Excessive Profits: Destruction of Society
Summery: The following is a record of what happened in Colonial America. Spelling and grammar is of the 17th century. In short, this is a report of a local merchant in Boston who charged excessive profits. Below that, is an article that I wrote explaining how excessive profits are financially destroying the people today.
The Wicked Capitalism of Robert Keayne , John Winthrop (1639) A merchant named Robert Keayne was practicing capitalistic economics in Boston and was squarely rebuked for it by John Cotton and Governor Winthrop.
John Winthrop’s Journal
Mo. 9 [Sept. 1639]
At a general court holden at Boston, great complaint was made of the oppression used in the country in sale of foreign commodities; and Mr. Robert Keaine, who kept a shop in Boston, was notoriously above others observed and complained of, and, being convented, he was charged with many particulars; in some, for taking above six-pence in the shilling profit; in some above eight-pence; and, in some small things, above two for one; and being hereof convict, (as appears by the records,) he was fined £200, which came thus to pass: The deputies considered, apart, of his fine, and set it at £200; the magistrates agreed but to £100. So, the court being divided, at length it was agreed, that his fine should be £200, but he should pay but £100, and the other should be respited to the further consideration of the next general court. By this means the magistrates and deputies were, brought to an accord, which otherwise had not been likely, and so much trouble might have grown, and the offender escaped censure. For the cry of the country was so great against oppression, and some of the elders and magistrates had declared such detestation of the corrupt practice of this man (which was the more observable, because he was wealthy and sold dearer than most other tradesmen, and for that he was of ill report for the like covetous practice in England, that incensed the deputies very much against him). And sure the course was very evil, especial circumstances considered: 1. He being an ancient professor of the gospel: 2. A man of eminent parts: 3. Wealthy, and having but one child: 4. Having come over for conscience’ sake, and for the advancement of the gospel here: 5. Having been formerly dealt with and admonished, both by private friends and also by some of the magistrates and elders, and having promised reformation; being a member of a church and commonwealth now in their infancy, and under the curious observation of all churches and civil states in the world. These added much aggravation to his sin in the judgment of all men of understanding. Yet most of the magistrates (though they discerned of the offence clothed with all these circumstances) would have been more moderate in their censure: 1. Because there was no law in force to limit or direct men in point of profit in their trade. 2. Because it is the common practice, in all countries, for men to make use of advantages for raising the prices of their commodities. 3. Because (though he were chiefly aimed at, yet) he was not alone in this fault. 4. Because all men through the country, in sale of cattle, corn, labor, etc., were guilty of the like excess in prices. 5. Because a certain rule could not be found out for an equal rate between buyer and seller, though much labor had been bestowed in it, and divers laws had been made, which, upon experience, were repealed, as being neither safe nor equal. Lastly, and especially, because the law of God appoints no other punishment but double restitution; and, in some cases, as where the offender freely confesseth, and brings his offering, onlv half added to the principal. After the court had censured him, the church of Boston called him also in question, where (as before he had done in the court) he did, with tears, acknowledge and bewail his covetous and corrupt heart, yet making some excuse for many of the particulars, which were charged upon him, as partly by pretence of ignorance of the true price of some wares, and chiefly by being misled by some false principles, as 1. That, if a man lost in one commodity, he might help himself in the price of another. 2. That if, through want of skill or other occasion, his commodity cost him more than the price of the market in England, he might then sell it for more than the price of the market in New England, etc. These things gave occasion to Mr. Cotton, in his public exercise the next lecture day, to lay open the error of such false principles, and to give some rules of direction in the case.”
Some false principles were these:
1. That a man might sell as dear as he can, and buv as cheap as he can.
2. If a man lose by casualty of sea, etc., in some of his commodities, he may raise the price of the rest.
3. That he may sell as he bought, though he paid too dear, etc., and though the commodity be fallen, etc.
4. That, as a man may take the advantage of his own skill or ability, so he may of another’s ignorance or necessity.
5. Where one gives time for payment, he is to take like recompense of one as of another.
The rules for trading, were these:
1. A man may not sell above the current price, i.e., such a price as is usual in the time and place, and as another (who knows the worth of the commodity) would give for it, if he had occasion to use it: as that is called current money, which every man will take, etc.
2. When a man loseth in his commodity for want of skill, etc., he must look at it as his own fault or cross, and therefore must not lay it upon another.
3. Where a man loseth by casualty of sea, or, etc., it is a loss cast upon himself by providence, and he may not ease himself of it by casting it upon another; for so a man should seem to provide against all providences, etc., that he should never lose; but where there is a scarcity of the commodity, there men may raise their price; for now it is a hand of God upon the commodity, and not the person.
4. A man may not ask any more for his commodity than his selling price, as Ephron to Abraham, the land is worth thus much. 14
[Keayne was censured by his church in Boston (in addition to the fine imposed by the General Court). Fourteen years later (1653), Keayne found it necessary to write a 158-page justification for his actions as his last will and testament.]
Source: John Winthrop, The History of New England from 1630 to 1649, 2 vols. (Boston, 1853), 1:377-82.
Excessive Profits Today
We are all familiar with how certain companies make excessive profits today. The pharmaceutical companies are the greatest violators of this, with profits of 1,000% to 10,000% mark-up. This would make the Pilgrim, Robert Keayne, look modest in his pricing of goods. What is wrong with profits like the above? Plenty! It robs the people.
In today’s society there is no law against excessive profits, as it was in colonial Massachusetts. Today, anything goes. After all, the government is owned by big business and what big business says, the politicians do.
There are many other areas where there is excessive profits such as: petroleum, jewelry, and batteries, breakfast cereal, etc. Do you know that the common battery for electronic devices costs only a few cents each to make, yet the price at the counter is nearly £1 each (for name brand makes). CEOs and even the common man in the street thinks that it’s OK to charge what the market can bear. Yet, these very same people would complain that shops mark up the price of batteries if there is a power failure in the city.
As a side note: Look at the money wasted on NASA supporting the globe earth belief. They probably are charging $1 million dollars per computer generated image that they show on TV!
There is nothing in the Bible that talks about being rich, as such. After all, Abram and his brother Lot were rich. But you can be sure that was not by charging 5x what the sheep cost to raise.
In has only been in recent years that excessive profits have become more and more common. Years ago I came up with the term “extreme capitalism” which better describes capitalism today. In fact, I don’t like the word ‘capitalism’. Instead, the word that would better convey what our economic system should be would be the word “free enterprise,” as capitalism has gone far beyond all Christian morality.
Charging of excessive prices for goods and service is part of the reason why people retire in poverty. Keep in mind, I said, ‘part of the problem’. So, when companies charge as much as they can get away with and with other companies joining in, you can see, over time, there is less money people have for retirement. Unless, of course, you are one of the greedy ones at the top of the ‘food chain’!
There is nothing wrong with being a millionaire but when people become billionaires – for the most part – this is because of the excessive profits they charge.
I could go on and on with this topic, as I’m sure that many of you might have a question such as, “But what about…?” Just let me say that if you have a company, you have provided for your family and you can pay all your operating costs, why not give the extra money you make to the employees who helped you climb the ladder of success? By cutting your price down a bit, you allow your customers to have more money; and by giving some of that profits to your employees, you are helping them to retire with more money. They, in turn, would be able to buy more when they retire.
In short, everybody wins in this situation.
It’s time we get Christian morality in our every day lives.