Scholasticism and Capitalism
This extract is taken from Chapter 2 of the History of Economic Analysis.
Schumpeter wants to point out the fact that "The scholastic science of the Middle Ages contained all the germs of the laical science of the Renaissance." And this because "the authority of the Church was not the absolute bar to free research that it has been made out to be."
For Schumpeter "The prevalent impression to the contrary is due to the fact that until recently the world has been content to accept the testimony of the enemies of the Church, which was inspired by unreasoning hatred and unduly dramatized individual events."
The processes that eventually shattered the social world of St. Thomas Aquinas are usually summed up in the phrase Rise of Capitalism. Though infinitely complex, they yet admit of a description in terms of a few broad generalizations that are not too hopelessly wrong. Also, though there was of course no break anywhere, it is possible to date developments at least by centuries. Capitalist enterprise had not been absent before, but from the thirteenth century on it slowly began to attack the framework of feudal institutions that had for ages fettered but also sheltered the farmer and the artisan, and to evolve the contours of the economic pattern that still is, or until quite recently was, our own. By the end of the fifteenth century most of the phenomena that we are in the habit of associating with that vague word Capitalism had put in their appearance, including big business, stock and commodity speculation, and 'high finance,' to all of which people reacted much as we do ourselves.  Even then these phenomena were not all of them new. Truly unprecedented was only their absolute and relative importance.
The growth of capitalist enterprise, however, created not only new economic patterns and problems but also a new attitude toward all problems. The rise of the commercial, financial, and industrial bourgeoisie of course altered the structure of European society and in consequence its spirit or, if you prefer, its civilization. The most obvious point about this is that the bourgeoisie acquired power to assert its interests. Here was a class that saw business facts in a different light and from a different angle; a class, in short, that was in business, and therefore could never look at its problems with the aloofness of the schoolman. But this point is second in importance to another. As we have seen in the first part of this book, it is more essential to realize that quite irrespective of the assertion of his interests, the businessman, as his weight in the social structure increased, imparted to society an increasing dose of his mind, just as the knight had done before him. The particular mental habits generated by the work in the business office, the schema of values that emanates from it, and the attitude to public and private life that is characteristic of it, slowly spread in all classes and over all fields of human thought and action. Results burst forth in the epoch of cultural transformation that has been so curiously misnamed Renaissance. .
One of the most important of these results was the emergence of the laical intellectual , and hence of laical science. We may distinguish developments of three different kinds. First, there always had been laical physicians and lawyers; but in the Renaissance they began to crowd out the clerical element. Second, starting from their professional needs and problems, laical artists and craftsmen - there was really no sociological distinction between them - began to develop a fund of tooled knowledge (for example, in anatomy, perspective, mechanics) that was an important source of modern science but grew up outside of scholastic university science: such a figure as Leonardo da Vinci will illustrate this point; and the figure of Galileo will illustrate another point, namely, how this kind of development produced the laical physicist. It had its analogue in economics; the businessman and civil servant, also starting like the artist-craftsman from his practical needs and problems, began to develop a fund of economic knowledge which will be surveyed in the next chapter. Third, there were the Humanists. Professionally, these were classical scholars. Their scientific work consisted in the critical editing, translation, and interpretation of the Greek and Latin texts that became available in the fifteenth and sixteenth century. But they loved to believe that a command of Greek and Latin would make a man competent in everything; and this together with their social location – also outside of the scholastic universities – turned these critics of texts into critics of men, manners, beliefs, and institutions, as well as into all-round littérateurs. They did not, however, contribute to technical economics. For us they are important only so far as they influenced the general intellectual atmosphere of their age.
The Catholic Church had little reason to object to the laical physician or lawyer as such and actually did not object to them; it was the most liberal patron of the artist-craftsman, whose art in fact remained primarily religious for a long time to come; it employed humanists in the Papal chancery and elsewhere, and the Renaissance Popes and Cardinals, some of whom were distinguished humanists themselves, invariably encouraged humanistic studies. The conflict that arose nevertheless is therefore a problem. And diagnosis of its nature is not facilitated by painting the picture all in black and white. There is little if anything o the saga of a new light that had flashed upon the world and was bitterly fought by the powers of darkness, or of a new spirit of free inquiry that the henchmen of hidebound authoritarianism vainly tried to smother. Nor is it our understanding of the conflict helped by mixing it up with the related but quite different phenomenon of the Reformation – the intellectual revolution and the religious revolution reinforced each other but their sources are not the same; they do not stand to each other in any simple relation of cause and effect.
There was no such thing as a New Spirit of Capitalism in the sense that
people would have had to acquire a new way of thinking in order to be able
to transform a feudal economic world into a wholly different capitalist one.
So soon as we realize that pure Feudalism and pure Capitalism are equally
unrealistic creations of our own mind, the problem of what it was that turned
the one into the other vanishes completely. 
The society of the feudal ages contained all the germs of the society of the capitalist age. These germs developed by slow degrees, each step teaching its lesson and producing another increment of capitalist methods and of capitalist 'spirit.'
Similarly there was no such thing as a New Spirit of Free Inquiry whose emergence would call for explanation. The scholastic science of the Middle Ages contained all the germs of the laical science of the Renaissance. And these germs developed slowly but steadily within the system of scholastic thought so that the laics of the sixteenth and seventeenth centuries continued rather than destroyed scholastic work.
This applies even where it is most persistently denied. Even in the thirteenth century Albertus Magnus observed, Roger Bacon experimented and invented - he also insisted upon the need for more powerful mathematical methods - while Jordanus the Nemore theorized in an entirely 'modern' spirit. 
Even the heliocentric system of astronomy was not simply a bomb thrown at the scholastic fortress from outside. It originated in the fortress. Nicolaus Cusanus (1401-64) was a cardinal. And Copernicus himself was a canon (though he did not actually take orders), a doctor of canon law, lived all his life in church circles, and Clement VII approved of his work and wished to see it published. 
Nor is this at all surprising because, as we have seen, the authority of
the Church was not the absolute bar to free research that it has been made
out to be. The prevalent impression to the contrary is due to the fact that
until recently the world has been content to accept the testimony of the
enemies of the Church, which was inspired by unreasoning hatred and unduly
dramatized individual events.
During the last twenty years or so a more impartial opinion has been gaining ground. This is fortunate for us because it makes it much easier to appreciate scholastic scientific performance in our field.
If, then, we remove a coating of partisan colors, the true picture of the
conflict appears without further difficulty. It was primarily political in
nature. The laical intellectuals, Catholics no less than Protestants, were
often opposed to the Church as a political power, and political opposition
against a church very easily turns into heresy. It was this spirit of political
opposition and the incidental danger of heresy that the Church sensed - sometimes
wrongly, more often rightly - in the works of the laical intellectuals and
which made it react even to writings that had nothing to do with either church
government or religion and would have passed unnoticed had they been published
by a cleric of whose political and religious allegiance the Church was sure.
There was, however, another point of limited but, for us, considerable importance. It would seem that the scientific profession does not always absorb novelties with alacrity. Moreover, professors are men who are constitutionally unable to conceive that the other fellow might be right. This holds for all times and places. In Galileo's day, however, the universities were in the hands of monastic orders, except in the countries that had become or were becoming Protestant. These orders welcomed novices and readily opened the scientific career to them. But they did not welcome the scientific work of people who did not want to join them: hence a conflict of interest between two groups of intellectuals that stood in each other's way. And professional resentment against a scientific opponent, of which all ages afford amusing examples, sometimes acquired a connotation that was not amusing under circumstances in which the universities, though they had not always the ear of the Pope, always had the ear of the Inquisition. But this does not mean that those professors themselves did nothing but rehearse Aristotelian texts.
 Owing to the importance of the financial complement of capitalist production and trade, the development of the law and the practice of negotiable paper and of 'created' deposits afford perhaps the best indication we can have for dating the rise of capitalism. Around the Mediterranean both emerged in the course of the fourteenth century, though negotiability was not fully established before the sixteenth. See A. P. Usher, The Early History of Deposit Banking in Mediterranean Europe (1943), and R. de Roover, 'Money, Banking, and Credit in Medieval Bruges: Journal of Economic History, Supplement, December 1942.
 The 'revival' of the interest in the thought and art of ancient Greece and Rome was so powerful a factor in the intellectual life of those times only because ancient forms provided convenient vessels for new needs and meanings. The real cultural achievement of that period did not consist in reconditioning old heirlooms.
 The word 'laical' has been chosen after some hesitation. 'Secular' would not do because it derives another connotation from the distinction: secular clergy - regular clergy. 'Laymen's science' conflicts with our use of the term layman (a man not trained in scientific method). 'Laicist' conveys the idea of an antagonism to the Church (cf., for instance, the phrases 'laicist state' or 'laicism'). So 'laical' will have to serve in order to denote people or any activity (scientific or propagandist) of people who are not in holy orders. The noun shall be 'laics.' There is a more serious difficulty, however. On the one hand, the educational system of the Catholic Church proved so strong that many laical intellectuals continued to be shaped by it. Many of them retained habits of mind that did not differ essentially from those of the intellectuals in holy orders. On the other hand, an increasing number of the. latter renounced allegiance to the scholastic system of thought as completely as any laic could have done: Erasmus of Rotterdam (1467 - 1536) affords an early instance. Our distinction though based upon a real difference is therefore not an easy one to handle. It is not simply a question of the cloth.
 This problem is a typical instance of what may be termed Spurious Problems, that is to say, of those problems that the analyst himself creates by his own method of procedure. For purposes of abbreviated description, we construct abstract pictures of social 'systems' that we endow with a number of well defined characteristics in order to contrast them sharply. This method of (logically) Ideal Types has, of course, its uses, though it inevitably involves distortion of the facts. But if, forgetting the methodological nature of these constructions, we put the 'ideal' Feudal Man face to face with the 'ideal' Capitalist Man, transition from the one to the other will present a problem that has, however, no counterpart in the sphere of historical fact. Unfortunately, Max Weber lent the weight of his great authority to a way of thinking that has no other basis than a misuse of the method of Ideal Types. Accordingly, he set out to find an explanation for a process which sufficient attention to historical detail renders self-explanatory. He found it in the New Spirit - i.e. a different attitude to life and its values - engendered by the Reformation (The Protestant Ethic and the Spirit of Capitalism, trans. by Talcott Parsons, 1930; see also, R. H. Tawney, Religion and the Rise of Capitalism, 1926, and, contra, H. M. Robertson, Aspects of the Rise of Economic Individualism; a Criticism of Max Weber and His School, 1933). The historical objections to this construction are too obvious to detain us. Much more important is it to see the fundamental methodological error involved.
 See, e.g., Pierre Duhem's Les Sources des theories physiques (1905) and Les Origines de la statique (1905-6); also Études sur Leonard da Vinci (1906-13). The subsequent struggle about the Copernican system of astronomy should be briefly noticed, both in order to display the element of truth in the, traditional saga and in order to reduce it to its true dimensions. Nicolas Copernicus (1473-1543) completed his manuscript in or about 1530. For decades his idea spread quietly without let or hindrance. It met indeed with opposition and even ridicule from professors who continued to hold on to the Ptolemaic system, but this is only what we should expect in the case of a new departure of such importance. It was this ridicule and not the Inquisition that Galileo feared when, toward the end of the sixteenth century, he became a convinced adherent of Copernicus' theory. The execution (1600) by the Inquisition of another adherent of it, Giordano Bruno, is no proof to the contrary because he also held purely, theological views of a heretical nature and, moreover, frankly expressed contempt for the Christian faith. But when Galileo finally decided to come out in support of it (1613 and 1632), the theory was indeed declared heretical by a group of theological advisers of the Inquisition - not, however, by Cardinal Bellarrmine - and he was forbidden to hold or teach it; when he failed to keep his promise to submit, he was forced to abjure it and was imprisoned for a fortnight. The point is not only that in this case a purely physical theory was considered theologically obnoxious and that its scientific sponsor was made to suffer for it but also that such an occurrence was an ever-present possibility in an age that interpreted scripture more or less literally. This is the element of truth in the saga. But it is clear that the case was quite exceptional; for the bulk of scientific work, that possibility hardly existed at all. Moreover, Galileo's case was complicated by his impulsiveness and his unfortunate talent for personally antagonizing people who were in a position to make their resentment felt. The case of Copernicus himself, and indeed the whole history of the fortunes of his theory up to 1613, suggest that more tactful handling of the matter might have avoided prosecution.