The asceticism of Protestantism ensured that the money made by capitalists was not wastefully spent but was reinvested to make more capital. Traditionally, economic activity had been aimed at satisfying needs. Capitalism involved “a struggle for profit free from the limits set by needs”. Profits were not spent or lent but reinvested in the business to make it even more profitable. Capitalism was not merely synonymous with a desire to acquire money and goods nor with trading for profit. Commercial activity undertaken by the new breed of entrepreneurs and traders was methodical, calculated, rationalised. The capitalist ethic involved the pursuit of profit for an end other than the goods, pleasure and position it could buy.
In this way capitalists were not working for personal happiness but for business success and the sense of achievement that brought. Such an approach would seem irrational and strange in other cultures. Even in Rome, which was one of the most materially rich civilisations of the ancient world, citizens who became rich used their wealth to buy position or to live in outrageous luxury.
Traders and merchants in the middle ages did not seek to continually increase and expand their business, nor to invest most of their profits back into the business.
The majority of merchants, traders and small craft manufacturers were content to make only a comfortable profit and, similarly, to enjoy the benefits of a comfortable standard of living... Chance opportunities for personal gain were quick to be exploited, but the systematic creation of wealth through ceaseless efforts in the marketplace were seen to be the prerogative only of ambitious and greedy persons who were personally inclined to such pursuits....
Those that became rich spent their money on luxury; magnificent homes and furnishings, jewellery, clothing, servants and land. However the new breed of capitalist traders and merchants had a very different approach. They were methodical and driven in their relentless drive to continually expand their businesses, and make more and more money, which they did not spend on themselves but reinvested in their business. Despite their wealth they lived modestly and were highly self-disciplined.
Although trade for profit has existed throughout history, modern capitalism involves a society-wide system of trade, and a common, shared way of life, as opposed to individuals trading here and there. It requires a system of values that revolve around economic meanings and goals. Capitalism had existed in earlier societies but without the spirit or ethos that guides modern capitalism.
The capitalist ethos exemplified by the preaching of Benjamin Franklin in the 1750s, a founding pilgrim father of the USA, was a complete reversal of more traditional ways of understanding the purpose of life and virtuous living. For example, Franklin preached:
Remember, that time is money. He that can earn ten shillings a day by his labour, and goes abroad, or sits idle, one half of that day, though he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent, or rather thrown away, five shillings besides.
Weber pointed out that Franklin was not merely giving rules or providing wisdom to guide the unwary but rather he was delivering a moral code, an ethos. Not surprisingly Franklin, although not religious himself, was brought up in a Calvinist family, his father strictly religious. In earlier times the sentiments expressed by Franklin would have been considered “as the lowest sort of avarice”. Now they became the ethos of a nation.