The Medieval Background

“Que pourrions-nous gagner,” once wrote a celebrated economist, “à recueillir des opinions absurdes, des doctrines décriées, et qui méritent de l’être? Il serait à la fois inutile et fastidieux de les exhumer.”¹ One who studies the development of social theory can hardly hope to avoid the criticism which is brought against those who disturb the dust in forgotten lumber-rooms. If he seeks an excuse beyond his own curiosity, he may find it, perhaps, in the reflection that the past reveals to the present what the present is capable of seeing, and that the face which to one age is a blank may to another be pregnant with meaning. Writing when economic science was in the first flush of its dogmatic youth, it was natural that Say should dismiss as an unprofitable dilettantism an interest in the speculations of ages unillumined by the radiance of the new Gospel. But to determine the significance of opinion is, perhaps, not altogether so simple a matter as he supposed. Since the brave days when Torrens could say of Political Economy, “Twenty years hence there will scarcely exist a doubt respecting any of its fundamental principles,”² how many confident certainties have been undermined! How many doctrines once dismissed as the emptiest of superstitions have revealed an unsuspected vitality!

“What could we gain,” a celebrated economist once wrote, “by collecting absurd opinions and discredited doctrines that deserve to be discredited? Digging them up would be both useless and tedious.”¹ Anyone who studies the development of social theory can hardly hope to escape criticism for stirring up dust in forgotten storerooms. If such a person seeks an excuse beyond curiosity, perhaps the past offers one. The past reveals to the present what the present is capable of seeing. A face that means nothing to one age may be full of meaning for another. Say wrote when economic science was still enjoying the first excitement of its dogmatic youth. It was natural, then, for him to dismiss interest in the theories of earlier ages as a pointless pastime. After all, those ages had not been illuminated by the radiance of the new Gospel. But determining the significance of opinions is perhaps not quite as simple as he supposed. In those confident days, Torrens could say of Political Economy, “Twenty years hence there will scarcely exist a doubt respecting any of its fundamental principles.”² Since then, how many confident certainties have been undermined! How many doctrines once dismissed as the emptiest superstitions have shown an unsuspected vitality!

The attempt to judge economic activity and social organization by ethical criteria raises problems which are eternal, and it is possible that a study of the thought of an age when that attempt was made, if with little success, at least with conviction and persistence, may prove, even today, not wholly without instruction. In the present century, the old issues seem, indeed, to have acquired a new actuality. The philosophy which would keep economic interests and ethical idealism safely locked up in their separate compartments finds that each of the prisoners is increasingly restive. On the one hand, it is evident that the whole body of regulations, by which modern societies set limits to the free play of economic self-interest, implies the acceptance, whether deliberate or unconscious, of moral standards, by reference to which certain kinds of economic conduct are pronounced illegitimate. On the other hand, there are indications that religious thought is no longer content to dismiss the transactions of business and the institutions of society as matters irrelevant to the life of the spirit.

Judging economic activity and social organization by ethical standards raises questions that never go away. A study of an age when people tried to make such judgments may still teach us something today. They had little success, but at least they tried with conviction and persistence. In the present century, these old questions do indeed seem newly relevant. One philosophy would keep economic interests and ethical ideals safely locked up in separate compartments. But both prisoners are growing increasingly restless. On the one hand, modern societies have a whole body of regulations that limit the free pursuit of economic self-interest. Clearly, these regulations imply an acceptance of moral standards, whether deliberate or unconscious. By those standards, certain kinds of economic conduct are judged illegitimate. On the other hand, there are signs that religious thought is no longer content to dismiss business transactions and social institutions as irrelevant to spiritual life.

Silently, but unmistakably, the conception of the scope and content of Christian ethics which was generally, though not universally, accepted in the nineteenth century, is undergoing a revision; and in that revision the appeal to the experience of mankind, which is history, has played some part, and will play a larger one. There have been periods in which a tacit agreement, accepted in practice if not stated in theory, excluded economic activities and social institutions from examination or criticism in the light of religion. A statesman of the early nineteenth century, whose conception of the relations of Church and State appears to have been modeled on those of Mr. Collins and Lady Catherine de Bourgh, is said to have crushed a clerical reformer with the protest, “Things have come to a pretty pass if religion is going to interfere with private life”; and a more recent occupant of his office has explained the catastrophe which must follow, if the Church crosses the Rubicon which divides the outlying provinces of the spirit from the secular capital of public affairs.³

The nineteenth century’s generally, though not universally, accepted view of the scope and content of Christian ethics is being revised. The change is silent but unmistakable. The appeal to human experience, which is history, has played some part in this revision and will play a larger one. In some periods, an unspoken agreement kept economic activities and social institutions from being examined or criticized in the light of religion. This agreement was accepted in practice, even if it was not stated in theory. An early nineteenth-century statesman seems to have modeled his view of Church and State on the relations between Mr. Collins and Lady Catherine de Bourgh. He is said to have crushed a clerical reformer with the protest, “Things have come to a pretty pass if religion is going to interfere with private life”. A more recent holder of the same office has explained what catastrophe must follow if the Church crosses the Rubicon. That Rubicon divides the outlying provinces of the spirit from the secular capital of public affairs.³

Whatever the merit of these aphorisms, it is evident today that the line of division between the spheres of religion and secular business, which they assume as self-evident, is shifting. By common consent the treaty of partition has lapsed and the boundaries are once more in motion. The age of which Froude, no romantic admirer of ecclesiastical pretensions, could write, with perhaps exaggerated severity, that the spokesmen of religion “leave the present world to the men of business and the devil,”⁴ shows some signs of drawing to a close. Rightly or wrongly, with wisdom or with its opposite, not only in England but on the Continent and in America, not only in one denomination but among Roman Catholics, Anglicans, and Nonconformists, an attempt is being made to restate the practical implications of the social ethics of the Christian faith, in a form sufficiently comprehensive to provide a standard by which to judge the collective actions and institutions of mankind, in the sphere both of international politics and of social organization. It is being made today. It has been made in the past. Whether it will result in any new synthesis, whether in the future at some point pushed farther into the tough world of practical affairs men will say,

Whatever the merit of these sayings, it is clear today that the boundary between religion and secular business is shifting. The sayings assume that the boundary is self-evident. By common agreement, the treaty dividing the two spheres has expired, and the boundaries are moving again. The age in which religious spokesmen “leave the present world to the men of business and the devil”⁴ shows some signs of ending. Froude described that age in those words. He was no romantic admirer of the Church’s claims, though his judgment was perhaps too harsh. Today, people are trying to restate the practical implications of Christian social ethics. Their aim is a statement broad enough to provide a standard for judging humanity’s collective actions and institutions. That standard would apply to both international politics and social organization. The attempt may be right or wrong, wise or unwise. It is being made not only in England but also on the Continent and in America. It is being made not only in one denomination but among Roman Catholics, Anglicans, and Nonconformists. The attempt is being made today. It has been made in the past. Whether it will result in any new synthesis, whether in the future, at some point deeper in the tough world of practical affairs, people will say,

will not be known by this generation. What is certain is that, as in the analogous problem of the relations between Church and State, issues which were thought to have been buried by the discretion of centuries have shown in our own day that they were not dead, but sleeping. To examine the forms which they have assumed and the phases through which they have passed, even in the narrow field of a single country and a limited period, is not mere antiquarianism. It is to summon the living, not to invoke a corpse, and to see from a new angle the problems of our own age, by widening the experience brought to their consideration.

will not be known by this generation. What is certain is that some issues have shown themselves to be sleeping, not dead. These issues were thought to have been buried by centuries of discretion. The same is true of the similar problem of relations between Church and State. Examining the forms these issues have taken and the stages they have passed through is not just an exercise in studying the past. This is true even within the narrow field of a single country and a limited period. Such study calls up the living, not a corpse. It also lets us see the problems of our own age from a new angle, by bringing wider experience to bear on them.

In such an examination the sixteenth and seventeenth centuries are obviously a critical period. Dr. Figgis⁵ has described the secularization of political theory as the most momentous of the intellectual changes which ushered in the modern world. It was not the less revolutionary because it was only gradually that its full consequences became apparent, so that seeds which were sown before the Reformation yielded their fruit in England only after the Civil War. The political aspects of the transformation are familiar. The theological mould which shaped political theory from the Middle Ages to the seventeenth century is broken; politics becomes a science, ultimately a group of sciences, and theology at best one science among others. Reason takes the place of revelation, and the criterion of political institutions is expediency, not religious authority. Religion, ceasing to be the master-interest of mankind, dwindles into a department of life with boundaries which it is extravagant to overstep.

In such an examination, the sixteenth and seventeenth centuries are clearly a critical period. Dr. Figgis⁵ described the secularization of political theory as the most momentous intellectual change that ushered in the modern world. It was no less revolutionary because its full consequences became clear only gradually. Ideas first planted before the Reformation bore fruit in England only after the Civil War. The political aspects of this transformation are familiar. From the Middle Ages to the seventeenth century, theology shaped political theory. That mold is broken. Politics becomes a science, and eventually a group of sciences. Theology becomes, at best, one science among others. Reason takes the place of revelation. Political institutions are judged by their practical usefulness, not by religious authority. Religion is no longer the chief concern of humanity. It shrinks into one part of life, with boundaries that it would be excessive to cross.

The ground which it vacates is occupied by a new institution, armed with a novel doctrine. If the Church of the Middle Ages was a kind of State, the State of the Tudors had some of the characteristics of a Church; and it was precisely the impossibility, for all but a handful of sectaries, of conceiving a society which treated religion as a thing privately vital but publicly indifferent, which in England made irreconcilable the quarrel between Puritanism and the monarchy. When the mass had been heated in the furnace of the Civil War, its component parts were ready to be disengaged from each other. By the end of the seventeenth century the secular State, separate from the Churches, which are subordinate to it, has emerged from the theory which had regarded both as dual aspects of a single society. The former pays a shadowy deference to religion; the latter do not meddle with the external fabric of the political and social system, which is the concern of the former. The age of religious struggles virtually ends with the Treaty of Westphalia in 1648. The age of the wars of economic nationalism virtually begins with the war between England and Holland under the Commonwealth and Charles II. The State, first in England, then in France and America, finds its sanction, not in religion, but in nature, in a presumed contract to establish it, in the necessity for mutual protection and the convenience of mutual assistance. It appeals to no supernatural commission, but exists to protect individuals in the enjoyment of those absolute rights which were vested in them by the immutable laws of nature. “The great and chief end of men uniting into commonwealths and putting themselves under government is the preservation of their property.”⁶

The ground it vacates is occupied by a new institution, armed with a new doctrine. If the Church of the Middle Ages was a kind of State, the State of the Tudors had some characteristics of a Church. All but a handful of sectarians found it impossible to imagine a society that treated religion as privately vital but publicly unimportant. This was precisely why the conflict between Puritanism and the monarchy in England could not be resolved. The Civil War heated the mass in its furnace, making its components ready to be separated. By the end of the seventeenth century, the secular State had emerged as separate from the Churches, which were subordinate to it. It had emerged from a theory that regarded Church and State as two aspects of a single society. The State shows a faint respect for religion. The Churches do not interfere with the outward structure of the political and social system, which is the State’s concern. The age of religious struggles virtually ends with the Treaty of Westphalia in 1648. The age of wars of economic nationalism virtually begins with the war between England and Holland under the Commonwealth and Charles II. The State finds its authority not in religion but in nature, first in England, then in France and America. It rests on a presumed contract to establish it, on the need for mutual protection, and on the convenience of mutual assistance. It claims no supernatural authority. Instead, it exists to protect individuals in the enjoyment of the absolute rights given to them by the unchanging laws of nature. “The great and chief end of men uniting into commonwealths and putting themselves under government is the preservation of their property.”⁶

While the political significance of this development has often been described, the analogous changes in social and economic thought have received less attention. They were, however, momentous, and deserve consideration. The emergence of an objective and passionless economic science took place more slowly than the corresponding movement in the theory of the State, because the issues were less absorbing, and, while one marched in the high lights of the open stage, the other lurked on the back stairs and in the wings. It was not till a century after Machiavelli had emancipated the State from religion, that the doctrine of the self-contained department with laws of its own begins generally to be applied to the world of business relations, and even in the England of the early seventeenth century, to discuss questions of economic organization purely in terms of pecuniary profit and loss still wears an air of not quite reputable cynicism. When the sixteenth century opens, not only political but social theory is saturated with doctrines drawn from the sphere of ethics and religion, and economic phenomena are expressed in terms of personal conduct, as naturally and inevitably as the nineteenth century expressed them in terms of mechanism.

The political significance of this development has often been described. Similar changes in social and economic thought have received less attention. Yet they were momentous and deserve consideration. An objective, dispassionate economic science emerged more slowly than a similar approach to the theory of the State. This was because economic questions attracted less interest. While the theory of the State took center stage in the spotlight, economic thought lurked backstage and in the wings. A century passed after Machiavelli freed the State from religion before the idea of a self-contained sphere, governed by its own laws, began to be applied generally to business relations. Even in early seventeenth-century England, discussing economic organization purely in terms of financial profit and loss still seemed somewhat disreputably cynical. At the beginning of the sixteenth century, both political and social theory were saturated with ideas drawn from ethics and religion. Economic phenomena were described in terms of personal conduct, as naturally and inevitably as the nineteenth century described them in terms of a mechanism.

Not the least fundamental of divisions among theories of society is between those which regard the world of human affairs as self-contained, and those which appeal to a supernatural criterion. Modern social theory, like modern political theory, develops only when society is given a naturalistic instead of a religious explanation, and a capital fact which presides at the birth of both is a change in the conception held of the nature and functions of a Church. The crucial period is the sixteenth and seventeenth centuries. The most important arena (apart from Holland) is England, because it is in England, with its new geographical position as the entrepôt between Europe and America, its achievement of internal economic unity two centuries before France and two and a half centuries before Germany, its constitutional revolution, and its powerful bourgeoisie of bankers, ship-owners, and merchants, that the transformation of the structure of society is earliest, swiftest, and most complete. Its essence is the secularization of social and economic philosophy. The synthesis is resolved into its elements—politics, business, and spiritual exercises; each assumes a separate and independent vitality and obeys the laws of its own being. The social functions matured within the Church, and long identified with it, are transferred to the State, which in turn is idolized as the dispenser of prosperity and the guardian of civilization. The theory of a hierarchy of values, embracing all human interests and activities in a system of which the apex is religion, is replaced by the conception of separate and parallel compartments, between which a due balance should be maintained, but which have no vital connection with each other.

One of the most fundamental divisions among theories of society concerns how they understand human affairs. Some see human affairs as self-contained, while others appeal to a supernatural standard. Modern social theory, like modern political theory, develops only when society is explained in natural rather than religious terms. Both theories emerge alongside a crucial change in how people understand the nature and functions of a Church. The crucial period is the sixteenth and seventeenth centuries. Apart from Holland, England is the most important setting for this change. England has a new geographical position as the trading center between Europe and America. It achieves internal economic unity two centuries before France and two and a half centuries before Germany. It also experiences a constitutional revolution and has a powerful bourgeoisie of bankers, ship-owners, and merchants. For these reasons, the transformation of society’s structure happens earliest, fastest, and most completely in England. The essence of this transformation is the secularization of social and economic philosophy. The old synthesis separates into its elements: politics, business, and spiritual exercises. Each takes on a separate, independent life and follows its own laws. Social functions that developed within the Church and were long identified with it pass to the State. The State, in turn, is idolized as the source of prosperity and the guardian of civilization. The old theory placed all human interests and activities in a hierarchy of values, with religion at the top. In its place comes the idea of separate, parallel spheres. A proper balance should be maintained among these spheres, but they have no vital connection to one another.

The intellectual movement is, of course, very gradual, and is compatible with both throw-backs and precocities which seem to refute its general character. It is easy to detect premonitions of the coming philosophy in the later Middle Ages, and reversions to an earlier manner at the very end of the seventeenth century. Oresme in the fourteenth century can anticipate the monetary theory associated with the name of Gresham; in the fifteenth century Laurentius de Rudolfis can distinguish between trade bills and finance bills, and St. Antonino describe the significance of capital; while Baxter in 1673 can write a Christian Directory in the style of a medieval Summa, and Bunyan in 1680 can dissect the economic iniquities of Mr. Badman, who ground the poor with high prices and usury, in the manner of a medieval friar.⁷ But the distance traversed in the two centuries between 1500 and 1700 is, nevertheless, immense. At the earlier date, though economic rationalism has proceeded far in Italy, the typical economic systems are those of the Schoolmen; the typical popular teaching is that of the sermon, or of manuals such as Dives et Pauper; the typical appeal in difficult cases of conscience is to the Bible, the Fathers, the canon law and its interpreters; the typical controversy is carried on in terms of morality and religion as regularly and inevitably as two centuries later it is conducted in terms of economic expediency.

Of course, intellectual change happens very gradually. It can include both returns to older ideas and unusually early advances that seem to contradict its general direction. Signs of the coming philosophy are easy to find in the later Middle Ages. Returns to an earlier way of thinking also appear at the very end of the seventeenth century. In the fourteenth century, Oresme anticipated the monetary theory associated with Gresham. In the fifteenth century, Laurentius de Rudolfis distinguished between trade bills and finance bills, and St. Antonino described the importance of capital. Yet in 1673, Baxter wrote a Christian Directory in the style of a medieval Summa. And in 1680, Bunyan examined the economic wrongdoing of Mr. Badman, who oppressed the poor with high prices and usury. Bunyan did so in the manner of a medieval friar.⁷ Nevertheless, the distance covered between 1500 and 1700 was immense. By 1500, economic rationalism had advanced far in Italy. Even so, the typical economic systems were those of the Schoolmen. Popular teaching typically took the form of sermons or manuals such as Dives et Pauper. In difficult matters of conscience, people typically turned to the Bible, the Fathers, canon law and its interpreters. Disputes were typically conducted in terms of morality and religion. This happened as regularly and inevitably as disputes were conducted in terms of economic expediency two centuries later.

It is not necessary to point out that the age of Henry VIII and Thomas Cromwell had nothing to learn from the twentieth century as to the niceties of political intrigue or commercial sharp practice. But a cynical unscrupulousness in high places is not incompatible with a general belief in the validity of moral standards which are contradicted by it. No one can read the discussions which took place between 1500 and 1550 on three burning issues—the rise in prices, capital and interest, and the land question in England—without being struck by the constant appeal from the new and clamorous economic interests of the day to the traditional Christian morality, which in social organization, as in the relations of individuals, is still conceived to be the final authority. It is because it is regarded as the final authority that the officers of the Church claim to be heard on questions of social policy, and that, however Catholics, Anglicans, Lutherans, and Calvinists may differ on doctrine or ecclesiastical government, Luther and Calvin, Latimer and Laud, John Knox and the Pilgrim Fathers are agreed that social morality is the province of the Church, and are prepared both to teach it, and to enforce it, when necessary, by suitable discipline.

It hardly needs saying that the age of Henry VIII and Thomas Cromwell had nothing to learn from the twentieth century about the finer points of political intrigue or sharp business practices. But cynical dishonesty among those in power can coexist with a general belief in the moral standards their actions violate. Between 1500 and 1550, people debated three burning issues: rising prices, capital and interest, and the land question in England. Anyone who reads those debates will notice how often people appealed from the loud demands of new economic interests to traditional Christian morality. That morality was still considered the final authority on social organization, just as it was on relations between individuals. Because Christian morality was regarded as the final authority, Church officials claimed the right to be heard on social policy. Catholics, Anglicans, Lutherans, and Calvinists may differ on doctrine or Church government. But Luther and Calvin, Latimer and Laud, John Knox and the Pilgrim Fathers agree that social morality is the Church’s concern. They are prepared both to teach social morality and, when necessary, to enforce it through suitable discipline.

By the middle of the seventeenth century all that is altered. After the Restoration, we are in a new world of economic, as well as of political, thought. The claim of religion, at best a shadowy claim, to maintain rules of good conscience in economic affairs finally vanished with the destruction of Laud’s experiment in a confessional State, and with the failure of the work of the Westminster Assembly. After the Civil War, the attempt to maintain the theory that there was a Christian standard of economic conduct was impossible, not only because of lay opposition, but because the division of the Churches made it evident that no common standard existed which could be enforced by ecclesiastical machinery. The doctrine of the Restoration economists,⁸ that, as proved by the experience of Holland, trade and tolerance flourished together, had its practical significance in the fact that neither could prosper without large concessions to individualism.

By the middle of the seventeenth century, all of that had changed. After the Restoration, we enter a new world of economic and political thought. Religion had claimed the right to uphold rules of good conscience in economic affairs. At best, that claim had been vague. It finally vanished when Laud’s experiment in a confessional State was destroyed and the work of the Westminster Assembly failed. After the Civil War, it was impossible to maintain the idea that there was a Christian standard of economic conduct. This was not only because laypeople opposed it. The divisions among the Churches also made clear that there was no common standard Church institutions could enforce. The Restoration economists⁸ argued that the experience of Holland showed that trade and tolerance flourished together. In practice, this meant that neither could prosper without substantial concessions to individualism.

The ground which is vacated by the Christian moralist is quickly occupied by theorists of another order. The future for the next two hundred years is not with the attempt to reaffirm, with due allowance for altered circumstances, the conception that a moral rule is binding on Christians in their economic transactions, but with the new science of Political Arithmetic, which asserts, at first with hesitation and then with confidence, that no moral rule beyond the letter of the law exists. Influenced in its method by the contemporary progress of mathematics and physics, it handles economic phenomena, not as a casuist, concerned to distinguish right from wrong, but as a scientist, applying a new calculus to impersonal economic forces. Its method, temper, and assumptions are accepted by all educated men, including the clergy, even though its particular conclusions continue for long to be disputed. Its greatest English exponent, before the days of Adam Smith, is the Reverend Dr. Tucker, Dean of Gloucester.

The ground abandoned by Christian moralists is quickly taken over by theorists of a different kind. For the next two hundred years, the future lies elsewhere than in reaffirming a moral rule for Christians in economic dealings. That rule would have allowed for changed circumstances. Instead, the future lies with the new science of Political Arithmetic. At first hesitantly, and then confidently, this science asserts that no moral rule exists beyond the letter of the law. Its method is influenced by contemporary advances in mathematics and physics. It treats economic events not as a moral reasoner concerned with right and wrong, but as a scientist applying a new calculus to impersonal economic forces. All educated men, including the clergy, accept its method, outlook, and assumptions, though its specific conclusions remain disputed for a long time. Before Adam Smith, its greatest English exponent is the Reverend Dr. Tucker, Dean of Gloucester.

Some of the particular stages in this transition will be discussed later. But that there was a transition, and that the intellectual and moral conversion which it produced was not less momentous than the effect of some more familiar intellectual revolutions, is undeniable. Nor is it to be refuted by insisting that economic motives and economic needs are as old as history, or that the appeal to religion is often a decorous drapery for a triumphant materialism. A medieval cynic, in expounding the canon law as to usury, remarked that “he who takes it goes to hell, and he who does not goes to the workhouse.”⁹ Mr. Coulton does well to remind us that, even in the Age of Faith, resounding principles were compatible with very sordid practice. In a discussion which has as its subject social thought, not the history of business organization, it is not necessary to elaborate that truism. Only the credulous or the disillusioned will contrast successive periods as light with darkness or darkness with light, or yield to the temper which finds romantic virtues in every age except its own. To appraise the merits of different theories of social organization must be left to those who feel confident that they possess an adequate criterion. All that can be attempted in these pages is to endeavor to understand a few among them.

Some stages of this transition will be discussed later. But the transition itself is undeniable. So is the intellectual and moral change it produced. That change was no less momentous than the effects of some more familiar intellectual revolutions. This cannot be disproved by insisting that economic motives and needs are as old as history. Nor can it be disproved by saying that appeals to religion often provide a respectable cover for triumphant materialism. A medieval cynic, explaining canon law on usury, remarked that “he who takes it goes to hell, and he who does not goes to the workhouse.”⁹ Mr. Coulton rightly reminds us that, even in the Age of Faith, lofty principles could coexist with very sordid practices. This discussion concerns social thought, not the history of business organization. So there is no need to elaborate on that obvious truth. Only the gullible or the disillusioned will contrast one period with another as light with darkness, or darkness with light. Only they will give in to the habit of finding romantic virtues in every age except their own. Judging the merits of different theories of social organization must be left to those confident they have an adequate standard. All these pages can attempt is to understand a few of those theories.

For, after all, because doctrine and conduct diverge, it does not follow that to examine the former is to hunt abstractions. That men should have thought as they did is sometimes as significant as that they should have acted as they did, and not least significant when thought and practice are at variance. It may be true that “theory is a criticism of life only in the same sense as a good man is a criticism of a bad one.” But the emphasis of the theorist on certain aspects and values is not arbitrary, but is itself an interpretation, and, if his answers are to be discounted, his questions are none the less evidence as to the assumptions of the period in which they were asked. It would be paradoxical to dismiss Machiavelli and Locke and Smith and Bentham as irrelevant to the political practice of their age, merely on the ground that mankind has still to wait for the ideal Prince or Whig or Individualist or Utilitarian. It is not less paradoxical to dismiss those who formulated economic and social theories in the Middle Ages or in the sixteenth century merely because, behind canon law and summæ and sermons, behind the good ordinances of borough and gild, behind statutes and proclamations and prerogative courts, there lurked the immutable appetites of the economic man.

After all, doctrine and conduct may differ, but that does not mean studying doctrine is a search for abstractions. What people thought is sometimes as significant as what they did. Their thoughts can be especially significant when they differ from their actions. It may be true that “theory is a criticism of life only in the same sense as a good man is a criticism of a bad one.” But a theorist’s emphasis on certain aspects and values is not arbitrary. It is itself an interpretation. Even if we discount the theorist’s answers, the questions remain evidence of the assumptions of the period in which they were asked. It would be paradoxical to dismiss Machiavelli, Locke, Smith, and Bentham as irrelevant to the political practice of their age. We cannot dismiss them merely because humanity is still waiting for the ideal Prince, Whig, Individualist, or Utilitarian. It is no less paradoxical to dismiss those who developed economic and social theories in the Middle Ages or the sixteenth century. We cannot dismiss them merely because the unchanging appetites of economic man lurked behind canon law, summæ, and sermons. Those appetites also lurked behind the good ordinances of borough and gild, and behind statutes, proclamations, and prerogative courts.

There is an evolution of ideas, as well as of organisms, and the quality of civilization depends, as Professor Wallas has so convincingly shown, on the transmission, less of physical qualities, than of a complex structure of habits, knowledge, and beliefs, the destruction of which would be followed within a year by the death of half the human race. Granted that the groundwork of inherited dispositions with which the individual is born has altered little in recorded history, the interests and values which compose his world have undergone a succession of revolutions. The conventional statement that human nature does not change is plausible only so long as attention is focused on those aspects of it which are least distinctively human. The wolf is today what he was when he was hunted by Nimrod. But, while men are born with many of the characteristics of wolves, man is a wolf domesticated, who both transmits the arts by which he has been partially tamed and improves upon them. He steps into a social inheritance, to which each generation adds its own contribution of good and evil, before it bequeaths it to its successors.

Ideas evolve, just as organisms do. As Professor Wallas has shown so convincingly, the quality of civilization depends less on passing down physical traits than on passing down a complex structure of habits, knowledge, and beliefs. If that structure were destroyed, half the human race would die within a year. Even if the inherited dispositions people are born with have changed little in recorded history, the interests and values that make up their world have undergone a series of revolutions. The familiar claim that human nature does not change seems convincing only when we focus on its least distinctly human aspects. The wolf is today what he was when Nimrod hunted him. But although people are born with many of the characteristics of wolves, man is a domesticated wolf. He passes on the arts by which he has been partly tamed, and he improves on them. He enters into a social inheritance. Each generation adds its own contribution of good and evil to that inheritance before passing it on to the next.

There is a moral and religious, as well as a material, environment, which sets its stamp on the individual, even when he is least conscious of it. And the effect of changes in this environment is not less profound. The economic categories of modern society, such as property, freedom of contract and competition, are as much a part of its intellectual furniture as its political conceptions, and, together with religion, have probably been the most potent force in giving it its character. Between the conception of society as a community of unequal classes with varying functions, organized for a common end, and that which regards it as a mechanism adjusting itself through the play of economic motives to the supply of economic needs; between the idea that a man must not take advantage of his neighbor’s necessity, and the doctrine that “man’s self-love is God’s providence”; between the attitude which appeals to a religious standard to repress economic appetites, and that which regards expediency as the final criterion—there is a chasm which no theory of the permanence and ubiquity of economic interests can bridge, and which deserves at least to be explored. To examine how the latter grew out of the former; to trace the change, from a view of economic activity which regarded it as one among other kinds of moral conduct, to the view of it as dependent upon impersonal and almost automatic forces; to observe the struggle of individualism, in the face of restrictions imposed in the name of religion by the Church and of public policy by the State, first denounced, then palliated, then triumphantly justified in the name of economic liberty; to watch how ecclesiastical authority strives to maintain its hold upon the spheres it had claimed and finally abdicates them—to do this is not to indulge a vain curiosity, but to stand at the sources of rivulets which are now a flood.

Our moral and religious environment, like our material surroundings, shapes us even when we are least aware of it. Changes in this environment have an equally profound effect. The economic concepts of modern society, such as property, freedom of contract, and competition, are part of its intellectual framework. So are its political ideas. Together with religion, these economic concepts have probably been the most powerful force in shaping society’s character. One view sees society as a community of unequal classes with different roles, organized for a common purpose. Another sees society as a mechanism that adjusts to economic needs through the play of economic motives. One view holds that a person must not take advantage of a neighbor’s need. Another teaches that “man’s self-love is God’s providence”. One attitude appeals to a religious standard to restrain economic desires. Another regards practical advantage as the final test. A gulf separates these views. No theory that economic interests are permanent and universal can bridge it, and the gulf deserves at least to be explored. We can examine how the second view grew out of the first. We can trace the change from treating economic activity as one kind of moral conduct among others. The later view treats economic activity as governed by impersonal and almost automatic forces. We can observe the struggle of individualism against restrictions. The Church imposed restrictions in the name of religion, and the State imposed them in the name of public policy. Individualism was first condemned, then excused, and finally triumphantly justified in the name of economic liberty. We can watch how the Church’s authority struggled to keep control over the areas it had claimed. Finally, the Church gave up that control. To do all this is not to indulge an idle curiosity. It is to stand at the sources of streams that have now become a flood.

Has religious opinion in the past regarded questions of social organization and economic conduct as irrelevant to the life of the spirit, or has it endeavored not only to christianize the individual but to make a Christian civilization? Can religion admit the existence of a sharp antithesis between personal morality and the practices which are permissible in business? Does the idea of a Church involve the acceptance of any particular standard of social ethics, and, if so, ought a Church to endeavor to enforce it as among the obligations incumbent on its members? Such are a few of the questions which men are asking today, and on which a more competent examination of history than I can hope to offer might throw at any rate an oblique and wavering light.

In the past, has religious thought treated questions of social organization and economic conduct as irrelevant to spiritual life? Or has it tried not only to make individuals Christian, but also to create a Christian civilization? Can religion accept a sharp divide between personal morality and the practices permitted in business? Does the idea of a Church involve accepting a particular standard of social ethics? If so, should a Church try to enforce that standard as an obligation for its members? These are a few of the questions people are asking today. A more competent examination of history than I can hope to offer might shed some indirect and uncertain light on them.

We are asking these questions today. Men were asking the same questions, though in different language, throughout the sixteenth century. It is a commonplace that modern economic history begins with a series of revolutionary changes in the direction and organization of commerce, in finance, in prices, and in agriculture. To the new economic situation men brought a body of doctrine, law and tradition, hammered out during the preceding three centuries. Since the new forces were bewildering, and often shocking, to conservative consciences, moralists and religious teachers met them at first by a re-affirmation of the traditional doctrines, by which, it seemed, their excesses might be restrained and their abuses corrected. As the changed environment became, not a novelty, but an established fact, these doctrines had to be modified. As the effects of the Reformation developed, different churches produced characteristic differences of social opinion.

We are asking these questions today. People asked the same questions throughout the sixteenth century, though in different language. It is widely accepted that modern economic history begins with a series of revolutionary changes. These changed the direction and organization of commerce, as well as finance, prices, and agriculture. People faced the new economic situation with a body of doctrine, law, and tradition developed over the previous three centuries. The new forces were bewildering and often shocking to people with conservative moral beliefs. So moralists and religious teachers first responded by reaffirming traditional doctrines. These doctrines seemed to offer a way to restrain the excesses of the new forces and correct their abuses. As the changed environment became an established fact rather than a novelty, the doctrines had to be modified. As the effects of the Reformation developed, different churches developed distinct social views.

But these were later developments, which only gradually became apparent. The new economic world was not accepted without a struggle. Apart from a few extremists, the first generation of reformers were rarely innovators in matters of social theory, and quoted Fathers and church councils, decretals and canon lawyers, in complete unconsciousness that innovations in doctrine and church government involved any breach with what they had learned to regard as the moral tradition of Christendom. Hence the sixteenth century sees a collision, not only between different schools of religious thought, but between the changed economic environment and the accepted theory of society. To understand it, one must place oneself at the point from which it started. One must examine, however summarily, the historical background.

But these were later developments that became apparent only gradually. The new economic world was not accepted without a struggle. Apart from a few extremists, the first generation of reformers rarely proposed new social theories. They quoted the Church Fathers, church councils, papal decrees, and canon lawyers. They were completely unaware that their changes to doctrine and church government broke with what they regarded as Christendom’s moral tradition. As a result, the sixteenth century saw a clash not only between different schools of religious thought. It also saw a clash between the changed economic environment and the accepted theory of society. To understand this clash, we must return to its starting point. We must examine the historical background, even if only briefly.

That background consisted of the body of social theory, stated and implicit, which was the legacy of the Middle Ages. The formal teaching was derived from the Bible, the works of the Fathers and Schoolmen, the canon law and its commentators, and had been popularized in sermons and religious manuals. The informal assumptions were those implicit in law, custom, and social institutions. Both were complex, and to speak of them as a unity is to sacrifice truth to convenience. It may be that the political historian is justified when he covers with a single phrase the five centuries or more to which tradition has assigned the title of the Middle Ages. For the student of economic conditions that suggestion of homogeneity is the first illusion to be discarded.

That background consisted of the social theories, both stated and unstated, inherited from the Middle Ages. Formal teaching drew on the Bible, the works of the Church Fathers and Schoolmen, canon law, and commentaries on canon law. Sermons and religious manuals brought these teachings to a wider audience. Informal assumptions were embedded in law, custom, and social institutions. Both were complex, and treating them as a single body of thought sacrifices truth for convenience. Political historians may be justified in using a single phrase for the five centuries or more traditionally called the Middle Ages. But students of economic conditions must first discard the illusion that this period was uniform.

The medieval economic world was marked, it is true, by certain common characteristics. They sprang from the fact that on the west it was a closed system, that on the north it had so much elbow-room as was given by the Baltic and the rivers emptying themselves into it, and that on the east, where it was open, the apertures were concentrated along a comparatively short coast-line from Alexandria to the Black Sea, so that they were easily commanded by any naval power dominating the eastern Mediterranean, and easily cut by any military power which could squat across the trade routes before they reached the sea. While, however, these broad facts determined that the two main currents of trade should run from east to west and north to south, and that the most progressive economic life of the age should cluster in the regions from which these currents started and where they met, within this general economic framework there was the greatest variety of condition and development. The contours of economic civilization ran on different lines from those of subsequent centuries, but the contrast between mountain and valley was not less clearly marked. If the sites on which a complex economic structure rose were far removed from those of later generations, it flourished none the less where conditions favored its growth. In spite of the ubiquity of manor and gild, there was as much difference between the life of a center of capitalist industry, like fifteenth-century Flanders, or a center of capitalist finance, like fifteenth-century Florence, and a pastoral society exporting raw materials and a little food, like medieval England, as there is between modern Lancashire or London and modern Denmark. To draw from English conditions a picture of a whole world stagnating in economic squalor, or basking in economic innocence, is as absurd as to reconstruct the economic life of Europe in the twentieth century from a study of the Shetland Islands or the Ukraine. The elements in the social theory of the Middle Ages were equally various, and equally changing. Even if the student confines himself to the body of doctrine which is definitely associated with religion, and takes as typical of it the Summæ of the Schoolmen, he finds it in constant process of development. The economic teaching of St. Antonino in the fifteenth century, for example, was far more complex and realistic than that of St. Thomas in the thirteenth, and down to the very end of the Middle Ages the best-established and most characteristic parts of the system—for example, the theory of prices and of usury—so far from being stationary, were steadily modified and elaborated.

The medieval economic world did have certain common features. These arose from its geography. In the west, it was a closed system. In the north, the Baltic and the rivers flowing into it gave trade some room to move. In the east, where the system was open, its openings were concentrated along a relatively short coastline from Alexandria to the Black Sea. A naval power dominating the eastern Mediterranean could easily control these openings. A military power could also easily cut them off by blocking the trade routes before they reached the sea. These broad conditions determined that the two main currents of trade ran from east to west and north to south. They also meant that the most advanced economic activity of the age clustered where these currents began and where they met. Yet within this general economic framework, conditions and levels of development varied enormously. The landscape of economic civilization followed different contours from those of later centuries, but the contrast between mountain and valley was no less clear. Complex economic structures arose in places far removed from those of later generations. But they flourished wherever conditions favored their growth. Manors and guilds were found everywhere, but economic life still varied greatly. Fifteenth-century Flanders was a center of capitalist industry, while fifteenth-century Florence was a center of capitalist finance. Medieval England, by contrast, was a pastoral society that exported raw materials and a little food. The difference between them was as great as the difference between modern Lancashire or London and modern Denmark. It would be absurd to use English conditions to portray the whole world as stagnating in economic squalor or basking in economic innocence. That would be as absurd as reconstructing the economic life of twentieth-century Europe from a study of the Shetland Islands or the Ukraine. The elements of medieval social theory were just as varied and just as changeable. A student may focus only on the body of doctrine clearly associated with religion and take the Summæ of the Schoolmen as typical of it. Even then, the student finds this doctrine constantly developing. For example, St. Antonino's economic teaching in the fifteenth century was far more complex and realistic than St. Thomas's in the thirteenth. Right up to the end of the Middle Ages, even the most established and distinctive parts of the system were steadily revised and developed. These included the theories of prices and usury, which were far from fixed.

There are, perhaps, four main attitudes which religious opinion may adopt toward the world of social institutions and economic relations. It may stand on one side in ascetic aloofness and regard them as in their very nature the sphere of unrighteousness, from which men may escape—from which, if they consider their souls, they will escape—but which they can conquer only by flight. It may take them for granted and ignore them, as matters of indifference belonging to a world with which religion has no concern; in all ages the prudence of looking problems boldly in the face and passing on has seemed too self-evident to require justification. It may throw itself into an agitation for some particular reform, for the removal of some crying scandal, for the promotion of some final revolution, which will inaugurate the reign of righteousness on earth. It may at once accept and criticize, tolerate and amend, welcome the gross world of human appetites, as the squalid scaffolding from amid which the life of the spirit must rise, and insist that this also is the material of the Kingdom of God. To such a temper, all activities divorced from religion are brutal or dead, but none are too mean to be beneath or too great to be above it, since all, in their different degrees, are touched with the spirit which permeates the whole. It finds its most sublime expression in the words of Piccarda: “Paradise is everywhere, though the grace of the highest good is not shed everywhere in the same degree.”

Religious opinion may take perhaps four main attitudes toward social institutions and economic relations. First, it may stand apart from them in ascetic withdrawal. It may regard them as by nature the realm of wrongdoing. People may escape from this realm. If they care about their souls, they will escape. But they can conquer it only by fleeing from it. Second, religious opinion may take social institutions and economic relations for granted and ignore them. It may treat them as matters of indifference, belonging to a world that is no concern of religion. In every age, the wisdom of looking problems boldly in the face and passing on has seemed too obvious to need justification. Third, religious opinion may throw itself into a campaign for a particular reform. It may seek to remove some glaring scandal or bring about a final revolution that will establish righteousness on earth. Fourth, religious opinion may accept and criticize social institutions and economic relations at the same time. It may tolerate and improve them. It may welcome the coarse world of human appetites as the squalid scaffolding from which spiritual life must rise. And it may insist that this world, too, is the material of the Kingdom of God. To this way of thinking, all activities separated from religion are brutal or lifeless. But none are too humble to be beneath religion or too great to be above it. For all activities, in different degrees, are touched by the spirit that runs through everything. This attitude finds its most sublime expression in the words of Piccarda: “Paradise is everywhere, though the grace of the highest good is not shed everywhere in the same degree.”

Each of these attitudes meets us today. Each meets us in the thought of the Middle Ages, as differences of period and place and economic environment and personal temperament evoke it. In the early Middle Ages the ascetic temper predominates. Lanfranc, for example, who sees nothing in economic life but the struggle of wolves over carrion, thinks that men of business can hardly be saved, for they live by cheating and profiteering.¹⁰ It is monasticism, with its repudiation of the prizes and temptations of the secular world, which is par excellence the life of religion. As one phase of it succumbed to ease and affluence, another rose to restore the primitive austerity, and the return to evangelical poverty, preached by St. Francis but abandoned by many of his followers, was the note of the majority of movements for reform. As for indifferentism—what else, for all its communistic phrases, is Wyclif’s teaching, that the “just man is already lord of all” and that “in this world God must serve the devil,” but an anticipation of the doctrine of celestial happiness as the compensation for earthly misery, to which Hobbes gave a cynical immortality when he wrote that the persecuted, instead of rebelling, “must expect their reward in Heaven,” and which Mr. and Mrs. Hammond have revealed as an opiate dulling both the pain and the agitation of the Industrial Revolution? If obscure sects like the Poor Men of Lyons are too unorthodox to be cited, the Friars are not, and it was not only Langland and that gentlemanly journalist, Froissart, who accused them—the phrase has a long history—of stirring up class hatred.

Each of these attitudes is still present today. Each also appears in medieval thought, depending on the period, place, economic conditions, and personal temperament. In the early Middle Ages, the ascetic attitude prevailed. Lanfranc, for example, sees economic life as nothing but wolves fighting over carrion. He thinks businesspeople can hardly be saved, because they live by cheating and profiteering.¹⁰ Monasticism, with its rejection of the rewards and temptations of the secular world, is par excellence the religious life. As one form of monasticism gave way to comfort and wealth, another arose to restore the original austerity. St. Francis preached a return to evangelical poverty, though many of his followers abandoned it. That return was the defining feature of most reform movements. And what of indifferentism? Despite all its communistic language, Wyclif’s teaching anticipates the doctrine that heavenly happiness compensates for earthly misery. He teaches that the “just man is already lord of all” and that “in this world God must serve the devil.” Hobbes gave that doctrine a cynical immortality when he wrote that the persecuted, instead of rebelling, “must expect their reward in Heaven.” Mr. and Mrs. Hammond have shown how the doctrine acted as an opiate, dulling both the pain and the unrest of the Industrial Revolution. If obscure sects like the Poor Men of Lyons are too unorthodox to cite, the Friars are not. Langland and the gentlemanly journalist Froissart were not alone in accusing the Friars of stirring up class hatred. The phrase has a long history.

To select from so immense a sea of ideas about society and religion only the specimens that fit the meshes of one’s own small net, and to label them “medieval thought,” is to beg all questions. Ideas have a pedigree which, if realized, would often embarrass their exponents. The day has long since passed when it could be suggested that only one-half of modern Christianity has its root in medieval religion. There is a medieval Puritanism and rationalism as well as a medieval Catholicism. In the field of ecclesiastical theory, as Mr. Manning has pointed out in his excellent book,¹¹ Gregory VII and Boniface VIII have their true successors in Calvin and Knox. What is true of religion and political thought is equally true of economic and social doctrines. The social theories of Luther and Latimer, of Bucer and Bullinger, of sixteenth-century Anabaptists and seventeenth-century Levellers, of Puritans like Baxter, Anglicans like Laud, Baptists like Bunyan, Quakers like Bellers, are all the children of medieval parents. Like the Church today in regions which have not yet emerged from savagery, the Church of the earlier Middle Ages had been engaged in an immense missionary effort, in which, as it struggled with the surrounding barbarism, the work of conversion and of social construction had been almost indistinguishable. By the very nature of its task, as much as by the intention of its rulers, it had become the greatest of political institutions. For good or evil it aspired to be, not a sect, but a civilization, and, when its unity was shattered at the Reformation, the different Churches which emerged from it endeavored, according to their different opportunities, to perpetuate the same tradition. Asceticism or renunciation, quietism or indifferentism, the zeal which does well to be angry, the temper which seeks a synthesis of the external order and the religion of the spirit—all alike, in one form or another, are represented in the religious thought and practice of the Middle Ages.

To choose only the ideas about society and religion that fit our own small net is to beg every question. The sea of ideas is immense, and calling our chosen specimens “medieval thought” settles nothing. Ideas have histories that would often embarrass those who express them, if they knew those histories. The time has long passed when anyone could claim that only half of modern Christianity is rooted in medieval religion. There is a medieval Puritanism and rationalism as well as a medieval Catholicism. In Church theory, as Mr. Manning has pointed out in his excellent book,¹¹ Calvin and Knox are the true successors of Gregory VII and Boniface VIII. What is true of religion and political thought is equally true of economic and social doctrines. All these social theories have medieval parents: those of Luther and Latimer, of Bucer and Bullinger, of sixteenth-century Anabaptists and seventeenth-century Levellers, of Puritans like Baxter, Anglicans like Laud, Baptists like Bunyan, and Quakers like Bellers. The Church of the early Middle Ages undertook a vast missionary effort, as the Church does today in regions that have not yet emerged from savagery. As the medieval Church struggled with the barbarism around it, conversion and the building of society were almost indistinguishable. The nature of its task, as much as the intentions of its rulers, made it the greatest political institution. For good or evil, the Church aspired to be not a sect, but a civilization. Its unity was shattered at the Reformation. The different Churches that emerged from it then tried to carry on the same tradition, according to their different opportunities. All these attitudes appear in the religious thought and practice of the Middle Ages in one form or another: asceticism or renunciation, quietism or indifference, righteous anger, and the desire to bring the external order together with the religion of the spirit.

All are represented in it, but not all are equally representative of it. Of the four attitudes suggested above, it is the last which is most characteristic. The first fundamental assumption which is taken over by the sixteenth century is that the ultimate standard of human institutions and activities is religion. The architectonics of the system had been worked out in the Summæ of the Schoolmen. In sharp contrast to the modern temper, which takes the destination for granted, and is thrilled by the hum of the engine, medieval religious thought strains every interest and activity, by however arbitrary a compression, into the service of a single idea. The lines of its scheme run up and down, and, since purpose is universal and all-embracing, there is, at least in theory, no room for eccentric bodies which move in their own private orbit. That purpose is set by the divine plan of the universe. “The perfect happiness of man cannot be other than the vision of the divine essence.”¹²

All are represented in it, but not all are equally representative of it. Of the four attitudes described above, the last is the most characteristic. The sixteenth century inherited a fundamental assumption: religion is the ultimate standard by which human institutions and activities are judged. The Schoolmen had worked out the structure of this system in their Summæ. Modern thinking takes the destination for granted and is thrilled by the hum of the engine. Medieval religious thought, by sharp contrast, forces every interest and activity into the service of a single idea, however arbitrarily. Its design runs vertically. Since its purpose is universal and all-embracing, there is, at least in theory, no room for eccentric bodies moving in their own private orbits. The divine plan of the universe sets that purpose. “The perfect happiness of man cannot be other than the vision of the divine essence.”¹²

Hence all activities fall within a single system, because all, though with different degrees of immediateness, are related to a single end, and derive their significance from it. The Church in its wider sense is the Christian Commonwealth, within which that end is to be realized; in its narrower sense it is the hierarchy divinely commissioned for its interpretation; in both it embraces the whole of life, and its authority is final. Though practice is perpetually at variance with theory, there is no absolute division between the inner and personal life, which is “the sphere of religion,” and the practical interests, the external order, the impersonal mechanism, to which, if some modern teachers may be trusted, religion is irrelevant.

All activities therefore belong to a single system. All are related to a single end, though some more directly than others, and all draw their meaning from that end. In its broader sense, the Church is the Christian Commonwealth, within which that end is to be achieved. In its narrower sense, the Church is the hierarchy divinely appointed to interpret that end. In both senses, the Church embraces the whole of life, and its authority is final. Practice constantly differs from theory, but there is no absolute division between the inner, personal life and the outside world. The inner life is “the sphere of religion.” The outside world consists of practical interests, the external order, and impersonal mechanisms. If some modern teachers are to be believed, religion has no relevance to that world.

There is no absolute division, but there is a division of quality. There are—to use a modern phrase—degrees of reality. The distinctive feature of medieval thought is that contrasts which later were to be presented as irreconcilable antitheses appear in it as differences within a larger unity, and that the world of social organization, originating in physical necessities, passes by insensible gradations into that of the spirit. Man shares with other animals the necessity of maintaining and perpetuating his species; in addition, as a natural creature, he has what is peculiar to himself, an inclination to the life of the intellect and of society—“to know the truth about God and to live in communities.”¹³ These activities, which form his life according to the law of nature, may be regarded, and sometimes are regarded, as indifferent or hostile to the life of the spirit. But the characteristic thought is different. It is that of a synthesis.

There is no absolute division, but there is a difference in quality. To use a modern phrase, there are degrees of reality. In medieval thought, contrasts that would later be presented as irreconcilable opposites appeared as differences within a larger unity. Social organization arose from physical needs, but passed gradually and almost imperceptibly into the realm of the spirit. Like other animals, humans must sustain and reproduce their species. But humans also have a distinctive natural inclination toward intellectual and social life: “to know the truth about God and to live in communities.”¹³ These activities make up human life according to the law of nature. They may be seen, and sometimes are seen, as indifferent or hostile to spiritual life. But the characteristic medieval view is different. It brings the two together.

The contrast between nature and grace, between human appetites and interests and religion, is not absolute, but relative. It is a contrast of matter and the spirit informing it, of stages in a process, of preparation and fruition. Grace works on the unregenerate nature of man, not to destroy it, but to transform it. And what is true of the individual is true of society. An attempt is made to give it a new significance by relating it to the purpose of human life as known by revelation. In the words of a famous (or notorious) Bull: “The way of religion is to lead the things which are lower to the things which are higher through the things which are intermediate. According to the law of the universe all things are not reduced to order equally and immediately; but the lowest through the intermediate, the intermediate through the higher.”¹⁴ Thus social institutions assume a character which may almost be called sacramental, for they are the outward and imperfect expression of a supreme spiritual reality. Ideally conceived, society is an organism of different grades, and human activities form a hierarchy of functions, which differ in kind and in significance, but each of which is of value on its own plane, provided that it is governed, however remotely, by the end which is common to all. Like the celestial order, of which it is the dim reflection, society is stable, because it is straining upwards:

The contrast between nature and grace, between human desires and interests and religion, is relative, not absolute. It is the contrast between matter and the spirit that gives it life. It is the contrast between stages in a process, between preparation and fulfillment. Grace works on unregenerate human nature, not to destroy it, but to transform it. What is true of the individual is also true of society. Society is given a new meaning by connecting it to the purpose of human life as revealed by God. A famous (or notorious) Bull puts it this way: “The way of religion is to lead lower things to higher things through those in between. According to the law of the universe, all things are not brought into order equally and directly. Instead, the lowest are brought into order through those in between, and those in between through the higher.”¹⁴ Social institutions therefore take on a character that may almost be called sacramental. They are the outward and imperfect expression of a supreme spiritual reality. Ideally, society is an organism made up of different ranks. Human activities form a hierarchy of functions, differing in kind and importance. Yet each has value at its own level, provided that it is guided, however indirectly, by the purpose common to all. Society is a dim reflection of the celestial order. Like that order, it is stable because it strives upward:

Needless to say, metaphysics, however sublime, were not the daily food of the Middle Ages, any more than of today. The fifteenth century saw an outburst of commercial activity and of economic speculation, and by the middle of it all this teaching was becoming antiquated. Needless to say, also, general ideas cannot be kept in compartments, and the teleology of medieval speculation colored the interpretation of common affairs, as it was colored by physics in the eighteenth century and by the idea of evolution in the nineteenth. If the first legacy of the Middle Ages to the sixteenth century was the idea of religion as embracing all aspects of human life, the second and third flowed naturally from the working of that idea in the economic environment of the time. They may be called, respectively, the functional view of class organization, and the doctrine of economic ethics.

Of course, metaphysics, however lofty, was no more a part of daily life in the Middle Ages than it is today. The fifteenth century saw a burst of commercial activity and economic speculation. By the middle of the century, all this teaching was becoming outdated. Of course, general ideas cannot be kept separate from one another. The medieval view that things have a purpose shaped how people understood everyday affairs. In the same way, physics shaped that understanding in the eighteenth century, and the idea of evolution shaped it in the nineteenth. If the first legacy of the Middle Ages to the sixteenth century was the idea that religion embraced every aspect of human life, the second and third followed naturally from how that idea worked in the economy of the time. They may be called the functional view of class organization and the doctrine of economic ethics, respectively.

From the twelfth century to the sixteenth, from the work of Beckett’s secretary in 1159 to the work of Henry VIII’s chaplain in 1537, the analogy by which society is described—an analogy at once fundamental and commonplace—is the same.¹⁵ Invoked in every economic crisis to rebuke extortion and dissension with a high doctrine of social solidarity, it was not finally discarded till the rise of a theoretical individualism in England in the seventeenth century. It is that of the human body. The gross facts of the social order are accepted in all their harshness and brutality. They are accepted with astonishing docility, and, except on rare occasions, there is no question of reconstruction. What they include is no trifle. It is nothing less than the whole edifice of feudal society—class privilege, class oppression, exploitation, serfdom. But these things cannot, it is thought, be treated as simply alien to religion, for religion is all-comprehensive. They must be given some ethical meaning, must be shown to be the expression of some larger plan. The meaning given them is simple. The facts of class status and inequality were rationalized in the Middle Ages by a functional theory of society, as the facts of competition were rationalized in the eighteenth by the theory of economic harmonies; and the former took the same delight in contemplating the moral purpose revealed in social organization as the latter in proving that to the curious mechanism of human society a moral purpose was superfluous or disturbing. Society, like the human body, is an organism composed of different members. Each member has its own function, prayer, or defense, or merchandise, or tilling the soil. Each must receive the means suited to its station, and must claim no more. Within classes there must be equality; if one takes into his hand the living of two, his neighbor will go short. Between classes there must be inequality; for otherwise a class cannot perform its function, or—a strange thought to us—enjoy its rights. Peasants must not encroach on those above them. Lords must not despoil peasants. Craftsmen and merchants must receive what will maintain them in their calling, and no more.

From the twelfth century to the sixteenth, the same comparison was used to describe society. It appeared in the work of Beckett’s secretary in 1159 and in that of Henry VIII’s chaplain in 1537.¹⁵ The comparison was both fundamental and commonplace. In every economic crisis, it was used to condemn exploitation and conflict through a lofty doctrine of social solidarity. It was not finally abandoned until theoretical individualism arose in England in the seventeenth century. The comparison was to the human body. The basic facts of the social order were accepted in all their harshness and brutality. They were accepted with astonishing obedience, and, except on rare occasions, no one considered rebuilding society. What was accepted was no small matter. It was nothing less than the whole structure of feudal society: class privilege, class oppression, exploitation, and serfdom. But people thought these things could not be treated as simply separate from religion, because religion included everything. They had to be given some ethical meaning and shown to express some larger plan. In the Middle Ages, class status and inequality were justified by a theory that each class had a social function. In the eighteenth century, competition was similarly justified by the theory of economic harmonies. Supporters of the medieval theory delighted in contemplating the moral purpose revealed in society’s organization. Supporters of the later theory took the same delight in proving that moral purpose was unnecessary or disruptive to the curious workings of human society. Society, like the human body, is an organism made up of different members. Each member has its own function: prayer, defense, trade, or farming. Each must receive the means suited to its position and claim no more. Within each class there must be equality. If one person takes enough to support two people, a neighbor will not have enough. Between classes there must be inequality. Otherwise, a class cannot perform its function or, a strange thought to us, enjoy its rights. Peasants must not encroach on those above them. Lords must not rob peasants. Craftsmen and merchants must receive what will maintain them in their occupations, and no more.

As a rule of social policy, the doctrine was at once repressive and protective. “There is degree above degree, as reason is, and skill it is that men do their devoir thereas it is due. But certes, extortions and despite of your underlings is damnable.”¹⁶ As a philosophy of society, it attempted to spiritualize the material by incorporating it in a divine universe, which should absorb and transform it. To that process of transmutation the life of mere money-making was recalcitrant, and hence, indeed, the stigma attached to it. For, in spite of the ingenuity of theorists, finance and trade, the essense of which seemed to be, not service, but a mere appetitus divitiarum infinitus, were not easily interpreted in terms of social function. Comparatively late intruders in a world dominated by conceptions hammered out in a pre-commercial age, they were never fitted harmoniously into the medieval synthesis, and ultimately, when they grew to their full stature, were to contribute to its overthrow. But the property of the feudal lord, the labor of the peasant or the craftsman, even the ferocity of the warrior, were not dismissed as hostile or indifferent to the life of the spirit. Touched by the spear of Ithuriel, they were to be sublimated into service, vocation and chivalry, and the ritual which surrounded them was designed to emphasize that they had undergone a re-dedication at the hands of religion. Baptized by the Church, privilege and power became office and duty.

As a rule of social policy, the doctrine was both restrictive and protective. “There are ranks above ranks, as reason requires, and it is right that people do their duty where it is due. But certainly, extortion and contempt toward those beneath you are damnable.”¹⁶ As a philosophy of society, the doctrine sought to spiritualize material life. It did so by placing material life within a divine universe that would absorb and transform it. A life devoted merely to making money resisted this transformation. That was why such a life carried a stigma. For all the ingenuity of theorists, finance and trade were hard to explain in terms of social function. Their essence seemed to be not service, but a mere appetitus divitiarum infinitus, an endless appetite for wealth. Finance and trade were relatively late arrivals in a world dominated by ideas formed before the commercial age. They were never fitted harmoniously into the medieval synthesis. Ultimately, when they grew to their full stature, they would help bring it down. But the property of the feudal lord and the labor of the peasant or craftsman were not dismissed as hostile or indifferent to spiritual life. Nor was even the warrior’s ferocity. Touched by the spear of Ithuriel, these were to be elevated into service, vocation, and chivalry. The rituals surrounding them were designed to show that religion had rededicated them. Baptized by the Church, privilege and power became office and duty.

That the reconciliation was superficial, and that in attempting it the Church often degraded itself without raising the world, is as indisputable as that its tendency was to dignify material interests, by stamping them with the impress of a universal design. Gentlemen took hard tallages and oppressed the poor; but it was something that they should be told that their true function was “to defend God’s law by power of the world.”¹⁷ Craftsmen—the burden of endless sermons—worked deceitfully; but it was perhaps not wholly without value that they should pay even lip-service to the ideal of so conducting their trade, that the common people should not be defrauded by the evil ingenuity of those exercising the craft. If lord and peasant, merchant and artisan, burgess and villager, pressed each other hard, was it meaningless to meet their struggles with an assertion of universal solidarity, to which economic convenience and economic power must alike give way? “The health of the whole commonwealth will be assured and vigorous, if the higher members consider the lower and the lower answer in like manner the higher, so that each is in its turn a member of every other.”¹⁸

The reconciliation was certainly superficial. In attempting it, the Church often degraded itself without improving the world. But the attempt also certainly gave dignity to material interests by presenting them as part of a universal design. Gentlemen imposed harsh taxes and oppressed the poor. But it mattered that they were told their true function was “to defend God’s law through worldly power.”¹⁷ Craftsmen, as countless sermons complained, worked dishonestly. But perhaps it was not entirely without value that they paid even lip service to an ideal. They were supposed to conduct their trade so that ordinary people would not be cheated by the dishonest ingenuity of those practicing the craft. Lords and peasants, merchants and artisans, town dwellers and villagers all put pressure on one another. But did it mean nothing to meet their struggles with a claim of universal solidarity, to which both economic convenience and economic power must yield? “The health of the whole commonwealth will be secure and strong if the higher members care for the lower, and the lower respond in the same way to the higher. In this way, each is in turn a member of every other.”¹⁸

If the medieval moralist was often too naïve in expecting sound practice as the result of lofty principles alone, he was at least free from that not unfashionable form of credulity which expects it from their absence or from their opposite. To say that the men to whom such teaching was addressed went out to rob and cheat is to say no more than that they were men. Nor is it self-evident that they would have been more likely to be honest, if they had been informed, like some of their descendants, that competition was designed by Providence to provide an automatic substitute for honesty. Society was interpreted, in short, not as the expression of economic self-interest, but as held together by a system of mutual, though varying, obligations. Social well-being exists, it was thought, in so far as each class performs its functions and enjoys the rights proportioned thereto. “The Church is divided in these three parts, preachers, and defenders, and ... laborers.... As she is our mother, so she is a body, and health of this body stands in this, that one part of her answer to another, after the same measure that Jesus Christ has ordained it.... Kindly man’s hand helps his head, and his eye helps his foot, and his foot his body ... and thus should it be in parts of the Church.... As divers parts of man served unkindly to man if one took the service of another and left his own proper work, so divers parts of the Church have proper works to serve God; and if one part leave his work that God has limited him and take work of another part, sinful wonder is in the Church.... Surely the Church shall never be whole before proportions of her parts be brought again by this heavenly leech and [by] medicine of men.”¹⁹

The medieval moralist was often too naïve in expecting lofty principles alone to produce good conduct. But at least he was free from a different kind of credulity, which is not without its followers. This credulity expects good conduct to result from the absence of such principles, or from their opposites. To say that the people who heard such teaching went out to rob and cheat is merely to say they were human. Nor is it self-evident that they would have been more likely to be honest if they had been taught otherwise. Some of their descendants, for example, were told that Providence designed competition to provide an automatic substitute for honesty. In short, society was understood not as an expression of economic self-interest, but as held together by mutual obligations. These obligations varied from one class to another. People thought that social well-being existed to the extent that each class performed its functions and enjoyed rights proportionate to them. “The Church is divided into three parts: preachers, defenders, and ... laborers.... Just as the Church is our mother, she is also a body. The health of this body depends on each part working with the others, in the measure ordained by Jesus Christ.... In a person, the hand naturally helps the head, the eye helps the foot, and the foot helps the body ... and so it should be with the parts of the Church.... A person's different body parts would act against nature if one did another's work and neglected its own. In the same way, the different parts of the Church have their own work in serving God. If one part leaves the work God has assigned it and takes up another's work, there is a sinful disorder in the Church.... Surely the Church will never be whole until her parts are restored to their proper proportions by this heavenly healer and by human medicine.”¹⁹

Speculation does not develop in vacuo. It echoes, however radical it is, the established order. Clearly this patriarchal doctrine is a softened reflection of the feudal land system. Not less clearly the Church’s doctrine of economic ethics is the expression of the conditions of medieval industry. A religious philosophy, unless it is frankly to abandon nine-tenths of conduct to the powers of darkness, cannot admit the doctrine of a world of business and economic relations self-sufficient and divorced from ethics and religion. But the facts may be difficult to moralize, or they may be relatively easy. Over a great part of Europe in the later Middle Ages, the economic environment was less intractable than it had been in the days of the Empire or than it is today. In the great commercial centers there was sometimes, it is true, a capitalism as inhuman as any which the world has seen, and from time to time ferocious class wars between artisans and merchants.²⁰ But outside them trade, industry, the money-market, all that we call the economic system, was not a system, but a mass of individual trades and individual dealings. Pecuniary transactions were a fringe on a world of natural economy. There was little mobility or competition. There was very little large-scale organization. With some important exceptions, such as the textile workers of Flanders and Italy, who, in the fourteenth century, again and again rose in revolt, the medieval artisan, especially in backward countries like England, was a small master. The formation of temporary organizations, or “parliaments,” of wage-earners, which goes on in London even before the end of the thirteenth century,²¹ and the growth of journeymen’s associations in the later Middle Ages, are a proof that the conditions which produced modern trade unionism were not unknown. But even in a great city like Paris the 128 gilds which existed at the end of the thirteenth century appear to have included 5,000 masters, who employed not more than 6,000 to 7,000 journeymen. At Frankfurt-am-Main in 1387 actually not more than 750 to 800 journeymen are estimated to have been in the service of 1,554 masters.²²

Ideas do not develop in a vacuum. However radical they are, they echo the established order. Clearly, this patriarchal doctrine is a softened reflection of the feudal land system. Just as clearly, the Church’s teaching on economic ethics reflects the conditions of medieval industry. A religious philosophy cannot accept business and economic relations as a self-contained world, separate from ethics and religion. To do so, it would have to openly abandon nine-tenths of human conduct to the powers of darkness. But applying moral principles to economic life may be difficult, or it may be relatively easy. In much of Europe during the later Middle Ages, the economic environment was easier to deal with than it had been under the Empire or than it is today. In the great commercial centers, it is true, capitalism was sometimes as inhuman as any the world has seen. From time to time, ferocious class wars broke out between artisans and merchants.²⁰ But outside those centers, trade, industry, and the money market did not form a system. What we call the economic system was a mass of individual trades and dealings. Money transactions played a marginal role in a world based on a natural economy. There was little mobility or competition. There was very little large-scale organization. With some important exceptions, medieval artisans were small masters, especially in backward countries like England. One exception was the textile workers of Flanders and Italy, who revolted again and again in the fourteenth century. Wage earners formed temporary organizations, or “parliaments,” in London even before the end of the thirteenth century.²¹ Journeymen’s associations also grew in the later Middle Ages. These developments prove that the conditions that produced modern trade unionism were not unknown. But even in a great city like Paris, the 128 guilds at the end of the thirteenth century appear to have included 5,000 masters. They employed no more than 6,000 to 7,000 journeymen. In Frankfurt-am-Main in 1387, an estimated 750 to 800 journeymen worked for 1,554 masters.²²

In cities of this kind, with their freedom, their comparative peace, and their strong corporate feeling, large enough to be prolific of associations and small enough for each man to know his neighbor, an ethic of mutual aid was not wholly impossible, and it is in the light of such conditions that the most characteristic of medieval industrial institutions is to be interpreted. To suggest that anything like a majority of medieval workers were ever members of a craft gild is extravagant. In England, at any rate, more than nine-tenths were peasants, among whom, though friendly societies called gilds were common, there was naturally no question of craft organization. Even in the towns it is a question whether there was not a considerable population of casual workers—consider only the number of unskilled workers that must have been required as laborers by the craftsmen building a cathedral in the days before mechanical cranes—who were rarely organized in permanent societies. To invest the craft gilds with a halo of economic chivalry is not less inappropriate. They were, first and foremost, monopolists, and the cases in which their vested interests came into collision with the consumer were not a few. Wyclif, with his almost modern devotion to the conception of a unitary society over-riding particular interests for the common good, was naturally prejudiced against corporations, on the ground that they distracted social unity by the intrusion of sectarian cupidities and sinister ambitions; but there was probably from time to time more than a little justification for his complaint that “all new fraternities or gilds made of men seem openly to run in this curse [against false conspirators],” because “they conspire to bear up each other, yea, in wrong, and oppress other men in their right by their wit and power.”²³ It is significant that the most striking of the projects of political and social reconstruction produced in Germany in the century before the Reformation proposed the complete abolition of gilds, as intolerably corrupt and tyrannical.²⁴

In cities like these, an ethic of mutual aid was not entirely impossible. They had freedom, comparative peace, and a strong sense of community. They were large enough to produce many associations, yet small enough for each person to know their neighbors. We must understand the most characteristic medieval industrial institution in light of these conditions. It would be an exaggeration to suggest that anything like a majority of medieval workers ever belonged to a craft guild. In England, at least, more than nine out of ten workers were peasants. Friendly societies called guilds were common among them, but there was naturally no question of craft organization. Even in towns, there may have been a sizable population of casual workers who rarely belonged to permanent associations. Consider how many unskilled laborers the craftsmen building a cathedral must have needed before mechanical cranes existed. It would be just as inappropriate to give craft guilds a halo of economic chivalry. Above all, they were monopolists, and their vested interests often clashed with those of consumers. Wyclif was devoted to a conception of a united society that overrode particular interests for the common good. His devotion was almost modern. He was naturally prejudiced against corporations because he believed their narrow greed and sinister ambitions disrupted social unity. But his complaint was probably often more than a little justified. He complained that “all new fraternities or guilds made by men seem openly to fall under this curse [against false conspirators],” because “they conspire to support one another, even in wrongdoing, and use their wits and power to deny other men their rights.”²³ It is significant that the most striking plans for political and social reconstruction in Germany proposed abolishing guilds completely. These plans appeared in the century before the Reformation and regarded guilds as intolerably corrupt and tyrannical.²⁴

There are, however, monopolists and monopolists. An age in which combinations are not tempted to pay lip-service to religion may do well to remember that the characteristic, after all, of the medieval gild was that, if it sprang from economic needs, it claimed, at least, to subordinate them to social interests, as conceived by men for whom the social and the spiritual were inextricably intertwined. “Tout ce petit monde antique,” writes the historian of French gilds, “était fortement imbu des idées chrétiennes sur le juste salaire et le juste prix; sans doute il y avait alors, comme aujourd’hui, des cupidités et des convoitises; mais une règle puissante s’imposait à tous et d’une manière générale exigeait pour chacun le pain quotidien promis par l’Evangile.”²⁵ The attempt to preserve a rough equality among “the good men of the mistery,” to check economic egotism by insisting that every brother shall share his good fortune with another and stand by his neighbor in need, to resist the encroachments of a conscienceless money-power, to preserve professional standards of training and craftsmanship, and to repress by a strict corporate discipline the natural appetite of each to snatch special advantages for himself to the injury of all—whether these things outweigh the evils of conservative methods and corporate exclusiveness is a question which each student will answer in accordance with his own predilections. What is clear, at least, is that both the rules of fraternities and the economic teaching of the Church were prompted by the problems of a common environment. Much that is now mechanical was then personal, intimate and direct, and there was little room for organization on a scale too vast for the standards that are applied to individuals, or for the doctrine which silences scruples and closes all accounts with the final plea of economic expediency.

There are, however, monopolists and monopolists. In an age when business combinations are not tempted to pay lip service to religion, one point is worth remembering. Medieval guilds arose from economic needs, but they at least claimed to put social interests first. For the people of that time, social and spiritual interests were inseparable. As the historian of French guilds writes, “All these people of the old world were deeply influenced by Christian ideas about fair wages and fair prices. No doubt there was greed and covetousness then, as there is today. But a powerful rule applied to everyone and generally required that each person receive the daily bread promised by the Gospel.”²⁵ Guilds tried to maintain rough equality among “the good men of the trade.” They tried to check economic selfishness by insisting that every member share his good fortune with another and stand by his neighbor in need. They resisted the encroachment of a money power without conscience. They maintained professional standards of training and craftsmanship. And through strict discipline within the guild, they restrained each member’s natural appetite for special advantages at everyone else’s expense. Whether these things outweigh the evils of conservative methods and guild exclusiveness is a question each student will answer according to personal preference. At least one thing is clear. Both the rules of the guilds and the Church’s economic teaching arose from the problems of a shared environment. Much that is now mechanical was then personal, intimate, and direct. There was little room for organizations so vast that the standards applied to individuals could not be applied to them. Nor was there much room for the doctrine that silences scruples and settles every question by a final appeal to economic expediency.

Such an environment, with its personal economic relations, was a not unfavorable field for a system of social ethics. And the Church, which brought to its task the tremendous claim to mediate between even the humblest activity and the divine purpose, sought to supply it. True, its teaching was violated in practice, and violated grossly, in the very citadel of Christendom which promulgated it. Contemporaries were under no illusion as to the reality of economic motives in the Age of Faith. They had only to look at Rome. From the middle of the thirteenth century a continuous wail arises against the iniquity of the Church, and its burden may be summed up in one word, “avarice.” At Rome, everything is for sale. What is reverenced is the gospel, not according to St. Mark, but according to the marks of silver.²⁶

Such an environment, with its personal economic relationships, was not unfavorable to a system of social ethics. The Church sought to provide one. It took on this task with the tremendous claim that it could mediate between even the humblest activity and the divine purpose. Its teaching was indeed violated in practice, and grossly violated, in the very citadel of Christendom that proclaimed it. People at the time were under no illusion about the reality of economic motives in the Age of Faith. They had only to look at Rome. From the middle of the thirteenth century, there was a continuous outcry against the wickedness of the Church. Its complaint may be summed up in one word, “avarice.” In Rome, everything is for sale. What is revered is the gospel, not according to St. Mark, but according to the marks of silver.²⁶

The Papacy might denounce usurers, but, as the center of the most highly organized administrative system of the age, receiving remittances from all over Europe, and receiving them in money at a time when the revenue of other Governments still included personal services and payments in kind, it could not dispense with them. Dante put the Cahorsine money-lenders in hell, but a Pope gave them the title of “peculiar sons of the Roman Church.”²⁸ Grosstête rebuked the Lombard bankers, and a bishop of London expelled them, but papal protection brought them back.²⁹ Archbishop Peckham, a few years later, had to implore Pope Nicholas III to withdraw a threat of excommunication, intended to compel him to pay the usurious interest demanded by Italian money-lenders, though, as the archbishop justly observed, “by your Holiness’s special mandate, it would be my duty to take strong measures against such lenders.”³⁰ The Papacy was, in a sense, the greatest financial institution of the Middle Ages, and, as its fiscal system was elaborated, things became, not better, but worse. The abuses which were a trickle in the thirteenth century were a torrent in the fifteenth. And the frailties of Rome, if exceptional in their notoriety, can hardly be regarded as unique. Priests, it is from time to time complained, engage in trade and take usury.³¹ Cathedral chapters lend money at high rates of interest. The profits of usury, like those of simony, should have been refused by churchmen, as hateful to God; but a bishop of Paris, when consulted by a usurer as to the salvation of his soul, instead of urging restitution, recommended him to dedicate his ill-gotten wealth to the building of Notre-Dame.³² “Thus,” exclaimed St. Bernard, as he gazed at the glories of Gothic architecture, “wealth is drawn up by ropes of wealth, thus money bringeth money.... O vanity of vanities, yet no more vain than insane! The Church is resplendent in her walls, beggarly in her poor. She clothes her stones in gold, and leaves her sons naked.”³³

The Papacy might condemn usurers, but it could not do without them. It was the center of the most highly organized administrative system of the age. It received payments from all over Europe, and it received them in money. At the time, other governments still received some of their revenue in personal services and goods. Dante put the Cahorsine money-lenders in hell, but a Pope gave them the title “special sons of the Roman Church.”²⁸ Grosstête rebuked the Lombard bankers, and a bishop of London expelled them, but papal protection brought them back.²⁹ A few years later, Archbishop Peckham had to plead with Pope Nicholas III to withdraw a threat of excommunication. The threat was intended to force Peckham to pay the usurious interest demanded by Italian money-lenders. Yet, as the archbishop rightly observed, “by your Holiness’s special command, it would be my duty to take strong measures against such lenders.”³⁰ In a sense, the Papacy was the greatest financial institution of the Middle Ages. As its financial system grew more elaborate, things became worse, not better. The abuses that were a trickle in the thirteenth century were a torrent in the fifteenth. And Rome’s failings, though unusually notorious, can hardly be considered unique. From time to time, people complained that priests engaged in trade and charged usurious interest.³¹ Cathedral chapters lent money at high rates of interest. Churchmen should have refused the profits of usury, like those of simony, because they were hateful to God. But a usurer once consulted a bishop of Paris about the salvation of his soul. Instead of urging him to repay the money, the bishop advised him to devote his ill-gotten wealth to building Notre-Dame.³² “Thus,” exclaimed St. Bernard, as he gazed at the glories of Gothic architecture, “wealth is drawn up by ropes of wealth, and so money brings in money.... O vanity of vanities, no less insane than vain! The Church is splendid in her walls, but poor in her poor. She clothes her stones in gold and leaves her sons naked.”³³

The picture is horrifying, and one must be grateful to those, like M. Luchaire and Mr. Coulton, who demolish romance. But the denunciation of vices implies that they are recognized as vicious; to ignore their condemnation is not less one-sided than to conceal their existence; and, when the halo has vanished from practice, it remains to ask what principles men valued, and what standards they erected. The economic doctrines elaborated in the Summæ of the Schoolmen, in which that question receives its most systematic answer, have not infrequently been dismissed as the fanciful extravagances of writers disqualified from throwing light on the affairs of this world by their morbid preoccupation with those of the next. In reality, whatever may be thought of their conclusions, both the occasion and the purpose of scholastic speculations upon economic questions were eminently practical. The movement which prompted them was the growth of trade, of town life, and of a commercial economy, in a world whose social categories were still those of the self-sufficing village and the feudal hierarchy. The object of their authors was to solve the problems to which such developments gave rise. It was to reconcile the new contractual relations, which sprang from economic expansion, with the traditional morality expounded by the Church. Viewed by posterity as reactionaries, who damned the currents of economic enterprise with an irrelevant appeal to Scripture and to the Fathers, in their own age they were the pioneers of a liberal intellectual movement. By lifting the weight of antiquated formulæ they cleared a space within the stiff framework of religious authority for new and mobile economic interests, and thus supplied an intellectual justification for developments which earlier generations would have condemned.

The picture is horrifying. We should be grateful to those, like M. Luchaire and Mr. Coulton, who strip away the romance. But condemning vices implies recognizing them as vices. Ignoring that condemnation is just as one-sided as hiding the vices themselves. Once we have stripped away the idealized picture of how people behaved, another question remains. What principles did people value, and what standards did they set? The most systematic answer appears in the economic doctrines developed in the Summæ of the Schoolmen. These doctrines have often been dismissed as the fanciful excesses of writers obsessed with the next world. Their obsession, it is said, made them unable to shed light on the affairs of this one. In reality, whatever one thinks of their conclusions, the Schoolmen’s economic inquiries arose from practical concerns and had practical aims. They were prompted by the growth of trade, town life, and a commercial economy. These developments took place in a world that still understood society in terms of the self-sufficient village and the feudal hierarchy. The Schoolmen sought to solve the problems these developments created. They wanted to reconcile the new contractual relationships arising from economic expansion with the traditional morality taught by the Church. Later generations saw the Schoolmen as reactionaries who condemned economic enterprise by appealing irrelevantly to Scripture and the Fathers. But in their own age, they were pioneers of a liberal intellectual movement. By removing the burden of outdated formulas, they made room for new and changing economic interests within the rigid framework of religious authority. They thus provided an intellectual justification for developments that earlier generations would have condemned.

The mercantilist thought of later centuries owed a considerable debt to scholastic discussions of money, prices, and interest. But the specific contributions of medieval writers to the technique of economic theory were less significant than their premises. Their fundamental assumptions, both of which were to leave a deep imprint on the social thought of the sixteenth and seventeenth centuries, were two: 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. Material riches are necessary; they have a secondary importance, since without them men cannot support themselves and help one another; the wise ruler, as St. Thomas said,³⁴ will consider in founding his State the natural resources of the country. But economic motives are suspect. Because they are powerful appetites, men fear them, but they are not mean enough to applaud them. Like other strong passions, what they need, it is thought, is not a clear field, but repression. There is no place in medieval theory for economic activity which is not related to a moral end, and to found a science of society upon the assumption that the appetite for economic gain is a constant and measurable force, to be accepted, like other natural forces, as an inevitable and self-evident datum, would have appeared to the medieval thinker as hardly less irrational or less immoral than to make the premise of social philosophy the unrestrained operation of such necessary human attributes as pugnacity or the sexual instinct. The outer is ordained for the sake of the inner; economic goods are instrumental—sicut quædam adminicula, quibus adjuvamur ad tendendum in beatitudinem. “It is lawful to desire temporal blessings, not putting them in the first place, as though setting up our rest in them, but regarding them as aids to blessedness, inasmuch as they support our corporal life and serve as instruments for acts of virtue.”³⁵ Riches, as St. Antonino says, exist for man, not man for riches.

The mercantilist thought of later centuries owed much to scholastic discussions of money, prices, and interest. But medieval writers’ specific contributions to the techniques of economic theory were less important than their starting assumptions. They had two fundamental assumptions. Both would leave a deep mark on the social thought of the sixteenth and seventeenth centuries. First, economic interests are subordinate to life’s real purpose, which is salvation. Second, economic conduct is one aspect of personal conduct and, like other aspects, is subject to moral rules. Material wealth is necessary, but it is of secondary importance. Without it, people cannot support themselves and help one another. As St. Thomas said,³⁴ a wise ruler will consider a country’s natural resources when founding a State. But economic motives are suspect. People fear these powerful appetites, but they are not base enough to applaud them. Like other strong passions, economic motives are thought to need restraint, not free rein. Medieval theory leaves no room for economic activity unrelated to a moral purpose. It would also have seemed to a medieval thinker hardly less irrational or immoral to base a science of society on the appetite for economic gain than to base social philosophy on the unchecked operation of aggression or the sexual instinct. All are necessary human attributes. Such a science would assume that the appetite for economic gain is a constant, measurable force. It would treat that appetite, like other natural forces, as an inevitable and self-evident datum. Outer things exist for the sake of inner things. Economic goods are useful as means, sicut quædam adminicula, quibus adjuvamur ad tendendum in beatitudinem. “It is lawful to desire earthly blessings, not putting them first, as though finding our rest in them, but seeing them as aids to blessedness. They support our bodily life and serve as instruments for acts of virtue.”³⁵ As St. Antonino says, riches exist for man, not man for riches.

At every turn, therefore, there are limits, restrictions, warnings against allowing economic interests to interfere with serious affairs. It is right for a man to seek such wealth as is necessary for a livelihood in his station. To seek more is not enterprise, but avarice, and avarice is a deadly sin. Trade is legitimate; the different resources of different countries show that it was intended by Providence. But it is a dangerous business. A man must be sure that he carries it on for the public benefit, and that the profits which he takes are no more than the wages of his labor. Private property is a necessary institution, at least in a fallen world; men work more and dispute less when goods are private than when they are common. But it is to be tolerated as a concession to human frailty, not applauded as desirable in itself; the ideal—if only man’s nature could rise to it—is communism. “Communis enim,” wrote Gratian in his decretum, “usus omnium, quae sunt in hoc mundo, omnibus hominibus esse debuit.”³⁶ At best, indeed, the estate is somewhat encumbered. It must be legitimately acquired. It must be in the largest possible number of hands. It must provide for the support of the poor. Its use must as far as practicable be common. Its owners must be ready to share it with those who need, even if they are not in actual destitution. Such were the conditions which commended themselves to an archbishop of the business capital of fifteenth-century Europe.³⁷ There have been ages in which they would have been described, not as a justification of property, but as a revolutionary assault on it. For to defend the property of the peasant and small master is necessarily to attack that of the monopolist and usurer, which grows by devouring it.

At every turn, then, there are limits, restrictions, and warnings against letting economic interests interfere with serious affairs. A man may rightly seek enough wealth to support himself in his station in life. To seek more is not enterprise but greed, and greed is a deadly sin. Trade is legitimate. The different resources of different countries show that Providence intended trade. But trade is a dangerous business. A man must be sure that he trades for the public benefit and takes no more profit than his labor earns. Private property is a necessary institution, at least in a fallen world. Men work more and quarrel less when goods are privately owned than when they are held in common. But private property should be tolerated as a concession to human weakness, not praised as desirable in itself. The ideal is communism, if only human nature could rise to it. “Communis enim,” wrote Gratian in his decretum, “usus omnium, quae sunt in hoc mundo, omnibus hominibus esse debuit.”³⁶ Even at best, property comes with considerable obligations. It must be acquired legitimately. It must be held by the largest possible number of people. It must provide support for the poor. As far as possible, its use must be shared. Its owners must be ready to share it with those in need, even if they are not actually destitute. These were the conditions that an archbishop of the business capital of fifteenth-century Europe found acceptable.³⁷ In some ages, such conditions would have been called a revolutionary attack on property, not a defense of it. For defending the property of the peasant and the small master necessarily means attacking that of the monopolist and the usurer. Their property grows by consuming the property of peasants and small masters.

The assumption on which all this body of doctrine rested was simple. It was that the danger of economic interests increased in direct proportion to the prominence of the pecuniary motives associated with them. Labor—the common lot of mankind—is necessary and honorable; trade is necessary, but perilous to the soul; finance, if not immoral, is at best sordid and at worst disreputable. This curious inversion of the social values of more enlightened ages is best revealed in medieval discussions of the ethics of commerce. The severely qualified tolerance extended to the trader was partly, no doubt, a literary convention derived from classical models; it was natural that Aquinas should laud the State which had small need of merchants because it could meet its needs from the produce of its own soil; had not the Philosopher himself praised αὐτάρκεια? But it was a convention which coincided with a vital element in medieval social theory, and struck a responsive note in wide sections of medieval society. It is not disputed, of course, that trade is indispensable; the merchant supplements the deficiencies of one country with the abundance of another. If there were no private traders, argued Duns Scotus, whose indulgence was less carefully guarded, the governor would have to engage them. Their profits, therefore, are legitimate, and they may include, not only the livelihood appropriate to the trader’s status, but payment for labor, skill, and risk.³⁸

The assumption behind this entire body of doctrine was simple. The more closely economic interests were tied to the desire for money, the more dangerous they became. Work, the common lot of humanity, is necessary and honorable. Trade is necessary, but dangerous to the soul. Finance, if not immoral, is at best sordid and at worst disreputable. This curious reversal of the social values of more enlightened ages is clearest in medieval discussions of the ethics of commerce. The strictly limited tolerance shown toward traders was no doubt partly a literary convention drawn from classical models. It was natural for Aquinas to praise a state that had little need of merchants because its own soil could supply its needs. After all, had not the Philosopher himself praised αὐτάρκεια? But this convention matched a vital element of medieval social theory. It also struck a responsive note among large sections of medieval society. Of course, no one disputes that trade is indispensable. Merchants make up for what one country lacks with the abundance of another. Duns Scotus was less guarded in his tolerance of traders. He argued that if there were no private traders, the governor would have to hire them. Their profits are therefore legitimate. These profits may include not only a living suited to the trader’s status, but also payment for labor, skill, and risk.³⁸

The defence, if adequate, was somewhat embarrassing. For why should a defence be required? The insistence that trade is not positively sinful conveys a hint that the practices of traders may be, at least, of dubious propriety. And so, in the eyes of most medieval thinkers, they are. Summe periculosa est venditionis et emptionis negotiatio.³⁹ The explanation of that attitude lay partly in the facts of contemporary economic organization. The economy of the medieval borough—consider only its treatment of food supplies and prices—was one in which consumption held somewhat the same primacy in the public mind, as the undisputed arbiter of economic effort, as the nineteenth century attached to profits. The merchant pure and simple, though convenient to the Crown, for whom he collected taxes and provided loans, and to great establishments such as monasteries, whose wool he bought in bulk, enjoyed the double unpopularity of an alien and a parasite. The best practical commentary on the tepid indulgence extended by theorists to the trader is the network of restrictions with which medieval policy surrounded his activities, the recurrent storms of public indignation against him, and the ruthlessness with which boroughs suppressed the middleman who intervened between consumer and producer.

The defense, even if adequate, was somewhat embarrassing. Why should trade need a defense? Insisting that trade is not actually sinful suggests that traders’ practices may be, at least, of doubtful propriety. And in the eyes of most medieval thinkers, they were. The business of buying and selling is extremely dangerous.³⁹ This attitude was partly explained by the economic organization of the time. In the medieval borough, consumption was the unquestioned measure of economic activity in the public mind. Consider, for example, how boroughs treated food supplies and prices. Consumption held much the same primacy that the nineteenth century gave to profits. The merchant who did nothing but trade was useful to the Crown, collecting taxes and providing loans. He was also useful to great establishments such as monasteries, whose wool he bought in bulk. Yet he was doubly unpopular, regarded as both an outsider and a parasite. The best practical commentary on theorists’ lukewarm tolerance of the trader is found in medieval policy. It surrounded his activities with a network of restrictions. There were also repeated storms of public anger against him. Boroughs ruthlessly suppressed the middleman who came between consumer and producer.

Apart, however, from the color which it took from its environment, medieval social theory had reasons of its own for holding that business, as distinct from labor, required some special justification. The suspicion of economic motives had been one of the earliest elements in the social teaching of the Church, and was to survive till Calvinism endowed the life of economic enterprise with a new sanctification. In medieval philosophy the ascetic tradition, which condemned all commerce as the sphere of iniquity, was softened by a recognition of practical necessities, but it was not obliterated; and, if reluctant to condemn, it was insistent to warn. For it was of the essence of trade to drag into a position of solitary prominence the acquisitive appetites; and towards those appetites, which to most modern thinkers have seemed the one sure social dynamic, the attitude of the medieval theorist was that of one who holds a wolf by the ears. The craftsman labors for his living; he seeks what is sufficient to support him, and no more. The merchant aims, not merely at livelihood, but at profit. The traditional distinction was expressed in the words of Gratian: “Whosoever buys a thing, not that he may sell it whole and unchanged, but that it may be a material for fashioning something, he is no merchant. But the man who buys it in order that he may gain by selling it again unchanged and as he bought it, that man is of the buyers and sellers who are cast forth from God’s temple.”⁴⁰ By very definition a man who “buys in order that he may sell dearer,” the trader is moved by an inhuman concentration on his own pecuniary interest, unsoftened by any tincture of public spirit or private charity. He turns what should be a means into an end, and his occupation, therefore, “is justly condemned, since, regarded in itself, it serves the lust of gain.”⁴¹

Apart from the influence of its surroundings, medieval social theory had its own reasons for thinking business required special justification. Labor, by contrast, did not. Suspicion of economic motives had been one of the earliest elements of the Church’s social teaching. It survived until Calvinism gave a new sacred standing to a life of economic enterprise. The ascetic tradition condemned all commerce as a realm of wrongdoing. Medieval philosophy softened this tradition by recognizing practical necessities, but it did not erase it. Even when medieval philosophy was reluctant to condemn commerce, it insisted on warning against it. Trade, by its very nature, brought the desire to acquire wealth into a position of singular prominence. To most modern thinkers, this desire has seemed the one sure force driving society. But the medieval theorist approached it like someone holding a wolf by the ears. The craftsman works for a living. He seeks enough to support himself, and no more. The merchant aims not merely to make a living, but to make a profit. Gratian expressed the traditional distinction in these words: “Anyone who buys something to use as material for making something else, rather than to sell it whole and unchanged, is no merchant. But anyone who buys something to profit by selling it again, unchanged and as he bought it, is one of the buyers and sellers cast out of God’s temple.”⁴⁰ By definition, a trader is someone who “buys in order to sell at a higher price.” He is driven by an inhuman focus on his own financial interest, softened by no trace of public spirit or private charity. He turns what should be a means into an end. His occupation, therefore, “is rightly condemned because, in itself, it serves the lust for gain.”⁴¹

The dilemma presented by a form of enterprise at once perilous to the soul and essential to society was revealed in the solution most commonly propounded for it. It was to treat profits as a particular case of wages, with the qualification that gains in excess of a reasonable remuneration for the merchant’s labor were, though not illegal, reprehensible as turpe lucrum. The condition of the trader’s exoneration is that “he seeks gain, not as an end, but as the wages of his labor.”⁴² Theoretically convenient, the doctrine was difficult of application, for evidently it implied the acceptance of what the sedate irony of Adam Smith was later to describe as “an affectation not very common among merchants.” But the motives which prompted it were characteristic. The medieval theorist condemned as a sin precisely that effort to achieve a continuous and unlimited increase in material wealth which modern societies applaud as a quality, and the vices for which he reserved his most merciless denunciations were the more refined and subtle of the economic virtues. “He who has enough to satisfy his wants,” wrote a Schoolman of the fourteenth century, “and nevertheless ceaselessly labors to acquire riches, either in order to obtain a higher social position, or that subsequently he may have enough to live without labor, or that his sons may become men of wealth and importance—all such are incited by a damnable avarice, sensuality, or pride.”⁴³ Two and a half centuries later, in the midst of a revolution in the economic and spiritual environment, Luther, in even more unmeasured language, was to say the same.⁴⁴ The essence of the argument was that payment may properly be demanded by the craftsmen who make the goods, or by the merchants who transport them, for both labor in their vocation and serve the common need. The unpardonable sin is that of the speculator or the middleman, who snatches private gain by the exploitation of public necessities. The true descendant of the doctrines of Aquinas is the labor theory of value. The last of the Schoolmen was Karl Marx.

The usual solution revealed the dilemma posed by an enterprise that was both dangerous to the soul and essential to society. The solution was to treat profits as a kind of wages. But gains beyond reasonable pay for a merchant’s labor were reprehensible as turpe lucrum, though not illegal. A trader is cleared of blame on condition that “he seeks gain, not as an end, but as the wages of his labor.”⁴² The doctrine was convenient in theory, but hard to apply. It plainly assumed what Adam Smith would later describe, with his calm irony, as “an affectation not very common among merchants.” But the motives behind the doctrine were characteristic. Medieval theorists condemned as a sin the very effort to increase material wealth continuously and without limit. Modern societies applaud that effort as a virtue. The vices they denounced most mercilessly were the more refined and subtle economic virtues. “Those who have enough to satisfy their wants may nevertheless work ceaselessly to gain riches. They may do so to gain a higher social position, or to have enough later to live without working. They may do so to make their sons wealthy and important. All such people are driven by damnable greed, sensuality, or pride.” So wrote a Schoolman of the fourteenth century.⁴³ Two and a half centuries later, amid a revolution in economic and spiritual life, Luther would say the same thing in even stronger language.⁴⁴ The heart of the argument was that craftsmen may rightly demand payment for making goods, as may merchants for transporting them. Both work at their calling and serve the common need. The unforgivable sin belongs to the speculator or middleman, who seizes private gain by exploiting public necessities. The true descendant of the doctrines of Aquinas is the labor theory of value. The last of the Schoolmen was Karl Marx.

If such ideas were to be more than generalities, they required to be translated into terms of the particular transactions by which trade is conducted and property acquired. Their practical expression was the body of economic casuistry, in which the best-known elements are the teaching with regard to the just price and the prohibition of usury. These doctrines sprang as much from the popular consciousness of the plain facts of the economic situation as from the theorists who expounded them. The innumerable fables of the usurer who was prematurely carried to hell, or whose money turned to withered leaves in his strong box, or who (as the scrupulous recorder remarks), “about the year 1240,” on entering a church to be married, was crushed by a stone figure falling from the porch, which proved by the grace of God to be a carving of another usurer and his money-bags being carried off by the devil, are more illuminating than the refinements of lawyers.⁴⁵

If such ideas were to be more than general principles, they had to be applied to specific transactions through which people traded and acquired property. In practice, they took the form of economic casuistry, the application of moral principles to particular cases. Its best-known elements are the teaching on the just price and the ban on usury. These doctrines came as much from ordinary people’s awareness of the plain economic facts as from the theorists who explained them. Countless fables told of a usurer taken to hell before his time, or one whose money turned to withered leaves in his strongbox. In another fable, a usurer entered a church to be married and was crushed by a stone figure falling from the porch. The careful recorder tells us that this happened “about the year 1240.” By the grace of God, the figure proved to be a carving of another usurer and his moneybags being carried off by the devil. These fables are more revealing than the fine distinctions made by lawyers.⁴⁵

On these matters, as the practice of borough and manor, as well as of national governments, shows, the Church was preaching to the converted, and to dismiss its teaching on economic ethics as the pious rhetoric of professional moralists is to ignore the fact that precisely similar ideas were accepted in circles which could not be suspected of any unnatural squeamishness as to the arts by which men grow rich. The best commentary on ecclesiastical doctrines as to usury and prices is the secular legislation on similar subjects, for, down at least to the middle of the sixteenth century, their leading ideas were reflected in it. Plain men might curse the chicanery of ecclesiastical lawyers, and gilds and boroughs might forbid their members to plead before ecclesiastical courts; but the rules which they themselves made for the conduct of business had more than a flavor of the canon law. Florence was the financial capital of medieval Europe; but even at Florence the secular authorities fined bankers right and left for usury in the middle of the fourteenth century, and, fifty years later, first prohibited credit transactions altogether, and then imported Jews to conduct a business forbidden to Christians.⁴⁶ Cologne was one of the greatest of commercial entrepôts; but, when its successful business man came to make his will, he remembered that trade was perilous to the soul and avarice a deadly sin, and offered what atonement he could by directing his sons to make restitution and to follow some less dangerous occupation than that of the merchant.⁴⁷ The burgesses of Coventry fought the Prior over a question of common rights for the best part of a century; but the Court Leet of that thriving business city put usury on a par with adultery and fornication, and decreed that no usurer could become mayor, councillor, or master of the gild.⁴⁸ It was not that laymen were unnaturally righteous; it was not that the Church was all-powerful, though its teaching wound into men’s minds through a hundred channels, and survived as a sentiment long after it was repudiated as a command. It was that the facts of the economic situation imposed themselves irresistibly on both. In reality, there was no sharp collision between the doctrine of the Church and the public policy of the world of business—its individual practice was, of course, another matter—because both were formed by the same environment, and accepted the same broad assumptions as to social expediency.

On these matters, the Church was preaching to the converted. The practices of boroughs and manors, as well as national governments, show this. To dismiss its teaching on economic ethics as the pious rhetoric of professional moralists is to overlook a fact. Exactly the same ideas were accepted in circles that could hardly be suspected of excessive scruples about how people grew rich. The best commentary on Church doctrines about usury and prices is secular legislation on the same subjects. Its main ideas reflected Church doctrine until at least the middle of the sixteenth century. Ordinary people might curse the trickery of Church lawyers, and guilds and boroughs might forbid their members to plead before Church courts. But their own rules for conducting business had more than a trace of canon law. Florence was the financial capital of medieval Europe. Yet even there, in the middle of the fourteenth century, secular authorities fined bankers for usury right and left. Fifty years later, they first prohibited credit transactions altogether. Then they brought in Jews to conduct a business forbidden to Christians.⁴⁶ Cologne was one of the greatest commercial trading centers. Yet when a successful Cologne businessman came to make his will, he remembered that trade endangered the soul and that greed was a deadly sin. He offered what atonement he could by directing his sons to make restitution and to take up a less dangerous occupation than that of a merchant.⁴⁷ The burgesses of Coventry fought the Prior over common rights for nearly a century. Yet the Court Leet of that thriving business city put usury on a par with adultery and fornication. It also decreed that no usurer could become mayor, councillor, or master of the guild.⁴⁸ It was not that laypeople were unusually virtuous. Nor was it that the Church was all-powerful, though its teaching entered people’s minds through countless channels. It survived as a sentiment long after people rejected it as a command. Rather, the facts of the economic situation imposed themselves irresistibly on both. In reality, there was no sharp conflict between Church doctrine and the public policy of the business world. Individual business practices were, of course, another matter. Church doctrine and business policy were shaped by the same environment, and both accepted the same broad assumptions about what was best for society.

The economic background of it all was very simple. The medieval consumer—we can sympathize with him today more easily than in 1914—is like a traveller condemned to spend his life at a station hotel. He occupies a tied house and is at the mercy of the local baker and brewer. Monopoly is inevitable. Indeed, a great part of medieval industry is a system of organized monopolies, endowed with a public status, which must be watched with jealous eyes to see that they do not abuse their powers. It is a society of small masters and peasant farmers. Wages are not a burning question, for, except in the great industrial centers of Italy and Flanders, the permanent wage-earning class is small. Usury is, as it is today in similar circumstances. For loans are made largely for consumption, not for production. The farmer whose harvest fails or whose beasts die, or the artisan who loses money, must have credit, seed-corn, cattle, raw materials, and his distress is the money-lender’s opportunity. Naturally, there is a passionate popular sentiment against the engrosser who holds a town to ransom, the monopolist who brings the livings of many into the hands of one, the money-lender who takes advantage of his neighbor’s necessities to get a lien on their land and foreclose. “The usurer would not loan to men these goods, but if he hoped winning, that he loves more than charity. Many other sins be more than this usury, but for this men curse and hate it more than other sin.”⁴⁹

The economic background to all this was very simple. The medieval consumer was like a traveler condemned to spend his life in a station hotel. We can sympathize with him more easily today than we could in 1914. He lives in a tied house and is at the mercy of the local baker and brewer. Monopoly is inevitable. In fact, much of medieval industry consists of organized monopolies with official public standing. They must be watched closely to make sure they do not abuse their powers. It is a society of small business owners and peasant farmers. Wages are not a pressing issue. Except in the great industrial centers of Italy and Flanders, there are few permanent wage earners. Usury is a pressing issue, as it is today in similar circumstances. Loans are made largely for consumption, not production. A farmer whose harvest fails or whose animals die needs credit, seed, cattle, and raw materials. So does an artisan who loses money. Their distress is the moneylender’s opportunity. Naturally, people feel strongly against the engrosser who buys up goods and holds a town to ransom. They oppose the monopolist who puts many people’s livelihoods in the hands of one person. They oppose the moneylender who exploits a neighbor’s need to claim and foreclose on their land. “The usurer would not lend people these goods unless he hoped to profit, for he loves profit more than charity. Many other sins are greater than usury, but for this reason people curse and hate it more than other sins.”⁴⁹

No one who examines the cases actually heard by the courts in the later Middle Ages will think that resentment surprising, for they throw a lurid light on the possibilities of commercial immorality.⁵⁰ Among the peasants and small masters who composed the mass of the population in medieval England, borrowing and lending were common, and it was with reference to their petty transactions, not to the world of high finance, that the traditional attitude towards the money-lender had been crystallized. It was natural that “Juetta [who] is a usuress and sells at a dearer rate for accommodation,” and John the Chaplain, qui est usurarius maximus,⁵¹ should be regarded as figures at once too scandalous to be tolerated by their neighbors and too convenient to be altogether suppressed. The Church accepts this popular sentiment, gives it a religious significance, and crystallizes it in a system, in which economic morality is preached from the pulpit, emphasized in the confessional, and enforced, in the last resource, through the courts.

Anyone who examines the cases heard by courts in the later Middle Ages will understand that resentment. The cases cast a lurid light on the possibilities for commercial immorality.⁵⁰ Borrowing and lending were common among peasants and small masters, who made up most of medieval England's population. The traditional attitude toward moneylenders had taken shape around these small transactions, not the world of high finance. Naturally, neighbors viewed “Juetta [who] is a usuress and sells at a higher rate for credit” and John the Chaplain, a very great usurer,⁵¹ as too scandalous to tolerate, yet too useful to suppress altogether. The Church accepted this popular sentiment, gave it religious significance, and made it part of a system. In that system, economic morality was preached from the pulpit, emphasized in the confessional, and enforced through the courts as a last resort.

The philosophical basis of it is the conception of natural law. “Every law framed by man bears the character of a law exactly to that extent to which it is derived from the law of nature. But if on any point it is in conflict with the law of nature, it at once ceases to be a law; it is a mere perversion of law.”⁵² The plausible doctrine of compensations, of the long run, of the self-correcting mechanism, has not yet been invented. The idea of a law of nature—of natural justice which ought to find expression in positive law, but which is not exhausted in it—supplies an ideal standard by which the equity of particular relations can be measured. The most fundamental difference between medieval and modern economic thought consists, indeed, in the fact that, whereas the latter normally refers to economic expediency, however it may be interpreted, for the justification of any particular action, policy, or system of organization, the former starts from the position that there is a moral authority to which considerations of economic expediency must be subordinated. The practical application of this conception is the attempt to try every transaction by a rule of right, which is largely, though not wholly, independent of the fortuitous combinations of economic circumstances. No man must ask more than the price fixed, either by public authorities, or, failing that, by common estimation. True, prices even so will vary with scarcity; for, with all their rigor, theologians are not so impracticable as to rule out the effect of changing supplies. But they will not vary with individual necessity or individual opportunity. The bugbear is the man who uses, or even creates, a temporary shortage, the man who makes money out of the turn of the market, the man who, as Wyclif says, must be wicked, or he could not have been poor yesterday and rich today.⁵³

Its philosophical basis is the idea of natural law. “Every human law is a law only to the extent that it comes from the law of nature. If it conflicts with natural law in any respect, it immediately ceases to be a law. It is merely a perversion of law.”⁵² The plausible doctrine of compensations, of the long run, of the self-correcting mechanism, has not yet been invented. The idea of natural law means natural justice that ought to be expressed in human law, but is not fully captured by it. This idea provides an ideal standard for judging whether particular relationships are fair. The most basic difference between medieval and modern economic thought lies in how each justifies an action, policy, or system of organization. Modern thought normally appeals to economic expediency, however it may be understood. Medieval thought starts from the position that moral authority must come before considerations of economic expediency. In practice, this means trying to judge every transaction by a rule of right. That rule is largely, though not wholly, independent of accidental combinations of economic circumstances. No one must ask more than the price set by public authorities or, if they have set none, by common judgment. Prices will still vary with scarcity. For all their strictness, theologians are not so impractical as to rule out the effect of changing supplies. But prices will not vary with an individual’s need or opportunity. The dreaded figure is the man who uses, or even creates, a temporary shortage. He is the man who makes money from a change in the market. As Wyclif says, he must be wicked, or he could not have been poor yesterday and rich today.⁵³

The formal theory of the just price went, it is true, through a considerable development. The dominant conception of Aquinas—that prices, though they will vary with the varying conditions of different markets, should correspond with the labor and costs of the producer, as the proper basis of the communis estimatio, conformity with which was the safeguard against extortion—was qualified by subsequent writers. Several Schoolmen of the fourteenth century emphasized the subjective element in the common estimation, insisted that the essence of value was utility, and drew the conclusion that a fair price was most likely to be reached under freedom of contract, since the mere fact that a bargain had been struck showed that both parties were satisfied.⁵⁴ In the fifteenth century St. Antonino, who wrote with a highly developed commercial civilization beneath his eyes, endeavored to effect a synthesis, in which the principle of the traditional doctrine should be observed, while the necessary play should be left to economic motives. After a subtle analysis of the conditions affecting value, he concluded that the fairness of a price could at best be a matter only of “probability and conjecture,” since it would vary with places, periods and persons. His practical contribution was to introduce a new elasticity into the whole conception by distinguishing three grades of prices—a gradus pius, discretus, and rigidus. A seller who exceeded the price fixed by more than 50 per cent. was bound, he argued, to make restitution, and even a smaller departure from it, if deliberate, required atonement in the shape of alms. But accidental lapses were venial, and there was a debatable ground within which prices might move without involving sin.⁵⁵

The formal theory of the just price did, it is true, develop considerably. Aquinas held the dominant view. He believed that prices would vary with conditions in different markets, but should reflect the producer’s labor and costs. These were the proper basis for the communis estimatio, or common estimation. Following that common estimation was a safeguard against extortion. Later writers qualified this view. Several Schoolmen of the fourteenth century emphasized the subjective element in common estimation. They insisted that the essence of value was utility. They concluded that a fair price was most likely under freedom of contract. The mere fact that a bargain had been struck showed, they argued, that both parties were satisfied.⁵⁴ In the fifteenth century, St. Antonino wrote with a highly developed commercial civilization before him. He tried to bring the views together, preserving the principle of the traditional doctrine while allowing necessary scope for economic motives. He carefully analyzed the conditions affecting value. He concluded that the fairness of a price could at best be a matter of “probability and conjecture,” since fairness would vary with places, periods, and persons. His practical contribution was to make the whole idea more flexible by distinguishing three grades of prices: a gradus pius, discretus, and rigidus. He argued that a seller who charged more than 50 percent above the fixed price was bound to make restitution. Even a smaller departure required atonement in the form of alms, if deliberate. But accidental lapses were venial, and there was a debatable range within which prices could move without involving sin.⁵⁵

This conclusion, with its recognition of the impersonal forces of the market, was the natural outcome of the intense economic activity of the later Middle Ages, and evidently contained the seeds of an intellectual revolution. The fact that it should have begun to be expounded as early as the middle of the fourteenth century is a reminder that the economic thought of Schoolmen contained elements much more various and much more modern than is sometimes suggested. But the characteristic doctrine was different. It was that which insisted on the just price as the safeguard against extortion. “To leave the prices of goods at the discretion of the sellers is to give rein to the cupidity which goads almost all of them to seek excessive gain.” Prices must be such, and no more than such, as will enable each man to “have the necessaries of life suitable for his station.” The most desirable course is that they should be fixed by public officials, after making an enquiry into the supplies available and framing an estimate of the requirements of different classes. Failing that, the individual must fix prices for himself, guided by a consideration of “what he must charge in order to maintain his position, and nourish himself suitably in it, and by a reasonable estimate of his expenditure and labor.”⁵⁶ If the latter recommendation was a counsel of perfection, the former was almost a platitude. It was no more than an energetic mayor would carry out before breakfast.

This conclusion recognized the impersonal forces of the market. It was the natural result of the intense economic activity of the later Middle Ages, and clearly contained the seeds of an intellectual revolution. The fact that it began to be explained as early as the mid-fourteenth century is a reminder of something important. The economic thought of the Schoolmen contained ideas far more varied and modern than is sometimes suggested. But their characteristic doctrine was different. It insisted on the just price as a safeguard against extortion. “Leaving the prices of goods to the sellers’ discretion gives free rein to the greed that drives almost all of them to seek excessive profit.” Prices must be no higher than needed to enable each person to “have the necessities of life suited to his station.” The best course is for public officials to set prices. They should first investigate the available supplies and estimate the needs of different classes. If they do not, individuals must set prices for themselves. They should consider “what they must charge to maintain their position and support themselves suitably in it, and make a reasonable estimate of their expenses and labor.”⁵⁶ If the latter recommendation was an ideal too perfect to achieve, the former was almost a commonplace. It was no more than an energetic mayor would do before breakfast.

No man, again, may charge money for a loan. He may, of course, take the profits of partnership, provided that he takes the partner’s risks. He may buy a rent-charge; for the fruits of the earth are produced by nature, not wrung from man. He may demand compensation—interesse—if he is not repaid the principal at the time stipulated. He may ask payment corresponding to any loss he incurs or gain he foregoes. He may purchase an annuity, for the payment is contingent and speculative, not certain. It is no usury when John Deveneys, who has borrowed £19 16s., binds himself to pay a penalty of £40 in the event of failure to restore the principal, for this is compensation for damages incurred; or when Geoffrey de Eston grants William de Burwode three marks of silver in return for an annual rent of six shillings, for this is the purchase of a rent-charge, not a loan; or when James le Reve of London advances £100 to Robert de Bree of Dublin, merchant, with which to trade for two years in Ireland, for this is a partnership; or when the priory of Worcester sells annuities for a capital sum paid down.⁵⁷ What remained to the end unlawful was that which appears in modern economic text-books as “pure interest”—interest as a fixed payment stipulated in advance for a loan of money or wares without risk to the lender. “Usura est ex mutuo lucrum pacto debitum vel exactum ... quidquid sorti accedit, subaudi per pactum vel exactionem, usura est, quodcunque nomen sibi imponat.”⁵⁸ The emphasis was on pactum. The essence of usury was that it was certain, and that, whether the borrower gained or lost, the usurer took his pound of flesh. Medieval opinion, which has no objection to rent or profits, provided that they are reasonable—for is not every one in a small way a profit-maker?—has no mercy for the debenture-holder. His crime is that he takes a payment for money which is fixed and certain, and such a payment is usury.

Again, no one may charge for lending money. A person may, of course, take the profits of a partnership, provided they also take on a partner’s risks. They may buy a rent-charge, because the fruits of the earth are produced by nature, not wrung from people. They may demand compensation, or interesse, if the principal is not repaid on time. They may ask for payment to cover any loss they suffer or gain they give up. They may buy an annuity, because payment is uncertain and speculative, not guaranteed. There is no usury when John Deveneys borrows £19 16s. and agrees to pay a £40 penalty if he fails to repay the principal. The penalty is compensation for damages incurred. Nor is there usury when Geoffrey de Eston gives William de Burwode three marks of silver in return for an annual rent of six shillings. This is the purchase of a rent-charge, not a loan. Nor is there usury when James le Reve of London advances £100 to Robert de Bree of Dublin, a merchant. Robert is to use the money to trade in Ireland for two years, so this is a partnership. Nor is there usury when the priory of Worcester sells annuities for a capital sum paid up front.⁵⁷ What remained unlawful to the end is what modern economics textbooks call “pure interest”. This is interest set in advance as a fixed payment for a loan of money or goods, without risk to the lender. “Usury is profit from a loan that is due by agreement or demanded ... whatever is added to the principal, understood to be by agreement or demand, is usury, whatever name it is given.”⁵⁸ The emphasis was on pactum, or agreement. The essence of usury was that the payment was certain. Whether the borrower gained or lost, the usurer took his pound of flesh. Medieval opinion has no objection to rent or profits, provided they are reasonable. After all, is not everyone a profit-maker in a small way? But it has no mercy for the debenture-holder. His crime is that he takes a fixed and certain payment for money, and such a payment is usury.

The doctrine was, of course, more complex and more subtle than a bald summary suggests. With the growth of the habit of investment, of a market for capital, and of new forms of economic enterprise such as insurance and exchange business, theory became steadily more elaborate, and schools more sharply divided. The precise meaning and scope of the indulgence extended to the purchase of rent-charges produced one controversy, the foreign exchanges another, the development of Monts de Piété a third. Even before the end of the fourteenth century there had been writers who argued that interest was the remuneration of the services rendered by the lender, and who pointed out (though apparently they did not draw the modern corollary) that present are more valuable than future goods.⁵⁹ But on the iniquity of payment merely for the act of lending, theological opinion, whether liberal or conservative, was unanimous, and its modern interpreter,⁶⁰ who sees in its indulgence to interesse the condonation of interest, would have created a scandal in theological circles in any age before that of Calvin. To take usury is contrary to Scripture; it is contrary to Aristotle; it is contrary to nature, for it is to live without labor; it is to sell time, which belongs to God, for the advantage of wicked men; it is to rob those who use the money lent, and to whom, since they make it profitable, the profits should belong; it is unjust in itself, for the benefit of the loan to the borrower cannot exceed the value of the principal sum lent him; it is in defiance of sound juristic principles, for when a loan of money is made, the property in the thing lent passes to the borrower, and why should the creditor demand payment from a man who is merely using what is now his own?

The doctrine was, of course, more complex and subtle than a bare summary suggests. Investment became more common, a market for capital grew, and new forms of business emerged, such as insurance and exchange business. As a result, the theory became steadily more elaborate, and schools of thought became more sharply divided. One controversy concerned the exact meaning and scope of the permission to purchase rent-charges. Another concerned foreign exchanges, and a third concerned the development of Monts de Piété. Even before the end of the fourteenth century, some writers argued that interest was payment for the services a lender provided. They also pointed out that goods in the present are more valuable than goods in the future. But apparently they did not draw the modern conclusion from this.⁵⁹ Still, theologians, whether liberal or conservative, all agreed that charging merely for lending was wicked. A modern interpreter of their views⁶⁰ sees their acceptance of interesse as approval of interest. That view would have caused a scandal in theological circles at any time before the age of Calvin. To charge usury is contrary to Scripture. It is contrary to Aristotle. It is contrary to nature, because it means living without labor. It means selling time, which belongs to God, for the benefit of wicked men. It means robbing those who use the money lent. Since they make the money profitable, the profits should belong to them. Usury is unjust in itself, because the benefit of a loan to the borrower cannot exceed the amount lent. It also defies sound legal principles. When money is lent, ownership of it passes to the borrower. So why should the creditor demand payment from someone who is merely using what is now his own?

The part played by authority in all this is obvious. There were the texts in Exodus and Leviticus; there was Luke vi. 35—apparently a mistranslation; there was a passage in the Politics, which some now say was mistranslated also.⁶¹ But practical considerations contributed more to the doctrine than is sometimes supposed. Its character had been given it in an age in which most loans were not part of a credit system, but an exceptional expedient, and in which it could be said that “he who borrows is always under stress of necessity.” If usury were general, it was argued, “men would not give thought to the cultivation of their land, except when they could do nought else, and so there would be so great a famine that all the poor would die of hunger; for even if they could get land to cultivate, they would not be able to get the beasts and implements for cultivating it, since the poor themselves would not have them, and the rich, for the sake both of profit and of security, would put their money into usury rather than into smaller and more risky investments.”⁶² The man who used these arguments was not an academic dreamer. He was Innocent IV, a consummate man of business, a believer, even to excess, in Realpolitik, and one of the ablest statesmen of his day.

The role of authority in all this is obvious. There were the texts in Exodus and Leviticus. There was Luke vi. 35, apparently a mistranslation. There was also a passage in the Politics, which some now say was mistranslated too.⁶¹ But practical considerations contributed more to the doctrine than is sometimes supposed. The doctrine took shape at a time when most loans were not part of a credit system. Instead, loans were an exceptional measure. At the time, people could say that “anyone who borrows is always driven by necessity.” It was argued that if usury became widespread, “people would think about cultivating their land only when they could do nothing else. As a result, there would be such a great famine that all the poor would die of hunger. Even if the poor could get land to cultivate, they could not get the animals and tools needed to cultivate it. The poor themselves would not have them, and the rich would put their money into usury instead. They would do so for the sake of both profit and security, rather than make smaller, riskier investments.”⁶² The man who used these arguments was not an academic dreamer. He was Innocent IV, a consummate man of business, a believer in Realpolitik even to excess, and one of the ablest statesmen of his day.

True, the Church could not dispense with commercial wickedness in high places. It was too convenient. The distinction between pawnbroking, which is disreputable, and high finance, which is eminently honorable, was as familiar in the Age of Faith as in the twentieth century; and no reasonable judgment of the medieval denunciation of usury is possible, unless it is remembered that whole ranges of financial business escaped from it almost altogether. It was rarely applied to the large-scale transactions of kings, feudal magnates, bishops and abbots. Their subjects, squeezed to pay a foreign money-lender, might grumble or rebel, but, if an Edward III or a Count of Champagne was in the hands of financiers, who could bring either debtor or creditor to book? It was even more rarely applied to the Papacy itself; Popes regularly employed the international banking-houses of the day, with a singular indifference, as was frequently complained, to the morality of their business methods, took them under their special protection, and sometimes enforced the payment of debts by the threat of excommunication. As a rule, in spite of some qualms, the international money-market escaped from it; in the fourteenth century Italy was full of banking-houses doing foreign exchange business in every commercial center from Constantinople to London, and in the great fairs, such as those of Champagne, a special period was regularly set aside for the negotiation of loans and the settlement of debts.⁶³

True, the Church could not do without commercial wrongdoing in high places. It was too convenient. The distinction between pawnbroking, which is disreputable, and high finance, which is eminently honorable, was familiar in the Age of Faith. It was just as familiar in the twentieth century. And no reasonable judgment of medieval condemnations of usury is possible without remembering that whole areas of finance escaped condemnation almost entirely. These condemnations rarely applied to the large transactions of kings, feudal magnates, bishops, and abbots. Their subjects might grumble or rebel when squeezed to pay a foreign money-lender. But if an Edward III or a Count of Champagne was in the hands of financiers, who could hold either debtor or creditor accountable? Condemnations of usury applied even less often to the Papacy itself. Popes regularly employed the international banking houses of the day. They did so with a remarkable indifference to the morality of the banks’ business methods, as people frequently complained. Popes took the banks under their special protection and sometimes enforced payment of debts by threatening excommunication. As a rule, despite some misgivings, the international money market escaped condemnation. In the fourteenth century, Italy was full of banking houses doing foreign exchange business in every commercial center from Constantinople to London. And at the great fairs, such as those of Champagne, a special period was regularly set aside to arrange loans and settle debts.⁶³

It was not that transactions of this type were expressly excepted; on the contrary, each of them from time to time evoked the protests of moralists. Nor was it mere hypocrisy which caused the traditional doctrine to be repeated by writers who were perfectly well aware that neither commerce nor government could be carried on without credit. It was that the whole body of intellectual assumptions and practical interests, on which the prohibition of usury was based, had reference to a quite different order of economic activities from that represented by loans from great banking-houses to the merchants and potentates who were their clients. Its object was simple and direct—to prevent the well-to-do money-lender from exploiting the necessities of the peasant or the craftsman; its categories, which were quite appropriate to that type of transaction, were those of personal morality. It was in these commonplace dealings among small men that oppression was easiest and its results most pitiable. It was for them that the Church’s scheme of economic ethics had been worked out, and with reference to them, though set at naught in high places, it was meant to be enforced, for it was part of Christian charity.

Transactions of this kind were not explicitly exempted. On the contrary, each of them drew protests from moralists from time to time. Nor was it mere hypocrisy that led writers to repeat the traditional doctrine. They knew perfectly well that neither commerce nor government could operate without credit. Rather, the intellectual assumptions and practical interests behind the ban on usury concerned a very different kind of economic activity. They did not concern loans from great banking houses to the merchants and rulers who were their clients. The ban had a simple, direct purpose: to prevent wealthy moneylenders from exploiting peasants or craftspeople in need. The ban relied on categories of personal morality, which were well suited to that kind of transaction. In these everyday dealings among people of modest means, oppression was easiest and its results most pitiable. The Church’s system of economic ethics had been worked out for such dealings. Although powerful people disregarded it, the system was meant to be enforced in these dealings, because it was part of Christian charity.

It was enforced partly by secular authorities, partly, in so far as the rivalry of secular authorities would permit it, by the machinery of ecclesiastical discipline. The ecclesiastical legislation on the subject of usury has been so often analyzed that it is needless to do more than allude to it. Early Councils had forbidden usury to be taken by the clergy.⁶⁴ The Councils of the twelfth and thirteenth centuries forbid it to be taken by clergy or laity, and lay down rules for dealing with offenders. Clergy who lend money to persons in need, take their possessions in pawn, and receive profits beyond the capital sum lent, are to be deprived of their office.⁶⁵ Manifest usurers are not to be admitted to communion or Christian burial; their offerings are not to be accepted; and ecclesiastics who fail to punish them are to be suspended until they make satisfaction to their bishop.⁶⁶ The high-water mark of the ecclesiastical attack on usury was probably reached in the legislation of the Councils of Lyons (1274) and of Vienne (1312). The former re-enacted the measures laid down by the third Lateran Council (1175), and supplemented them by rules which virtually made the money-lender an outlaw. No individual or society, under pain of excommunication or interdict, was to let houses to usurers, but was to expel them (had they been admitted) within three months. They were to be refused confession, absolution and Christian burial until they had made restitution, and their wills were to be invalid.⁶⁷ The legislation of the Council of Vienne was even more sweeping. Declaring that it has learned with dismay that there are communities which, contrary to human and divine law, sanction usury and compel debtors to observe usurious contracts, it declares that all rulers and magistrates knowingly maintaining such laws are to incur excommunication, and requires the legislation in question to be revoked within three months. Since the true nature of usurious transactions is often concealed beneath various specious devices, money-lenders are to be compelled by the ecclesiastical authorities to submit their accounts to examination. Any person obstinately declaring that usury is not a sin is to be punished as a heretic, and inquisitors are to proceed against him tanquam contra diffamatos vel suspectos de hæresi.⁶⁸

It was enforced partly by secular authorities and partly through church discipline, as far as rivalry among secular authorities allowed. Church legislation on usury has been analyzed so often that it needs only a brief mention here. Early Councils had forbidden clergy to charge usury.⁶⁴ The Councils of the twelfth and thirteenth centuries forbade both clergy and laypeople to charge it. They also set rules for dealing with offenders. Clergy who lend money to people in need, take their possessions as security, and receive profits beyond the amount lent must be removed from office.⁶⁵ Known usurers must not be admitted to communion or given Christian burial, and their offerings must not be accepted. Church officials who fail to punish them must be suspended until they make amends to their bishop.⁶⁶ The church’s attack on usury probably reached its height in the legislation of the Councils of Lyons (1274) and of Vienne (1312). The Council of Lyons re-enacted the measures laid down by the third Lateran Council (1175). It also added rules that virtually made the money-lender an outlaw. No individual or society could rent houses to usurers, on pain of excommunication or interdict. If usurers had been admitted, they had to be expelled within three months. Usurers were to be denied confession, absolution and Christian burial until they had made restitution, and their wills were to be invalid.⁶⁷ The legislation of the Council of Vienne was even more sweeping. The Council declared that it had learned with dismay of communities that sanctioned usury, contrary to human and divine law. These communities also forced debtors to honor usurious contracts. The Council declared that all rulers and magistrates who knowingly maintained such laws would be excommunicated. It also required the laws in question to be revoked within three months. Because the true nature of usurious transactions is often concealed by various deceptive devices, church authorities must compel money-lenders to submit their accounts for examination. Anyone who stubbornly declares that usury is not a sin must be punished as a heretic. Inquisitors must proceed against that person tanquam contra diffamatos vel suspectos de hæresi.⁶⁸

It would not be easy to find a more drastic example, either of ecclesiastical sovereignty, or of the attempt to assert the superiority of the moral law to economic expediency, than the requirement, under threat of excommunication, that all secular legislation sanctioning usury shall be repealed. But, for an understanding of the way in which the system was intended to work, the enactments of Councils are perhaps less illuminating than the correspondence between the papal Curia and subordinate ecclesiastical authorities on specific cases and questions of interpretation. Are the heirs of those who have made money by usury bound to make restitution? Yes, the same penalties are to be applied to them as to the original offenders. The pious object of ransoming prisoners is not to justify the asking of a price for a loan. A man is to be accounted a usurer, not only if he charges interest, but if he allows for the element of time in a bargain, by asking a higher price when he sells on credit. Even when debtors have sworn not to proceed against usurers, the ecclesiastical authorities are to compel the latter to restore their gains, and, if witnesses are terrorized by the protection given to usurers by the powerful, punishment can be imposed without their evidence, provided that the offence is a matter of common notoriety. An archbishop of Canterbury is reminded that usury is perilous, not only for the clergy, but for all men whatever, and is warned to use ecclesiastical censures to secure the restoration, without the deduction of interest, of property which has been pawned. Usurers, says a papal letter to the archbishop of Salerno, object to restoring gains, or say that they have not the means; he is to compel all who can to make restitution, either to those from whom interest was taken, or to their heirs; when neither course is possible, they are to give it to the poor; for, as Augustine says, non remittitur peccatum, nisi restituitur ablatum. At Genoa, the Pope is informed, a practice obtains of undertaking to pay, at the end of a given term, a higher price for wares than they were worth at the moment when the sale took place. It is not clear that such contracts are necessarily usurious; nevertheless, the sellers run into sin, unless there is a probability that the wares will have changed in value by the time that payment is made; “and therefore your fellow-citizens would show a wise regard for their salvation if they ceased making contracts of the kind, since the thoughts of men cannot be concealed from Almighty God.”⁶⁹

It would be hard to find a more extreme example of church sovereignty, or of an attempt to place moral law above economic convenience. Under threat of excommunication, the church required the repeal of all secular laws that permitted usury. But the decrees of Councils are perhaps less helpful in showing how the system was meant to work than the correspondence between the papal Curia and lower church authorities. That correspondence dealt with specific cases and questions of interpretation. Must the heirs of those who made money through usury pay it back? Yes, they face the same penalties as the original offenders. Even the pious aim of ransoming prisoners does not justify charging for a loan. A man is considered a usurer not only if he charges interest. He is also a usurer if he takes time into account in a bargain by charging more for goods sold on credit. Even when debtors have sworn not to take action against usurers, church authorities must compel the usurers to repay their gains. Powerful people sometimes protect usurers, terrorizing witnesses. In such cases, punishment can be imposed without the witnesses’ evidence, provided that the offense is common knowledge. An archbishop of Canterbury is reminded that usury is dangerous, not only for the clergy, but for everyone. He is warned to use church penalties to ensure that pawned property is returned without any deduction for interest. A papal letter to the archbishop of Salerno says that usurers object to repaying their gains or claim they cannot afford to. The archbishop must compel all who can repay to do so, either to those charged interest or to their heirs. When neither is possible, the usurers must give the money to the poor. For, as Augustine says, non remittitur peccatum, nisi restituitur ablatum. The Pope is told that in Genoa people promise to pay for goods at the end of a set period. The price they promise to pay is higher than the goods were worth at the time of sale. It is not clear that such contracts necessarily involve usury. Nevertheless, sellers sin unless the goods are likely to have changed in value by the time payment is made. “And therefore your fellow citizens would show wise concern for their salvation if they stopped making contracts of this kind, since the thoughts of men cannot be hidden from Almighty God.”⁶⁹

It is evident from the number of doubtful cases referred to Rome for decision that the law with regard to usury was not easily administered. It is evident, also, that efforts were made to offer guidance in dealing with difficult and technical problems. In the book of common forms, drawn up in the thirteenth century for the guidance of the papal penitentiary in dealing with hard cases, precedents were inserted to show how usurers should be handled.⁷⁰ About the same time appeared St. Raymond’s guide to the duties of an archdeacon, which contains a long list of inquiries to be made on visitation, covering every conceivable kind of extortion, and designed to expose the various illusory contracts—fictitious partnerships, loans under the guise of sales, excessive deposits against advances—by which the offence was concealed.⁷¹ Instructions to confessors define in equal detail the procedure to be followed. The confessor, states a series of synodal statutes, is to “make inquiry concerning merchandising, and other things pertaining to avarice and covetousness.” Barons and knights are to be requested to state whether they have made ordinances contrary to the liberty of the Church, or refused justice to any man seeking it, or oppressed their subjects with undue tallages, tolls or services. “Concerning burgesses, merchants and officers (ministrales) the priest is to make inquiry as to rapine, usury, pledges made by deceit of usury, barratry, false and lying sales, unjust weights and measures, lying, perjury and craft. Concerning cultivators (agricolas) he is to inquire as to theft and detention of the property of others, especially with regard to tithes ... also as to the removing of landmarks and the occupation of other men’s land.... Concerning avarice it is to be asked in this wise: hast thou been guilty of simony ... an unjust judge ... a thief, a robber, a perjurer, a sacrilegious man, a gambler, a remover of landmarks in fields ... a false merchant, an oppressor of any man and above all of widows, wards and others in misery, for the sake of unjust and greedy gain?” Those guilty of avarice are to do penance by giving large alms, on the principle that “contraries are to be cured with contraries.” But there are certain sins for which no true penitence is possible until restitution has been made. Of these usury is one; and usury, it is to be noted, includes, not only what would now be called interest, but the sin of those who, on account of lapse of time, sell dearer and buy cheaper. If for practical reasons restitution is impossible, the offender is to be instructed to require that it shall be made by his heirs, and, when the injured party cannot be found, the money is to be spent, with the advice of the bishop if the sum is large and of the priest if it is small, “on pious works and especially on the poor.”⁷²

The many doubtful cases referred to Rome for a decision show that the law on usury was difficult to administer. They also show that efforts were made to provide guidance on difficult and technical problems. A book of standard forms was drawn up in the thirteenth century to guide the papal penitentiary in handling difficult cases. It included precedents showing how usurers should be dealt with.⁷⁰ Around the same time, St. Raymond’s guide to the duties of an archdeacon appeared. It contains a long list of questions to ask during an inspection, covering every conceivable kind of extortion. The questions were designed to expose the various sham contracts used to conceal the offense. These included fictitious partnerships, loans disguised as sales, and excessive deposits demanded against advances.⁷¹ Instructions to confessors set out the procedure to follow in equal detail. According to a series of synodal statutes, the confessor must “inquire about trading and other matters relating to greed and covetousness.” Barons and knights must be asked whether they have made rules contrary to the liberty of the Church. They must also be asked whether they have denied justice to anyone seeking it, or burdened their subjects with excessive taxes, tolls, or services. “Concerning townspeople, merchants, and officers (ministrales), the priest must inquire about robbery, usury, and pledges made through the deceit of usury. He must also inquire about barratry, false and dishonest sales, unjust weights and measures, lying, perjury, and deceit. Concerning cultivators (agricolas), he must inquire about theft and the withholding of other people’s property, especially tithes ... and about moving boundary markers and occupying other people’s land.... Concerning greed, he must ask: have you been guilty of simony ... an unjust judge ... a thief, a robber, a perjurer, a sacrilegious person, a gambler, someone who moves boundary markers in fields ... a dishonest merchant, someone who oppresses others, especially widows, wards, and others in misery, for the sake of unjust and greedy gain?” Those guilty of greed must do penance by giving generous alms, on the principle that “opposites must be cured with opposites.” But for certain sins, true repentance is impossible until restitution has been made. Usury is one of these sins. It should be noted that usury includes not only what would now be called interest. It also includes the sin of those who sell at a higher price or buy at a lower price because of the passage of time. If restitution is impossible for practical reasons, the offender must be instructed to require his heirs to make it. If the injured party cannot be found, the money must be spent “on pious works and especially on the poor.” This must be done with the bishop’s advice if the sum is large, and with the priest’s advice if it is small.⁷²

The more popular teaching on the subject is illustrated by the manuals for use in the confessional and by books for the guidance of the devout. The space given in them to the ethics of business was considerable. In the fifteenth century, Bishop Pecock could meet the Lollards’ complaint that the Scriptures were buried beneath a mass of interpretation, by taking as his illustration the books which had been written on the text, “Lend, hoping for nothing again,” and arguing that all this teaching upon usury was little enough “to answer ... all the hard, scrupulous doubts and questions which all day have need to be assoiled in men’s bargains and chafferings together.”⁷³ A century later there were regions in which such doctrine was still being rehearsed with all the old rigor. In 1552 the Parliament which made the Scottish Reformation was only eight years off. But the catechism of the archbishop of St. Andrews, which was drawn up in that year, shows no disposition to compromise with the economic frailties of his fellow-countrymen. It denounces usurers, masters who withhold wages, covetous merchants who sell fraudulent wares, covetous landlords who grind their tenants, and in general—a comprehensive and embarrassing indictment—“all wretches that will be grown rich incontinent,” and all “who may keep their neighbor from poverty and mischance and do it not.”⁷⁴

Popular teaching on the subject appears in manuals for use in the confessional and books guiding the devout. These books gave considerable space to business ethics. In the fifteenth century, the Lollards complained that the Scriptures were buried beneath a mass of interpretation. Bishop Pecock answered by pointing to books written about the text, “Lend, hoping for nothing again.” He argued that all this teaching on usury was little enough “to answer ... all the difficult and troubling doubts and questions that need resolving every day in people’s bargains and dealings with one another.”⁷³ A century later, some regions were still repeating this teaching with all its old rigor. In 1552, the Parliament that brought about the Scottish Reformation was only eight years away. But the catechism drawn up that year by the archbishop of St. Andrews showed no willingness to compromise with his fellow countrymen’s economic weaknesses. It condemns usurers, masters who withhold wages, greedy merchants who sell fraudulent goods, and greedy landlords who oppress their tenants. More generally, it makes a sweeping and embarrassing indictment of “all wretches who want to get rich at once” and all “who can keep their neighbor from poverty and misfortune and do not.”⁷⁴

On the crucial question, how the ecclesiastical courts dealt in practice with these matters, we have very little light. They are still almost an unworked field. On the Continent we catch glimpses of occasional raids. Bishops declare war on notorious usurers, only to evoke reprisals from the secular authorities, to whom the money-lender is too convenient to be victimized by any one but themselves.⁷⁵ At the end of the thirteenth century an archbishop of Bourges makes some thirty-five usurers disgorge at a sitting,⁷⁶ and seventy years later an inquisitor at Florence collects 7,000 florins in two years from usurers and blasphemers.⁷⁷ In England commercial morality was a debatable land, in which ecclesiastical and secular authorities contended from time to time for jurisdiction. The ecclesiastical courts claimed to deal with cases of breach of contract in general, on the ground that they involved læsio fidei, and with usury in particular, as an offence against morality specifically forbidden by the canon law. Both claims were contested by the Crown and by municipal bodies. The former, by the Constitutions of Clarendon,⁷⁸ had expressly reserved proceedings as to debts for the royal courts, and the same rule was laid down more than once in the course of the next century. The latter again and again forbade burgesses to take proceedings in the courts christian, and fined those who disregarded the prohibition.⁷⁹ Both, in spite of repeated protests from the clergy,⁸⁰ made good their pretension to handle usurious contracts in secular courts; but neither succeeded in ousting the jurisdiction of the Church. The question at issue was not whether the usurer should be punished—a point as to which there was only one opinion—but who should have the lucrative business of punishing him, and in practice he ran the gauntlet of all and of each. Local authorities, from the City of London to the humblest manorial court, make by-laws against “unlawful chevisance” and present offenders against them.⁸¹ The Commons pray that Lombard brokers may be banished, and that the ordinances of London concerning them may be made of general application.⁸² The justices in eyre hear indictments of usurers,⁸³ and the Court of Chancery handles petitions from victims who can get no redress at common law.⁸⁴ And Holy Church, though there seems to be only one example of legislation on the subject by an English Church Council,⁸⁵ continues to deal with the usurer after her own manner.

We know very little about the crucial question of how the Church courts dealt with these matters in practice. The subject is still almost unstudied. On the Continent, we catch glimpses of occasional crackdowns. Bishops declare war on notorious usurers, only to provoke retaliation from the secular authorities. Moneylenders are too useful to those authorities to be victimized by anyone but themselves.⁷⁵ At the end of the thirteenth century, an archbishop of Bourges makes some thirty-five usurers give up their gains in a single session.⁷⁶ Seventy years later, an inquisitor in Florence collects 7,000 florins from usurers and blasphemers in two years.⁷⁷ In England, commercial morality was disputed territory, where Church and secular authorities sometimes fought over jurisdiction. The Church courts claimed the right to deal with breaches of contract in general, because they involved læsio fidei, a breach of faith. The courts also claimed jurisdiction over usury in particular, as a moral offence specifically forbidden by canon law. Both claims were challenged by the Crown and municipal authorities. The Crown had expressly reserved proceedings concerning debts for the royal courts in the Constitutions of Clarendon.⁷⁸ The same rule was laid down more than once during the next century. Municipal authorities repeatedly forbade burgesses to bring cases before the Church courts and fined those who ignored the ban.⁷⁹ Despite repeated protests from the clergy,⁸⁰ both the Crown and municipal authorities succeeded in asserting their right to handle usurious contracts in secular courts. But neither succeeded in removing the Church's jurisdiction. The issue was not whether the usurer should be punished. Everyone agreed on that. The question was who should get the lucrative business of punishing him. In practice, he had to run the gauntlet of all of them, together and separately. Local authorities, from the City of London to the humblest manorial court, make by-laws against “unlawful chevisance” and bring offenders before the courts.⁸¹ The Commons petition for Lombard brokers to be banished and for London's ordinances concerning them to apply everywhere.⁸² The justices in eyre hear indictments of usurers,⁸³ and the Court of Chancery deals with petitions from victims who can get no remedy at common law.⁸⁴ Holy Church, too, continues to deal with the usurer in her own way, though there seems to be only one example of legislation on the subject by an English Church Council.⁸⁵

For, in spite of the conflict of jurisdictions, the rising resentment against the ways of ecclesiastical lawyers, and the expanding capitalism of the later Middle Ages, it is evident that commercial cases continued, on occasion at least, to come before the courts christian. Nor, after the middle of the fourteenth century, was their right to try cases of usury contested by the secular authorities. A statute of 1341 enacted that (as laid down long before) the King should have cognizance of usurers dead, and the Church of usurers living. The same reservation of ecclesiastical rights was repeated when the question was taken up a century later under Henry VII, and survived, an antiquated piece of common form, even into the age of lusty capitalism under Elizabeth and James I.⁸⁶

Despite conflicts over jurisdiction, growing resentment of church lawyers’ practices, and expanding capitalism in the later Middle Ages, commercial cases clearly continued to come before church courts, at least occasionally. After the middle of the fourteenth century, secular authorities did not contest the church courts’ right to try usury cases. A statute of 1341 confirmed a long-established rule: the King had jurisdiction over dead usurers, and the Church over living ones. The same protection of Church rights was repeated when the question arose a century later under Henry VII. It survived as an outdated piece of standard wording even into the age of vigorous capitalism under Elizabeth and James I.⁸⁶

That ecclesiastical authorities had much opportunity of enforcing the canon law in connection with money-lending is improbable. It was naturally in the commercial towns that cases of the kind most frequently arose, and the towns did not look with favor on the interference of churchmen in matters of business. In London, collisions between the courts of the Official, the Mayor and the King were frequent in the early thirteenth century. Men took proceedings before the first, it seems, when a speedy decision was desired, or when their case was of a kind which secular courts were not likely to regard with favor. Thus craftsmen, to give one curious example out of many, were evidently using the courts christian as a means of giving effect to trade union regulations, which were more likely to be punished than enforced by the mayor and aldermen, by the simple device of imposing an oath and proceeding against those who broke it for breach of faith. The smiths, for instance, made a “confederacy,” supported by an oath, with the object, as they declared, of putting down night-work, but, as was alleged in court, of preventing any but members of their organization from working at the trade, and summoned blacklegs before the ecclesiastical courts. The spurriers forbade any one to work between sunset and sunrise, and haled an offending journeyman before the archdeacon, with the result that “the said Richard, after being three times warned by the Official, had been expelled from the Church and excommunicated, until he would swear to keep the ordinance.”⁸⁷

It is unlikely that church authorities had much opportunity to enforce canon law on money-lending. Such cases naturally arose most often in commercial towns, where people did not welcome church interference in business. In London, the courts of the Official, the Mayor and the King frequently clashed in the early thirteenth century. People seem to have gone to the Official’s court when they wanted a quick decision. They also went there when secular courts were unlikely to view their case favorably. For one curious example among many, craftsmen evidently used church courts to enforce trade union rules. The mayor and aldermen were more likely to punish than enforce such rules. The craftsmen simply required an oath and took anyone who broke it to court for breaking their word. The smiths, for instance, formed a “confederacy” supported by an oath. They declared that its purpose was to stop night-work. But it was alleged in court that their purpose was to prevent anyone outside their organization from working at the trade. They summoned blacklegs before the church courts. The spurriers forbade anyone to work between sunset and sunrise. They brought a journeyman who broke the rule before the archdeacon. As a result, “the said Richard, after being warned three times by the Official, had been expelled from the Church and excommunicated until he would swear to keep the rule.”⁸⁷

Even at a later period the glimpses which we catch of the activities of the ecclesiastical jurisdiction are enough to show that it was not wholly a dead letter. Priests accused of usury undergo correction at the hands of their bishops.⁸⁸ Petitioners appeal for redress to the Court of Chancery on the ground that they have failed to secure justice in the courts of bishops or archdeacons, where actions on cases of debts or usury have been begun before “spiritual men.”⁸⁹ The records of ecclesiastical courts show that, though sometimes commercial questions were dismissed as belonging to the secular courts, cases of breach of contract and usury continued, nevertheless, to be settled by them.⁹⁰ The disreputable family of Marcroft—William the father was a common usurer, Alice his daughter baked bread at Pentecost, and Edward his son made a shirt on All Saints’ Day—is punished by the ecclesiastical court of Whalley as it deserves.⁹¹ At Ripon a usurer and his victim are induced to settle the case out of court.⁹² The Commissary of London cites Thomas Hall super crimine usurariæ pravitatis, on the ground that, having advanced four shillings on the security of Thomas Foster’s belt, he had demanded twelve pence over and above the principal, and suspends him when he does not appear in court.⁹³ Nor did business of this kind cease with the Reformation. Cases of usury were being heard by ecclesiastical courts under Elizabeth, and even in a great commercial center like the City of London it was still possible in the reign of James I for the Bishop’s Commissary to be trying tradesmen for “lending upon pawnes for an excessive gain.”⁹⁴

Even in a later period, the glimpses we get of church courts show that their authority was not entirely a dead letter. Bishops disciplined priests accused of usury.⁸⁸ Petitioners appealed to the Court of Chancery for redress because they had failed to obtain justice in bishops’ or archdeacons’ courts. In those courts, cases involving debts or usury had been brought before “spiritual men.”⁸⁹ Church court records show that commercial disputes were sometimes dismissed as matters for the secular courts. Nevertheless, the church courts continued to settle cases of breach of contract and usury.⁹⁰ The church court of Whalley punished the disreputable Marcroft family as they deserved. William, the father, was a common usurer. Alice, his daughter, baked bread at Pentecost. Edward, his son, made a shirt on All Saints’ Day.⁹¹ At Ripon, a usurer and his victim were persuaded to settle their case out of court.⁹² The Commissary of London summoned Thomas Hall super crimine usurariæ pravitatis. Hall had lent Thomas Foster four shillings against the security of Foster’s belt and demanded twelve pence in addition to the principal. When Hall failed to appear in court, the Commissary suspended him.⁹³ Nor did cases of this kind end with the Reformation. Church courts heard usury cases under Elizabeth. Even in a great commercial center like the City of London, the Bishop’s Commissary could still try tradesmen in the reign of James I for “lending upon pawnes for an excessive gain.”⁹⁴

It was not only by legal penalties, however, that an attempt was made to raise a defensive barrier against the exactions of the money-lender. From a very early date there was a school of opinion which held that, in view of the various stratagems by which usurious contracts could be “colored,” direct prohibition was almost necessarily impotent, and which favored the policy of providing facilities for borrowing on more reasonable terms than could be obtained from the money-lender. Ecclesiastics try, in fact, to turn the flank of the usurer by establishing institutions where the poor can raise capital cheaply. Parishes, religious fraternities, gilds, hospitals and perhaps monasteries lend corn, cattle and money.⁹⁵ In England, bishops are organizing such loans with papal approval in the middle of the thirteenth century,⁹⁶ and two centuries later, about 1462, the Franciscans lead the movement for the creation of Monts de Piété, which, starting in Italy, spread by the first half of the sixteenth century to France, Germany, and the Low Countries, and, though never taken up in England—for the Reformation intervened—supplied a topic of frequent comment and eulogy to English writers on economic ethics.⁹⁷ The canon law on the subject of money-lending underwent a steady development, caused by the necessity of adapting it to the increasing complexity of business organization, down at least to the Lateran Council of 1515. The ingenuity with which professional opinion elaborated the code was itself a proof that considerable business—and fees—were the result of it, for lawyers do not serve God for naught. The canonists, who had a bad reputation with the laity, were not, to put it mildly, more innocent than other lawyers in the gentle art of making business. The Italians, in particular, as was natural in the financial capital of Europe, made the pace, and Italian canonists performed prodigies of legal ingenuity. In England, on the other hand, either because Englishmen were unusually virtuous, or, as a foreigner unkindly said, because “they do not fear to make contracts on usury,”⁹⁸ or, most probably, because English business was a conservative and slow-going affair, the English canonist Lyndwood is content to quote a sentence from an English archbishop of the thirteenth century and to leave it at that.⁹⁹

Legal penalties were not the only means used to build a barrier against the moneylender’s excessive demands. From very early on, some believed that an outright ban was almost bound to fail. They pointed to the various tricks used to “color,” or disguise, contracts charging excessive interest. They favored providing loans on more reasonable terms than moneylenders offered. In fact, churchmen tried to outflank the usurer by establishing institutions where the poor could borrow cheaply. Parishes, religious fraternities, guilds, hospitals and perhaps monasteries lent grain, cattle and money.⁹⁵ In England, bishops were organizing such loans with papal approval in the middle of the thirteenth century.⁹⁶ Two centuries later, around 1462, the Franciscans led the movement to create Monts de Piété. These institutions began in Italy and had spread to France, Germany, and the Low Countries by the first half of the sixteenth century. They were never adopted in England, because the Reformation intervened. Even so, English writers on economic ethics frequently discussed and praised them.⁹⁷ Church law on moneylending developed steadily until at least the Lateran Council of 1515. It had to adapt to increasingly complex business practices. The ingenuity with which legal experts elaborated the code was itself proof that it generated considerable business and fees. After all, lawyers do not serve God for nothing. The canon lawyers had a bad reputation among laypeople. To put it mildly, they were no more innocent than other lawyers in the gentle art of creating business. The Italians, in particular, led the way, as was natural in Europe’s financial capital. Italian canon lawyers performed prodigies of legal ingenuity. In England, by contrast, the canon lawyer Lyndwood was content to quote a sentence from a thirteenth-century English archbishop and leave it at that.⁹⁹ Perhaps Englishmen were unusually virtuous. Or perhaps, as a foreigner unkindly said, “they do not fear to make contracts on usury.”⁹⁸ Most probably, though, English business was a conservative and slow-moving affair.

But, however lawyers might distinguish and refine, the essential facts were simple. The Church sees buying and selling, lending and borrowing, as a simple case of neighborly or unneighborly conduct. Though a rationalist like Bishop Pecock may insist that the rich, as such, are not hateful to God,¹⁰⁰ it has a traditional prejudice against the arts by which men—or at least laymen—acquire riches, and is apt to lump them together under the ugly name of avarice. Merchants who organize a ring, or money-lenders who grind the poor, it regards, not as business strategists, but as nefandæ belluæ—monsters of iniquity. As for grocers and victualers “who conspire wickedly together that none shall sell better cheap than another,” and speculators “who buy up corn, meat and wine ... to amass money at the cost of others,” they are “according to the laws of the Church no better than common criminals.”¹⁰¹ So, when the price of bread rises, or when the London fruiterers, persuaded by one bold spirit that they are “all poor and caitiffs on account of their own simplicity, and if they would act on his advice they would be rich and powerful,”¹⁰² form a combine, to the great loss and hardship of the people, burgesses and peasants do not console themselves with the larger hope that the laws of supply and demand may bring prices down again. Strong in the approval of all good Christians, they stand the miller in the pillory, and reason with the fruiterers in the court of the mayor. And the parish priest delivers a sermon on the sixth commandment, choosing as his text the words of the Book of Proverbs, “Give me neither riches nor poverty, but enough for my sustenance.”

But however much lawyers might make distinctions and refine their arguments, the essential facts were simple. The Church sees buying and selling, lending and borrowing, as matters of neighborly or unneighborly conduct. A rationalist like Bishop Pecock may insist that the rich are not hateful to God simply because they are rich.¹⁰⁰ Even so, the Church has a traditional prejudice against the ways men, or at least laymen, acquire riches. It tends to lump those ways together under the ugly name of greed. The Church regards merchants who form a ring and moneylenders who squeeze the poor as nefandæ belluæ, monsters of iniquity. It does not regard them as business strategists. Grocers and food sellers “who conspire wickedly together so that none will sell more cheaply than another” are “no better than common criminals under Church law.” So are speculators “who buy up corn, meat and wine ... to amass money at the expense of others.”¹⁰¹ So, the price of bread may rise. Or the London fruit sellers may form a combine, causing great loss and hardship to the people. One bold spirit persuades them that they are “all poor and wretched because of their own foolishness, and that if they follow his advice they will be rich and powerful.”¹⁰² In either case, the townspeople and peasants do not console themselves with the larger hope that supply and demand may bring prices down again. Confident that all good Christians approve, they put the miller in the pillory and take the fruit sellers to the mayor’s court to reason with them. And the parish priest delivers a sermon on the sixth commandment. He chooses as his text the words of the Book of Proverbs, “Give me neither riches nor poverty, but enough for my sustenance.”

Such, in brief outline, was the background of economic thought which the sixteenth century inherited, and which it brought to the bewildering changes in land tenure, in prices, in commercial and financial organization, that made the age a watershed in economic development. It is evident that the whole implication of this philosophy was, on one side, intensely conservative. There was no question of progress, still less of any radical social reconstruction. In the numerous heretical movements of the Middle Ages social aspirations were often combined with criticisms of the luxury and pomp of the ecclesiastical hierarchy. The official Church, to which independence of thought among the lower orders was but little less abhorrent when it related to their temporal well-being than when it was concerned with their eternal salvation, frowned upon these dangerous speculations, and sometimes crushed them with a ferocity as relentless as the most savage of the White Terrors of modern history has shown to the most formidable of insurrections.

This, in brief, was the background of economic thought that the sixteenth century inherited. The century brought these ideas to bear on bewildering changes in land tenure, prices, and commercial and financial organization. These changes made the age a turning point in economic development. Clearly, the whole tendency of this philosophy was, in one respect, intensely conservative. Progress was not considered, much less any radical reconstruction of society. In the many heretical movements of the Middle Ages, hopes for social change were often combined with criticism of the luxury and pomp of the Church hierarchy. The official Church found independent thought among the lower classes almost as hateful when it concerned their earthly welfare as when it concerned their eternal salvation. The Church disapproved of these dangerous ideas and sometimes crushed them with fierce brutality. Its ferocity was as relentless as that shown by the most savage of the White Terrors of modern history toward the most formidable uprisings.

Intellectually, religious opinion endorsed to the full the static view, which regarded the social order as a thing unalterable, to be accepted, not to be improved. Except on rare occasions, its spokesmen repeated the conventional doctrine, according to which the feet were born to labor, the hands to fight, and the head to rule. Naturally, therefore, they denounced agitations, like the communal movement,¹⁰³ designed to overturn that natural order, though the rise of the Free Cities was one of the glories of medieval Europe and the germ of almost every subsequent advance in civilization. They referred to questions of economic conduct, not because they were anxious to promote reforms, but because they were concerned with the maintenance of traditional standards of personal morality, of which economic conduct formed an important part.

In its thinking, religious opinion fully supported the belief that the social order could not be changed. It saw the social order as something to accept, not improve. With rare exceptions, religious spokesmen repeated the conventional doctrine: the feet were born to labor, the hands to fight, and the head to rule. Naturally, they therefore denounced movements, such as the communal movement,¹⁰³ that aimed to overturn this natural order. Yet the rise of the Free Cities was one of the glories of medieval Europe. It was also the seed of almost every later advance in civilization. Religious spokesmen addressed questions of economic conduct, not because they wanted to promote reforms, but because they wanted to maintain traditional standards of personal morality. Economic conduct was an important part of personal morality.

Practically, the Church was an immense vested interest, implicated to the hilt in the economic fabric, especially on the side of agriculture and land tenure. Itself the greatest of landowners, it could no more quarrel with the feudal structure than the Ecclesiastical Commission, the largest of mineral owners today, can lead a crusade against royalties. The persecution of the Spiritual Franciscans, who dared, in defiance of the bull of John XXII, to maintain St. Francis’ rule as to evangelical poverty, suggests that doctrines impugning the sanctity of wealth resembled too closely the teaching of Christ to be acceptable to the princes of the Christian Church.

In practice, the Church had enormous interests to protect and was deeply involved in the economy, especially in farming and landholding. As the greatest landowner, it could no more oppose the feudal system than the Ecclesiastical Commission, the largest owner of mineral rights today, can lead a crusade against royalties. The Spiritual Franciscans dared to uphold St. Francis’ rule of evangelical poverty, defying a papal decree by John XXII. Their persecution suggests that teachings challenging the sanctity of wealth were too close to Christ’s teachings to be acceptable to the princes of the Christian Church.

The basis of the whole medieval economic system, under which, except in Italy and Flanders, more than nine-tenths of the population consisted of agriculturists, had been serfdom or villeinage. Confronted in the sixteenth century with the unfamiliar evils of competitive agriculture, conservative reformers were to sigh for the social harmonies of a vanished age, which “knyt suche a knott of colaterall amytie betwene the Lordes and the tenaunts that the Lorde tendered his tenaunt as his childe, and the tenaunts againe loved and obeyed the Lorde as naturellye as the childe the father.”¹⁰⁴ Their idealization of the past is as misleading, as an account of the conditions of previous centuries, as it is illuminating as a comment upon those of their own. In reality, so far as the servile tenants, who formed the bulk of medieval agriculturists, were concerned, the golden age of peasant prosperity is, except here and there, a romantic myth, at which no one would have been more surprised than the peasants themselves. The very essence of feudal property was exploitation in its most naked and shameless form, compulsory labor, additional corvées at the very moments when the peasant’s labor was most urgently needed on his own holding, innumerable dues and payments, the obligation to grind at the lord’s mill and bake at the lord’s oven, the private justice of the lord’s court. The custom of the manor, the scarcity of labor, and, in England, the steadily advancing encroachments of the royal courts, blunted the edge of the system, and in fifteenth-century England a prosperous yeomanry was rising on its ruins. But, during the greater part of the Middle Ages, its cumulative weight had been, nevertheless, immense. Those who lived under it had no illusions as to its harshness. The first step which the peasant who had saved a little money took was to buy himself out of the obligation to work on the lord’s demesne. The Peasants’ Revolt in England, the Jacquerie in France and the repeated risings of the German peasantry reveal a state of social exasperation which has been surpassed in bitterness by few subsequent movements.

Serfdom, or villeinage, had been the foundation of the entire medieval economic system. Except in Italy and Flanders, more than nine-tenths of the population were farmers. In the sixteenth century, conservative reformers faced the unfamiliar evils of competitive agriculture. They longed for the social harmony of a vanished age. They said the old order “tied such a knot of mutual friendship between lords and tenants that the lord cared for his tenant as his child, and the tenants in turn loved and obeyed the lord as naturally as a child does his father.”¹⁰⁴ Their idealized view of the past misrepresents conditions in earlier centuries, but it reveals much about conditions in their own time. In reality, most medieval farmers were tenants bound to serve their lords. For them, a golden age of peasant prosperity was, apart from a few places, a romantic myth. No one would have been more surprised by it than the peasants themselves. Feudal property was based on exploitation in its most open and shameless form. Peasants had to perform compulsory labor, including extra corvées just when their work was most urgently needed on their own land. They faced countless dues and payments. They had to grind their grain at the lord’s mill and bake at the lord’s oven. They were also subject to the private justice of the lord’s court. The customs of the manor and the shortage of labor softened the system’s harshness. In England, the royal courts also steadily extended their reach, weakening the system. By the fifteenth century, a prosperous class of yeomen was rising from its ruins in England. But for most of the Middle Ages, the system’s combined burdens had been immense. Those who lived under it had no illusions about its harshness. The first thing a peasant did after saving a little money was to pay for release from the duty to work on the lord’s demesne. The Peasants’ Revolt in England, the Jacquerie in France and the repeated uprisings of German peasants reveal intense social anger. Few later movements have surpassed them in bitterness.

It is natural to ask (though some writers on medieval economics refrain from asking) what the attitude of religious opinion was towards serfdom. And it is hardly possible to answer that question except by saying that, apart from a few exceptional individuals, religious opinion ignored it. True, the Church condemned arbitrary tallages, and urged that the serf should be treated with humanity. True, it described the manumission of serfs as an act of piety, like gifts to the poor. For serfs are not “living tools,” but men; in the eyes of God all men are serfs together, conservi, and in the Kingdom of Heaven Lazarus is before Dives.¹⁰⁵ True, villeinage was a legal, not an economic, category; in the England of the fourteenth century there were serfs who were rich men. But to release the individual is not to condemn the institution. Whatever “mad priests” might say and do, the official Church, whose wealth consisted largely of villeins, walked with circumspection.

It is natural to ask what religious opinion thought of serfdom, though some writers on medieval economics do not ask. It is hardly possible to answer except by saying that, apart from a few exceptional individuals, religious opinion ignored serfdom. True, the Church condemned arbitrary tallages and urged that serfs be treated humanely. True, the Church described freeing serfs as an act of piety, like giving to the poor. For serfs are not “living tools,” but men. In God’s eyes, all men are fellow serfs, conservi, and in the Kingdom of Heaven Lazarus comes before Dives.¹⁰⁵ True, villeinage was a legal category, not an economic one. In fourteenth-century England, some serfs were rich men. But freeing individuals is not the same as condemning the institution. Whatever “mad priests” might say and do, the official Church was cautious. Much of its wealth consisted of villeins.

The canon law appears to have recognized and enforced serfdom.¹⁰⁶ Few prominent ecclesiastics made any pronouncement against it. Aquinas explains it as the result of sin, but that does not prevent his justifying it on economic grounds.¹⁰⁷ Almost all medieval writers appear to assume it or excuse it. Ecclesiastical landlords, though perhaps somewhat more conservative in their methods, seem as a whole to have been neither better nor worse than other landlords. Rustica gens optima flens, pessima gaudens, was a sentiment which sometimes appealed, it is to be feared, to the children of light concerned with rent rolls and farming profits, not less than to the feudal aristocracy, with whom the heads of the ecclesiastical hierarchy were inextricably intermingled. When their chance came, John Nameless, and John the Miller, and John Carter, who may be presumed to have known their friends, burned the court rolls of an abbot of St. Albans, and cut off the head of an archbishop, and ran riot on the estates of an abbot of Kempten, with not less enthusiasm than they showed in plundering their lay exploiters. It was not the Church, but revolting peasants in Germany and England, who appealed to the fact that “Christ has made all men free”;¹⁰⁸ and in Germany, at least, their ecclesiastical masters showed small mercy to them. The disappearance of serfdom—and, after all, it did not disappear from France till late in the eighteenth century, and from Germany till the nineteenth—was part of a general economic movement, with which the Church had little to do, and which churchmen, as property-owners, had sometimes resisted. It owed less to Christianity than to the humanitarian liberalism of the French Revolution.

Canon law seems to have recognized and enforced serfdom.¹⁰⁶ Few prominent church leaders spoke out against it. Aquinas explains serfdom as the result of sin, but still justifies it on economic grounds.¹⁰⁷ Almost all medieval writers seem to take serfdom for granted or excuse it. Church landlords may have been somewhat more conservative in their methods. But on the whole, they seem to have been neither better nor worse than other landlords. Rustica gens optima flens, pessima gaudens (the peasants are best when weeping, worst when rejoicing) was a sentiment that sometimes appealed, it must be feared, to the children of light concerned with rents and farming profits. It appealed to them no less than to the feudal aristocracy, with whom the heads of the Church hierarchy were inextricably mixed. When their chance came, John Nameless, John the Miller, and John Carter, who may be presumed to have known their friends, burned an abbot of St. Albans’s court records and cut off an archbishop’s head. They also ran riot on an abbot of Kempten’s estates. They did all this with no less enthusiasm than they showed in plundering their non-church exploiters. It was not the Church, but revolting peasants in Germany and England, who appealed to the fact that “Christ has made all men free”.¹⁰⁸ In Germany, at least, their church masters showed them little mercy. The disappearance of serfdom was part of a general economic movement. After all, serfdom did not disappear from France until late in the eighteenth century, or from Germany until the nineteenth. The Church had little to do with this movement, and churchmen, as property owners, had sometimes resisted it. The disappearance of serfdom owed less to Christianity than to the humanitarian liberalism of the French Revolution.

The truth was that the very triumph of the Church closed its mouth. The Church of the third century, a minority of believers confronted with an alien civilization, might protest and criticize. But, when the whole leaven was mixed with the lump, when the Church was regarded, not as a society, but as society itself, it was inevitably diluted by the mass which it absorbed. The result was a compromise—a compromise of which the critic can say, “How much that was intolerable was accepted!” and the eulogist, “How much that was intolerable was softened!”

The truth was that the Church’s very triumph silenced it. In the third century, the Church was a minority of believers facing an alien civilization. It could protest and criticize. But once the leaven was mixed throughout the lump, the Church came to be seen differently. It was no longer a society, but society itself. The Church was inevitably diluted by the mass of people it absorbed. The result was a compromise. A critic could say of that compromise, “How much that was intolerable was accepted!” A supporter could say, “How much that was intolerable was softened!”

Both critic and eulogist are right. For if religious opinion acquiesced in much, it also claimed much, and the habit of mind which made the medieval Church almost impotent when dealing with the serried abuses of the medieval land system was precisely that which made it strong, at least in theory, in dealing with the economic transactions of the individual. In the earlier Middle Ages it had stood for the protection of peaceful labor, for the care of the poor, the unfortunate and the oppressed—for the ideal, at least, of social solidarity against the naked force of violence and oppression. With the growing complexity of economic civilization, it was confronted with problems not easily handled by its traditional categories. But, if applied capriciously, they were not renounced, and the world of economic morality, which baffles us today, was in its turn converted by it into a new, though embarrassing, opportunity. Whatever emphasis may be laid—and emphasis can hardly be too strong—upon the gulf between theory and practice, the qualifications stultifying principles, and the casuistry by which the work of canonists, not less than of other lawyers, was disfigured, the endeavor to draw the most commonplace of human activities and the least tractable of human appetites within the all-embracing circle of a universal system still glows through it all with a certain tarnished splendor. When the distinction between that which is permissible in private life and that which is permissible in business offers so plausible an escape from the judgment pronounced on covetousness, it is something to have insisted that the law of charity is binding on the second not less than on the first. When the austerity of principles can be evaded by treating them as applicable only to those relations of life in which their application is least exacting, it is something to have attempted to construct a system tough enough to stand against commercial unscrupulousness, but yet sufficiently elastic to admit any legitimate transaction. If it is proper to insist on the prevalence of avarice and greed in high places, it is not less important to observe that men called these vices by their right names, and had not learned to persuade themselves that greed was enterprise and avarice economy.

Both the critic and the admirer are right. Religious opinion accepted much, but it also made many demands. The medieval Church was nearly powerless against the entrenched abuses of the medieval land system. Yet the same way of thinking made it strong, at least in theory, when dealing with individuals’ economic transactions. In the early Middle Ages, the Church had stood for the protection of peaceful labor. It had also stood for care for the poor, the unfortunate, and the oppressed. It had upheld, at least as an ideal, social solidarity against the raw force of violence and oppression. As economic life grew more complex, the Church faced problems its traditional categories could not easily address. But although the Church applied those categories inconsistently, it did not abandon them. Instead, it turned the world of economic morality, which puzzles us today, into a new, though awkward, opportunity. The gap between theory and practice cannot be stressed too strongly. Principles were undermined by qualifications, and the work of canon lawyers, like that of other lawyers, was marred by casuistry. Yet through it all, their effort still shines with a certain tarnished splendor. They tried to bring the most ordinary human activities and the most unruly human appetites within a universal system that embraced everything. The distinction between private life and business offers a plausible way to escape the condemnation of greed. In these circumstances, it means something to have insisted that the law of charity applies to business no less than to private life. Strict principles can be evaded by applying them only to relationships where they make the fewest demands. In these circumstances, it means something to have tried to build a system strong enough to resist commercial dishonesty, yet flexible enough to allow every legitimate transaction. We are right to stress how common avarice and greed were among those in high places. But it is just as important to notice that people called these vices by their proper names. They had not learned to persuade themselves that greed was enterprise and avarice was thrift.

Such antitheses are tempting, and it is not surprising that some writers should have dwelt upon them. To a generation disillusioned with free competition, and disposed to demand some criterion of social expediency more cogent than the verdict of the market, the jealous and cynical suspicion of economic egotism, which was the prevalent mood of the Middle Ages, is more intelligible than it was to the sanguine optimists of the Age of Reason, which, as far as its theory of the conduct of men in society is concerned, deserves much more than the thirteenth century to be described as the Age of Faith. In the twentieth century, with its trusts and combines, its control of industry by business and of both by finance, its attempts to fix fair wages and fair prices, its rationing and food controls and textile controls, the economic harmonies are, perhaps, a little blown upon. The temper in which it approaches questions of economic organization appears to have more affinity with the rage of the medieval burgess at the uncharitable covetousness of the usurer and the engrosser, than it has with the confidence reposed by its innocent grandfathers in the infallible operations of the invisible hand.

Such contrasts are tempting, and it is not surprising that some writers have dwelt on them. The prevailing mood of the Middle Ages was one of wary and cynical suspicion of economic self-interest. This mood is more understandable to a generation disillusioned with free competition. That generation is inclined to demand a more convincing measure of social benefit than the market's verdict. It understands medieval suspicion better than the confident optimists of the Age of Reason did. In its theory of how people behave in society, the Age of Reason deserves to be called the Age of Faith far more than the thirteenth century does. In the twentieth century, faith in economic harmony has perhaps lost some of its force. This is a century of trusts and combines, of industry controlled by business and both controlled by finance. It is also a century of attempts to fix fair wages and fair prices, of rationing and controls on food and textiles. In its approach to economic organization, the twentieth century seems closer in spirit to the medieval townsman. He raged against the uncharitable greed of the usurer and the engrosser, who bought up goods to control their price. The century seems less like its innocent grandfathers, who trusted the invisible hand to work without fail.

The resemblance, however, though genuine, is superficial, and to over-emphasize it is to do less than justice to precisely those elements in medieval thought which were most characteristic. The significance of its contribution consists, not in its particular theories as to prices and interest, which recur in all ages, whenever the circumstances of the economic environment expose consumer and borrower to extortion, but in its insistence that society is a spiritual organism, not an economic machine, and that economic activity, which is one subordinate element within a vast and complex unity, requires to be controlled and repressed by reference to the moral ends for which it supplies the material means. So merciless is the tyranny of economic appetites, so prone to self-aggrandizement the empire of economic interests, that a doctrine which confines them to their proper sphere, as the servant, not the master, of civilization, may reasonably be regarded as among the pregnant truisms which are a permanent element in any sane philosophy. Nor is it, perhaps, as clear today as it seemed a century ago, that it has been an unmixed gain to substitute the criterion of economic expediency, so easily interpreted in terms of quantity and mass, for the conception of a rule of life superior to individual desires and temporary exigencies, which was what the medieval theorist meant by “natural law.”

The resemblance, however, is real but superficial. To overstate it is to do less than justice to the most distinctive elements of medieval thought. Its contribution lies not in its particular theories of prices and interest. Such theories recur in all ages when economic conditions leave consumers and borrowers open to extortion. The contribution lies instead in its insistence that society is a spiritual organism, not an economic machine. Economic activity is one subordinate part of a vast and complex whole. It must be controlled and restrained according to the moral ends for which it provides the material means. Economic appetites are ruthlessly tyrannical, and economic interests are all too ready to expand their power. So a doctrine that confines them to their proper sphere may reasonably be regarded as a profound truism. It holds that economic appetites and interests should serve civilization, not master it. Such a truism is a permanent part of any sane philosophy. A century ago, it seemed a clear gain to replace the idea of a rule of life with economic expediency. Economic expediency is a standard all too easily understood in terms of quantity and mass. The rule of life, by contrast, stood above individual desires and temporary needs. It was what the medieval theorist meant by “natural law.” Perhaps today it is less clear that replacing that rule was an unmixed gain.

When all is said, the fact remains that, on the small scale involved, the problem of moralizing economic life was faced and not abandoned. The experiment may have been impracticable, and almost from the first it was discredited by the notorious corruption of ecclesiastical authorities, who preached renunciation and gave a lesson in greed. But it had in it something of the heroic, and to ignore the nobility of the conception is not less absurd than to idealize its practical results. The best proof of the appeal which the attempt to subordinate economic interests to religion had made is the persistence of the same attempt among reformers, to whom the Pope was anti-Christ and the canon law an abomination and the horror of decent men when, in the sixteenth century, its breakdown became too obvious to be contested.

After all is said, the fact remains that people faced the problem of making economic life moral, rather than abandoning it. The scale of the effort was small. The experiment may have been impractical. Almost from the start, it was discredited by the notorious corruption of church authorities, who preached self-denial while setting an example of greed. But there was something heroic in the experiment. It is just as absurd to ignore the nobility of the idea as to idealize its practical results. The strongest evidence of the appeal of placing economic interests under religion is that reformers continued to try it. For those reformers, the Pope was anti-Christ and canon law was an abomination. Further evidence is the horror of decent people when, in the sixteenth century, the breakdown of that attempt became undeniable.