Monday, 27 August 2012

Greed isn't Good - a Medieval View on Capitalism

In medieval times it seems capitalism flourished on the principle of fair dealing, hard bargaining and allowing the "market" to determine the value of any goods or services. Naked greed was not something the merchant classes encouraged or accepted. Medieval traders built trading empires, extended credit and charged interest on it, but frowned on blatantly selfish economic behaviour. Anyone who was blatantly greedy and deliberately drove prices up to increase profits soon found himself shunned and despised by his fellow businessmen. 

The interesting thing is that these men were also intensely conscious of community needs, and there are many examples of foundations they established for the benefit of the communities they lived and worked amongst. The City of London still funds most of its activities from money invested in Foundations and Trusts established for the benefit of the populace by men like Sir Richard Whittington (yes, Dick Whittington was a real person). Put simply, blatant greed was simply unacceptable among the Mercant classes of this period, so why has it changed?

It does seem to have crept in with the Reformation. Over the last 500 years there has been a gradual drift toward amassing and holding as much wealth as possible. Gradually the ethos of 'taking care of the poor of the parish' has been pushed away from the individual and onto 'the parish' at first and now 'the state.' That sense of being part of the community and sharing one's good fortune with a community, has apparently gone. Now the faceless 'state' must provide, the merchant's only concern is how to make sure he contributes as little as possible toward it.

Adam Smith certainly did not advocate unbridled greed. His treatise on wealth and wealth creation highlights the fact that wealth and prosperity need to be shared fairly, not simply accumulated for the benefit of a few. A fair price should be coupled with a fair wage for a fair days work. That last bit does, of course, impose the need for the 'worker' to deliver what they have contracted to do - a fair days work. And they do have a right to expect a fair wage for it, but you soon realise that a worker who failed to deliver in medieval times soon found himself out of work, house and community. Just as greed was frowned on, so to was idleness and shoddy work.

The Medieval Guilds acted to regulate many of these matters, and, according to one blog I read regularly on medieval matters, sometimes even condoned the murder of excessively greedy individuals whose actions threatened the welfare of the wider community. The full article I read on this can be found at under the title Greed wasn't good in the Middle Ages.

Perhaps a return to some of the ethics they practiced would do much to cure some of the ills that beset our economics today. However, I suspect that we workers need to get our focus adjusted as well. It is our demands for a greater share of the "merchant's rewards" that propels prices ever upward.


  1. The medievals see to have things right.

    I wonder if one of the reasons we see less help from the well heeled for the community today is because with federal government taking more taxes away and spending them on not entirely effective but overbureaucratized attempts at the same thing, people have begun to believe, "it's the government's job".

    "The words you should fear most are 'I'm from the government, and I'm here to help'."

    -- Ronald Reagan

    I know that many employers have actually been "run out" of the United States, outsourcing the manufacturing of goods and many services because the unions have all but made themselves partners in these firms by constantly demanding more and more in terms of wages, allocation of on-the-job responsibilities for their members and of course their many benefits, yet at the same time they protect the lazy and the incompetent, preventing them from being dismissed and maintaining the same wages for them that are paid to the best and the brightest.

    Just live in New York and observe the day to day activities of infrastructural union workers, the ones who service public rest rooms (loos), are charged with keeping escalators working and so forth.

    It's a never ending quagmire...

    1. All the criticism of 'Capitalists,' while to some extent justified, masks the other end of the coin - the Unions that have driven many companies to the wall with their demands. I confess I'm ambivalent about the activities of Unions. They do some good work, but they encourage an attitude of 'entitlement' and drive unrealistic demands to the point where - as you say - jobs end up being moved out of communities and countries. One example has to be the Fire Brigades Union in the UK which demanded (and then got everyone out on strike for) a starting wage level increase equivalent to a 30% payrise. What was never considered or at least never admitted, was that raising the basic pay of a firefighter to £30k pa would push every Grade up by a like percentage. No employer could fund or justify a rise like that - least of all one funded by the taxpayer!

      The result of the strike was cuts in staffing, changes to recruiting and the legislation and the service lost out - primarily it lost the respect of the populace. I think Unions have a place, but I am seriously uneasy at Union Leaders earning as much or more than senior managers in International companies. Some earn as much as some of the "bankers" they fulminate against.

      I think Ronald Reagan was a very astute man!

    2. Here we have an excellent example cited by the Monk where a qualitative argument was interpreted as a quantitative one and where union leaders ignored early and appropriate communication inviting consultation and then complained that they were not consulted.

      Firstly, the "30k" figure was, originally, never demanded or suggested as a realistic option, it was later taken up by the membership as a clarion-call, but originated in a rhetorical question based on the principle that a police officer and a fire-fighter were roughly equal as public servants; at the time a fully qualified top-rate constable earned ~30k, hence the figure.

      Secondly, I have in my posession a letter (30 minutes later, my filing system is chaotic enough that I cannot locate it!) dated October 2002 from the LGA to Mr Gilchrist, general secretary of the Fire Brigades Union, which clearly lays down a modernisation adgenda including changes in working practice, legislative developpment and provision of service baded upon IRMP and invited the response of the union.

      Some months later, all of these factors were cited as an imposition by the FBU and the "government", when it was actually the Local Government Association, accused of imposing change without consultation. Then the press got hold of the story, the 30k explosion began and every single struggling fire-fighter beleived in fairy god-mothers and felt entitled to a minimum of £30,000 p.a.

      One of the factors of philosophical importance that is rare to have debate about, except with theologians, who, at their best, are most interested in the concept, is truth.

      It is, perhaps best put in the words of two well-known phrases, one is the standard form of sworn testimony that in the English-speaking western legal form will contain a form of the words "the truth, the whole truth and nothing but the truth", the other, a quote from Oscar Wilde normally given as “The pure and simple truth is rarely pure and never simple.”

      In the original writings of Marx and Engels, the factor that led to the formation of workers communes was that the labourer had "nothing to offer but his labour" and that this was used as a mechanism to keep the down-trodden trodden down; this was justifiable in the late nineteenth century as a reason for workers to rebel and to form unions to gain humane conditions and living wages. It does not however, give overpaid union representatives the right to hold governments to ransom in the way that certain larger-than-life figures have tried to. I found it no surprise that A Scargill was roundly defeated by M Thatcher, he should have listened to the reasoned argument and worked with those holding the purse-strings rather than denying, denouncing and insulting those in power and misleading his members: perhaps history will suggest that in the 21st century Mr Gilchrist should have read his recent political history before making the same mistakes.