From Oikonomia to Political Economy

Constructing Economic Knowledge from the Renaissance to the Scientific Revolution

Germano Maifreda

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781409433019
• eBook ISBN: 9781317131977
• Edition: 1
• Topic: History
• Subtopic: Early Modern History
• Index: History

Renaissance Europe witnessed a surge of interest in new scientific ideas and theories. Whilst the study of this 'Scientific Revolution' has dramatically shifted our appreciation of many facets of the early-modern world, remarkably little attention has been paid to its influence upon one key area; that of economics. Through an interrogation of the relationship between economic and scientific developments in early-modern Western Europe, this book demonstrates how a new economic epistemology appeared that was to have profound consequences both at the time, and for subsequent generations. Dr Maifreda argues that the new attention shown by astronomers, physicians, aristocrats, men of letters, travellers and merchants for the functioning of economic life and markets, laid the ground for a radically new discourse that envisioned 'economics' as an independent field of scientific knowledge. By researching the historical context surrounding this new field of knowledge, he identifies three key factors that contributed to the cultural construction of economics. Firstly, Italian Humanism and Renaissance, which promoted new subjects, methods and quantitative analysis. Secondly, European overseas expansion, which revealed the existence of economic cultures previously unknown to Europeans. Thirdly factor identified is the fifteenth- and sixteenth-century crisis of traditional epistemologies, which increasingly valued empirical scientific knowledge over long-held beliefs. Based on a wide range of published and archival sources, the book illuminates new economic sensibilities within a range of established and more novel scientific disciplines (including astronomy, physics, ethnography, geology, and chemistry/alchemy). By tracing these developments within the wider social and cultural fields of everyday commercial life, the study offers a fascinating insight into the relationship between economic knowledge and science during the early-modern period.

Chapter 1
Exchange of Value; Value of Exchange

Galileo and the Value of a Horse

‘A horse is really worth 100 scudi: one person values it at 1,000 scudi, another at 10 scudi: the question is, which of them made the best evaluation and which the least extravagant.’ This ‘mathematical point’ was proposed by Andrea Gerini, a Florentine gentleman in a letter dated 24 April 1627 addressed to Tolomeo Nozzolini, parish priest of Sant’Agata in Mugello.1 Nozzolini replied two days later:

The question Your Excellency poses seems so easy to resolve that I doubt I have understood it and that it conceals some difficulty I am not familiar with. Spontaneously, I would reply that if the first is ‘out’ of the right by 900, and the second by 90, who cannot see that the first commits an extravagance ten times greater than the second? I know very well that it can be objected that the first makes an evaluation that is ten times what is right and the second ten times less, yet the extravagance of the first in excess ends up being similar and equal to the second in defect. To this I reply that this kind of consideration and proportion does not occur in merchants’ reckoning.2

For the parish priest of Sant’Agata in Mugello the ‘extravagance’ of an incorrect estimation of value was not a mathematical question. It was irrelevant whether one evaluation was as far from the ‘correct’ value as another; nonetheless, the two evaluations could not be considered equally ‘extravagant’. The ‘merchants’ reckonings’ had a specificity that Nozzolini made clear in the rest of his letter. ‘Buying, selling, lending, repaying, bartering, and other like market traffic, belong to that area of justice called commutative, whose office it is to adjust the inequalities of our exchanges.’3 From the time in antiquity when humanity had bartered to the moment in which Nozzolini wrote, this form of justice had, in his opinion, taken on the task of resolving the difficulties deriving from values which could not be compared. This it did through a specific logical structure very different from the distributive structure characterizing the function ‘whose task it is to distribute justly rewards to merit and penalties to crime’.4

The commutative justice of material exchange and the distributive justice of rewards and punishments operate according to distinct fundamental criteria. The second operates by geometric proportion. ‘Thus, if my merit is double yours, then my reward must be double yours.’5 Commutative justice, instead, unfolds in arithmetical proportion and works through money that ‘like a common commodity, serves us as judge and price’, allowing us ‘to equilibrate our trafficking justly’.

Let us say that we divide up some common commodities: you get wool, and I silk; and having recourse to the judge of price and money, we find that you have had wool for 24 scudi and I have had silk for 6 scudi. At this point, we need to adjust this inequality reducing it to a median number between 24 and 6, which equilibrates our goods. Now I say that this median number must not have a geometric median proportion; rather, that 24 has above it the same strength as it has itself above 6 … 15 is the true median of our division, because it is as far less than 24 as it is more than 6. So that, if you give me 9 of your scudi, I will have 15 and you 15 and our inequality will have been adjusted.6

Nozzolini’s ‘Aristotelian’ discourse is very clear. In the day-to-day evaluation of merits and demerits it is morally necessary to establish a distributive proportionality of rewards and punishments. Human justice is good if it is equitable – that is, if its interventions are thought to be proportionate to each other. Mercantile justice is something else, for it can count on a rigorous judge – money – which acts as the basis of an act of direct exchange between subjects. ‘Though here we are talking about an estimate, and not a barter or a sale’, Nozzolini writes, explaining the reason why the criteria of commutation must be applied even in a case of simple evaluation, ‘nonetheless the same judgement must be made of it’,

… for the estimate is directed to the sale or to the barter – or, to put it in a better way, they are one and the same, for the evaluation is nothing but a purchase not yet ratified, and the purchase is not other than an evaluation already accepted: yet the extravagances of the evaluations must be reduced to equity in the same way, [that is] arithmetic proportion.7

Even before Andrea Gerini had written to Tolomeo Nozzolini, the group of Florentine intellectuals who had posed the question had turned to Galileo Galilei. He answered around the same time in late April, giving a ‘decision’ contrary to Nozzolini’s. According to Galileo, the two men evaluating the horse had exaggerated equally: ‘Those who esteem more or less than is just, deviate from the correct evaluation and exaggerate: and of them, he who most exorbitantly deviates from the just price, in more or in less, commits the greater exaggeration.’8 The scientist was not disposed to recognize any specificity in the mercantile transaction: ‘one must consider the proportion geometric and not arithmetic’.9 When he learned from Gerini what Galileo’s opinion was, Nozzolini was embarrassed:

If I had known from the beginning that a person of such standing and learning had given an opinion on this, I should not in any way have written to Your Excellency what I thought, for I must be convinced that the dreams of such a man are worth more than the most exquisite considerations I would know how to make. But since I have already written to Your Excellency, and since you require me to consider this comment of Mr Galilei and, as it is contrary to mine, say whether I have anything else to add to confirm what I said; and because I know that learned men do not disdain some lesser person who turns up in the midst of their thoughts in investigating truth, I do not hesitate to say something further on this question.10

‘We would not say that Santa Maria del Fiore and San Giovanni were equally distant from the Bell Tower, for the Bell Tower is ten baby steps distant, while San Giovanni is ten large giant steps distant,’ the parish priest commented, recalling his interlocutors to the material specificity of the reality to be measured. And, inviting his interlocutors once more to adhere to the day-to-day reality of contemporary economic life, he writes:

I saw butchers many times, enter into dispute and wager with country folk and among themselves who might come closest in estimating the weight of a hog or a calf; and I saw that if one estimates 48 pounds and the other 12 pounds, when the judgement of the scales comes, if the thing weighs 30 pounds, it is decided that no one has won; but from 30 on down the victory goes to the one [who has said] 12, and from 30 up, to [whoever has said] 48; and I do not see that the geometric proportion has any importance at all with these judges.

Nozzolini concludes, somewhat ironically:

It greatly surprises me that among the noble Florentine spirits this problem – that among butchers has been decided, known and evident for a thousand years – should be put in doubt with such discussion and writings. Yet if someone should pronounce sentence against me in this dispute, I promise Your Excellency I shall appeal to the butchers’ forum; which for its particular prerogative merits the name of forum of justice, for every butcher knows so well how to use the scale with one hand and with the other the cleaver, that it seems one might truly affirm that every one of them is a Justice.11

The seventeenth-century dispute on the estimation of the value of a horse – which did not, however, address what we would consider today to be an underlying question: that of the existence or non-existence of a just value for that horse – holds within it two latent, irreconcilable, cognitive approaches. The divergence cannot be reduced to the sole point of acceptance or refusal of the Aristotelian precept, although Nozzolini makes explicit reference to the third chapter of the fifth book of the Ethics where we find the distinction between distributive justice, operating by geometric proportion, and naturally arithmetical commutative activity. The real point of the conflict is in the geometrically-oriented knowledge of new science, well reassumed in Galileo’s arguments: for him, the merit of the theme addressed was a matter of total indifference. This is evidenced by the fact that, once he had received notice of Nozzolini’s second reply, he was surprised that Nozzolini could persist in the ‘opinion’ in which ‘the exaggeration of the estimate is to be measured by its absolute distance from the just price, and … is founded on a certain political decree that wants commutative justice to proceed, in adjusting inequalities, with arithmetical proportions, and in distributive [justice] with geometric’. He continues:

I freely confess I am not able to understand this business, and I wonder whether something is not happening here that happens in many other propositions written by men commonly considered important, who are not understood, or perhaps understandable; but those who offer them – and even more those who listen to them – made credulous by the authority of their first proponents, pretend to understand and so as not to declare [their] capacities inferior to those who put them forward, give their assent.12

The accusation of stolid dogmatism, which provokes all of Galileo’s bitterness against the decades of ferocious criticisms and which would soon to lead him to abjure in front of the Holy Office, seems perhaps unmerited. In Nozzolini’s arguments we sense, in fact, a sincere conviction in the theses proposed and a love for physical perception that are far from the dogmatic stance of contemporary Aristotelianism. But Galileo’s defence suggested more than it said: the simple dispute over the evaluation of a horse was a scientific dispute in that it interpreted a phenomenon with logical instruments that purged it of any socially determined contingency. On the purely quantitative plane, Galileo could thus object without fear of contradiction that Nozzolini’s calculations were incorrect, since the seller of wool at the end of the transaction will find himself with 15 scudi in silk and money, compared with the 24 scudi in wool he had previously.13 ‘We can conclude, the measure of exorbitance is not the same that measures things, but it is in abstract a general relationship and habit that the false estimate has towards the true value of the things evaluated.’14

Clearly, the dispute poses an historical problem of great importance. The method engaged in by Galileo is classic in terms of the function that we still commonly attribute to science today. For the scientist, it is really not important to consider factuality in its empirical variety. For Galileo – and, in this, he is closer to Aristotle than many of his accusers15 – this is significant only to the extent that it favours grasping the characteristics of things, and so of their value, in a sense that is essential, general and constant. It is the paradigm that dominates Western philosophical thought up until Husserl and Heidegger: accepting it implies the primacy of the general, of the category over the particular, the singular and the unique. Galileo’s emphasis is not on the specific thing which, together with many others, the subject perceives and acts upon. Conversely, Nozzolini maintains not so implicitly that the appropriateness of a procedure of evaluation must be judged within the historically specific social and cultural construction of the world. Starting, then, with the real exercise of evaluation itself – whether in relation to its object or to the subject exercising it – if Nozzolini’s position is the cultural product of a society profoundly divided into segments by role, extraction and geographic, economic and professional situation, in Galileo’s ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Acknowledgements
• 1 Exchange of Value; Value of Exchange
• 2 Genealogies of Value
• 3 Talking, Looking, Portraying the Marketplace
• 4 Demanding and Offering
• 5 Work: The Yardstick of Value
• 6 The Economic System
• 7 A Systemic View of Nature
• Epilogue
• Bibliography
• Index