To the settlers of the Massachusetts Bay Colony, the record spoke for itself. Keayne’s two decades in Boston encompassed three public scandals. One was deeply embarrassing (in 1652, Keayne was found guilty of public drunkenness); one was surely annoying (a decade before, one Goody Sherman had failed to successfully prosecute him for stealing her sow); but the final scandal, and the earliest of the three, gave the merchant the greatest anguish, for it seemed to encapsulate the impossible quandaries of his trade.
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.
For the sake of modern ears, let me paraphrase these “false principles:”
- Buy low, sell high.
- If supply falls, raise prices.
- Pass along losses.
- Buyer and seller beware.
- Charge interest.
If it seems preposterous that anyone might successfully pursue business by the photographic negative of these principles, that underscores how completely our views have changed since the 17th century. In Religion and the Rise of Capitalism, a magnificent book that deserves to be better remembered, the English social critic and economic historian R. H. Tawney describes how the work of Catholic theologians in the late Middle Ages provided the “fundamental assumptions” that shaped Robert Keayne’s world and that capitalism’s proponents would later have to reinterpret, if not displace outright. Tawney said there were two central precepts that guided commercial activity: “that economic interests are subordinate to the real business of life, which is salvation, and that economic conduct is one aspect of personal conduct upon which, as on other parts of it, the rules of morality are binding.”
Taken together, these precepts are directly at odds with the central organizational assumption of capitalism, namely, that we should be guided by self-interest in commercial pursuits. To men of Keayne’s day, the idea that a stable economic system could indeed be organized along the lines of self-interest would have seemed absurd, but it would have also made for a technical dispute that they would never have countenanced, not at least before they had disposed of some pretty serious moral objections.
