This tension reaches far back into American history, well before the creation of the United States. John Paul Rollert tells the story of protocapitalist Robert Keayne in "When making a profit was immoral," which appears in the Chicago Booth Review (Summer 2017). Rollert writes:
"Keayne was born in 1595 in Berkshire, England, not far from Windsor Castle. A humble butcher’s son, he would later note that he had received “no portion from my parents or friends to begin the world withal.” Accordingly, he obtained little in the way of formal education and was apprenticed at 10 years old to John Heyfield, a merchant-tailor in London. ...
"Keayne successfully completed his eight-year contract before striking out on his own. He proved adept at his trade, a blessing that was compounded by marrying well in his early 20s. By 1634, Keayne was prosperous enough to wager £100 on the Massachusetts Bay Company. It was an enormous sum, more than double the yearly income of the average wageworker in Victorian England 250 years later. The risk, however, was in keeping with Keayne’s conscience, which had been inflamed and enlightened by Puritan evangelists, while also being a considered bet by a savvy merchant on the bounty of a brave new world just across the ocean.
"Along with Anne, his wife, and beloved Ben, the only one of his four children to survive infancy, Keayne voyaged to Boston in 1635, swiftly becoming one of the city’s most distinguished and widely despised merchants. In fact, we only know so much about him because of the 50,000-word will that he began writing in 1653, three years before his death, to provide a full account of his life and the probity of his business affairs in order to “cleare myself in all material things.” ...
"In 1639, only four years after he had arrived in town, Keayne was accused of “oppression” in his dealings, a catch-all term that covered any instance of buyers or sellers taking advantage of the ignorance or necessity of one another in a business transaction. The specific charge was that he had sold sixpenny nails for 10 pence a pound, reaping a healthy profit off his neighbor. Too healthy, it seemed, for the customary profit margin on basic goods in the colony was between 10 and 30 percent.
"Keayne argued that the matter was a simple misunderstanding, willful on the part of his accuser. He said that the man had originally purchased sixpenny nails on credit for 8 pence a pound and later exchanged them for eightpenny nails at 10 pence a pound, a profit margin of only 20 percent (hardly a “haynous sine,” Keayne observed in his will). It was only when Keayne asked him to pay off his balance, after giving him ample time to do so, that the man brought his suit to the authorities, with the accusation of oppressive pricing.
"Early on during the trial, Keayne made a strong show of defending himself, with the messenger who delivered the second bag of nails testifying on his behalf, but then a raft of townspeople came forward to levy similar charges against him. As John Winthrop, the governor of the settlement and perhaps the most esteemed man in Boston, wrote in his diary, Keayne was widely known for being “notoriously above others observed and complained of” for the prices he charged and had been “admonished, both by private friends and also by some of the magistrates and elders”—all, it seemed, to no effect. He was convicted by the General Court of the offense, which had broadened beyond a single transaction to encompass a general way of doing business, and fined £200, a sum that was later reduced to £80.
"Had the matter rested there, one suspects that Keayne would still have complained in his will of the “deep and sharpe censure that was layd upon me,” but the incident would not have been the defining moment of his professional career and, perhaps, his life. But then the elders of the First Church of Boston took up the matter to determine whether an ecclesiastical reproach was also warranted.
"Keayne was fortunate to escape the most serious punishment, excommunication. That sentence was passed on eight offenses related to economic matters between 1630 and 1654, a period when only 40 such sentences were given, tantamount, as they were, to consigning one to eternal damnation. Instead, Keayne was formally admonished, according to the records of the First Church, “for selling his wares at excessive Rates, to the Dishonor of Gods name, the Offense of the Generall Cort, and the Publique scandal of the Cuntry,” a censure he lived under until the following May, when he became “Reconciled to the Church.”
"Keayne continued to attend services, and the day after the rebuke was handed down, the Reverend John Cotton, the city’s foremost theologian, delivered a sermon that was obviously inspired by the wayward merchant. The subject, Winthrop wrote in his diary, was the “false principles” of trade that so many merchants seemed to abide by. They were recorded by Winthrop as follows:
- That a man might sell as dear as he can, and buy as cheap as he can.
- If a man lose by casualty of sea, etc., in some of his commodities, he may raise the price of the rest.
- That he may sell as he bought, though he paid too dear, etc., and though the commodity be fallen, etc.
- That as a man may take advantage of his own skill or ability, so he may of another’s ignorance or necessity.
- Where one gives time for payment, he is to take like recompense of one as of another.
Again, following these bullet points are considered “false principles,” and following such principles was considered grounds for censure or even excommunication. The guiding social/religious principle for merchants, as Rollert quotes in the words of the famous Puritan John Bunyan (author of The Pilgrim's Progress) is that "A man in dealing should as really design his neighbour’s good, profit and advantage, as his own.” In the modern lingo, the parallel comment would be that there is a corporate social responsibility that all stakeholders should be taken into account.
The story of Robert Keayne's last will and testament seems to have been unearthed some decades ago by Bernard Bailyn, who described "The Apologia of Robert Keayne" in the William and Mary Quarterly (7:4, October 1950, pp. 568-587, available through JSTOR). Keayne's actual will from 1653 was reprinted in 1886 in "A Report of the Record Commissioners of the City of Boston containing miscellaneous papers," which is available through the magic of HathiTrust. Bailyn writes:
The story of Robert Keayne's last will and testament seems to have been unearthed some decades ago by Bernard Bailyn, who described "The Apologia of Robert Keayne" in the William and Mary Quarterly (7:4, October 1950, pp. 568-587, available through JSTOR). Keayne's actual will from 1653 was reprinted in 1886 in "A Report of the Record Commissioners of the City of Boston containing miscellaneous papers," which is available through the magic of HathiTrust. Bailyn writes:
"When his executors came to open this Last Will and Testament they found not only a complicated allocation of his worldly goods but an outpouring of long suppressed indignation, a helter-skelter apologia pro vita sua and a reiterated demand that justice be done him even if only in memory. It had taken him five months to write out the document, and when the will was copied into the first volume of the probate records of Suffolk County it filled no less than 158 pages ...Of course, we don't know the ins and outs of the dispute over the price of nails (which were a highly valuable commodity at the time). We do know that Keayne rose from being an impoverished apprentice to being one of the wealthiest men in the Boston of his time. We know that he had enemies, and that some of the accusations made against him were false, and that he a high-profile court case was decided against him. We also know that he gave considerable money to the poor and to the city throughout his life, and even left a bequest to Harvard. We also know that he was often chosen for responsible positions. Baily writes:
The resulting 5I,000 words provide an insight into the workings of a seventeenth-century mind. What he had "here writt out of the greife and trouble of my heart" was an appeal to the Puritan conscience of New England to reconsider its "un- christian, uncharitable and unjust reproaches and slandrs" against him, and raised the hope "that such which have taken liberties to load me with divers reproaches and long to lay me under a darke cloude may have cause to see that they have done amisse and now to be sorry for it though they have not beene so before."
"Until his death in 1656, however, despite unpopularity and repeated controversies with his fellow citizens, Robert Keayne continued to fill responsible public positions. He held his earliest public office in 1636, when the Boston Town Meeting elected him to a committee charged with the ordering of all land allotments and other business except elections. In the years that followed he was reelected selectman four times, chosen as a representative to the General Court at least seven times and served in innumerable lesser functions such as surveyor of the highways."From a modern view, almost 400 years later, Robert Keayne seems like a many of considerable practical talent, trying to combine a life of capitalist success and Puritan moral values--and sometimes getting caught in grinding of these two forces.
(For a discussion of price controls in the colonial United States at the time of the Revolutionary War, see "Price Controls in the Colonial United States: "A Sharping Set of Mushroom Pedlers" (December 27, 2016).
