Thanks UC, I hadn't really put that together before. The natural progression then proceeded from State mandated religion to freedom of religion and separation of church and state.
The Biblical truth behind capitalism resides in the acknowledgment that God gives men their place on earth, numbers their days, establishes their boundaries, and that each man is thus required to glorify God in thought, word and deed in this life.
If the reason for our very existence is to glorify God on earth, then it follows that our work is the fruit of the spirit, and thus that work is good and God-given.
Before the Reformation, men were told their lives on earth were simply preface to their heavenly existence, and so it didn't matter that despots ruled over them. This myopia is what accounts for the lethargy found in places even today like Catholic Central and South America, etc.
But as the Bible was actually read by the masses during the Reformation, men understood that God had ordained them to be fruitful now, and thus they had a right and responsibility on this earth today, according to God's will for them, which included a liberty of life and conscience.
I really like Loraine (a guy) Boettner's book, "The Reformed Doctrine of Predestination," especially the last chapter...
As Uncle Chip pointed out, the correct understanding of separation between church and state (while always maintaining the state's responsibility to protect the rights of the church) was a gradual process coming to fruition in the reformed churches...
And in regard to the relationship which existed between the Church and the State, the Lutherans were content to allow the local princes great influence in the Church or even to allow them to determine the religion within their bounds — a tendency leading toward the establishment of a State Church — while the Reformed soon came to demand complete separation between Church and State." "At the time of the Reformation the Lutheran Church did not make such a complete break with the Catholic Church as did the Reformed. In fact some Lutherans point out with pride that Lutheranism was a "moderate Reformation." While all protestants appealed to the Bible as a final authority, the tendency in Lutheranism was to keep as much of the old system as did not have to be thrown out, while the tendency in the Reformed Church was to throw out all that did not have to be kept.
Even those who worked against the Reformation knew the inherent power and truth of its goal -- individual freedom according to the words and will of God...
"The testimony of Emilio Castelar, the famous Spanish statesman, orator and scholar, is interesting and valuable. Castelar had been professor of Philosophy in the University of Madrid before he entered politics, and he was made president of the republic which was set up by the Liberals in 1873. As a Roman Catholic he hated Calvin and Calvinism. Says he: "It was necessary for the republican movement that there should come a morality more austere than Luther's, the morality of Calvin, and a Church more democratic than the German, the Church of Geneva. The Anglo-Saxon democracy has for its lineage a book of a primitive society — the Bible. It is the product of a severe theology learned by the few Christian fugitives in the gloomy cities of Holland and Switzerland, where the morose shade of Calvin still wanders . . . And it remains serenely in its grandeur, forming the most dignified, most moral and most enlightened portion of the human race."
The Reformation underscored the validity of the "trickle-down theory of economics." As Christ told us, "For unto whomsoever much is given, of him shall be much required" (Luke 12:48). All philanthropy is founded on sharing the bounty of God's world by producing more of it through the God-given mandate to help our fellow man become likewise productive. Thus the truest basis for a sound and God-glorifying capitalism is to abide by Paul's instructions...
"And whatsoever ye do in word or deed, do all in the name of the Lord Jesus, giving thanks to God and the Father by him." -- Colossians 3:17