A History of Czech Economic Thought

Antonie Doležalová

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781317428657
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Situated in the turbulent heart of Europe, the Czech Republic has suffered from significant discontinuity in its historical development, but its economic thinking has not until now been subject to a full analysis. This book offers a history of Czech economic thought from the late Middle Ages to the present day. It traces methodological developments and the relationship between economics and politics, and introduces not just pioneering figures in the field but also those whose lives and careers were thwarted by history, as well as Czech exile thinkers.

Identifying key themes in Czech economic thought, the volume considers which branches of economic theory have had the greatest influence on Czech thought, and explores the relationship between Czech economic thinking and wider established schools of thought.

This book will benefit students and researchers of history of economic thought, economic history, economic theory, and political economy, as well as those with a specific interest in the Czech Republic.

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1 Between faith and freedom

The Christian roots of Czech economic thought

‘Therefore, faithful Christians, search for the truth, listen to the truth, learn the truth, love the truth, speak the truth, keep with the truth, protect the truth until death; for the truth will set you free from sin, from the devil, from death of the soul, and finally, from eternal death, which is the eternal separation from God’s mercy.’

John Hus (1947, 18)

From the pagan world to the state of the high Middle Ages, Czech society underwent a transformation comparable to that of the modernization of the 19th century. The transformations were accompanied by changes of ruling family lines and of the legal system, but the most fundamental transformation was the process of the Reformation, which shook not only the church but also society itself to its foundations.

From Byzantium in 863, Cyril and Methodius brought Christianity to Great Moravia, the first state unit on the territory of what is today the Czech Republic, where they introduced the Slavonic liturgy, which spread also to Bohemia, which embraces the western part thereof. Bořivoj (r. 867–889), the first historically documented Duke of Bohemia and progenitor of the Přemyslid dynasty, which evolved its origin from the mythical fortune-teller Libuše and Přemysl the Ploughman, converted to Christianity around 880. Christianity than constituted an indispensable tool for early state-building.

Still during the Přemyslid rule, the sovereign gradually ceased to have a monopoly on his rule and began to share it with the owners of individual domains. This social stratum arose from the original Přemyslid officials, entrusted with stewardship of the land which they, however, gradually ‘privatized’ – also with its population, including all public jurisdictions, even fiscal and judicial. This process was never enacted and gave rise to the specific Bohemian form of common law, but also to the specific position of the estates. It stemmed both from the actual disintegration of public sovereign power and from the needs of the developing market; the concept of private ownership was fixed in the concept of ‘justified’ possession (Třeštík, 1971). Under the last Přemyslids there began a process of territorial expansion: The influence of established Kindgdom of Bohemia extended beyond Central Europe and it became one of the important powers in Europe.

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The power position of the nobility solidified after the Přemyslids had died out (1306), when the nobility implemented not only the independent election of the king, but also the separation of the direct sovereign domain from the sphere of the provincial municipality. On the basis of the election of the estates, John of Luxembourg was elected King of Bohemia (1310). In the time of the Luxembourg rule, especially that of Charles IV (r. 1346–1378), the Bohemian Kingdom became a major European power including not only Bohemia and Moravia, but also the minor provinces Lusiatia and Silesia. Housing some of the great European mining centres, Jáchymov (Joachimsthal) and Kutná Hora (Kuttenberg), the Kingdom of Bohemia was also economically a prospering country. An attempt to appoint a Czech king from the ranks of the domestic nobility was successful only once, after the extinction of the Luxembourgs, in the person of Georg of Poděbrady (r. 1458–1471); he was succeeded by the rule of the Polish Jagiellons (r. 1471–1526).

The time of prosperity was ended by a crisis in the church and the subsequent Reformation, which grew into the Hussite movement. The Reformation, the series of upheavals in the religious life of Europe during the 16th and the first half of the 17th centuries, had taken place 100 years earlier in the Bohemian Kingdom and isolated it from the rest of the orthodox Catholic world. Only at the beginning of the 16th century did the Reformation undergo another wave in neighbouring Germany and thus found its historical fulfilment. (Scribner, 1994) After initial hesitation, Luther acknowledged Hus’s teaching publicly. Hus’s legacy was that the Eucharistic ‘Bohemian practice’ was assumed by practically all reformed churches. Hus’s doctrine of predestination became a common point of departure for the whole Reformation, albeit in varying interpretations. (Kavka, 1994, 139–141) The Bohemian Lands had by then already established religious tolerance; in principle, every single individual could choose their own religion; the Kingdom of Bohemia was the first land where the majority of the population on the territory belonged to reformed churches or sects. The largest of these was the Utraquist Church including, especially, peasants and burghers. Less than 5% of the population belonged to the Jednota bratrská [Unity of Brethren], and only some 15% were Catholics. (David, 2003, 579)

The multifarious dimensions of the Hussite movement transformed the Kingdom of Bohemia into a monarchy of estates. In 1526, they had elected as their King the Habsburg Ferdinand I (r. 1526–1564), brother of Emperor Charles V. Habsburg’s intention was to enforce a union of the Utraquist Church with the Roman Church. A number of Silesian and Moravian princes openly rejected this and granted protection to illegal churches in their territories. Moravia thus became in the 16th century the most tolerant country and one of the most important centres of the Anabaptist movement in the whole of Europe. At the same time, one can identify growing numbers of Catholics among the aristocracy, who sought in conversion better prospects for a career at court. (Kavka, 1994, 147)

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The nobility, however, was growing ever wealthier especially thanks to the growth of the manorial economy. The socio-economic interests of the nobility and sovereign house grew into a point of conflict in the rebellion of 1618–1620 which became the prologue to the Thirty Years’ War. Some years after the fateful defeat at the Battle of White Mountain (1620) the Bohemian common law was abolished and Recatholicization was introduced. In Bohemia in 1627 and in Moravia in 1628, the estates were ordered either to convert to Catholicism or to leave the country. Hundreds of aristocrats and several thousand burgher families emigrated. The Unity of Brethren preserved an independent religious existence until 1656 in Lešno in Poland, where even its last senior, Comenius, was forced to emigrate.

The spiritual origin of Czech Reformation consists in recognizing the signs of the Last Days, calling attention to the imminent ‘end of all time’ and pointing out Christianity’s unpreparedness for the Second Coming of Christ. The eschatological tendency accompanied the Czech Reformation throughout its entire duration until Comenius. Although this chapter does not concern the Reformation, writing about economic thought at that time necessarily entails being confronted by it and equally so with practical economic questions (Wood, 2002); one can hardly speak of economic thought stricto sensu. The reason is clear – the only science of the Middle Ages was the science of God, theology. And it was the theologians who opened the doors to the penetration of notions which were to change the face of Czech thought in issues which had hitherto been the domain of the church. When these thinkers focused on issues of freedom, equality, correct conduct, fair prices or good organization of the community, they did so always from the perspective of Christianity; the convergence point of their considerations was always the endeavour for eternal salvation. And they would clearly ask whether this premise would suit today’s organization of economic relationships.

Not even the most significant representatives of that time, John Hus and Comenius, were economic thinkers, but theologians. We can find their economic considerations latently, implicitly, and only in a minimal number of texts can a more detailed explanation of economic concepts valid at the time be found. Both Hus’s effort to reform the church, in the vices of which he saw a source of evil for the entire society, and Comenius’s endeavour to correct human matters, were under the protection of God’s Providence and were firmly rooted in the Scriptures. The most important legacy of Hus is the emphasis on the freedom of human will and education in Czech. The mystic and visionary Comenius brought the second of these legacies to perfection by placing education at the centre of any endeavour for social change. Four hundred years before it was expressed by modern social science, he discovered that the root of all evil was ignorance and illiteracy.

The publication of Hus’s books would be one of the first fruits of Czech typography; in the revolutionary year of 1848, these books would be reprinted and from that time, especially thanks to the Czech National Revival, Hus would be associated with the social reform and progressive tradition in the Czech history. Even in spring 1892, however, a student who at a university meeting on the occasion of the anniversary of Comenius’s birth dared to refer to Jesus Christ as the first socialist would be exemplarily punished by a Dean’s warning. After the national revivalists, the communists also utilized the ‘revolutionary’ potential hidden in the Czech Reformation, to which they directly referred as a first revolutionary worker’s movement. Hussitism would thus be subjected to merciless popular humour, such as Josef Škvorecký’s (1924–2012) immortal sentence from his The Republic of Whores (1996), that the sources of the revolutionary tradition of the Czechoslovak People’s Army were three: comrade Hus, comrade Žižka (the Hussite military commander) and comrade Gottwald (the first president of Czechoslovakia after the communist takeover in 1948).

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Hus’s predecessors

The economic thought of Czechs, as of other nations in Central Europe, was formed on the pagan foundations of exchange as a gift which obliges one and has a reciprocal character (Mauss, 1990). In the time of Great Moravia in the 9th century and at the beginning of Bohemian statehood in the 10th century, this is proved by voluntary payment of marriage taxes based on the idea that it is the sovereign who influences the number of descendants, or the payment of the so-called rate as compensation for protection (for peace and a good year). The same practice continued when the elected sovereign became the chief owner of all land in the country. In the interpretation of the chronicler Kosmas’s Chronica Boemorum (1119–1125) by election of the prince the people placed into his hands freedom in the sense of personal freedom and the free usage of his property. This situation was changed in the first half of the 12th century: The Saint Wenceslaus (r. 921–935) who was murdered by his brother and was later canonized as a martyr, became the sovereign of Bohemia as the ‘owner’ of all estates in the country.

In the time of the high Middle Ages, the age-old peace was replaced by law, found by the Land Court and stored in the Land Desks, and the independence of the sovereign house decreased with the growing power of the nobility. It is therefore not surprising that the myth-emblazoned, but in policy (including economic) very practical and utilitarian Emperor Charles IV, branded, in his autobiography, the majority of the Bohemian lords as tyrants and saw himself as the guardian of justice and the community of all the good. The first Archbishop of Prague, Arnošt of Pardubice (1297–1364), had a significant influence on his considerations.

It was Arnošt who published in 1349 statutes which ordered priests to live chastely, avoid excesses, wear inconspicuous clothes and forbade them to visit taverns, have secular occupations, carry weapons and have wives or bed mates. The punishment for contravening the last point was the confiscation of so-called obročí (benefices). (Sedlák, 1915, 112) This was a fundamental punishment, for it extended to the property of the church, or more precisely, every individual priest. Since graduate priests did not have a post guaranteed in advance they had to be selected by existing parishes; and these decided according to the amounts, property or services, obročí, which the young priests offered. Thus specific patronal and clientelistic relationships were formed in the church. Besides benefice, the second source of the unprecedented growth of church property was the institution of devolutiones (escheat).

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On the other hand, towns had the resources for their economic development limited by canon law, which forbade any interest from loans: this was always usury. Whoever returned what they borrowed met their obligations fully, and it would be a sin to demand more from them.

This in substance corresponded with the general awareness that money is but a means of exchange, consumed by utility, and does not create new value of itself. Nevertheless, with the development of trade, the ban on usury was circumvented by the closure of purchase agreements in which profit above the principal was acceptable; the principal was a house or landed property. (Ibid., 65–66)

The church became an unpleasant rival to the towns, nobility and the emperor; in the second half of the 14th century it owned a quarter of all the land in the Bohemian Crownlands (Ibid., 62). King Charles IV decided to take two steps – to subject the church to social criticism and to break their educational monopoly. The end of the educational monopoly of the church was carried out by Charles IV with the establishment of Charles University in Prague – the first north of the Alps and west of Paris – as a free community of scholars. As early as a year later it became a complete medieval education facility with four faculties – those of Law, Theology, Medicine and Arts, with the last mentioned being only a step to further specialized studies at the first two faculties. In order to enable foreigners to study in Prague as well, Charles divided the academic community into four nations according to the Parisian model – Czech, Polish, Bavarian and Saxon.

Studies at the Faculty of Arts included the study of Aristotle’s (384–322 BC) works and the interpretation thereof by Thomas Aquinas (1225–1274) or Albert the Great (c.1200–1280). The curriculum included not only works focused on nature, dialectics and metaphysics, but also practical philosophy including ethics, political philosophy and economics. The foundation of the study of economics was the Nichomachean Ethics, the Politics and the pseudo-Aristotelian Oeconomia. The connected study of theology focused on interpretation of the Scriptures and the Sentences, i.e. selected dictums by the Church Fathers. The Scriptures were literally interpreted according to the French theologian from the first half of the 14th century, Nicholas of Lyra (1270–1349), and the Sentences by the Parisian bishop from the 12th century, Peter Lombard (1096–1160).

The point of the studies was mechanical learning based on the teacher’s purposeful reading out aloud; the more authors the student was able to quote by memory, the better he was considered to be. We will see that this method of learning (economics) would remain in the Bohemian Lands until the first half of the 19th century. At the beginning of the 15th century, tuition also included exercises which had the form of questiones, in which questions were asked and answered according to previously given rules; Plato’s (427–347 BC) teaching of ideas was a great theme for questiones in Prague.

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Likewise, Charles IV invited to Prague Konrad Waldhauser (1326–1369), known for his critique of greed, clientelism and other church practices which he branded as simony. Waldhauser was directly followed by Milíč from Kroměříž (1325-1374), born in Moravia, who developed his preaching activity in Prague. In contrast to Waldhauser, who preached in German, Milíč also preached in Czech, and the reaction to his sermons, which were supported by the authority of the Bible and Church Fathers, was immense. Mathew of Janov (1350–1393), born in South Bohemia, probably belonged to the circle of Milíč’s students; in any event, however, he studied at the Parisian Sorbonne for 9 years. The principle according to which human life and self-knowledge should be directed was, according to him, the primary Truth, veritas prima, inscribed into every person’s reason in a natural way. Thanks to this absolute criterion, everyone could control themselves and justly judge others. Vojtěch Raňkův of Ježov (c.1320–1388) became Rector of the Sorbonne in 1355 and laid down binding rules for lecturing at the Faculty of Arts. During his repeated visits to Oxford University in 1353–1354, he became a friend of Bishop Richard Fitzralph (1295–1360), who influenced John Wycliff’s (1328–1384) ideas on dominion. Vojtěch’s last will had a fundamental significance for further development in Bohemia. In it, Vojtěch bequeathed money to provide scholarships for studies in philosophy and theology at Paris and Oxford for students whose parents were both Czechs (Herold et al. 2011, 183–185). As early as the 1380s, Wycliff’s works found their way to Prague thanks to these students and fell on fertile soil in Bohemia.

And finally, there was Thomas Štítný of Štítné (c. 1333–1409), a representative of the lay stream of the critique of social conditions. It was he who was the first to present in Czech – and thus to the broader social strata – a remarkable selection of Christian learning and tradition of European thought from antiquity, through Augustinianism, Neoplatonism and Patristics through to 14th century mysticism. He did so in a comprehensible form, often supplementing his texts with proverbs and stories, although his texts are likewise filled with original thoughts. In his most original work,...

Table of contents

• Cover Page
• A History of Czech Economic Thought
• The Routledge History of Economic Thought
• Title
• Copyright
• Dedication
• Contents
• Introduction
• Acknowledgements
• 1 Between Faith and Freedom: The Christian Roots of Czech Economic Thought
• 2 Between Occupation and Mission: From Enlightenment to Institutionalization (1648–1882)
• 3 Between Economics and Politics: From the Glorious Beginnings to the Bitter Ends (1882–1948)
• 4 Between Theory and Ideology: Economics as a Political Tool (1948–1989)
• Epilogue: The Unbearable Lightness of Economics
• Bibliography
• Index