it was widely accepted despite the fact that it was so obviously wrong. As a great deal of subsequent research has demonstrated, Catholic areas of western Europe did not lag in their industrial development. And fully developed capitalism had appeared in Europe many centuries before the Reformation.As Hugh Trevor-Roper explained: The idea that large-scale industrial capitalism was ideologically impossible before the Reformation is exploded by the simple fact that it existed. The celebrated Fernand Braudel complained that all historians have opposed this tenuous theory [the Protestant ethic], although they have not managed to be rid of it once and for all. Yet it is clearly false. The northern countries took over the place that earlier had been so long and brilliantly occupied by the old capitalist centres of the Mediterranean. They invented nothing, either in technology or business management. Moreover, during their critical period of economic development, these northern centres of capitalism were Catholic, not Protestant the Reformation still lay well into the future.Everyone writing on capitalism accepts that it rests upon free markets, secure property rights and free (uncoerced) labour. By this definition, capitalism was a very Catholic invention: it first appeared in the great Catholic monastic estates, way back in the 9th century.Many of the very early Church Fathers shared the views prevalent in the Greco-Roman world that commerce is a degrading activity and, at best, involves great moral risk that it is very difficult to avoid sin in the course of buying and selling. However, soon after the conversion of Constantine in 312, attitudes toward commerce began to mellow, leading Augustine to teach that wickedness was not inherent in commerce, but that, as with any occupation, it was up to the individual to live righteously.This helped bring about the eventual deep involvement of the Church in the birth of capitalism, when its earliest forms began to appear in about the 9th century in the great estates belonging to monastic orders. Because of the immense increases in agricultural productivity that resulted from such significant innovations, such as the switch to horses, the heavy mouldboard plough and the three-field system, the monastic estates were no longer limited to mere subsistence agriculture. Instead, they began to specialise in particular crops or products and to sell these at a profit, allowing them to purchase their other needs, which led them to initiate a cash economy. They also began to reinvest their profits to increase their productive capacity, and as their incomes continued to mount, this led many monasteries to became banks, lending to the nobility as they did to so many Crusaders.As Randall Collins noted, this was not merely a sort of proto capitalism involving only the institutional preconditions for capitalism ... but a version of the developed characteristics of capitalism itself. Collins referred to this as religious capitalism, adding that the dynamism of the medieval economy was primarily that of the Church.Throughout the medieval era the Church was by far the largest landowner in Europe, and its liquid assets and annual income not only far surpassed that of the wealthiest king, but