Italy, in Germany, and in the rigourist wing of the new Franciscan Order.
A new ingredient to this witches’ brew was added a little later by a learned professor of theology at the great University of Paris at the end of the twelfth century. Once a great favourite of the French royal court, Amalric's odd doctrines were condemned by the pope and, after a forced public recantation, Amalric died shortly thereafter, in 1206 or 1207. His doctrines were then picked up by a small, secret group of erudite clerical disciples, the Amaurians, most of whom had been students in theology at Paris. Centred at the important commercial cloth-making town of Troyes, in Champagne, the Amaurian missionaries influenced many people and distributed popular works of theology in the vernacular. Their leader was the priest William Aurifex, who was either a goldsmith or an alchemist attempting to transform base metals into gold. Subjected to espionage by the bishop of Paris, the 14 Amaurians were all rounded up and either imprisoned for life or burnt at the stake, depending on whether they recanted their heresies. Most of them refused to recant.
The Amaurians, like Joachim, propounded the three ages of human history, but they added some spice to it; each age apparently enjoyed its own incarnation. For the Old Testament, it was Abraham and perhaps some other patriarchs; for the New Testament, the incarnation was of course Jesus; and now, for the dawning age of the Holy Spirit, the incarnation would now emerge in human beings themselves. As might be expected, the Amaurians considered themselves the new incarnation; in other words, they proclaimed themselves as living gods, the embodiment of the Holy Spirit. Not that they would always remain a divine elite among men; on the contrary, they were destined to lead mankind to its universal incarnation.
The congeries of groups throughout northern Europe in the fourteenth century known as the Brethren of the Free Spirit added another important ingredient to the stew; the dialectic of ‘reabsorption into God’ derived from the third century Platonist philosopher, Plotinus. Plotinus had had his own three stages: the original unity with God, the human-history stage of degradation and separation or alienation from God, and the final ‘return’ or ‘reabsorption’ as all human beings are submerged into the One and history is finished. The Brethren of the Free Spirit added a new elitist twist: while the reabsorption of every man must await the end of history, and the ‘crude in spirit’ must meanwhile meet their individual deaths, there was a glorious minority, the ‘subtle in spirit’, who could and did become reabsorbed and therefore living gods during their lifetime. This minority, of course, were the Brethren themselves who, by virtue of years of training, self-torture and visions had become perfect gods, more perfect and more godlike than even Christ himself. Once this stage of mystical union was reached, furthermore, it was permanent and eternal. These new gods often proclaimed themselves greater than God himself. Thus a group of female Free Spirits at Schweidnitz claimed to be able to dominate the Holy Trinity such that they could ‘ride it as in a saddle’; and one of these women declared that ‘when God created all things I created all things with him... I am more than God’. Man himself, therefore, or at least a gifted minority of men, could lift themselves up to divine status by their own efforts far earlier than their fellows.
Being living gods on earth brought many good things in its wake. In the first place, it led directly to an extreme form of the antinomian heresy: if people are gods, then it is impossible for them to sin. Whatever they do is necessarily moral and perfect. That means that any act ordinarily considered as sin, from adultery to murder, becomes perfectly legitimate when performed by the living gods. Indeed, the Free Spirits, like other antinomians, were tempted to demonstrate and flaunt their freedom from sin by performing all manner of sins imaginable.
But there was also a catch. Among the Free Spirit cultists, only a minority of leading adepts were ‘living gods’; for the rank-and-file cultists, striving to become gods, there was one sin alone which they must not commit: disobedience to their master. Each disciple was bound by an oath of absolute obedience to a particular living god. Take for example Nicholas of Basle, a leading Free Spirit guru whose cult stretched most of the length of the Rhine. Claiming to be the new Christ, Nicholas held that everyone's sole path to salvation is making an act of absolute and total submission to Nicholas himself. In return for this total fealty, Nicholas granted his followers freedom from all sin.
As for the rest of mankind outside the cults, they were simply unredeemed and unregenerate beings who existed only to be used and exploited by the elect. This attitude of total rule went hand in hand with the social doctrine many Free Spirit cults adopted in the fourteenth century: a communistic assault on the institution of private property. In essence, however, that philosophic communism was a thinly camouflaged cover for their – the Free Spirits’ – self-proclaimed right to commit theft at will. The Free Spirit adept, in short, regarded all property of the non-elect as rightfully his own. As the bishop of Strasbourg summed it up in 1317: ‘They believe that all things are common, whence they conclude that theft is lawful for them’. Or as the Free Spirit adept from Erfurt, Johann Hartmann, put it: ‘The truly free man is king and lord of all creatures. All things belong to him, and he has the right to use whatever pleases him. If anyone tries to prevent him, the free man may kill him and take his goods’. As one of the favourite sayings of the Brethren of the Free Spirit put it: ‘Whatever the eye sees and covets, let the hand grasp it’.
The final ingredient for the revolutionary communist Müntzer–Münster stew came with the extreme Taborites of the early fifteenth century. All Taborites constituted the radical wing of the Hussite movement, a pre-Protestant revolutionary movement that blended struggles of religion (anti-Catholic), nationality (Czech vs upper-class and upper-clergy German), and class (artisans cartellized in guilds trying to take political power from the patricians).
The new ingredient added by the extreme wing of the Taborites was the duty to exterminate. For the Last Days are coming, and the elect must go out and stamp out sin by exterminating all sinners, which means – at the very least – all non-Taborites. For all sinners are enemies of Christ, and ‘accursed be the man who withholds his sword from shedding the blood of the enemies of Christ. Every believer must wash his hands in that blood’. Having that mind-set, the extreme Taborites were not going to stop at intellectual destruction. When sacking churches and monasteries, the Taborites took particular delight in destroying libraries and burning books. For ‘all belongings must be taken away from God's enemies and burned or otherwise destroyed’. Besides, the elect have no need for books. When the Kingdom of God on earth arrived, there would no longer be ‘need for anyone to teach another. There would be no need for books or scriptures, and all worldly wisdom will perish’. And all people too, one suspects.
Moreover, elaborating anew the theme of a ‘return’ to a lost golden age, the ultra-Taborites proposed to return to the allegedly early Czech condition of communism: a society with no private property. In order to achieve this classless society, the cities in particular, those centres of luxury and avarice, and especially the merchants and the landlords, must be exterminated. After the elect have established their communist Kingdom of God in Bohemia by revolutionary violence, their task would be to forge and impose such communism on the rest of the world.
In addition to material property, the bodies of the faithful would have to be communized as well. The Taborite ultras were nothing if not logical. Their preachers taught: ‘Everything will be common, including wives; there will be free sons and daughters of God and there will be no marriage as union of two – husband and wife’.
The Hussite revolution broke out in 1419, and in that same year, the Taborites gathered in the town of Usti, in northern Bohemia near the German border. They renamed Usti, Tabor, i.e. the Mount of Olives where Jesus had foretold his Second Coming, had ascended to heaven, and where he was expected to reappear. The Taborites engaged in a communist experiment at Tabor, owning everything in common, and dedicated to the proposition that ‘whoever owns private property commits a mortal sin’. True to their doctrines, all women were owned in common, while if husband and wife were ever seen together, they were beaten to death or otherwise executed. Unfortunately but characteristically, the Taborites were so caught up in their unlimited right to consume from the common store that they felt themselves exempt from the need to work. The common store soon disappeared, and then what? Then, of course, the radical Taborites claimed that their need entitled them to claim the property of the non-elect, and they proceeded to rob others at will. As a synod of the moderate Taborites complained, ‘many communities never think of earning their own living by the work of their hands but are only willing to live on other people's property and to undertake unjust campaigns for the sole purpose of robbing’. And the Taborite peasantry who did not join the communes found the radical regime reimposing feudal dues and bonds only six months after they had abolished them.
Discredited among themselves, their more moderate allies, and their own peasantry, the communist regime of the radicals at Usti/Tabor soon collapsed. The torch of frenetic mystical communism was soon picked up, however, by a sect known as Bohemian Adamites. Like the Free Spirits of the previous century, the Adamites held themselves to be living gods, superior to Christ, since Christ had died whereas they still lived. (Impeccable logic, if a bit short-sighted.) Yet, in a curious contradiction, the founder of the Adamites, the former priest Peter Kanisch, had already been captured and burnt by the Hussite military commander, John Zizka. The Adamites dubbed the dead Kanisch Jesus, and then selected as their leader a peasant whom they called Adam–Moses.
For the Adamites, not only were all goods strictly owned in common, but marriage was considered a heinous sin. In short, promiscuity was compulsory, since the chaste were unworthy to enter the messianic kingdom. Any man could choose any woman at will, and that will would have to be obeyed. The Adamites also went around naked most of the time, imitating the original state of Adam and Eve. On the other hand, promiscuity was at one and the same time compulsory and restricted, because sex could only take place with the permission of the leader Adam–Moses.
Like the other radical Taborites, the Adamites regarded it as their sacred mission to exterminate all the unbelievers in the world, wielding the sword until blood floods the world to the height of a horse's bridle. They were God's scythe, sent to cut down and eradicate the unrighteous.
The Adamites took refuge from the Zizka forces on an island in the River Nezarka, from which they went forth in commando raids to try their best, despite their small number, to fulfil their twin pledge of compulsory communism and extermination of the non-elect. At night, they sallied forth in raids, which they called a ‘holy war’, to steal everything they could lay their hands on and then to exterminate their victims. True to their creed, they murdered every man, woman and child they could discover.

Finally, Zizka sent a force of 400 trained soldiers who besieged the Adamites’ island, and finally, in October 1421, overwhelmed the commune and massacred every single person. One more hellish kingdom of God on earth had been put to the sword.
The Taborite army was crushed by the moderate Hussites at the Battle of Lipan, in 1434, and from then on, Taborism declined and went underground. But it continued to emerge here and there, not only among the Czechs, but in Bavaria and other German lands bordering Bohemia. The stage was set for the Müntzer–Münster phenomenon of the following century.

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Totalitarian communism in Münster

North-western Germany in that era was dotted by a number of small ecclesiastical states, each run by a prince-bishop. The state was run by aristocratic clerics, who elected one of their own as bishop. Generally, these bishops were secular lords who were not ordained. By bargaining over taxes, the capital city of each of these states had usually wrested for itself a degree of autonomy. The clergy, which constituted the ruling elite of the state, exempted themselves from taxation while imposing very heavy taxes on the rest of the populace. Generally, the capital cities came to be run by their own power elite, an oligarchy of guilds, which used government power to cartellize their various professions and occupations.
The largest of these ecclesiastical states in north-west Germany was the bishopric of Münster, and its capital city of Münster, a town of some 10 000 people, was run by the town guilds. The Münster guilds were particularly exercised by the economic competition of the monks, who were not forced to obey guild restrictions and regulations.
During the Peasants’ War, the capital cities of several of these states, including Münster, took the opportunity to rise in revolt, and the bishop of Münster was forced to make numerous concessions. With the crushing of the rebellion, however, the bishop took back the concessions, and re-established the old regime. By 1532, however, the guilds, supported by the people, were able to fight back and take over the town, soon forcing the bishop to recognize Münster officially as a Lutheran city.
It was not destined to remain so for long, however. From all over the northwest, hordes of Anabaptist enthusiasts flooded into Münster, seeking the onset of the New Jerusalem. From the northern Netherlands came hundreds of Melchiorites, followers of the itinerant visionary Melchior Hoffmann. Hoffmann, an uneducated furrier's apprentice from Swabia in southern Germany, had for years wandered through Europe preaching the imminence of the Second Coming, which he had concluded from his researches would occur in 1533, the fifteenth centenary of the death of Jesus. Melchiorism had flourished in the northern Netherlands, and many adepts now poured into Münster, rapidly converting the poorer classes of the town.
Meanwhile, the Anabaptist cause in Münster received a shot in the arm, when the eloquent and popular young minister Bernt Rothmann, a highly educated son of a town blacksmith, converted to Anabaptism. Originally a Catholic priest, Rothmann had become a friend of Luther and the head of the Lutheran movement in Münster. Converted to Anabaptism, Rothmann lent his eloquent preaching to the cause of communism as it had supposedly existed in the primitive Christian Church, holding everything in common with no Mine and Thine and giving to each according to his ‘need’. In response to Rothmann's reputation, thousands flocked to Münster, hundreds of the poor, the rootless, those hopelessly in debt, and ‘people who, having run through the fortunes of their parents, were earning nothing by their own industry...’. People, in general, who were attracted by the idea of ‘plundering and robbing the clergy and the richer burghers’. The horrified burghers tried to drive out Rothmann and the Anabaptist preachers, but to no avail.
In 1533, Melchior Hoffmann, sure that the Second Coming would happen any day, returned to Strasbourg, where he had had great success, calling himself the Prophet Elias. He was promptly clapped into jail, and remained there until his death a decade later.
Hoffmann, for all the similarities with the others, was a peaceful man who counselled non-violence to his followers; after all, if Jesus were imminently due to return, why commit against unbelievers? Hoffmann's imprisonment, and of course the fact that 1533 came and went without a Second Coming, discredited Melchior, and so his Münster followers turned to far more violent, post-millennialist prophets who believed that they would have to establish the Kingdom by fire and sword.
The new leader of the coercive Anabaptists was a Dutch baker from Haarlem, one Jan Matthys (Matthyszoon). Reviving the spirit of Thomas Müntzer, Matthys sent out missionaries or ‘apostles’ from Haarlem to rebaptize everyone they could, and to appoint ‘bishops’ with the power to baptize. When the new apostles reached Münster in early 1534, they were greeted, as we might expect, with enormous enthusiasm. Caught up in the frenzy, even Rothmann was rebaptized once again, followed by many ex-nuns and a large part of the population. Within a week the apostles had rebaptized 1 400 people.
Another apostle soon arrived, a young man of 25 who had been converted and baptized by Matthys only a couple of months earlier. This was Jan Bockelson (Bockelszoon, Beukelsz), who was soon to become known in song and story as Johann of Leyden. Though handsome and eloquent, Bockelson was a troubled soul, having been born the illegitimate son of the mayor of a Dutch village by a woman serf from Westphalia. Bockelson began life as an apprentice tailor, married a rich widow, but then went bankrupt when he set himself up as a self-employed merchant.
In February 1534, Bockelson won the support of the wealthy cloth merchant Bernt Knipperdollinck, the powerful leader of the Münster guilds, and shrewdly married Knipperdollinck's daughter. On 8 February, son-in-law and father-in-law ran wildly through the streets together, calling upon everyone to repent. After much frenzy, mass writhing on the ground, and the seeing of apocalyptic visions, the Anabaptists rose up and seized the town hall, winning legal recognition for their movement.
In response to this successful uprising, many wealthy Lutherans left town, and the Anabaptists, feeling exuberant, sent messengers to surrounding areas summoning everyone to come to Münster. The rest of the world, they proclaimed, would be destroyed in a month or two; only Münster would be saved, to become the New Jerusalem. Thousands poured in from as far away as Flanders and Frisia in the northern Netherlands. As a result, the Anabaptists soon won a majority on the town council, and this success was followed three days later, on 24 February, by an orgy of looting of books, statues and paintings from the churches and throughout the town. Soon Jan Matthys himself arrived, a tall, gaunt man with a long black beard. Matthys, aided by Bockelson, quickly became the virtual dictator of the town. The coercive Anabaptists had at last seized a city. The Great Communist Experiment could now begin.
The first mighty programme of this rigid theocracy was, of course, to purge the New Jerusalem of the unclean and the ungodly, as a prelude to their ultimate extermination throughout the world. Matthys called therefore for the execution of all remaining Catholics and Lutherans, but Knipperdollinck's cooler head prevailed, since he warned Matthys that slaughtering all other Christians than themselves might cause the rest of the world to become edgy, and they might all come and crush the New Jerusalem in its cradle. It was therefore decided to do the next best thing, and on 27 February the Catholic and Lutherans were driven out of the city, in the midst of a horrendous snowstorm. In a deed prefiguring communist Cambodia, all non-Anabaptists, including old people, invalids, babies and pregnant women were driven into the snowstorm, and all were forced to leave behind all their money, property, food and clothing. The remaining Lutherans and Catholics were compulsorily rebaptized, and all refusing this ministration were put to death.
The expulsion of all Lutherans and Catholics was enough for the bishop, who began a long military siege of the town the next day, on 28 February. With every person drafted for siege work, Jan Matthys launched his totalitarian communist social revolution.
The first step was to confiscate the property of the expelled. All their worldly goods were placed in central depots, and the poor were encouraged to take ‘according to their needs’, the ‘needs’ to be interpreted by seven appointed ‘deacons’ chosen by Matthys. When a blacksmith protested at these measures imposed by Dutch foreigners, Matthys arrested the courageous smithy. Summoning the entire population of the town, Matthys personally stabbéd, shot, and killed the ‘godless’ blacksmith, as well as throwing into prison several eminent citizens who had protested against his treatment. The crowd was warned to profit by this public execution, and they obediently sang a hymn in honour of the killing.
A key part of the Anabaptist reign of terror in Münster was now unveiled. Unerringly, just as in the case of the Cambodian communists four-and-a-half centuries later, the new ruling elite realized that the abolition of the private ownership of money would reduce the population to total slavish dependence on the men of power. And so Matthys, Rothmann and others launched a propaganda campaign that it was unchristian to own money privately; that all money should be held in ‘common’, which in practice meant that all money whatsoever must be handed over to Matthys and his ruling clique. Several Anabaptists who kept or hid their money were arrested and then terrorized into crawling to Matthys on their knees, begging forgiveness and beseeching him to intercede with God on their behalf. Matthys then graciously ‘forgave’ the sinners.
After two months of severe and unrelenting pressure, a combination of propaganda about the Christianity of abolishing private money, and threats and terror against those who failed to surrender, the private ownership of money was effectively abolished in Münster. The government seized all the money and used it to buy or hire goods from the outside world. Wages were doled out in kind by the only remaining employer: the theocratic Anabaptist state.
Food was confiscated from private homes, and rationed according to the will of the government deacons. Also, to accommodate the immigrants, all private homes were effectively communized, with everyone permitted to quarter themselves anywhere; it was now illegal to close, let alone lock, doors. Communal dining-halls were established, where people ate together to readings from the Old Testament.
This compulsory communism and reign of terror was carried out in the name of community and Christian ‘love’. All this communization was considered the first giant steps toward total egalitarian communism, where, as Rothmann put it, ‘all things were to be in common, there was to be no private property and nobody was to do any more work, but simply trust in God’. The workless part, of course, somehow never arrived.
A pamphlet sent in October 1534 to other Anabaptist communities hailed the new order of Christian love through terror:

For not only have we put all our belongings into a common pool under the care of deacons, and live from it according to our need; we praise God through Christ with one heart and mind and are eager to help one another with every kind of service.
And accordingly, everything which has served the purposes of selfseeking and private property, such as buying and selling, working for money, taking interest and practising usury... or eating and drinking the sweat of the poor... and indeed everything which offends against love – all such things are abolished amongst us by the power of love and community.

With high consistency, the Anabaptists of Münster made no pretence about preserving intellectual freedom while communizing all material property. For the Anabaptists boasted of their lack of education, and claimed that it was the unlearned and the unwashed who would be the elect of the world. The Anabaptist mob took particular delight in burning all the books and manuscripts in the cathedral library, and finally, in mid-March 1534, Matthys outlawed all books except the Good Book – the Bible. To symbolize a total break with the sinful past, all privately and publicly owned books were thrown upon a great communal bonfire. All this ensured, of course, that the only theology or interpretation of the scriptures open to the Münsterites was that of Matthys and the other Anabaptist preachers.
At the end of March, however, Matthys's swollen hubris laid him low. Convinced at Eastertime that God had ordered him and a few of the faithful to lift the bishop's siege and liberate the town, Matthys and a few others rushed out of the gates at the besieging army, and were literally hacked to pieces. In an age when the idea of full religious liberty was virtually unknown, one can imagine that any Anabaptists whom the more orthodox Christians might get hold of would not earn a very kindly reward.
The death of Matthys left Münster in the hands of young Bockelson. And if Matthys had chastised the people of Münster with whips, Bockelson would chastise them with scorpions. Bockelson wasted little time in mourning his mentor. He preached to the faithful: ‘God will give you another Prophet who will be more powerful’. How could this young enthusiast top his master? Early in May, Bockelson caught the attention of the town by running naked through the streets in a frenzy, falling then into a silent three-day ecstasy. When he rose again, he announced to the entire populace a new dispensation that God had revealed to him. With God at his elbow, Bockelson abolished the old functioning town offices of council and burgomasters, and installed a new ruling council of 12 elders, with himself, of course, as the eldest of the elders. The elders were now given total authority over the life and death, the property and the spirit, of every inhabitant of Münster. A strict system of forced labour was imposed, with all artisans not drafted into the military now public employees, working for the community for no monetary reward. This meant, of course, that the guilds were now abolished.
The totalitarianism in Münster was now complete. Death was now the punishment for virtually every independent act, good or bad. Capital punishment was decreed for the high crimes of: murder, theft, lying, avarice, and quarrelling(!). Also death was decreed for every conceivable kind of insubordination: the young against their parents, wives against their husbands and, of course, anyone at all against the chosen representatives of God on earth, the totalitarian government of Münster. Bernt Knipperdollinck was appointed high executioner to enforce the decrees.
The only aspect of life previously left untouched was sex, and this now came under the hammer of Bockelson's total despotism. The only sexual relation permitted was marriage between two Anabaptists. Sex in any other form, including marriage with one of the ‘godless’, was a capital crime. But soon Bockelson went beyond this rather old-fashioned credo, and decided to establish compulsory polygamy in Münster. Since many of the expellees had left their wives and daughters behind, Münster now had three times as many marriageable women as men, so that polygamy had become technologically feasible. Bockelson converted the other rather startled preachers by citing polygamy among the patriarchs of Israel, as well as by threatening dissenters with death.
Compulsory polygamy was a bit too much for many of the Münsterites, who launched a rebellion in protest. The rebellion, however, was quickly crushed and most of the rebels put to death. Execution was also the fate of any further dissenters. And so by August 1534, polygamy was coercively established in Münster. As one might expect, young Bockelson took an instant liking to the new regime, and before long he had a harem of 15 wives, including Divara, the beautiful young widow of Jan Matthys. The rest of the male population also began to take to the new decree as ducks to water. Many of the women did not take as kindly to the new dispensation, and so the elders passed a law ordering compulsory marriage for every women under (and presumably also over) a certain age, which usually meant being a compulsory third or fourth wife.
Moreover, since marriage among the godless was not only invalid but also illegal, the wives of the expellees now became fair game, and were forced to ‘marry’ good Anabaptists. Refusal to comply with the new law was punishable, of course, by death, and a number of women were actually executed as a result. Those ‘old’ wives who resented the new wives coming into their household were also suppressed, and their quarrelling was made a capital crime. Many women were executed for quarrelling.
But the long arm of the state could reach only just so far and, in their first internal setback, Bockelson and his men had to relent, and permit divorce. Indeed, the ceremony of marriage was now outlawed totally, and divorce made very easy. As a result, Münster now fell under a regime of what amounted to compulsory free love. And so, within the space of only a few months, a rigid puritanism had been transmuted into a regime of compulsory promiscuity.
Meanwhile, Bockelson proved to be an excellent organizer of a besieged city. Compulsory labour, military and civilian, was strictly enforced. The bishop's army consisted of poorly and irregularly paid mercenaries, and Bockelson was able to induce many of them to desert by offering them regular pay (pay for money, that is, in contrast to Bockelson's rigid internal moneyless communism). Drunken ex-mercenaries were, however, shot immediately. When the bishop fired pamphlets into the town offering a general amnesty in return for surrender, Bockelson made reading such pamphlets a crime punishable by – of course – death.
At the end of August 1534, the bishop's armies were in disarray and the siege temporarily lifted. Jan Bockelson seized this opportunity to carry his ‘egalitarian’ communist revolution one step further: he had himself named king and Messiah of the Last Days.
Proclaiming himself king might have appeared tacky and perhaps even illegitimate. And so Bockelson had one Dusentschur, a goldsmith from a nearby town and a self-proclaimed prophet, do the job for him. At the beginning of September, Dusentschur announced to one and all a new revelation: Jan Bockelson was to be king of the whole world, the heir of King David, to keep that Throne until God himself reclaimed his Kingdom. Unsurprisingly, Bockelson confirmed that he himself had had the very same revelation. Dusentschur then presented a sword of justice to Bockelson, anointed him, and proclaimed him king of the world. Bockelson, of course, was momentarily modest; he prostrated himself and asked guidance from God. But he made sure to get that guidance swiftly. And it turned out, mirabile dictu, that Dusentschur was right. Bockelson proclaimed to the crowd that God had now given him ‘power over all nations of the earth’; anyone who might dare to resist the will of God ‘shall without delay be put to death with the sword’.
And so, despite a few mumbled protests, Jan Bockelson was declared king of the world and Messiah, and the Anabaptist preachers of Münster explained to their bemused flock that Bockelson was indeed the Messiah as foretold in the Old Testament. Bockelson was rightfully ruler of the entire world, both temporal and spiritual.
It often happens with ‘egalitarians’ that a hole, a special escape hatch from the drab uniformity of life, is created – for themselves. And so it was with King Bockelson. It was, after all, important to emphasize in every way the importance of the Messiah's advent. And so Bockelson wore the finest robes, metals and jewellery; he appointed courtiers and gentlemen-at-arms, who also appeared in splendid finery. King Bockelson's chief wife, Divara, was proclaimed queen of the world, and she too was dressed in great finery and had a suite of courtiers and followers. This luxurious court of some two hundred people was housed in fine mansions requisitioned for the occasion. A throne draped with a cloth of gold was established in the public square, and King Bockelson would hold court there, wearing a crown and carrying a sceptre. A royal bodyguard protected the entire procession. All Bockelson's loyal aides were suitably rewarded with high status and finery: Knipperdollinck was the chief minister, and Rothmann royal orator.
If communism is the perfect society, somebody must be able to enjoy its fruits; and who better but the Messiah and his courtiers? Though private property in money was abolished, the confiscated gold and silver was now minted into ornamental coins for the glory of the new king. All horses were confiscated to build up the king's armed squadron. Also, names in Münster were transformed; all the streets were renamed; Sundays and feastdays were abolished; and all new-born children were named personally by the king in accordance with a special pattern.
In a starving slave society such as communist Münster, not all citizens could live in the luxury enjoyed by the king and his court; indeed, the new ruling class was now imposing a rigid class oligarchy seldom seen before. So that the king and his nobles might live in high luxury, rigorous austerity was imposed on everyone else in Münster. The subject population had already been robbed of their houses and much of their food; now all superfluous luxury among the masses was outlawed. Clothing and bedding were severely rationed, and all ‘surplus’ turned over to King Bockelson under pain of death. Every house was searched thoroughly and 83 wagonloads of ‘surplus’ clothing collected.
It is not surprising that the deluded masses of Münster began to grumble at being forced to live in abject poverty while the king and his courtiers lived in extreme luxury on the proceeds of their confiscated belongings. And so Bockelson had to beam them some propaganda to explain the new system. The explanation was this: it was all right for Bockelson to live in pomp and luxury because he was already completely dead to the world and the flesh. Since he was dead to the world, in a deep sense his luxury didn't count. In the style of every guru who has ever lived in luxury among his credulous followers, he explained that for him material objects had no value. How such ‘logic’ can ever fool anyone passes understanding. More important, Bockelson assured his subjects that he and his court were only the advance guard of the new order; soon, they too would be living in the same millennial luxury. Under their new order, the people of Münster would forge outward, armed with God's will, and conquer the entire world, exterminating the unrighteous, after which Jesus would return and they would all live in luxury and perfection. Equal communism with great luxury for all would then be achieved.
Greater dissent meant, of course, greater terror, and King Bockelson's reign of ‘love’ intensified its intimidation and slaughter. As soon as he proclaimed the monarchy, the prophet Dusentschur announced a new divine revelation: all who persisted in disagreeing with or disobeying King Bockelson would be put to death, and their very memory blotted out. They would be extirpated forever. Some of the main victims to be executed were women: women who were killed for denying their husbands their marital rights, for insulting a preacher, or for daring to practise bigamy – polygamy, of course, being solely a male privilege.
Despite his continual preaching about marching forth to conquer the world, King Bockelson was not crazy enough to attempt that feat, especially since the bishop's army was again besieging the town. Instead, he shrewdly used much of the expropriated gold and silver to send out apostles and pamphlets to surrounding areas of Europe, attempting to rouse the masses for Anabaptist revolution. The propaganda had considerable effect, and serious mass risings occurred throughout Holland and north-western Germany during January 1535. A thousand armed Anabaptists gathered under the leadership of someone who called himself Christ, son of God; and serious Anabaptist rebellions took place in west Frisia, in the town of Minden, and even in the great city of Amsterdam, where the rebels managed to capture the town hall. All these risings were eventually suppressed, with the considerable help of betrayal to the various authorities of the names of the rebels and of the location of their munition dumps.
The princes of north-western Europe by this time had had enough; and all the states of the Holy Roman Empire agreed to supply troops to crush the monstrous and hellish regime at Münster. For the first time, in January 1535, Münster was totally and successfully blockaded and cut off from the outside world. The Establishment then proceeded to starve the population of Münster into submission. Food shortages appeared immediately, and the crisis was met with characteristic vigour: all remaining food was confiscated, and all horses killed, for the benefit of feeding the king, his royal court and his armed guards. At all times the king and his court ate and drank well, while famine and devastation raged throughout the town of Münster, and the masses ate literally everything, even inedible, they could lay their hands on.
King Bockelson kept his rule by beaming continual propaganda and promises to the starving masses. God would definitely save them by Easter, or else he would have himself burnt in the public square. When Easter came and went, Bockelson craftily explained that he had meant only ‘spiritual’ salvation. He promised that God would change cobblestones to bread, and of course that did not come to pass either. Finally, Bockelson, long fascinated with the theatre, ordered his starving subjects to engage in three days of dancing and athletics. Dramatic performances were held, as well as a Black Mass. Starvation, however, was now becoming all-pervasive.
The poor hapless people of Münster were now doomed totally. The bishop kept firing leaflets into the town promising a general amnesty if the people would only revolt and depose King Bockelson and his court and hand them over. To guard against such a threat, Bockelson stepped up his reign of terror still further. In early May, he divided the town into 12 sections, and placed a ‘duke’ over each one with an armed force of 24 men. The dukes were foreigners like himself; as Dutch immigrants they were likely to be loyal to Bockelson. Each duke was strictly forbidden to leave his section, and the dukes, in turn, prohibited any meetings whatsoever of even a few people. No one was allowed to leave town, and any caught plotting to leave, helping anyone else to leave, or criticizing the king, was instantly beheaded, usually by King Bockelson himself. By mid-June such deeds were occurring daily, with the body often quartered and nailed up as a warning to the masses.
Bockelson would undoubtedly have let the entire population starve to death rather than surrender; but two escapees betrayed weak spots in the town's defence, and on the night of 24 June 1535, the nightmare New Jerusalem at last came to a bloody end. The last several hundred Anabaptist fighters surrendered under an amnesty and were promptly massacred, and Queen Divara was beheaded. As for ex-King Bockelson, he was led about on a chain, and the following January, along with Knipperdollinck, was publicly tortured to death, and their bodies suspended in cages from a church tower.
The old Establishment of Münster was duly restored and the city became Catholic once more. The stars were once again in their courses, and the events of 1534–35 understandably led to an abiding distrust of mysticism and enthusiast movements throughout Protestant Europe.

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Communist zealots: the Anabaptists

Sometimes Martin Luther must have felt that he had loosed the whirlwind, even opened the gates of Hell. Shortly after Luther launched the Reformation, various Anabaptist sects appeared and spread throughout Germany. The Anabaptists believed in predestination of the elect, but they also believed, in contrast to Luther, that they knew infallibly who the elect were: i.e. themselves. The sign of that election was in an emotional, mystical conversion process, that of being ‘born again’, baptized in the Holy Spirit. Such baptism must be adult and not among infants; more to the point, it meant that only the elect are to be sect members who obey the multifarious rules and creeds of the Church. The idea of the sect, in contrast to Catholicism, Lutheranism or Calvinism, was not comprehensive Church membership in the society. The sect was to be distinctly separate, for the elect only.
Given that creed, there were two ways that Anabaptism could and did go. Most Anabaptists, like the Mennonites or Amish, became virtual anarchists. They tried to separate themselves as much as possible from a necessarily sinful state and society, and engaged in non-violent resistance to the state's decrees.
The other route, taken by another wing of Anabaptists, was to try to seize power in the state and to shape up the majority by extreme coercion: in short, ultra-theocracy. As Monsignor Knox incisively points out, even when Calvin established a theocracy in Geneva, it had to pale beside one which might be established by a prophet enjoying continuous, new, mystical revelation.
As Knox points out, in his usual scintillating style:

... in Calvin's Geneva... and in the Puritan colonies of America, the left wing of the Reformation signalized its ascendancy by enforcing the rigorism of its morals with every available machinery of discipline; by excommunication, or, if that failed, by secular punishment. Under such discipline sin became a crime, to be punished by the elect with an intolerable self-righteousness...
I have called this rigorist attitude a pale shadow of the theocratic principle, because a full-blooded theocracy demands the presence of a divinely inspired leader or leaders, to whom government belongs by right of mystical illumination. The great Reformers were not, it must be insisted, men of this calibre; they were pundits, men of the new learning...13

And so one of the crucial differences between the Anabaptists and the more conservative reformers was that the former claimed continuing mystical revelation to themselves, forcing men such as Luther and Calvin to fall back on the Bible alone as the first as well as the last revelation.
The first leader of the ultra-theocrat wing of the Anabaptists was Thomas Müntzer (c. 1489–1525). Born into comfort in Stolberg in Thuringia, Müntzer studied at the Universities of Leipzig and Frankfurt, and became highly learned in the scriptures, the classics, theology, and in the writings of the German mystics. Becoming a follower almost as soon as Luther launched the Reformation in 1520, Müntzer was recommended by Luther for the pastorate in the city of Zwickau. Zwickau was near the Bohemian border, and there the restless Müntzer was converted by the weaver and adept Niklas Storch, who had been in Bohemia, to the old Taborite doctrine that had flourished in Bohemia a century earlier. This doctrine consisted essentially of a continuing mystical revelation and the necessity for the elect to seize power and impose a society of theocratic communism by brutal force of arms. Furthermore, marriage was to be prohibited, and each man was to be able to have any woman at his will.
The passive wing of Anabaptists were voluntary anarcho-communists, who wished to live peacefully by themselves; but Müntzer adopted the Storch vision of blood and coercion. Defecting very rapidly from Lutheranism, Müntzer felt himself to be the coming prophet, and his teachings now began to emphasize a war of blood and extermination to be waged by the elect against the sinners. Müntzer claimed that the ‘living Christ’ had permanently entered his own soul; endowed thereby with perfect insight into the divine will, Müntzer asserted himself to be uniquely qualified to fulfil the divine mission. He even spoke of himself as ‘becoming God’. Abandoning the world of learning, Müntzer was now ready for action.
In 1521, only a year after his arrival, the town council of Zwickau took fright at these increasingly popular ravings and ordered Müntzer's expulsion from the city. In protest, a large number of the populace, in particular the weavers, led by Niklas Storch, rose in revolt, but the rising was put down. At that point, Müntzer hied himself to Prague, searching for Taborite remnants in the capital of Bohemia. Speaking in peasant metaphors, he declared that harvest-time is here, ‘so God himself has hired me for his harvest. I have sharpened my scythe, for my thoughts are most strongly fixed on the truth, and my lips, hands, skin, hair, soul, body, life curse the unbelievers’. Müntzer, however, found no Taborite remnants; it did not help the prophet's popularity that he knew no Czech, and had to preach with the aid of an interpreter. And so he was duly expelled from Prague.
After wandering around central Germany in poverty for several years, signing himself ‘Christ's messenger’, Müntzer in 1523 gained a ministerial position in the small Thuringian town of Allstedt. There he established a wide reputation as a preacher employing the vernacular, and began to attract a large following of uneducated miners, whom he formed into a revolutionary organization called ‘The League of the Elect’.
A turning point in Müntzer's stormy career came a year later, when Duke John, a prince of Saxony and a Lutheran, hearing alarming rumours about him, came to little Allstedt and asked Müntzer to preach him a sermon. This was Müntzer's opportunity, and he seized it. He laid it on the line: he called upon the Saxon princes to make their choice and take their stand, either as servants of God or of the Devil. If the Saxon princes are to take their stand with God, then they ‘must lay on with the sword’. ‘Don't let them live any longer,’ counselled our prophet, ‘the evil-doers who turn us away from God. For a godless man has no right to live if he hinders the godly’. Müntzer's definition of the ‘godless’, of course, was all-inclusive. ‘The sword is necessary to exterminate’ priests, monks and godless rulers. But, Müntzer warned, if the princes of Saxony fail in this task, if they falter, ‘the sword shall be taken from them... If they resist, let them be slaughtered without mercy...’. Müntzer then returned to his favourite harvest-time analogy: ‘At the harvest-time, one must pluck the weeds out of God's vineyard... For the ungodly have no right to live, save what the Elect chooses to allow them....’ In this way the millennium, the thousand-year Kingdom of God on earth, would be ushered in. But one key requisite is necessary for the princes to perform that task successfully; they must have at their elbow a priest/prophet (guess who!) to inspire and guide their efforts.
Oddly enough for an era when no First Amendment restrained rulers from dealing sternly with heresy, Duke John seemed not to care about Müntzer's frenetic ultimatum. Even after Müntzer proceeded to preach a sermon proclaiming the imminent overthrow of all tyrants and the beginning of the messianic kingdom, the duke did nothing. Finally, under the insistent prodding of Luther that Müntzer was becoming dangerous, Duke John told the prophet to refrain from any provocative preaching until his case was decided by his brother, the elector.
This mild reaction by the Saxon princes, however, was enough to set Thomas Müntzer on his final revolutionary road. The princes had proved themselves untrustworthy; the mass of the poor were now to make the revolution. The poor were the elect, and would establish a rule of compulsory egalitarian communism, a world where all things would be owned in common by all, where everyone would be equal in everything and each person would receive according to his need. But not yet. For even the poor must first be broken of worldly desires and frivolous enjoyments, and must recognize the leadership of a new ‘servant of God’ who ‘must stand forth in the spirit of Elijah... and set things in motion’. (Again, guess who!)
Seeing Saxony as inhospitable, Müntzer climbed over the town wall of Allstedt and moved in 1524 to the Thuringian city of Muhlhausen. An expert in fishing in troubled waters, Müntzer found a friendly home in Muhlhausen, which had been in a state of political turmoil for over a year. Preaching the impending extermination of the ungodly, Müntzer paraded around the town at the head of an armed band, carrying in front of him a red crucifix and a naked sword. Expelled from Muhlhausen after a revolt by his allies was suppressed, Müntzer went to Nuremberg, which in turn expelled him after he published some revolutionary pamphlets. After wandering through southwestern Germany, Müntzer was invited back to Muhlhausen in February 1525, where a revolutionary group had taken over.
Thomas Müntzer and his allies proceeded to impose a communist regime on the city of Muhlhausen. The monasteries were seized, and all property was decreed to be in common, and the consequence, as a contemporary observer noted, was that ‘he so affected the folk that no one wanted to work’. The result was that the theory of communism and love quickly became in practice an alibi for systemic theft:

... when anyone needed food or clothing he went to a rich man and demanded it of him in Christ's name, for Christ had commanded that all should share with the needy. And what was not given freely was taken by force. Many acted thus... Thomas [Müntzer] instituted this brigandage and multiplied it every day.’14

At that point, the great Peasants’ War erupted throughout Germany, a rebellion launched by the peasantry in favour of their local autonomy and in opposition to the new centralizing, high-tax, absolutist rule of the German princes. Throughout Germany, the princes crushed the feebly armed peasantry with great brutality, massacring about 100 000 peasants in the process. In Thuringia, the army of the princes confronted the peasants on 15 May with a great deal of artillery and 2 000 cavalry, luxuries denied to the peasantry. The landgrave of Hesse, commander of the princes’ army, offered amnesty to the peasants if they would hand over Müntzer and his immediate followers. The peasants were strongly tempted, but Müntzer, holding aloft his naked sword, gave his last flaming speech, declaring that God had personally promised him victory; that he would catch all the enemy cannon-balls in the sleeves of his cloak; that God would protect them all. Just at the strategic moment of Müntzer's speech, a rainbow appeared in the heavens, and Müntzer had previously adopted the rainbow as the symbol of his movement. To the credulous and confused peasantry, this seemed a veritable sign from Heaven. Unfortunately, the sign didn't work, and the princes’ army crushed the peasants, killing 5000 while losing only half a dozen men. Müntzer himself fled and hid, but was captured a few days later, tortured into confession, and then executed.
Thomas Müntzer and his signs may have been defeated, and his body may have mouldered in the grave, but his soul kept marching on. Not only was his spirit kept alive by followers in his own day, but also by Marxist historians from Engels to the present day, who saw in this deluded mystic an epitome of social revolution and the class struggle, and a forerunner of the chiliastic prophesies of the ‘communist stage’ of the supposedly inevitable Marxian future.
The Müntzerian cause was soon picked up by a former disciple, the bookbinder Hans Hut. Hut claimed to be a prophet sent by God to announce that at Whitsuntide, 1528, Christ would return to earth and give the power to enforce justice to Hut and his following of rebaptized saints. The saints would then ‘take up double-edged swords’ and wreak God's vengeance on priests, pastors, kings and nobles. Hut and his followers would then ‘establish the rule of Hans Hut on earth’, with Muhlhausen as the favoured capital. Christ was then to establish a millennium marked by communism and free love. Hut was captured in 1527 (before Jesus had had a chance to return), imprisoned at Augsburg, and killed trying to escape. For a year or two, Huttian followers kept emerging, at Augsburg, Nuremberg, and Esslingen, in southern Germany, threatening to set up their communist Kingdom of God by force of arms. But by 1530 they were smashed and suppressed by the alarmed authorities. Müntzerian-type Anabaptism was now to move to north-western Germany.

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Calvinists on usury

Perhaps because he was considered the greatest French jurist of the mid-sixteenth century, the merit of the contributions of Charles Du Moulin (latinized name, Carolus Molinaeus) (1500–66), has been highly inflated, in his and in later times. A Catholic who later converted to Calvinism and was then forced to leave for Germany, Du Moulin had nothing but contempt for scholasticism, which he attacked vehemently in his highly publicized work, The Treatise on Contracts and Usury (Paris, 1546). Whereas Molinaeus officially denounced the prohibition of usury, in actuality his views were little different from those of the contemporary scholastics or indeed of Calvin. While clearly denouncing the view that money is sterile and demonstrating that it is as productive as the goods bought with it, he hedges his defence of usury sufficiently so that his views are little different from many others. He does maintain that the charge of interest on a loan per se is unjust, but ingeniously points out that a lender charges for the utility of the money rather than for the money itself. But Molinaeus attacks the ‘cruel usuries’ permitted by lucrum cessans, and maintains with Calvin that interest may not be charged for loans to the poor. (One wonders that if such a rule were enforced, who in the world would ever lend to the poor, and would the poor then be better off by being deprived of all credit?)
Indeed, it seems that Molinaeus’ main contribution was to blacken unjustly the name of poor Conrad Summenhart, a cruel injustice that would last for four centuries. In an act obviously motivated by malice toward scholasticism, Molinaeus took the great Summenhart's arguments against the usury ban and twisted them to make the German theologian a particularly doltish advocate of the prohibition. He took Summenhart's initial arguments for the prohibition, which he had stated in order to knock down, claimed that they were Summenhart's own, and then plagiarized Summenhart's critique of these arguments without acknowledgment. As a result of this shabby mendacity, as Professor Noonan points out, since ‘Du Moulin's writings have alone become famous, Conrad [Summenhart] has appeared to posterity only as Du Moulin caricatures him’, i.e., ‘as a particularly obstinate and strangely stupid defender of the usury prohibition’.
The honour of putting the final boot to the usury prohibition belongs to the seventeenth century classicist and Dutch Calvinist, Claude Saumaise (latinized name, Claudius Salmasius) (1588–1653). In several works published in Leyden, beginning with De usuris liber in 1630 and continuing to 1645, Salmasius finished off this embarrassing remnant of the mountainous errors of the past. His forte was not so much in coining new theoretical arguments as in finally willing to be consistent. In short, Salmasius trenchantly pointed out that money-lending was a business like any other, and like other businesses was entitled to charge a market price. He did make the important theoretical point, however, that, as in any other part of the market, if the number of usurers multiplies, the price of money or interest will be driven down by the competition. So that if one doesn't like high interest rates, the more usurers the better!
Salmasius also had the courage to point out that there were no valid arguments against usury, either by divine or natural law. The Jews only prohibited usury against other Jews, and this was a political and tribal act rather than an expression of a moral theory about an economic transaction. As for Jesus, he taught nothing at all about civil polity or economic transactions. This leaves the only ecclesiastical law against usury that of the pope, and why should a Calvinist obey the pope? Salmasius also took some deserved whacks at the evasions permeating the various scholastic justifications, or ‘extrinsic titles’, justifying interest. Let's face it, Salmasius in effect asserted: what the canonists and scholastics ‘took away with one hand, they restored with the other’. The census is really usury, foreign exchange is really usury, lucrum cessans is really usury. Usury all, and let them all be licit. Furthermore, usury is always charged as compensation for something, in essence the lack of use of money and the risk of loss in a loan.
Salmasius also had the courage to take the hardest case: professional money-lending to the poor, and to justify that. Selling the use of money is a business like any other. If it is licit to make money with things bought with money, why not from money itself? As Noonan paraphrases Salmasius, ‘The seller of bread is not required to ask if he sells it to a poor man or a rich man. Why should the moneylender have to make a distinction?’ And: ‘there is no fraud or theft in charging the highest market price for other goods; why is it wrong for the usurer to charge the heaviest usuries he can collect?’
Empirically, Salmasius also analysed the case of public usurers in Amsterdam (the great commercial and financial centre of the seventeenth century, replacing Antwerp of the previous century), showing that the usual 16 per cent charge on small loans to the poor is accounted for by: the costs of the usurers borrowing their own money, of holding some money idle, of renting a large house, of absorbing some losses on loans, of paying licence fees, hiring employees, and paying an auctioneer. Deducting all these expenses, the average net interest rate of the money-lenders is only 8 per cent, barely enough to keep them in business.
In concluding that usury is a business like any other, Salmasius, in his typical witty and sparkling style, declared, ‘I would rather be called a usurer, than be a tailor’. Our examples of his style already demonstrate the aptness of the great Austrian economist Bohm-Bawerk's conclusion about Salmasius: that his works

are extremely effective pieces of writing, veritable gems of sparkling polemic. The materials for them, it must be confessed, had in great part been provided by his predecessors... But the happy manner in which Salmasius employs these materials, and the many pithy sallies with which he enriches them, places his polemic far above anything that had gone before.

As a result, Salmasius’ essays had wide influence throughout the Netherlands and the rest of Europe. As Böhm-Bawerk declared, Salmasius’ views on usury were the high-water mark of interest theory, to remain so for over 100 years.

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The economics of Calvin and Calvinism

John Calvin's social and economic views closely parallel Luther's, and there is no point in repeating them here. There are only two main areas of difference: their views on usury, and on the concept of the ‘calling’, although the latter difference is more marked for the later Calvinist Puritans of the seventeenth century.

Calvin's main contribution to the usury question was in having the courage to dump the prohibition altogether. This son of an important town official had only contempt for the Aristotelian argument that money is sterile. A child, he pointed out, knows that money is only sterile when locked away somewhere; but who in their right mind borrows to keep money idle? Merchants borrow in order to make profits on their purchases, and hence money is then fruitful. As for the Bible, Luke's famous injunction only orders generosity towards the poor, while Hebraic law in the Old Testament is not binding in modern society. To Calvin, then, usury is perfectly licit, provided that it is not charged in loans to the poor, who would be hurt by such payment. Also, any legal maximum of course must be obeyed. And finally, Calvin maintained that no one should function as a professional money-lender.
The odd result was that hedging his explicit pro-usury doctrine with qualification, Calvin in practice converged on the views of such scholastics as Biel, Summenhart, Cajetan and Eck. Calvin began with a sweeping theoretical defence of interest-taking and then hedged it about with qualifications; the liberal scholastics began with a prohibition of usury and then qualified it away. But while in practice the two groups converged and the scholastics, in discovering and elaborating upon exceptions to the usury ban, were theoretically more sophisticated and fruitful, Calvin's bold break with the formal ban was a liberating breakthrough in Western thought and practice. It also threw the responsibility for applying teachings on usury from the Church or state to the individual's conscience. As Tawney puts it, ‘The significant feature in his [Calvin's] discussion of the subject is that he assumes credit to be a normal and inevitable incident in the life of a society.’
A more subtle difference, but in the long run perhaps having more influence on the development of economic thought, was the Calvinist concept of the ‘calling’. This new concept was embryonic in Calvin and was developed further by later Calvinists, and especially Puritans, in the late seventeenth century. Older economic historians, such as Max Weber, made far too much of the Calvinist as against Lutheran and Catholic conceptions of the ‘calling’. All these religious groups emphasized the merit of being productive in one's labour or occupation, one's ‘calling’ in life. But there is, especially in the later Puritans, the idea of success in one's calling as a visible sign of being a member of the elect. The success is striven for, of course, not to prove that one is a member of the elect destined to be saved but, assuming that one is in the elect by virtue of one's Calvinist faith, to strive to labour and succeed for the glory of God. A Calvinist emphasis on postponement of earthly gratification led to a particular stress on saving. Labour or ‘industry’ and thrift, almost for their own sake, or rather for God's sake, were emphasized in Calvinism much more than in the other segments of Christianity.
The focus, then, both in Catholic countries and in scholastic thought, became very different from that of Calvinism. The scholastic focus was on consumption, the consumer, as the goal of labour and production. Labour was not so much a good in itself as a means toward consumption on the market. The Aristotelian balance, or golden mean, was considered a requisite of the good life, a life leading to happiness in keeping with the nature of man. And that balanced life emphasized the joys of consumption, as well as of leisure, in addition to the importance of productive effort. In contrast, a rather grim emphasis on work and on saving began to be stressed in Calvinist culture. This de-emphasis on leisure of course fitted with the iconoclasm that reached its height in Calvinism – the condemnation of the enjoyment of the senses as a means of expressing religious devotion. One of the expressions of this conflict came over religious holidays, which Catholic countries enjoyed in abundance. To the Puritans, this was idolatry; even Christmas was not supposed to be an occasion for sensate enjoyment.
There has been considerable dispute over the ‘Weber thesis’, propounded by the early twentieth century German economic historian and sociologist, Max Weber, which attributed the rise of capitalism and the Industrial Revolution to the late Calvinist concept of the calling and the resulting ‘capitalist spirit’. For all its fruitful insights, the Weber thesis must be rejected on many levels. First, modern capitalism, in any meaningful sense, begins not with the Industrial Revolution of eighteenth and nineteenth centuries but, as we have seen, in the Middle Ages and particularly in the Italian city-states. Such examples of capitalist rationality as double-entry bookkeeping and various financial techniques begin in these Italian city-states as well. All were Catholic. Indeed, it is in a Florentine account book of 1253 that there is first found the classic pro-capitalist formula: ‘In the name of God and of profit’. No city was more of a financial and commercial centre than Antwerp in the sixteenth century, a Catholic centre. No man shone as much as financier and banker as Jacob Fugger, a good Catholic from southern Germany. Not only that: Fugger worked all his life, refused to retire, and announced that ‘he would make money as long as he could’. A prime example of the Weberian ‘Protestant ethic’ from a solid Catholic! And we have seen how the scholastic theologians moved to understand and accommodate the market and market forces.
On the other hand, while it is true that Calvinist areas in England, France, Holland and the north American colonies prospered, the solidly Calvinist Scotland remained a backward and undeveloped area, even to this day.
But even if the focus on calling and labour did not bring about the Industrial Revolution, it might well have led to another outstanding difference between Calvinist and Catholic countries – a crucial difference in the development of economic thought. Professor Emil Kauder's brilliant speculation to this effect will inform the remainder of this work. Thus Kauder:

Calvin and his disciples placed work at the center of their social theology... All work in this society is invested with divine approval. Any social philosopher or economist exposed to Calvinism will be tempted to give labor an exalted position in his social or economic treatise, and no better way of extolling labor can be found than by combining work with value theory, traditionally the very basis of an economic system. Thus value becomes labor value, which is not merely a scientific device for measuring exchange rates but also the spiritual tie combining Divine Will with economic everyday life.

In their extolling of work, the Calvinists concentrated on systematic, continuing industriousness, on a settled course of labour. Thus the English Puritan divine Samuel Hieron opined that ‘He that hath no honest business about which ordinarily to be employed, no settled course to which he may betake himself, cannot please God’. Particularly influential was the early seventeenth century Cambridge University academic, the Rev. William Perkins, who did much to translate Calvinist theology into English practice. Perkins denounced four groups of men who had ‘no particular calling to walk in’: beggars and vagabonds; monks and friars; gentlemen who ‘spend their days in eating and drinking’; and servants, who allegedly spent their time waiting. All these were dangerous because unsettled and undisciplined. Particularly dangerous were wanderers, who ‘avoided the authority of all’. Furthermore, believed Perkins, the ‘lazy multitude was always inclined... to popish opinions, always more ready to play than to work; its members would not find their way to heaven’.
In contrast to the Calvinist glorification of labour, the Aristotelian-Thomist tradition was quite different:

Instead of work, moderate pleasure-seeking and happiness form the center of economic actions, according to Aristotelian and Thomistic philosophy. A certain balanced hedonism is an integrated part of the Aristotelian theory of the good life. If pleasure in a moderate form is the purpose of economics, then following the Aristotelian concept of the final cause, all principles of economics including valuation must be derived from this goal. In this pattern of Aristotelian and Thomistic thinking, valuation has the function of showing how much pleasure can be derived from economic goods.9

Hence, Great Britain, heavily influenced by Calvinist thought and culture, and its glorification of the mere exertion of labour, came to develop a labour theory of value, while France and Italy, still influenced by Aristotelian and Thomist concepts, continued the scholastic emphasis on the consumer and his subjective valuation as the source of economic value. While there is no way to prove this hypothesis conclusively, the Kauder insight has great value in explaining the comparative development of economic thought in Britain and in the Catholic countries of Europe after the sixteenth century.

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Luther's economics

As a man fundamentally opposed to later scholastic refinements or even to the kind of integral, systematic thought of scholasticism, as a man hankering after what he believed to be Augustinian purity, Martin Luther cannot be expected to have looked very kindly upon commerce or upon the later scholastic justifications for usury. And indeed he did not. A confused, contradictory, and unsystematic thinker at best, Luther was unsurprisingly least consistent in an area of secular affairs – economics – in which he had little interest.
Thus, on a crucial question which had vexed scholastics for centuries: whether private property is natural or conventional, i.e. merely the product of positive law, Luther was characteristically anti-intellectual. He was not interested in such questions; therefore they were trivial: ‘it is vain to mention these things; they cannot be acquired by thought,...’. As Dr Gary North has commented, ‘So much for 1500 years of debate’.2 All in all, Richard Tawney's assessment of Luther on these matters is perhaps not an overstatement;

Confronted with the complexities of foreign trade and financial organization, or with the subtleties of economic analysis, he [Luther] is like a savage introduced to a dynamo or a steam engine. He is too frightened and angry even to feel curiosity. Attempts to explain the mechanism merely enrage him; he can only repeat that there is a devil in it, and that good Christians will not meddle with the mystery of iniquity.3

The rest is confusion. Upholding the commandment prohibiting theft meant that Luther had to be, at least in some sense, an advocate of the rights of private property. But to Luther, ‘stealing’ meant not only what everyone defines to be theft, but also ‘taking advantage of others at market, warehouses, wine and beer cellars, workshops...’. In different writings, sometimes even within the same one, Luther was capable of denouncing a person who ‘makes use of the market in his own wilful way, proud and defiant, as though he had a good right to sell at as high a price as he chose, and none could interfere’, while also writing: ‘Anyone may sell what he has for the highest price he can get, so long as he cheats no one’, and then defining such cheating as simply using false weights and measures.
On the just price, Luther tends to revert to the minority medieval view that a just price is not the market price but a cost of production plus expenses and profit for labour and risk of the merchant. On usury in particular, Luther tended to revert to the drastic prohibition that the Catholic Church had long left behind. The census contract he would ban, as he would lucrum cessans; money was sterile; there should be no increase in price for time as against cash payments for goods, etc. All the old nonsense, which the scholastics had spent centuries burying or transforming, was back intact. It is certainly fitting that, as we have seen, one of Luther's great theological opponents in Germany was his former friend, Johann Eck, a Catholic theologian and friend of the great Fugger banking family, who was even ahead of his time in arguing in thoroughgoing fashion in favour of usury.
Yet, despite his opposition to usury, Luther advised the young ruler of Saxony not to abolish interest or to relieve debtors of the burden of paying it. Interest is, after all, a ‘common plague that all have taken upon themselves. We must put up with it, therefore, and hold debtors to it’.
Some of these contradictions can be reconciled in the light of Luther's deeply pessimistic view of man and therefore of human institutions. In the wicked secular world, he believed, we cannot expect people or institutions to act in accordance with the Christian gospel. Therefore, in contrast to the Catholic attempt through the art of casuistry to apply moral principles to social and political life, Luther tended to privatize Christian morality and to leave the secular world and its rulers to operate in a pragmatic and, in practice, an unchecked manner.

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