An Essay on Mediaeval Economic Teaching

SECTION 1.-AIM AND SCOPE OF THE ESSAY

It is the aim of this essay to examine and present in as concise a form as possible the principles and rules which guided and regulated men in their economic and social relations during the period known as the Middle Ages. The failure of the teaching of the so-called orthodox or classical political economists to bring peace and security to society has caused those interested in social and economic problems to inquire with ever-increasing anxiety into the economic teaching which the orthodox economy replaced; and this inquiry has revealed that each system of economic thought that has from time to time been accepted can be properly understood only by a knowledge of the earlier system out of which it grew. A process of historical inquiry of this kind leads one ultimately to the Middle Ages, and it is certainly not too much to say that no study of modern European economic thought can be complete or satisfactory unless it is based upon a knowledge of the economic teaching which was accepted in medi?val Europe. Therefore, while many will deny that the economic teaching of that period is deserving of approval, or that it is capable of being applied to the conditions of the present day, none will deny that it is worthy of careful and impartial investigation.

There is thus a demand for information upon the subject dealt with in this essay. On the other hand, the supply of such information in the English language is extremely limited. The books, such as Ingram's History of Political Economy and Haney's History of Economic Thought, which deal with the whole of economic history, necessarily devote but a few pages to the Middle Ages. Ashley's Economic History contains two excellent chapters dealing with the Canonist teaching; but, while these chapters contain a mass of most valuable information on particular branches of the medi?val doctrines, they do not perhaps sufficiently indicate the relation between them, nor do they lay sufficient emphasis upon the fundamental philosophical principles out of which the whole system sprang. One cannot sufficiently acknowledge the debt which English students are under to Sir William Ashley for his examination of medi?val opinion on economic matters; his book is frequently and gratefully cited as an authority in the following pages; but it is undeniable that his treatment of the subject suffers somewhat on account of its being introduced but incidentally into a work dealing mainly with English economic practice. Dr. Cunningham has also made many valuable contributions to particular aspects of the subject; and there have also been published, principally in Catholic periodicals, many important monographs on special points; but so far there has not appeared in English any treatise, which is devoted exclusively to medi?val economic opinion and attempts to treat the whole subject completely. It is this want in our economic literature that has tempted the author to publish the present essay, although he is fully aware of its many defects.

It is necessary, in the first place, to indicate precisely the extent of the subject with which we propose to deal; and with this end in view to give a definition of the three words, 'medi?val, economic, teaching.'

SECTION 2.-EXPLANATION OF THE TITLE

§ 1. Medi?val.

Ingram, in his well-known book on economic history, following the opinion of Comte, refuses to consider the fourteenth and fifteenth centuries as part of the Middle Ages.[1] We intend, however, to treat of economic teaching up to the end of the fifteenth century. The best modern judges are agreed that the term Middle Ages must not be given a hard-and-fast meaning, but that it is capable of bearing a very elastic interpretation. The definition given in the Catholic Encyclop?dia is: 'a term commonly used to designate that period of European history between the Fall of the Roman Empire and about the middle of the fifteenth century. The precise dates of the beginning, culmination, and end of the Middle Ages are more or less arbitrarily assumed according to the point of view adopted.' The eleventh edition of the Encyclop?dia Britannica contains a similar opinion: 'This name is commonly given to that period of European history which lies between what are known as ancient and modern times, and which has generally been considered as extending from about the middle of the fifth to about the middle of the fifteenth centuries. The two dates adopted in old text-books were 476 and 1453, from the setting aside of the last emperor of the west until the fall of Constantinople. In reality it is impossible to fix any exact dates for the opening and close of such a period.'

[Footnote 1: History of Political Economy, p. 35.]

We are therefore justified in considering the fifteenth century as comprised hi the Middle Ages. This is especially so in the domain of economic theory. In actual practice the fourteenth and fifteenth centuries may have presented the appearance rather of the first stage of a new than of the last stage of an old era. This is Ingram's view. However true this may be of practice, it is not at all true of theory, which, as we shall see, continued to be entirely based on the writings of an author of the thirteenth century. Ingram admits this incidentally: 'During the fourteenth and fifteenth centuries the Catholic-feudal system was breaking down by the mutual conflicts of its own official members, while the constituent elements of a new order were rising beneath it. The movements of this phase can scarcely be said to find an echo in any contemporary economic literature.'[1] We need not therefore apologise further for including a consideration of the fourteenth and fifteenth centuries in our investigations as to the economic teaching of the Middle Ages. We are supported in doing so by such excellent authorities as Jourdain,[2] Roscher,[3] and Cossa.[4] Haney, in his History of Economic Thought,[5] says: 'It seems more nearly true to regard the years about 1500 as marking the end of medi?val times.... On large lines, and from the viewpoint of systems of thought rather than systems of industry, the Middle Ages may with profit be divided into two periods. From 400 down to 1200, or shortly thereafter, constitutes the first. During these years Christian theology opposed Roman institutions, and Germanic customs were superposed, until through action and reaction all were blended. This was the reconstruction; it was the "stormy struggle" to found a new ecclesiastical and civil system. From 1200 on to 1500 the world of thought settled to its level. Feudalism and scholasticism, the corner-stones of medi?valism, emerged and were dominant.'

[Footnote 1: Op. cit., p. 35.]

[Footnote 2: Mémoires sur les commencements de l'économie politique dans les écoles du moyen age, Académie des Inscriptions et Belles-Lettres, vol. 28.]

[Footnote 3: Geschichte zur National-?konomik in Deutschland.]

[Footnote 4: Introduction to the Study of Political Economy.]

[Footnote 5: P. 70.]

We shall not continue the study further than the beginning of the sixteenth century. It is true that, if we were to refer to several sixteenth-century authors, we should be in possession of a very highly developed and detailed mass of teaching on many points which earlier authors left to some extent obscure. We deliberately refrain nevertheless from doing so, because the whole nature of the sixteenth-century literature was different from that of the fourteenth and fifteenth; the early years of the sixteenth century witnessed the abrogation of the central authority which was a basic condition of the success of the medi?val system; and the same period also witnessed 'radical economic changes, reacting more and more on the scholastic doctrines, which found fewer and fewer defenders in their original form.'[1]

[Footnote 1: Cossa, op. cit., p. 151. Ashley warns us that 'we must be careful not to interpret the writers of the fifteenth century by the writers of the seventeenth' (Economic History, vol. i. pt. ii. p. 387). These later writers sometimes contain historical accounts of controversies in previous centuries, and are relevant on this account.]

§ 2. Economic.

It must be clearly understood that the political economy of the medi?vals was not a science, like modern political economy, but an art. 'It is a branch of the virtue of prudence; it is half-way between morality, which regulates the conduct of the individual, and politics, which regulates the conduct of the sovereign. It is the morality of the family or of the head of the family, from the point of view of the good administration of the patrimony, just as politics is the morality of the sovereign, from the point of view of the good government of the State. There is as yet no question of economic laws in the sense of historical and descriptive laws; and political economy, not yet existing in the form of a science, is not more than a branch of that great tree which is called ethics, or the art of living well.'[1] 'The doctrine of the canon law,' says Sir William Ashley, 'differed from modern economics in being an art rather than a science. It was a body of rules and prescriptions as to conduct, rather than of conclusions as to fact. All art indeed in this sense rests on science; but the science on which the canonist doctrine rested was theology. Theology, or rather that branch of it which we may call Christian ethics, laid down certain principles of right and wrong in the economic sphere; and it was the work of the canonists to apply them to specific transactions and to pronounce judgment as to their permissibility.'[2] The conception of economic laws, in the modern sense, was quite foreign to the medi?val treatment of the subject. It was only in the middle of the fourteenth century that anything approaching a scientific examination of the phenomena of economic life appeared, and that was only in relation to a particular subject, namely, the doctrine of money.[3]

[Footnote 1: Rambaud, Histoire des Doctrines économiques, p. 39. 'It is evident that a household is a mean between the individual and the city or Kingdom, since just as the individual is part of the household, so is the household part of the city or Kingdom, and therefore, just as prudence commonly so called which governs the individual is distinct from political prudence, so must domestic prudence (oeconomica) be distinct from both. Riches are related to domestic prudence, not as its last end, but as its instrument. On the other hand, the end of political prudence is a good life in general as regards the conduct of the household. In Ethics i. the philosopher speaks of riches as the end of political prudence, by way of example, and in accordance with the opinion of many.' Aquinas, Summa II. ii. 50. 3, and see Sent. III. xxxiii. 3 and 4. 'Practica quidem scientia est, quae recte vivendi modum ac disciplinae formam secundum virtutum institutionem disponit. Et haec dividitur in tres, scilicet: primo ethicam, id est moralem; et secundo oeconomicam, id est dispensativam; et tertio politicam, id est civilem' (Vincent de Beauvais, Speculum, VII. i. 2).]

[Footnote 2: Op. cit., vol. i. part. ii. p. 379.]

[Footnote 3: Rambaud, op. cit., p. 83; Ingram, op. cit., p. 36. So marked was the contrast between the medi?val and modern conceptions of economics that the appearance of this one treatise has been said by one high authority to have been the signal of the dawn of the Renaissance (Espinas, Histoire des Doctrines économiques, p. 110).]

To say that the medi?val method of approaching economic problems was fundamentally different from the modern, is not in any sense to be taken as indicating disapproval of the former. On the contrary, it is the general opinion to-day that the so-called classical treatment of economics has proved disastrous in its application to real life, and that future generations will witness a retreat to the earlier position. The classical economists committed the cardinal error of subordinating man to wealth, and consumption to production. In their attempt to preserve symmetry and order in their generalisations they constructed a weird creature, the economic man, who never existed, and never could exist. The medi?vals made no such mistake. They insisted that all production and gain which did not lead to the good of man was not alone wasteful, but positively evil; and that man was infinitely more important than wealth. When he exclaims that 'Production is on account of man, not man of production,' Antoninus of Florence sums up in a few words the whole view-point of his age.[1] 'Consumption,' according to Dr. Cunningham, 'was the aspect of human nature which attracted most attention.... Regulating consumption wisely was the chief practical problem in medi?val economics.'[2] The great practical benefits of such a treatment of the problems relating to the acquisition and enjoyment of material wealth must be obvious to every one who is familiar with the condition of the world after a century of classical political economy. 'To subordinate the economic order to the social order, to submit the industrial activity of man to the consideration of the final and general end of his whole being, is a principle which must exert on every department of the science of wealth, an influence easy to understand. Economic laws are the codification of the material activity of a sort of homo economicus; of a being, who, having no end in view but wealth, produces all he can, distributes his produce in the way that suits him best, and consumes as much as he can. Self interest alone dictates his conduct.'[3] Economics, far from being a science whose highest aim was to evolve a series of abstractions, was a practical guide to the conduct of everyday affairs.[4] 'The pre-eminence of morality in the domain of economics constitutes at the same time the distinctive feature, the particular merit, and the great teaching of the economic lessons of this period.'[5]

[Footnote 1: Irish Theological Quarterly, vol. vii. p. 151.]

[Footnote 2: Christianity and Economic Science, p. 10.]

[Footnote 3: Brants, Les Théories économiques aux xiii^{e} et xii^{e} siècles, p. 34.]

[Footnote 4: Gide and Rist, History of Economic Doctrines, Eng. trans., p. 110.]

[Footnote 5: Brants, op. cit., p. 9.]

Dr. Cunningham draws attention to the fact that the existence of such a universally received code of economic morality was largely due to the comparative simplicity of the medi?val social structure, where the relations of persons were all important, in comparison with the modern order, where the exchange of things is the dominant factor. He further draws attention to the changes which affected the whole constitution of society in the sixteenth and seventeenth centuries, and proceeds: 'These changes had a very important bearing on all questions of commercial morality; so long as economic dealings were based on a system of personal relationships they all bore an implied moral character. To supply a bad article was morally wrong, to demand excessive payment for goods or for labour was extortion, and the right or wrong of every transaction was easily understood.'[1] The application of ethics to economic transactions was rendered possible by the existence of one universally recognised code of morality, and the presence of one universally accepted moral teacher. 'In the thirteenth century, the ecclesiastical organisation gave a unity to the social structure throughout the whole of Western Europe; over the area in which the Pope was recognised as the spiritual and the Emperor as the temporal vicar of God, political and racial differences were relatively unimportant. For economic purposes it is scarcely necessary to distinguish different countries from one another in the thirteenth century, for there were fewer barriers to social intercourse within the limits of Christendom than there are to-day.... Similar ecclesiastical canons, and similar laws prevailed over large areas, where very different admixtures of civil and barbaric laws were in vogue. Christendom, though broken into so many fragments politically, was one organised society for all the purposes of economic life, because there was such free intercommunication between its parts.'[2] 'There were three great threads,' we read later in the same book, 'which ran through the whole social system of Christendom. First of all there was a common religious life, with the powerful weapons of spiritual censure and excommunication which it placed in the hands of the clergy, so that they were able to enforce the line of policy which Rome approved. Then there was the great judicial system of canon law, a common code with similar tribunals for the whole of Western Christendom, dealing not merely with strictly ecclesiastical affairs, but with many matters that we should regard as economic, such as questions of commercial morality, and also with social welfare as affected by the law of marriage and the disposition of property by will....'[3] 'To the influence of Christianity as a moral doctrine,' says Dr. Ingram, 'was added that of the Church as an organisation, charged with the application of the doctrine to men's daily transactions. Besides the teaching of the sacred books there was a mass of ecclesiastical legislation providing specific prescriptions for the conduct of the faithful. And this legislation dealt with the economic as well as with other provinces of social activity.'[4]

[Footnote 1: Growth of English Industry and Commerce, vol. i. p. 465.]

[Footnote 2: Cunningham, Western Civilisation, vol. ii. pp. 2-3.]

[Footnote 3: Ibid., p. 67.]

[Footnote 4: Op. cit., p. 27.]

The teaching of the medi?val Church, therefore, on economic affairs was but the application to particular facts and cases of its general moral teaching. The suggestion, so often put forward by so-called Christian socialists, that Christianity was the exponent of a special social theory of its own, is unfounded. The direct opposite would be nearer the truth. Far from concerning itself with the outward forms of the political or economic structure, Christianity concentrated its attention on the conduct of the individual. If Christianity can be said to have possessed any distinctive social theory, it was intense individualism. 'Christianity brought, from the point of view of morals, an altogether new force by the distinctly individual and personal character of its precepts. Duty, vice or virtue, eternal punishment-all are marked with the most individualist imprint that can be imagined. No social or political theory appeared, because it was through the individual that society was to be regenerated.... We can say with truth that there is not any Christian political economy-in the sense in which there is a Christian morality or a Christian dogma-any more than there is a Christian physic or a Christian medicine.'[1] In seeking to learn Christian teaching of the Middle Ages on economic matters, we must therefore not look for special economic treatises in the modern sense, but seek our principles in the works dealing with general morality, in the Canon Law, and in the commentaries on the Civil Law. 'We find the first worked out economic theory for the whole Catholic world in the Corpus Juris Canonici, that product of medi?val science in which for so many centuries theology, jurisprudence, philosophy, and politics were treated....'[2]

[Footnote 1: Rambaud, op. cit., pp. 34-5; Cunningham, Western

Civilisation, vol. ii. p. 8.]

[Footnote 2: Roscher, op. cit., p. 5. It must not be concluded that all the opinions expressed by the theologians and lawyers were necessarily the official teaching of the Church. Brants says: 'It is not our intention to attribute to the Church all the opinions of this period; certainly the spirit of the Church dominated the great majority of the writers, but one must not conclude from this that all their writings are entitled to rank as doctrinal teaching' (Op. cit., p. 6).]

There is not to be found in the writers of the early Middle Ages, that is to say from the eighth to the thirteenth centuries, a trace of any attention given to what we at the present day would designate economic questions. Usury was condemned by the decrees of several councils, but the reasons of this prohibition were not given, nor was the question made the subject of any dialectical controversy; commerce was so undeveloped as to escape the attention of those who sought to guide the people in their daily life; and money was accepted as the inevitable instrument of exchange, without any discussion of its origin or the laws which regulated it.

The writings of this period therefore betray no sign of any interest in economic affairs. Jourdain says that he carefully examined the works of Alcuin, Rabanas Mauras, Scotus Erigenus, Hincmar, Gerbert, St. Anselm, and Abelard-the greatest lights of theology and philosophy in the early Middle Ages-without finding a single passage to suggest that any of these authors suspected that the pursuit of riches, which they despised, occupied a sufficiently large place in national as well as in individual life, to offer to the philosopher a subject fruitful in reflections and results. The only work which might be adduced as a partial exception to this rule is the Polycraticus of John of Salisbury; but even this treatise contained only some scattered moral reflections on luxury and on zeal for the interest of the public treasury.[1]

[Footnote 1: Jourdain, op. cit., p. 4.]

Two causes contributed to produce this almost total lack of interest in economic subjects. One was the miserable condition of society, still only partially rescued from the ravages of the barbarians, and half organised, almost without industry and commerce; the other was the absence of all economic tradition. The existence of the Categories and Hermenia of Aristotle ensured that the chain of logical study was not broken; the works of Donatus and Priscian sustained some glimmer of interest in grammatical theory; certain rude notions of physics and astronomy were kept alive by the preservation of such ancient elementary treatises as those of Marcian Capella; but economics had no share in the heritage of the past. Not only had the writings of the ancients, who dealt to some extent with the theory of wealth, been destroyed, but the very traces of their teaching had been long forgotten. A good example of the state of thought in economic matters is furnished by the treatment which money receives in the Etymologies of Isidore of Seville, which was regarded in the early Middle Ages as a reliable encyclop?dia. 'Money,' according to Isidore, 'is so called because it warns, monet, lest any fraud should enter into its composition or its weight. The piece of money is the coin of gold, silver, or bronze, which is called nomisma, because it bears the imprint of the name and likeness of the prince.... The pieces of money nummi have been so called from the King of Rome, Numa, who was the first among the Latins to mark them with the imprint of his image and name.'[1] Is it any wonder that the early Middle Ages were barren of economic doctrines, when this was the best instruction to which they had access?

[Footnote 1: Etymol. xvi. 17.]

In the course of the thirteenth century a great change occurred. The advance of civilisation, the increased organisation of feudalism, the development of industry, and the extension of commerce, largely under the influence of the Crusades, all created a condition of affairs in which economic questions could no longer be overlooked or neglected. At the same time the renewed study of the writings of Aristotle served to throw a flood of new light on the nature of wealth.

The Ethics and Politics of Aristotle, although they are not principally devoted to a treatment of the theory of wealth, do in fact deal with that subject incidentally. Two points in particular are touched on, the utility of money and the injustice of usury. The passages of the philosopher dealing with these subjects are of particular interest, as they may be said, with a good deal of truth, to be the true starting point of medi?val economics.[1] The writings of Aristotle arrested the attention, and aroused the admiration of the theologians of the thirteenth century; and it would be quite impossible to exaggerate the influence which they exercised on the later development of medi?val thought. Albertus Magnus digested, interpreted, and systematised the whole of the works of the Stagyrite; and was so steeped in the lessons of his philosophic master as to be dubbed by some 'the ape of Aristotle.' Aquinas, who was a pupil of Albertus, also studied and commented on Aristotle, whose aid he was always ready to invoke in the solution of all his difficulties. With the single and strange exception of Vincent de Beauvais, Aristotle's teaching on money was accepted by all the writers of the thirteenth century, and was followed by later generations.[2] The influence of Aristotle is apparent in every article of the Summa, which was itself the starting point from which all discussion sprang for the following two centuries; and it is not too much to say that the Stagyrite had a decisive influence on the introduction of economic notions into the controversies of the Schools. 'We find in the writings of St. Thomas Aquinas,' says Ingram, 'the economic doctrines of Aristotle reproduced with a partial infusion of Christian elements.'[3]

[Footnote 1: Jourdain, op. cit., p. 7.]

[Footnote 2: Ibid., p. 12.]

[Footnote 3: Op. cit., p. 27. Espinas thinks that the influence of Aristotle in this respect has been exaggerated. (Histoire des Doctrines économiques, p. 80.)]

In support of the account we have given of the development of economic thought in the thirteenth century, we may quote Cossa: 'The revival of economic studies in the Middle Ages only dates from the thirteenth century. It was due in a great measure to a study of the Ethics and Politics of Aristotle, whose theories on wealth were paraphrased by a considerable number of commentators. Before that period we can only find moral and religious dissertations on such topics as the proper use of material goods, the dangers of luxury, and undue desire for wealth. This is easily explained when we take into consideration (1) the prevalent influence of religious ideas at the time, (2) the strong reaction against the materialism of pagan antiquity, (3) the predominance of natural economy, (4) the small importance of international trade, and (5) the decay of the profane sciences, and the metaphysical tendencies of the more solid thinkers of the Middle Ages.'[1]

[Footnote 1: Op. cit., p. 14; Espinas, op. cit., p. 80.]

The teaching of Aquinas upon economic affairs remained the groundwork of all the later writers until the end of the fifteenth century. His opinions on various points were amplified and explained by later authors in more detail than he himself employed; monographs of considerable length were devoted to the treatment of questions which he dismissed in a single article; but the development which took place was essentially one of amplification rather than opposition. The monographists of the later fifteenth century treat usury and sale in considerable detail; many refinements are indicated which are not to be found in the Summa; but it is quite safe to say that none of these later writers ever pretended to supersede the teaching of Aquinas, who was always admitted to be the ultimate authority. 'During the fourteenth and fifteenth centuries, the general political doctrine of Aquinas was maintained with merely subordinate modifications.'[1] 'The canonist doctrine of the fifteenth century,' according to Sir William Ashley, 'was but a development of the principles to which the Church had already given its sanction in earlier centuries. It was the outcome of these same principles working in a modified environment. But it may more fairly be said to present a system of economic thought, because it was no longer a collection of unrelated opinions, but a connected whole. The tendency towards a separate department of study is shown by the ever-increasing space devoted to the discussion of general economic topics in general theological treatises, and more notably still in the manuals of casuistry for the use of the confessional, and handbooks of canon law for the use of ecclesiastical lawyers. It was shown even more distinctly by the appearance of a shoal of special treatises on such subjects as contracts, exchange, and money, not to mention those on usury.'[2] In all this development, however, the principles enunciated by Aquinas, and through him, by Aristotle, though they may have been illustrated and applied to new instances, were never rejected. The study of the writers of this period is therefore the study of an organic whole, the germ of which is to be found in the writings of Aquinas.[3]

[Footnote 1: Ingram, op. cit., p. 35.]

[Footnote 2: Op. cit., vol. i. pt. ii. p. 382.]

[Footnote 3: The volume of literature which bears more or less on economic matters dating from the fourteenth and fifteenth centuries is colossal. By far the best account of it is to be found in Endemann's Studien in der Romanisch-canonistischen Wirthschafts- und Rechtslehre, vol. i. pp. 25 et seq. Many of the more important works written during the period are reprinted in the Tractatus Universi Juris, vols. vi. and vii. The appendix to the first chapter of Reseller's Geschichte also contains a valuable account of certain typical writers, especially of Langenstein and Henricus de Hoyta. Brants gives a useful bibliographical list of both medi?val and modern authorities in the second chapter of his Théories économiques aux xiii^{e} et xiv^{e} siècles. Those who desire further information about any particular writer of the period will find it in Stintzing, Literaturgeschichte des r?m. Rechts, or in Chevallier's Répertoire historique des Sources du moyen age; Bio-bibliographie. The authorship of the treatise De Regimine Principum, from which we shall frequently quote, often attributed to Aquinas, is very doubtful. The most probable opinion is that the first book and the first three chapters of the second are by Aquinas, and the remainder by another writer. (See Franck, Réformateurs et Publicistes, vol. i. p. 83.)]

§ 3. Teaching.

We shall confine our attention in this essay to the economic teaching of the Middle Ages, and shall not deal with the actual practice of the period. It may be objected that a study of the former without a study of the latter is futile and useless; that the economic teaching of a period can only be satisfactorily learnt from a study of its actual economic institutions and customs; and that the scholastic teaching was nothing but a casuistical attempt to reconcile the early Christian dogmas with the ever-widening exigencies of real life. Endemann, for instance, devotes a great part of his invaluable books on the subject to demonstrating how impracticable the canonist teaching was when it was applied to real life, and recounting the casuistical devices that were resorted to in order to reconcile the teaching of the Church with the accepted mercantile customs of the time. Endemann, however, in spite of his colossal research and unrivalled acquaintance with original authorities, was essentially hostile to the system which he undertook to explain, and thus lacked the most essential quality of a satisfactory expositor, namely, sympathy with his subject. He does not appear to have realised that development and adaptability to new situations, far from being marks of impracticability, are rather the signs of vitality and of elasticity. This is not the place to discuss how far the doctrine of the late fifteenth differed from that of the early thirteenth century; that is a matter which will appear below when each of the leading principles of scholastic economic teaching is separately considered; it is sufficient to say here that we agree entirely with Brants, in opposition to Endemann, that the change which took place in the interval was one of development, and not of opposition. 'The law,' says Brants, 'remained identical and unchanged; justice and charity-nobody can justly enrich himself at the expense of his neighbour or of the State, but the reasons justifying gain are multiplied according as riches are developed.'[1] 'The canonist doctrine of the fifteenth century was but a development of the principles to which the Church had already given its sanction in earlier centuries. It was the outcome of these same principles working in a modified environment.'[2] With these conclusions of Brants and Ashley we are in entire agreement.

[Footnote 1: Brants, op. cit., p. 9.]

[Footnote 2: Ashley, op. cit., p. 381.]

Let us say in passing that the assumption that the medi?val teaching grew out of contemporary practice, rather than that the latter grew out of the former, is one which does not find acceptance among the majority of the students of the subject. The problem whether a correct understanding of medi?val economic life can be best attained by first studying the teaching or the practice is possibly no more soluble than the old riddle of the hen and the egg; but it may at least be argued that there is a good deal to be said on both sides. The supporters of the view that practice moulded theory are by no means unopposed. There is no doubt that in many respects the exigencies of everyday commercial concerns came into conflict with the tenets of canon law and scholastic opinion; but the admission of this fact does not at all prove that the former was the element which modified the latter, rather than the latter the former. In so far as the expansion of commerce and the increasing complexity of intercourse raised questions which seemed to indicate that mercantile convenience conflicted with received teaching, it is probable that the difficulty was not so much caused by a contradiction between the former and the latter, as by the fact that an interpretation of the doctrine as applied to the facts of the new situation was not available before the new situation had actually arisen. This is a phenomenon frequently met with at the present day in legal practice; but no lawyer would dream of asserting that, because there had arisen an unprecedented state of facts, to which the application of the law was a matter of doubt or difficulty, therefore the law itself was obsolete or incomplete. Examples of such a conflict are familiar to any one who has ever studied the case law on any particular subject, either in a country such as England, where the law is unwritten, or in continental countries, where the most exhaustive and complete codes have been framed. Nevertheless, in spite of the occurrence of such difficulties, it would be foolish to contend that the laws in force for the time being have not a greater influence on the practice of mercantile transactions than the convenience of merchants has upon the law. How much more potent must this influence have been when the law did not apply simply to outward observances, but to the inmost recesses of the consciences of believing Christians!

The opinion that medi?val teaching exercised a profound effect on medi?val practice is supported by authorities of the weight of Ashley, Ingram, and Cunningham,[1] the last of whom was in some respects unsympathetic to the teaching the influence of which he rates so highly. 'It has indeed,' writes Sir William Ashley, 'not infrequently been hinted that all the elaborate argumentation of canonists and theologians was "a cobweb of the brain," with no vital relation to real life. Certain German writers have, for instance, maintained that, alongside of the canonist doctrine with regard to trade, there existed in medi?val Europe a commercial law, recognised in the secular courts, and altogether opposed to the peculiar doctrines of the canonists. It is true that parts of mercantile jurisprudence, such as the law of partnership, had to a large extent originated in the social conditions of the time, and would have probably made their appearance even if there had been no canon law or theology. But though there were branches of commercial law which were, in the main, independent of the canonist doctrine, there were none that were opposed to it. On the fundamental points of usury and just price, commercial law in the later Middle Ages adopted completely the principles of the canonists. How entirely these principles were recognised in the practice of the courts which had most to do with commercial suits, viz. those of the towns, is sufficiently shown by the frequent enactments as to usury and as to reasonable price which are found in the town ordinances of the Middle Ages; in England as well as in the rest of Western Europe.... Whatever may have been the effect, direct or indirect, of the canonist doctrine on legislation, it is certain that on its other side, as entering into the moral teaching of the Church through the pulpit and the confessional, its influence was general and persistent, even if it were not always completely successful.'[2] 'Every great change of opinion on the destinies of man,' says Ingram, 'and the guiding principles of conduct must react in the sphere of material interests; and the Catholic religion had a profound influence on the economic life of the Middle Ages.... The constant presentations to the general mind and conscience of Christian ideas, the dogmatic bases of which were as yet scarcely assailed by scepticism, must have had a powerful effect in moralising life.'[3] According to Dr. Cunningham: 'The medi?val doctrine of price was not a theory intended to explain the phenomena of society, but it was laid down as the basis of rules which should control the conduct of society and of individuals. At the same time current opinion seems to have been so fully formed in accordance with it that a brief enumeration of the doctrine of a just price will serve to set the practice of the day in clearer light. In regard to other matters, it is difficult to determine how far public opinion was swayed by practical experience, and how far it was really moulded by Christian teaching-this is the case in regard to usury. But there can be little doubt about the doctrine of price-which really underlies a great deal of commercial and gild regulations, and is constantly implied in the early legislation on mercantile affairs.'[4] The same author expresses the same opinion in another work: 'The Christian doctrine of price, and Christian condemnation of gain at the expense of another man, affected all the medi?val organisation of municipal life and regulation of inter-municipal commerce, and introduced marked contrasts to the conditions of business in ancient cities. The Christian appreciation of the duty of work rendered the lot of the medi?val villain a very different thing from that of the slave of the ancient empire. The responsibility of proprietors, like the responsibility of prices, was so far insisted on as to place substantial checks on tyranny of every kind. For these principles were not mere pious opinions, but effective maxims in practical life. Owing to the circumstances in which the vestiges of Roman civilisation were locally maintained, and the foundations of the new society were laid, there was ample opportunity for Christian teaching and example to have a marked influence on its development.'[5] In Dr. Cunningham's book entitled Politics and Economics the same opinion is expressed:[6] 'Religious and industrial life were closely interconnected, and there were countless points at which the principles of divine law must have been brought to bear on the transaction of business, altogether apart from any formal tribunal. Nor must we forget the opportunities which directors had for influencing the conduct of penitents.... Partly through the operation of the royal power, partly through the decisions of ecclesiastical authorities, but more generally through the influence of a Christian public opinion which had been gradually created, the whole industrial organism took its shape, and the acknowledged economic principles were framed.' We have quoted these passages from Dr. Cunningham's works at length because they are of great value in helping us to estimate the rival parts played by theory and practice in medi?val economic teaching; in the first place, because the author was by no means prepossessed in favour of the teaching of the canonists, but rather unsympathetic to it; in the second place, because, although his work was concerned primarily with practice, he found himself obliged to make a study of theory before he could properly understand the practice; and lastly, because they point particularly to the effect of the teaching on just price. When we come to speak of this part of the subject we shall find that Dr. Cunningham failed to appreciate the true significance of the canonist doctrine. If an eminent author, who does not quite appreciate the full import of this doctrine, and who is to some extent contemptuous of its practical value, nevertheless asserts that it exercised an all-powerful influence on the practice of the age in which it was preached, we are surely justified in asserting that the study of theory may be profitably pursued without a preliminary history of the contemporary practice.

[Footnote 1: Even Endemann warns his readers against assuming that the canonist teaching had no influence on everyday life. (Studien, vol. ii. p. 404.)]

[Footnote 2: Ashley, op. cit., vol. i. pt. ii. pp. 383-85. Again: 'The later canonist dialectic was the midwife of modern economics' (ibid., p. 397).]

[Footnote 3: History of Political Economy, p. 26.]

[Footnote 4: Cunningham, Growth of English Industry and Commerce, vol. i. p. 252.]

[Footnote 5: Cunningham, Western Civilisation, vol. ii. pp. 9-10.]

[Footnote 6: P. 25.]

But we must not be taken to suggest that there were no conflicts between the teaching and the practice of the Middle Ages. As we have seen, the economic teaching of that period was ethical, and it would be absurd to assert that every man who lived in the Middle Ages lived up to the high standard of ethical conduct which was proposed by the Church.[1] One might as well say that stealing was an unknown crime in England since the passing of the Larceny Act. All we do suggest is that the theory had such an important and incalculable influence upon practice that the study of it is not rendered futile or useless because of occasional or even frequent departures from it in real life. Even Endemann says: 'The teaching of the canon law presents a noble edifice not less splendid in its methods than in its results. It embraces the whole material and spiritual natures of human society with such power and completeness that verily no room is left for any other life than that decreed by its dogmas.'[2] 'The aim of the Church,' says Janssen, 'in view of the tremendous agencies through which it worked, in view of the dominion which it really exercised, cannot have the impression of its greatness effaced by the unfortunate fact that all was not accomplished that had been planned.'[3] The fact that tyranny may have been exercised by some provincial governor in an outlying island of the Roman Empire cannot close our eyes to the benefits to be derived from a study of the code of Justinian; nor can a remembrance of the manner in which English law is administered in Ireland in times of excitement, blind us to the political lessons to be learned from an examination of the British constitution.

[Footnote 1: The many devices which were resorted to in order to evade the prohibition of usury are explained in Dr. Cunningham's Growth of English Industry and Commerce, vol. i. p. 255. See also Delisle, L'Administration financière des Templiers, Académie des Inscriptions et Belles-Lettres, 1889, vol. xxxiii. pt. ii., and Ashley, Economic History, vol. i. pt. ii. p. 426. The Summa Pastoralis of Raymond de Pennafort analyses and demolishes many of the commoner devices which were employed to evade the usury laws. On the part played by the Jews, see Brants, op. cit., Appendix I.]

[Footnote 2: Die National?konomischen Grunds?tze der canonistischen

Lehre, p. 192.]

[Footnote 3: History of the German People (Eng. trans.), vol. ii. p. 99.]

SECTION 3.-VALUE OF THE STUDY OF THE SUBJECT

The question may be asked whether the study of a system of economic teaching, which, even if it ever did receive anything approaching universal assent, has long since ceased to do so, is not a waste of labour. We can answer that question in the negative, for two reasons. In the first place, as we said above, a proper understanding of the earlier periods of the development of a body of knowledge is indispensable for a full appreciation of the later. Even if the canonist system were not worth studying for its own sake, it would be deserving of attention on account of the light it throws on the development of later economic doctrine. 'However the canonist theory may contrast with or resemble modern economics, it is too important a part of the history of human thought to be disregarded,' says Sir William Ashley. 'As we cannot fully understand the work of Adam Smith without giving some attention to the physiocrats, nor the physiocrats without looking at the mercantilists: so the beginnings of mercantile theory are hardly intelligible without a knowledge of the canonist doctrine towards which that theory stands in the relation partly of a continuation, partly of a protest.'[1]

[Footnote 1: Op. cit., vol. i. pt. ii. p. 381.]

But we venture to assert that the study of canonist economics, far from being useful simply as an introduction to later theories, is of great value in furnishing us with assistance in the solution of the economic and social problems of the present day. The last fifty years have witnessed a reaction against the scientific abstractions of the classical economists, and modern thinkers are growing more and more dissatisfied with an economic science which leaves ethics out of account.[1] Professor Sidgwick, in his Principles of Political Economy, published in 1883, devotes a separate section to 'The Art of Political Economy,' in which he remarks that 'The principles of Political Economy are still most commonly understood even in England, and in spite of many protests to the contrary, to be practical principles-rules of conduct, public or private.'[2] The many indications in recent literature and practice that the regulation of prices should be controlled by principles of 'fairness' would take too long to recite. It is sufficient to refer to the conclusion of Devas on this point: 'The notion of just price, worked out in detail by the theologians, and in later days rejected as absurd by the classical economists, has been rightly revived by modern economists.'[3] Not alone in the sphere of price, but in that of every other department of economics, the impossibility of treating the subject as an abstract science without regard to ethics is being rapidly abandoned. 'The best usage of the present time,' according to the Catholic Encyclop?dia, 'is to make political economy an ethical science-that is, to make it include a discussion of what ought to be in the economic world as well as what is.'[4] We read in the 1917 edition of Palgrave's Dictionary of Political Economy, that 'The growing importance of distribution as a practical problem has led to an increasing mutual interpenetration of economic and ethical ideas, which in the development of economic doctrine during the last century and a half has taken various forms.' [5] The need for some principle by which just distribution can be attained has been rendered pressing by the terrible effects of a period of unrestricted competition. 'It has been widely maintained that a strictly competitive exchange does not tend to be really fair-some say cannot be really fair-when one of the parties is under pressure of urgent need; and further, that the inequality of opportunity which private property involves cannot be fully justified on the principle of maintaining equal freedom, and leads, in fact, to grave social injustice.'[5] In other words, the present condition of affairs is admitted to be intolerable, and the task before the world is to discover some alternative. The day when economics can be divorced from ethics has passed away; there is a world-wide endeavour to establish in the place of the old, a new society founded on an ethical basis.[7] There are two, and only two, possible ways to the attainment of this ideal-the way of socialism and the way of Christianity. There can be no doubt the socialist movement derives a great part of its popularity from its promise of a new order, based, not on the unregulated pursuit of selfish desires, but on justice. 'To this view of justice or equity,' writes Dr. Sidgwick, 'the socialistic contention that labour can only receive its due reward if land and other instruments of production are taken into public ownership, and education of all kinds gratuitously provided by Government-has powerfully appealed; and many who are not socialists, nor ignorant of economic science, have been led by it to give welcome to the notion that the ideally "fair" price of a productive service is a price at least rendering possible the maintenance of the producers and their families in a condition of health and industrial efficiency.' This is not the place to enter into a discussion as to the merits or practicability of any of the numerous schemes put forward by socialists; it is sufficient to say that socialism is essentially unhistorical, and that in our opinion any practical benefits which it might bestow on society would be more than counterbalanced by the innumerable evils which would be certain to emerge in a system based on unsatisfactory foundations.

[Footnote 1: We must guard against the error, which is frequently made, that, because the classical economists assumed self-interest as the sole motive of economic action, they therefore approved of and inculcated it.]

[Footnote 2: P. 401, and see Marshall's Preface to Price's Industrial

Peace, and Ashley, op. cit., vol. i. pt. i. p. 137.]

[Footnote 3: Political Economy, p. 268.]

[Footnote 4: Tit., 'Political Economy.']

[Footnote 5: Vol. iii. p. 138.]

[Footnote 6: Ibid.]

[Footnote 7: See Laveleye, Elements of Political Economy (Eng. trans.), pp. 7-8. On the general conflict between the ethical and the non-ethical schools of economists see Keynes, Scope and Method, pp. 20 et seq.]

The other road to the establishment of a society based on justice is the way of Christianity, and, if we wish to attempt this path, it becomes vitally important to understand what was the economic teaching of the Church in the period when the Christian ethic was universally recognised. During the whole Middle Ages, as we have said above, the Canon Law was the test of right and wrong in the domain of economic activity; production, consumption, distribution, and exchange were all regulated by the universal system of law; once before economic life was considered within the scope of moral regulation. It cannot be denied that a study of the principles which were accepted during that period may be of great value to a generation which is striving to place its economic life once more upon an ethical foundation.

One error in particular we must be on our guard to avoid. We said above that both the socialists and the Christian economists are agreed in their desire to reintroduce justice into economic life. We must not conclude, however, that the aims of these two schools are identical. One very frequently meets with the statement that the teachings of socialism are nothing more or less than the teachings of Christianity. This contention is discussed in the following pages, where the conclusion will be reached that, far from being in agreement, socialism and Christian economics contradict each other on many fundamental points. It is, however, not the aim of the discussion to appraise the relative merits of either system, or to applaud one and disparage the other. All that it is sought to do is to distinguish between them; and to demonstrate that, whatever be the merits or demerits of the two philosophies, they are two, and not one.

SECTION 4.-DIVISION OF THE SUBJECT

The opinion is general that the distinctive doctrine of the medi?val Church which permeated the whole of its economic thought was the doctrine of usury. The holders of this view may lay claim to very influential supporters among the students of the subject. Ashley says that 'the prohibition of usury was clearly the centre of the canonist doctrine.'[1] Roscher expresses the same opinion in practically the same words;[2] and Endemann sees the whole economic development of the Middle Ages and the Renaissance as the victorious destruction of the usury law by the exigencies of real life.[3] However impressed we may be by the opinions of such eminent authorities, we, nevertheless, cannot help feeling that on this point they are under a misconception. There is no doubt that the doctrine of the canonists which impresses the modern mind most deeply is the usury prohibition, partly because it is not generally realised that the usury doctrine would not have forbidden the receipt of any of the commonest kinds of unearned revenue of the present day, and partly because the discussion of usury occupies such a very large part of the writings of the canonists. It may be quite true to say that the doctrine of usury was that which gave the greatest trouble to the medi?val writers, on account of the nicety of the distinctions with which it abounded, and on account of the ingenuity of avaricious merchants, who continually sought to evade the usury laws by disguising illegal under the guise of legal transactions. In practice, therefore, the usury doctrine was undoubtedly the most prominent part of the canonist teaching, because it was the part which most tempted evasion; but to admit that is not to agree with the proposition that it was the centre of the canonist doctrine.

[Footnote: 1 Op. cit., vol. i. pt. ii. p. 399.]

[Footnote: 2 'Bekanntlich war das Wucherverbot der praktische Mittelpunkt der ganzen kanonischen Wirthschaftspolitik,' Op. cit., p. 8.]

[Footnote: 3 Studien, vol. i. p. 2 and passim. At vol. ii. p. 31 it is stated that the teaching on just price is a corollary of the usury teaching. But Aquinas treats of usury in the article following his treatment of just price.]

Our view is that the teaching on usury was simply one of the applications of the doctrine that all voluntary exchanges of property must be regulated by the precepts of commutative justice. In one sense it might be said to be a corollary of the doctrine of just price. This is apparently the suggestion of Dr. Cleary in his excellent book on usury: 'It seems to me that the so-called loan of money is really a sale, and that a loan of meal, wine, oil, gunpowder, and similar commodities-that is to say, commodities which are consumed in use-is also a sale. If this is so, as I believe it is, then loans of all these consumptible goods should be regulated by the principles which regulate sale contracts. A just price only may be taken, and the return must be truly equivalent.'[1] This statement of Dr. Cleary's seems well warranted, and finds support in the analogy which was drawn between the legitimacy of interest-in the technical sense-and the legitimacy of a vendor's increasing the price of an article by reason of some special inconvenience which he would suffer by parting with it. Both these titles were justified on the same ground, namely, that they were in the nature of compensations, and arose independently of the main contract of loan or sale as the case might be. 'Le vendeur est en présence de l'acheteur. L'objet a pour lui une valeur particulière: c'est un souvenir, par exemple. A-t-il le droit de majorer le prix de vente? de dépasser le juste prix convenu? ... Avec l'unanimité des docteurs on peut trouver légitime la majoration du prix. L'évaluation commune distingue un double élément dans l'objet: sa valeur ordinaire à laquelle répond le juste prix, et cette valeur extraordinaire qui appartient au vendeur, dont il se prive et qui mérite une compensation: il le fait pour ainsi dire l'objet d'un second contrat qui se superpose au premier. Cela est si vrai que le supplément de prix n'est pas d? au même titre que le juste prix.'[2] The importance of this analogy will appear when we come to treat just price and usury in detail; it is simply referred to here in support of the proposition that, far from being a special doctrine sui generis, the usury doctrine of the Church was simply an application to the sale of consumptible things of the universal rules which applied to all sales. In other words, the doctrines of the just price and of usury were founded on the same fundamental precept of justice in exchange. If we indicate what this precept was, we can claim to have indicated what was the true centre of the canonist doctrine.

[Footnote 1: The Church and Usury, p. 186.]

[Footnote 1: Desbuquois, 'La Justice dans l'Echange,' Semaine Sociale de France, 1911, p. 174.]

The scholastic teaching on the subject of the rules of justice in exchange was founded on the famous fifth book of Aristotle's Ethics, and is very clearly set forth by Aquinas. In the article of the Summa, where the question is discussed, 'Whether the mean is to be observed in the same way in distributive as in commutative justice?' we find a clear exposition: 'In commutations something is delivered to an individual on account of something of his that has been received, as may be seen chiefly in selling and buying, where the notion of commutation is found primarily. Hence it is necessary to equalise thing with thing, so that the one person should pay back to the other just so much as he has become richer out of that which belonged to the other. The result of this will be equality according to the arithmetical mean, which is gauged according to equal excess in quantity. Thus 5 is the mean between 6 and 4, since it exceeds the latter, and is exceeded by the former by 1. Accordingly, if at the start both persons have 5, and one of them receives 1 out of the other's belongings, the one that is the receiver will have 6, and the other will be left with 4: and so there will be justice if both are brought back to the mean, I being taken from him that has 6 and given to him that has 4, for then both will have 5, which is the mean.'[1] In the following article the matter of each kind of justice is discussed. We are told that: 'Justice is about certain external operations, namely, distribution and commutation. These consist in the use of certain externals, whether things, persons, or even works: of things as when one man takes from or restores to another that which is his: of persons as when a man does an injury to the very person of another...: and of works as when a man justly enacts a work of another or does a work for him.... Commutative justice directs commutations that can take place between two persons. Of these some are involuntary, some voluntary.... Voluntary commutations are when a man voluntarily transfers his chattel to another person. And if he transfer it simply so that the recipient incurs no debt, as in the case of gifts, it is an act not of justice, but of liberality. A voluntary transfer belongs to justice in so far as it includes the notion of debt.' Aquinas then goes on to distinguish between the different kinds of contract, sale, usufruct, loan, letting and hiring, and deposit, and concludes, 'In all these actions the mean is taken in the same way according to the equality of repayment. Hence all these actions belong to the one species of justice, namely, commutative justice.'[2]

[Footnote 1: ii. ii. 61, 2.]

[Footnote 2: ii. ii. 61, 3. The reasoning of Aristotle is characteristically reinforced by the quotation of Matt. vii. 12; ii. ii. 77,1.]

This is not the place to discuss the precise meaning of the equality upon which Aquinas insists, which will be more properly considered when we come to deal with the just price. What is to be noticed at present is that all the transactions which are properly comprised in a discussion of economic theory-sales, loans, etc.-are grouped together as being subject to the same regulative principle. It therefore appears more correct to approach the subject which we are attempting to treat by following that principle into its various applications, than by making one particular application of the principle the starting-point of the discussion.

It will be noticed, however, that the principles of commutative justice all treat of the commutations of external goods-in other words, they assume the existence of property of external goods in individuals. Commutations are but a result of private property; in a state of communism there could be no commutation. This is well pointed out by Gerson[1] and by Nider.[2] It consequently is important, before discussing exchange of ownership, to discuss the principle of ownership itself; or, in other words, to study the static before the dynamic state.[3]

[Footnote 1: De Contractibus, i. 4 'Inventa est autem commutatio civilis post peccatum quoniam status innocentias habuit omnia communia.']

[Footnote 2: De Contractibus, v. 1: 'Nunc videndum est breviter unde originaliter proveniat quod rerum dominia sunt distincta, sic quod hoc dicatur meum et illud tuum; quia illud est fundamentum omnis injustitiae in contractando rem alienam, et post omnis injustitia reddendo eam.']

[Footnote 3: See l'Abbé Desbuquois, op. cit., p. 168.]

We shall therefore deal in the first place with the right of private property, which we shall show to have been fully recognised by the medi?val writers. We shall then point out the duties which this right entailed, and shall establish the position that the scholastic teaching was directed equally against modern socialistic principles and modern unregulated individualism. The next point with which we shall deal is the exchange of property between individuals, which is a necessary corollary of the right of property. We shall show that such exchanges were regulated by well-defined principles of commutative justice, which applied equally in the case of the sale of goods and in the case of the sale of the use of money. The last matter with which we shall deal is the machinery by which exchanges are conducted, namely, money. Many other subjects, such as slavery and the legitimacy of commerce, will be treated as they arise in the course of our treatment of these principal divisions.

In its ultimate analysis, the whole subject may be reduced to a classification of the various duties which attached to the right of private property. The owner of property, as we shall see, was bound to observe certain duties in respect of its acquisition and its consumption, and certain other duties in respect of its exchange, whether it consisted of goods or of money. The whole fabric of medi?val economics was based on the foundation of private property; and the elaborate and logical system of regulations to ensure justice in economic life would have had no purpose or no use if the subject matter of that justice were abolished.

It must not be understood that the medi?val writers treated economic subjects in this order, or in any order at all. As we have already said, economic matters are simply referred to in connection with ethics, and were not detached and treated as making up a distinct body of teaching. Ashley says: 'The reader will guard himself against supposing that any medi?val writer ever detached these ideas from the body of his teaching, and put them together as a modern text-book writer might do; or that they were ever presented in this particular order, and with the connecting argument definitely stated.'[1]

[Footnote 1: Op. cit., vol. i. pt. ii. p. 387.]