Diana Wood, Medieval Economic Thought

NB: This was the first book I started reading that I knew would end up on my list, and I read it last summer. As such, I spent over a week poring over and condensing it, and while I think I got a lot out of what I feel is a pretty stellar book, my notes are way too much for exam reading. Attempting to do the same for my other secondary works would likely be an exercise much like this: 

Wood, Diana. Medieval Economic Thought. Cambridge: Cambridge UP, 2002. Print.

  

Introduction: Wood maintains that medieval economic thought is closely tied to theology, largely stemming from the role of most medieval writers on economics as clergymen. Early medieval Church views on economics were largely moral, suggesting that any attempt to pursue economic affluence is innately against the proper pursuits of Christians. Woods argues that the 12-15^th centuries represents a marked shift in these views at a societal level, possibly led by friars living in urban communities, with a recognition of the value of economic prominence and the growing affluence of merchants and bankers.

Chapter 1 “Private Property versus Communal Rights”: Woods discusses the contradictory relationship between private property and religious ideals. Before the 12^th century, most clergymen argued that the ownership of private property was itself an immoral construction, coming directly from sin due to the Fall. With the 12^th century rise of individualism, many Church thinkers attempted to reconcile these issues, trying to bring together the law of nature (i.e. God) and the law of man. Some of these attempts began earlier, such as Augustine’s move to have God as the author of human law, but the eventual move was to begin to suggest that private property was part of man’s natural state (despite pushback from groups such as the Franciscans and the Wyclifites). Part of the debate these groups took on was the idea that the clergy should follow the apostolic model, making the growing wealth held by clerical institutions more and more problematic. The solution, eventually, was the establishment as Christ/the Pope as the holder of all Church property in trust, with clergymen merely retaining the use value of that property. On the secular side of things, Woods suggests that the vassalage system that was predominant in England before the 12^th century actually ameliorates the seemingly disparate ideas of human and natural law, with all property held by the feudal lord and his vassals merely using that property in trust. As this system broke down the process of taxation through national levies began to replace it.

Chapter 2, “Wealth, Beggary, and Sufficiency”: Woods is primarily concerned with three things in this chapter: the redefinition of the “poor=good, rich=bad” dichotomy, the “rights” of the poor in regards to property and salvation, and the commodification of salvation and spiritual practices. There are several interesting points here, but some that stand out are the shift in how the rich are perceived, once again falling along the post 12^th century individualism Woods has already plotted, and the process under which spiritual practices became commodified, ranging from post-mortem gifts to the poor/clergy to the calculation of what intercessions equal how much time in Purgatory. As Woods has established that any discussion of medieval economics has part in a discussion of Christian theology, this seems to further evaluate just how economics and theology are becoming intertwined in this period.

Chapter 3, “What is Money?”: Woods lays out the debates over what money is/should be, focusing on three perspectives: “ghost money” of account, medium of exchange, and an imperishable store of value. In many ways, the debates between these forms of currency bear similarity to contemporary debates of gold standard based currencies versus fiat currencies. If money is primarily an imperishable store of value, i.e. consisting of a precious metal, the exchange value would ideally maintain stability but the temptation could be to collect money for its own sake (not to mention the lack of control over the devaluation of that precious metal). Unlike contemporary debates, however, each commentator discusses not only the function of currency in economic terms but ethical/moral terms as well. Thus following her early statement that economics and theology cannot be considered independently when dealing with late medieval philosophers, Woods argues that the ethical fallout had as much or more cause for concern than the function of currency in the marketplace. Additionally, Woods suggests that the use of currency rose significantly in the 12-14^th centuries in Europe, due to a wide range of factors, beginning to edge out market exchanges based on the direct exchange of commodities. A shortage of coin in the 15^th century curtailed some of this change, but the spread of currency in the marketplace seems to have changed how it is both perceived and used.

Chapter 3: Woods looks at the issues of Weights, measures, and coinage. She starts by aligning these to the theological connections, focusing on how Plato and Aritstotle’s discussion of the ethical necessity and divine origin of the mean was later appropriated by medieval religious writers. Interestingly, despite this emphasis from the philosophical side of things, the spread of manipulating the value of coinage was conducted by both the royalty and peasantry alike, with buyers and sellers in markets employing differently weighted scales and kings engaging in seignorage, forcing people to exchange older coins for newer coins of less inherent value (the mix of precious metals: non-precious metals had been weighted more heavily to the later). Thus, while economic philosophers seemed to agree that the regulation of coinage should be in royal hands, this did not ensure the ideal and platonically

Chapter 4: Woods discusses the Mercantile system. Careful to separate it from the term Mercantilism, which would be anachronistic to apply in this context, Woods primarily treats to issues: the ethics/morality of mercantile trade and the function of trade and currency at a national level in regards to mercantile trade. For the former, much of the pre-12^th century positions mirrored the others previously discussed, with some questioning whether it is moral for a merchant t to earn a profit from buying items cheaply and selling them at higher cost. The philosophical perspective on this shifts, with many coming down to say that a merchant has a right to seek a profit for his labor and that his work can even be virtuous, providing goods to areas of scarcity. Woods moves on to discuss how the mercantile system affected England at a national level, with trade deficits and the balance of currency entering and exiting the country under primary concern. The stability of English currency was both a boon and a curse, as other countries sought to import the currency for that stability only to send back cheaper counterfeited currency, causing problems of exchange. In the end, currency itself could have significant impacts on trade, both due to its physical condition and the current level of scarcity of the precious metals therein, silver or gold, in both the country of production and others in Europe. 

Chapter 5: Woods’ focus here is on the debate of just price and just wages, part of a long and evolving discussion as medieval philosophers continue to consider more of the real world market aspects involved. The debate centers around Aristotle’s two models of just price, arithmetic (specific preset price) and geometric or proportional price. At issue is the decision of whether goods and services have a precise, somewhat platonic exchange value that should not be deviated from in market exchanges or whether their just price is somewhat conditional. Woods spends a great deal of this chapter teasing out how these ideas impact labor, identifying that most of this debate focused on price rather than wages and filling in the gap with what is discussed, and plots the difficulty many of these economic thinkers had mediating the ideals of ethical economics and the realities of the market. Woods’ discussion in this chapter brings in more Roman law than else, largely due to the Roman interest in wages.  One notable discussion centered around issues of monopoly, where the state would seek to curtail monopolizing practices of engrossing, forestalling, and regrating. These were seen as both manipulative and harmful to the market and were railed against at the intellectual level and punished at the governmental. The issue of just price was often used, according to Woods, to support employers and curtail the “greedy” practices of laborers seeking higher wages for their labor, which was now in higher demand. Some examples did point to specific tampering, such as the proto-employment agencies in 1381, but in many ways this became more of a tool to try to stabilize prices and wages to a state that the first two estates saw as just, ignoring the realities of the market. Guilds could often take part in this process, even receiving support from governments to control prices, but they could also manipulate prices and supply by denying membership into their guilds and fixing prices above market standards. When apprentices and laborers engaged in a form of collective bargaining to improve their lots, they were often decried and worked against by both guilds and local government.

Chapters 6 and 7: Woods focuses on usury and interest in the last two chapters. The problems with usury stems from garnering a profit by selling what is only under God’s domain and committing theft upon the borrower; usury was seen as selling time, which was under God’s command alone, and depriving the borrower of more than he borrowed was seen as a theft of his goods. Interest, however, was seen as a way to recoup loss, to make up for damages caused by the lender being temporarily deprived of his goods. The debate on each was long standing and complex, but Pope Leo X finally approved a form of interest in the 16^th century, which many used to get around the ban on usury. This pronouncement came a bit late to the game however, as by this point Protestants had reopened the debate with a much more conservative position on the matter.