Chapter 10 (Part 9): Conclusion-Why did Western Europe develop capitalism?

The European Medieval Model is the lone survivor of a material symbolon—a fictive person (persona ficta), a de facto corporation, that ushers the capitalist age

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If you are new here, we are reading David Graeber’s Debt: The First 5,000 Years. Catch up and join us on Thursdays in 2025. My first slow read here on Substack in 2023 was David Graeber’s The Dawn of Everything. These two books showcase his thesis on the development of humanity by looking at how people organised themselves and their world around human values and choices. Unique among his peers, Graeber still asks the big questions in anthropology.

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Dear Reader,

I am sad to leave the Medieval Period because there is so much more to learn, especially Western Europe’s Christian foundation. I came in with zero knowledge and I am leaving with much more than I bargained for.

The traditional altar for a Tridentine Latin Mass complete with the table by the altar, the tabernacle (later a covered chalice will be offered), the six liturgical candles and the altar/chancel rail for communion. The Mass draws from a long legacy of codified reforms since 1570 in the Council of Trent until 1962. It uses the Roman Rite Mass sung in Gregorian chant that lasts 1.5 hours. Our Lady of the Immaculate Conception (Onze Lieve Maria Onblevekte Ontvangenis) in Oss, bishopry of S’Hertogen Bosch.

I now understand what the Age of Faith was all about—the spread of Christianity in the Baltic Area, the rise of the Catholic Church following the fall of the Western Roman Empire, the Crusades, and the merchants that transformed the region with their international exports and imports. Most of all, the daily calendar that governed much of Christian life between feast and fast days. The Age of Faith is all about emotions—ecstasy, rage, and deep awe.

There is much I have skipped: the Black Death that would stalk Europe multiple times in the 14th century, the messy often violent institutionalisation of the Catholic Church, and the mendicant orders that continued to vow poverty and yet also was corporatised (see below)…

My last post on fasting and fishing is one of my favourites. Today, let us conclude what we have learned and ask, what was the Middle Ages all about? The section in your book is pp. 296-305 (on my PDF).

Melanie

We have eight posts in Chapter 10 that looked at the breadth of the Middle Ages across Asia, the European continent, and the Middle East with some mention of the Levant region. Across these disparate geographic areas, we see the rise of three great spiritual/religious movements that remain with us today: Buddhism, Islam, and Christianity. All three converge but only one spearheaded capitalism as we know today: Christianity. Why?

Convergence: Monastic Capitalism

Across different geographic spaces and time, humankind brought forth a period producing a common pattern, what Graeber calls monastic capitalism.¹ I use the term here to refer to how religion and faith, particularly its monastic or ascetic way of life, built a material and spiritual debt economy. The pattern is shared between Asia, the Middle East and Western Europe, in which seclusion and worship demanded charity from others. Donors enter into a spiritual debt relationship by entrusting their cash or land assets to monasteries in exchange for perpetual prayers. After all, one needs to house and feed the monks to fuel their rituals. The Age of Faith is only possible when you have the fusion of money with religion.

The mental framework of the Symbolon

An economy only works when there is a mental framework to support it. That trust is made possible with what Graeber calls the symbolon— a Greek term used to describe a token that represents a friendship or a contract, with the material object standing in as a witness. The material itself does not matter or have no value, but is dictated by social convention. Aristotle emphasises that it is important that one can break an object in half.

This is an example of a tally: two pieces of tiger made of bronze with gold inlay, 2nd to 1st century BC. Note that both sides remain equal and become whole when fused back together again. Wikipedia

The Greek term converges with the Chinese term fú that means an agreement, to tally, two halves of a tally, a promise, proof of identity, evidence, to reconcile, and a symbol.

This tally included ‘the mutual agreement between heaven’s appointment and human affairs.’ According to Graeber, in the Chinese cosmos, there is little distance between the heavens and the world, thereby it can be bridged by a tally. This is made tangible when Medieval Taoist monks rip pieces of paper as their contract with heaven, a ceremony called ‘rending the tally.’

This is unlike what we have seen with Medieval Christianity. Graeber recalls a Greek mystic, Dionysius the Areopagite, who ponders

How is it possible for humans to have knowledge of God?

In this formulation, God is unknowable. He can come in any form—whether as a host in the Eucharist or as statues of angels. However, Dionysius disabused us of beauty to include its opposite—the ugly, funny, ridiculous, to remind us that it is not God. And in doing so, these are also God. This means that a relationship with an ephemeral God is impossible. Any relationship must be seen as gifts in which repayment or even debt or obligation is implausible. Graeber says we have two similar sides of the same mental coin with very different outcomes.

Divergence: Capitalism’s many Symbolon

The mental symbolon between the Medieval Chinese and the Medieval Christian produced different outcomes. The former was able to interact with other beings even if it is in an unintelligible language; meanwhile, the latter built an intelligible language around other spiritual beings even if they could not interact with them. In both cases, the debt or gift relationship with deities produces social hierarchy on earth.

• India deepened the difference between priests, warriors, merchants, and farmers

• Christendom also separated people into priests, warriors, farmers, and the outlier merchants

• China developed different social debt relations ranging from karmic debts, milk-debts, and deity-human contracts

Surprisingly, despite these different effects, Graeber observes that all seemed to end up in excess and the concentration of capital and wealth in a few hands. The role of the government was supposed to temper such extremes. It did not seem like a problem in Medieval Islam because Graeber noted that any market fluctuations were interpreted as the manifestation of divine will.

Why then did capitalism emerge in the West?

Given that most of these cultures seem to have a common symbolon, why did capitalism as we know it spring from Christianity? An intriguing question, one in which Graeber explored a little. He ponders why Islam did not produce what we recognise as capitalists, even if they had large-scale merchants called sāhib al-māl or ‘owners of capital.’ Not only that, he wrote that there were individuals who possessed millions of dinars but never went into profitable investments. Or expanded their capital funds.

Graeber hypothesised that:

• contracts were inherently personal—collapsing credit with honour that discourages ‘cutthroat’ competition

• profits are derived from risk-taking—anything that reduces that was considered impious;

  • corollary to this, Graeber included that if there is a fixed rate of interest, guaranteed profits are deemed irregular;

  • Islamic co-investors reduce the risk instead of developing the other financial and insurance instruments developed in Europe

I can tackle this in the next post in more detail. Here, Graeber provides us with different symbolons that restrict the Islamic free market.

With India, Graeber points out that Buddhism is the opposite: it was lending for risk-free profits without touching their Inexhaustible Treasures (principal endowment). He says, what they were creating was essentially a corporate body, free from ‘all the human untidiness of marriage, reproduction, infirmity, and death.’ Pretty much like angels, in the medieval sense.

And yet, we also see that this Buddhism monastic capitalism was nipped in the bud with its eradication in the Indian subcontinent. We shall also explore this later on as a prelude to Chapter 11.

The winner?

This leaves the European Medieval Model as the lone survivor of a material symbolon—a fictive person (persona ficta), a de facto corporation. John Davis, political scientist who in 1904 wrote a foundational history of corporations, found that the temporal Christian Church were organised as an ecclesiastical corporation.

• it had the ecclesiastical hierarchy that provided structure and unity over other bishops, the provincial synods and the metropolitan areas

• for other members of the Church that needed further control, monasteries were established that could hold land and other assets as defined by Pope Gregory the Great, a monk himself

• these monastic corporations, and later, religious orders, were also designed to be autonomous, independent of the Church, and self-sufficient; the outcome of which was that they acquired more power

• these bodies were timeless or existed in perpetuity, separate from the individual or group lifespan

This same model, inherited from the Roman Empire, was replicated in the organisation of the municipalities, universities, and guilds. The corporate symbolon of the fictive person was slowly developed through the monasticisation of everyday life and made the pioneering transition to the capitalist age.

Round-Up

To close Chapter 10, I selected the one common theme found across all eight posts, that is the role of religion and the economy that grew around them. One of the more interesting questions that is not answered in this post is, why did this period give rise to the three largest religious movements that originate during this period?

Though I do not have a definitive answer to this, yet, one of the strongest explanations can be found is in the relationship between religion and economy that developed to support it.

Across all our posts, we see a convergence in a common symbolon, a symbolic understanding of money, debt/credit relationships and an artefact of neutral value to stand for a social contract. However, the conceptions around them differ.

• for the Medieval Chinese, a contract can be procured with a deity by way of a materially divisible tally

• for the Medieval Christian, a contract is impossible with a deity because they are unreachable, though we can describe their likeness

• for the Medieval Muslim, rather than a contract, all market movements and incidents are by divine will and cannot be controlled or negotiated with

This mental symbolon is the building block to answer why Western European Christian brand of monastic capitalism survived compared to its counterparts.

• Islamic law diverged on practices with regards to risk, credit, and profit

• Indian Buddhism declined once the sub-continent was conquered by Turkic invaders, religion/belief replacement, and dwindling endowments

• This left the Christian apparatus that benefited from the organisation of the Church into what we recognise as a corporation

Sources:

Davis, John P. 1904. Corporations: A Study of the Origin and Development of Great Business Combinations and of their Relation to the Authority of the State. New York: Putnam & Sons.

Ray, Nicholas Dylan. 1997. The Medieval Islamic System of Credit and Banking: Legal and Historical Considerations. Arab Law Quarterly 12(1): 43-90.

Find your way around: the book outline

Debt: The First 5,000 Years

Re-read the previous post:

1. I chose this as the most important feature of the Medieval period. I include below some of his arguments and what I thought of them.

Graeber concludes

Graeber points out that Western Europe was late to the progressive party.

• the letters of credit or the suftaja were practiced as early as Ancient Egypt, but documents record its mainstream use during the Abbasid Caliphate around AD 750

  • the Italian city-states, such as Medieval Genoa, first used credit instruments and established banks when they were politically organising themselves around AD 1099

• the ancient Nalanda Mahavira was a centre of learning established during the Magadha Period that operated a thousand years beginning AD 427

  • the oldest form of the universitas magisterium et scholarium is the University of Bologna, or a community of teachers and students, established in 1088 and still in operation (the others are Oxford in 1200, Cambridge in 1209)

Indeed, these development came late because of the collapse of the Roman Empire in AD 476. Without a larger empire organisation, except for the Christian church, some the population was freed from restrictions to labour on land and merchants became prominent power players. The financial revolution in Western Europe came late only after the chaos of the Roman Empire had settled and pockets of smaller kingdoms arose.

Graeber observes

Summarising his views on this period, Graeber makes four points that I was not completely convinced:

• the Axial Age was the age of materialism versus the Medieval Period’s Age of Transcendence

• he argues that slavery declined or disappeared

• he observes that the overall level of violence decreased, but he points out specifically that Western Europe was violent

On his first point, I am partially unconvinced because the history of humanity has always been religious. Behind every army, there lies a politico-religious framework especially during the Axial Age. Though it is questionable that violence reduced during this period, low-level violence was rampant as small fiefdoms arose simultaneously. The predominant slave society that characterised old Rome did disintegrate—only to be replaced by a different sort, debt slavery. Without extensive slave mining for minerals, coinage during this period returned to its abstract form—trust and commitment. This was shored by faith and in Western Europe defined by Christianity, in the Middle East by Islam, and the Asian continent by Buddhism.