Property and Prophets: The Evolution of Economic Institutions and Ideologies

The Evolution of Economic Institutions and Ideologies

E. K. Hunt

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317461982
• Edition: 7
• Topic: Negocios y empresa
• Subtopic: Negocios en general

"Property and Prophets" is a concise history of the rise and subsequent triumph of capitalism. Focused primarily on England until 1800 and the United States since 1800, the book's economic history is interspersed with the history of ideas that evolved along with the capitalist system.

CHAPTER 1

The Ideology of Precapitalist Europe

Human beings must exist in societies in order to survive. Unlike some species of animals, whose individual members can exist fairly adequately in relative isolation, human beings are not equipped by nature with the physical prowess to provide the material requisites of life by themselves. Humans survive and indeed prosper because by living in groups they have learned to subdivide tasks and to use tools. It was this division of labor and the accumulation of more and better tools (or capital) that made possible the impressive increases in humankind’s control over nature, or increases in our potential to produce the material necessities of life.

This division of labor also resulted, of necessity, in a differentiation of the roles that the different members of a society occupy. This differentiation was probably purely functional in earliest times; that is, when productivity was low, all members of society lived near the subsistence level, and social class, or hierarchical differentiation, was absent. Increasingly elaborate divisions of tasks, combined with more sophisticated tools, however, led to higher productivity, which made possible an escape from the drudgery of everyday toil for at least a small part of society.

A small leisure class could be supported because with higher per capita productivity the labor of a smaller number of people could support the entire society at its customary standard of living or at an even higher standard. When this occurred, societies began to differentiate among their members according to social class. This hierarchical class differentiation was generally economic in nature. Those who worked were usually assigned to the lowest classes; those who escaped the burdens of ordinary labor were of higher-class standing. Although these higher-class people were no longer directly connected with the production of everyday necessities, they often performed rites, rituals, or extensive duties, some of which were undoubtedly beneficial to society.

Such a system would not have been able to exist for long if the majority of its members did not share common feelings about the proper way of conducting economic and social affairs. These common feelings and values, which generally stemmed from a common world view, or system of metaphysics, justified both the division of productive tasks and the class differentiation that existed. These common feelings and values were expressed in ideologies.

An ideology, as the term is used in this book, refers to ideas and beliefs that tend to provide moral justification for a society’s social and economic relationships. Most members of a society internalize the ideology and thus believe that their functional role as well as those of others is morally correct and that the method by which society divides its produce is fair. This common belief gives society its cohesiveness and viability. Lack of it creates turmoil, strife, and ultimately revolution, if the differences are deep enough.

This book is concerned primarily with our present economic system, capitalism. We sketch the broad outlines of the evolution of this system. In doing so, we focus on conflicts and social antagonisms and examine the ideologies with which the capitalist system attempted to mitigate these conflicts and to promote social cohesiveness. By way of background, we begin with the economic systems and ideologies of precapitalist Europe.

Ancient Greek and Roman Slavery

In ancient Greece and Rome, as many as 80 percent of the people were slaves. The slaves did all the manual work and even much of the clerical, bureaucratic, and artistic work of these societies. They were given just enough food and clothing for bare subsistence. The slave owners owned and utilized the entire surplus produced by the slaves above their own subsistence. Most of the economy was agricultural, aside from a few cities where the central government was located. On each agricultural plantation the slave owner was king and lived in splendid luxury, though he might also have a villa in Athens or Rome. In addition to his wife, who was treated as a valuable piece of property, he sexually exploited his slave women.

What sort of economic ideology existed? There were a few treatises, especially in the Roman period, on the best ways to plant crops, the best agricultural implements to use, and the best ways to supervise, control, and punish slaves. In addition, there were a large number of justifications for slavery. Even brilliant philosophers such as Plato and Aristotle argued that slavery was “natural,” was the only possible system, and would exist forever. They argued that some men and women were born to be slaves and were inherently inferior, while others were born superior and were meant to be slave owners. Plato and Aristotle were not apologists; this was the dominant ideology and they simply took it for granted.

Slavery had many limitations, although it did result in many great public works and the advance of science and culture. One limitation was the fact that slaves could not be given complex or delicate machinery of any sort. Most likely, they would break it up and would often use it for weapons to revolt. Moreover, agricultural organization had to be very simple, usually limited to one crop tilled with crude implements. As a result, much land was totally ruined and the agricultural product limited. Another effect of slavery was the view that all work was demeaning. Because this attitude spread even to invention, the Roman period saw little technological advance and the economy stagnated.

Its economic weaknesses, and accompanying political and social weaknesses, made the Roman Empire vulnerable to attack by the primitive Germanic and Slavic tribes. The empire collapsed in the West, and out of the chaos eventually arose the system of feudalism. The kings of the feudal states were mostly former chiefs of the primitive tribes that invaded the area.

Feudalism

The decline of the western part of the old Roman Empire left Europe without the laws and protection the empire had provided. The vacuum was filled by the creation of a feudal hierarchy. In this hierarchy, the serf, or peasant, was protected by the lord of the manor, who, in turn, owed allegiance to and was protected by a higher overlord. And so the system went, ending eventually with the king. The strong protected the weak, but they exacted a high price. In return for payments of money, food, labor, or military allegiance, overlords granted the fief, or feudum—a hereditary right to use land—to their vassals. At the bottom was the serf, a peasant who tilled the land. The vast majority of the population raised crops for food or clothing or tended sheep for wool and clothing. (See Clapham and Powers [1966] for a more complete discussion of these matters.)

Custom and tradition are the keys to understanding medieval relationships. In place of laws as we know them today, the custom of the manor governed. There was no strong central authority in the Middle Ages that could have enforced a system of laws. The entire medieval organization was based on a system of mutual obligations and services up and down the hierarchy. Possession or use of the land obligated one to certain customary services or payments in return for protection. The lord was as obligated to protect the serf as the serf was to turn over a portion of the crop to or perform extensive labor for the lord.

Customs were broken, of course; no system always operates in fact as it is designed to operate in theory. One should not, however, underestimate the strength of custom and tradition in determining the lives and ideas of medieval people. Disputes between serfs were decided in the lord’s court according to both the special circumstances of each case and the general customs of the manor for such cases. Of course, a dispute between a serf and a lord would usually be decided by the lord in his own favor. Even in this circumstance, however, especially in England, an overlord would impose sanctions or punishments on a lord who, as his vassal, had persistently violated the customs in his treatment of serfs. This rule by the custom of the manor stands in sharp contrast to the legal and judicial system of capitalism. The capitalist system is based on the enforcement of contracts and universally binding laws, which are softened only rarely by the possible mitigating circumstances and customs that often swayed the lord’s judgment in medieval times.

The extent to which the lords could enforce their “rights” varied greatly from time to time and from place to place. It was the strengthening of these obligations and the nobleman’s ability to enforce them through a long hierarchy of vassals and over a wide area that eventually led to the emergence of the modern nation-states. This process occurred during the period of transition from feudalism to capitalism. Throughout most of the Middle Ages, however, many of these claims to feudal rights were very weak because political control was so fragmented.

The basic economic institution of medieval rural life was the manor, which contained within it two separate and distinct classes: noblemen, or lords of the manors, and serfs (from the Latin word servus “slave”). Serfs were not really slaves, however. Unlike slaves, who were simply property to be bought and sold at will, serfs could not be parted from either their families or their land. If their lord transferred possession of the manor to another nobleman, the serfs simply had another lord. In varying degrees, however, obligations were placed upon the serfs that were sometimes very onerous and from which there was often no escape. Usually, they were far from being “free.”

The lord lived off the labor of the serfs who farmed his fields and paid taxes in kind and money according to the custom of the manor. Similarly, the lord gave protection, supervision, and administration of justice according to the custom of the manor. It must be added that although the system did rest on reciprocal obligations, the concentration of economic and political power in the hands of the lord led to a system in which, by any standard, the serf was exploited in the extreme.

The Catholic Church was by far the largest owner of land during the Middle Ages. Although bishops and abbots occupied much the same place as counts and dukes in the feudal hierarchy, there was one important difference between religious and secular lords. Dukes and counts might shift their loyalty from one overlord to another, depending on the circumstances and the balance of power involved, but bishops and abbots always had (in principle at least) a primary loyalty to the church in Rome. This was also an age during which the religious teaching of the church had a very strong and pervasive influence throughout western Europe. These factors combined to make the church the closest thing to a strong central government throughout this period.

Thus, the manor might be secular or religious (many times secular lords had religious overlords and vice versa), but the essential relationships between lord and serfs were not significantly affected by this distinction. There is little evidence that serfs were treated any less harshly by religious lords than by secular ones. The religious lords and the secular nobility were the joint ruling classes; they controlled the land and the power that went with it. In return for very onerous appropriations of the serfs’ labor, produce, and money, the nobility provided military protection and the church provided spiritual aid.

And while the manor dominated rural life, late medieval Europe had many towns, which were important centers of manufacturing. Manufactured goods were sold to manors and, sometimes, traded in long-distance commerce. The dominant economic institutions in the towns were the guilds-craft, professional, and trade associations that had existed as far back as the Roman Empire. If anyone wanted to produce or sell any good or service, it was necessary to join a guild.

The guilds were as involved with social and religious questions as with economic ones. They regulated their members’ conduct in all their activities: personal, social, religious, and economic. Although the guilds did regulate very carefully the production and sale of commodities, they were less concerned with making profits than with saving their members’ souls. Salvation demanded that the individual lead an orderly life based on church teachings and custom. Thus, the guilds exerted a powerful influence as conservators of the status quo in the medieval towns.

The Christian Paternalist Ethic

The feudal lords, secular as well as religious, needed an ideology that would reflect and justify the feudal status quo. This ideology, which provided the moral cement holding feudal Europe together and protecting its rulers, was the medieval version of the Judeo-Christian tradition. This tradition evolved a moral code sometimes called the Christian corporate ethic, reflecting the fact that all of society was considered a single entity or corporation. To emphasize another feature of it, the Judeo-Christian moral code, as interpreted in the medieval period, will be called the Christian paternalist ethic in this book. It can be understood most easily by comparing society with a family. Those with positions of power and wealth can be likened to the father or keeper of the family. They have strong paternalistic obligations toward the common people—the poor or, in our analogy, the children. The common person, however, is expected to accept his or her place in society and to be willingly subordinate to the leadership of the wealthy and the powerful in much the same way that a child accepts the authority of his or her father.

The Old Testament Jews quite literally regarded themselves as the children of one God (see Gray 1963, chap. 2). This relationship meant that all Jews were brothers; the Mosaic law was intended to maintain this feeling of membership in one big family. This brotherhood was one of grown children who acknowledged their mutual obligations, even though they no longer shared possessions.

From the confused mass of duties and regulations governing the early Jews, the most salient feature is the large number of provisions made for the prevention and relief of poverty. Their humane treatment of debtors was also notable. Each Jew was to be his brother’s keeper; indeed, his obligations extended to caring for his neighbor’s animals should they wander his way (Deut. 22:1–4). The first duty of all, however, and particularly of the wealthy, was to care for the poor: “Thou shalt open thine hand wide unto my brother, to the poor, and to the needy, in the land” (Deut. 15:7–11). An important element in this paternalistic code was the sanction against taking a worker’s tools as a means of satisfying a debt: “No man shalt take the nether or the upper millstone to pledge; for he taketh a man’s life to pledge” (Deut. 24:6). The same point was made elsewhere in the Old Testament: “He that taketh away his neighbor’s living slayeth him” (Eccles. 34:22).

All Jews did not, of course, live up to these lofty professions. Great extremes of wealth and poverty existed that would have been impossible had the Mosaic law been strictly observed. Many of the prophets, who were often radical champions of the poor, eloquently denounced the rich for their abuse of their wealth, for their wicked, slothful luxury, and for their general unrighteousness. The important point is not that they failed to live up to the code, but that the moral code of this small tribe left so important an imprint on much of subsequent history.

The teachings of Christ in the New Testament carry on part of the Mosaic tradition relevant to economic ideology. He taught the necessity of being concerned with the welfare of one’s brother, the importance of charity and almsgiving, and the evil of selfish acquisitiveness and covetousness. His emphasis on the special responsibilities and obligations of the rich is even more pronounced than that of the earlier Jewish writers. In fact, on the basis of a reading of the Gospel of Luke, one might conclude that Christ condemned the rich simply because they were rich and praised the poor simply because they were poor: “Woe unto you that are rich! … Woe unto you that are full! for ye shall hunger. Woe unto you that laugh now! for ye shall mourn and weep” (quoted in Gray 1963, p. 41). However, on examining the other gospels, it must be concluded that this is probably Luke speaking, not Christ. Luke must be seen as the radical “leveller among the apostles” (Gray 1963, p. 42).

In the other gospels there are warnings that wealth may be a stumbling block in getting to heaven, but there is no condemnation of wealth as such. The most important passages in this regard deal with the wealthy young man who wants to know what he must do to attain eternal life (Matt. 19:16–26, etc.). Christ’s first answer amounts to nothing more than a brief statement of the Ten Commandments. It is only after being pressed further that Christ goes beyond the binding, universal moral requirements to a counsel of perfection. “If thou wilt be perfect” (Matt. 19) begins the statement in which he tells the young man to sell whatever he has and give to the poor.

The Christian paternalist ethic, with its parental obligations of the wealthy toward the poor, was developed more specifically and elaborately by most of the Christian fathers. The writings of Clement of Alexandria are a reasonably good reflection of the traditional attitudes of the early church. He emphasized the dangers of greed, love of material things, and acquisition of wealth. Those who had wealth were under a special obligation to treat it as a gift from God and to use it wisely in the promotion of the general well-being of others.

Clement’s The Rich Man’s Salvation was written in order to free the rich of the “unfounded despair” they might have acquired from reading passages in the gospels like those found in Luke. Clement began by asserting that, contrary to anything one might find in Luke, “it is no great or enviable thing to be simply without riches.” Those who were poor would not for that reason alone find God’s blessedness. In order to seek salvation, the rich man need not renounce his wealth but need merely “banish from the soul its opinions about riches, its attachment to them, its excessive desire, its morbid excitement over them, its anxious cares, the thorns of our earthly existence which choke the seed of the true life” (quoted in Gray 1963, p. 48).

Not the possession of wealth but the way in which it was used was important to Clement. The wealthy were given the responsibility of administering their wealth, on God’s behalf, to alleviate the suffering and to promote the general welfare of their brothers. In decreeing that the hungry should be fed and the naked clothed, God certainly had no...