Wallace on Origins of Capitalism

During some extemporaneous remarks Henry Wallace made during a talk at Iowa State College in 1935, he lays out the connection between the Protestant Reformation and the rise of capitalism:

It seems to me that economics of necessity must serve some deeper end in human life; and as we endeavor along this line, we will discover that the economic mechanism with which we are now equipped is a mechanism that is rather imperfect with respect to serving the true ends of human life. The economic mechanism which we now have has of necessity been built up out of ideas which we, in the United States especially, have had and that the capitalist economy has had during the past fifty years—or we might say 300 years, for that matter.

Going back 300 years, we can trace it in some measure to the Protestant Reformation which let loose forces of individualism in a way which was rather new in this world. The religious world was the focus of important decisions back in the 1300's and 1400's, and when the point was made that you did not need to go through the priestly hierarchy but were able to go to God direct—when that attitude began to influence millions of people, then individualistic forces were let loose which were very quickly appropriated by the incipient capitalistic enterprises and capitalism was launched "in a big way." That was reinforced promptly by the discovery of America; and the very heart and soul of that approach was exemplified in American surroundings because the very soul of Protestantism could express itself best under pioneer conditions. There is the discipline of daily life, of rising at a certain time. Seven-eights of the people still rise at a certain hour; and half of them still get up at the same time on Sunday because they have the habit, though the Protestant tradition seems to be fading into the background as regards Sunday rising. But the Protestant discipline, the regimentation of the individual life according to the individual's soul, the discipline of saving, of thrift and frugality, resulted in the accumulation of capital supplies; and then of course you come along to the early part of the nineteenth century and have the Darwinian doctrine of evolution and Herbert Spencer's doctrine of the survival of the fittest, which was slightly different. And then in the economic world you have the whole laissez-faire doctrine, the Manchester school; and you have all these ideas being developed by various professors and filtered down to the graduates, and continually being worshiped by businessmen; and many of the economic graduates of the colleges becoming the hired men of big business and getting thereby the best salaries—some of them preparing monthly economic letters; and then individual Protestants, now seeking to enrich themselves as rapidly as possible through the stock market, reading these letters with avidity and finding on every occasion their disappointments hooked up with governmental action.