A History of European Economic Thought

Antonio Magliulo

• Publisher: Routledge
• Year: 2022
• Print ISBN:
  9781032037677
• eBook ISBN:
  9781000585803
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

A History of European Economic Thought grafts the history of economic thought onto Global History by showing how significant economic ideas have influenced the process of Europe's formation from the very beginning to the present day.

This work combines two classical stories that until today have followed parallel paths. On the one hand, there is the political history of Europe, which is often limited to a few fleeting references to the ideas of the great economists of the past. On the other hand, there is the history of economic thought, which examines Europe as a whole, as a distinct supranational community, only with reference to the institutions created after World War II.

The volume sheds light on the constitutive values of Europe, which also stem from a particular economic culture, and provides essential reading for students and scholars of the history of economic thought.

1 Medieval Economic Thought and the Birth of Europe

DOI: 10.4324/9781003188889-1

Introduction

“Europe arose when the Roman Empire crumbled” (quoted by Le Goff 2007: 2). This provocative statement, taken from a review written by Marc Bloch in 1935, opens an enlightening debate on the relevant issue of the birth of Europe, one that remains ongoing among historians of various disciplines.

The vast majority of leading historians have maintained that Europe is a cultural union of peoples born during Medieval Christendom. Some have asserted that this unity occurred in the High Middle Ages with the rise of Charlemagne’s empire. According to Febvre (1944–1945 [1999]: 82, my translation from Italian), “Carolingian Europe is the heart, it is the yeast that made European dough ferment. It is around Carolingian Europe that our Europe was built”. In Dawson’s (1956: 202) view, several elements comprising European identity merged at that time:

Western Europe first achieved cultural unity in the Carolingian period. The rise of the Carolingian Empire marks the end of the dualism of culture that had characterised the age of the invasions and the full acceptance by the Western barbarians of the ideal of unity for which the Roman Empire and the Catholic Church alike stood. And thus in the new culture all the elements that constitute European civilisation were already represented – the political tradition of the Roman Empire, the religious tradition of the Catholic Church, the intellectual tradition of classical learning and the national traditions of the barbarian peoples.

Other leading scholars have asserted that cultural unity emerged only in the Late Middle Ages. According to Halecki (1950: 17), “Europe is the community of all nations which … accepted and developed the heritage of Greco-Roman civilization, transformed and elevated by Christianity”. This occurred in the first five centuries of the second millennium and also involved East-Central regions. Europe was not a Western invention:

One of the main defects of … the basic distinction between Western and Eastern Europe, lies in the impression obviously created that all of what is geographically Eastern is alien, or even opposed, to Western – that is, truly European – civilization. As a matter of fact, a closer study of the various historical regions of Europe confirms quite another impression, which first seemed paradoxical: it appears that some countries which are situated in the eastern, or at least the east-central, part of Europe have particularly close ties, cultural and even political, with the Latin West of the continent.

Halecki 1950: 138

Le Goff deems the Carolingian world an “aborted Europe” (this is the title of chapter 2 of his The Birth of Europe) because “Charlemagne’s vision was a ‘nationalist’ one. The empire that he founded was first and foremost Frankish and was inspired by a truly patriotic spirit” (Le Goff 2007: 29). According to Le Goff (2007: 198), Europe was born in the Late Middle Ages when the entire society was embedded in religion, and there were no threats “either from the emergence of nations or from the religious dissent”.

In this chapter, I will try to sketch the influence of medieval economic ideas on the birth of Europe.¹ The chapter is divided into three parts. In the first, I outline the long conception of Europe from the very beginning to 1250 (a symbolic year). In the second, I summarise, in light of the valuable literature on the topic, some of the teachings of medieval economic thought. In the last part, I illustrate the prevailing forces that led to the “birth of Europe” in the symbolic year 1453. In the concluding section, I sketch the influence of significant medieval economic ideas on the making of Europe in the late Middle Ages by discussing the main theses provided by leading historians.

The Long Conception of Europe Until 1250

In the course he delivered in the 1944–1945 academic year, Lucien Febvre (1944–1945 [1999]: 30) stated, “Greece invented Europe” (my translation from Italian).

At the very outset, Europe was a mere mythological figure: the daughter of Agenor, king of Phoenicia (now Lebanon). The Greeks adapted a Semitic word that for Phoenician sailors meant “West”. For them, Europeans were thus the inhabitants of the Western end of the Asian continent (Le Goff 2007: 8–9). Later on, “Europe” came to indicate a continent as well. Herodotus, in his Histories, divided the world into three continents: Asia, Libya (or Africa) and Europe. Lastly, and above all, Europe became a cultural identity: a land inhabited by free men. Freedom, for the Greeks, was the hallmark of Europeans: it was, on the one hand, what made them similar and, on the other, what made them feel different from Asians, which were seen as subjects of despotic regimes. Some years ago, Federico Chabod posed a historical question à propos cultural identity:

when did men living on European soil begin to think of themselves and with them their own land, as something essentially different, in terms of customs, feelings, thoughts, from men living in other lands beyond the Mediterranean, on the African coast, for example, or beyond the Aegean and the Black Sea on Asian soil? When, that is, did the name Europe begin to designate not only a geographical complex but also a historical complex; not only a specific physical factor, but also a specific moral, political, religious, artistic factor of the life of humanity?

Chabod (1964: 21, 23, my translation from Italian) replied,

Between the age of the Persian wars and the age of Alexander the Great, for the first time, the sense of a Europe opposed to Asia was formed, in terms of customs and, above all, political organization; a Europe that represents the spirit of freedom as opposed to Asian despotism.

According to Chabod, freedom was therefore the identity of Europe, an identity strengthened by comparison to Asian despotism. But what was freedom for the Greeks?

Even today it is difficult to formulate a clear and shared idea of freedom. However, following the studies initiated by Isaiah Berlin (1958 [1969]), we can say that true or full freedom is the possibility, guaranteed to any person, to “act” and “want”. A person is free to act when, in her actions, she is not prevented by others, and is free to want when, in her decision, she is not forced by others. The first is also called “negative” freedom and is substantiated by the defence of civil rights against unjustified coercions and interferences by people and authorities. The second is also called “positive” freedom and is embodied in the recognition of political rights of participation in collective deliberations. True or full freedom is both negative and positive, that is, as Bobbio (1978 [2009]) points out, without one the other falls (simul stabunt vel simul cadent), because without civil rights, such as freedom of opinion and of the press, popular participation in political power is a deception, while, at the same time, without popular participation in political power, civil rights can hardly endure.

From Benjamin Constant to Quentin Skinner, an intensive debate arose around the real meaning of the two freedoms in the ancient and modern eras.

In a very broad sense, we can state that in ancient Greece, “positive” freedom prevailed over “negative” freedom: only the citizens of the polis were free, but the right of citizenship was reserved for the select few, and it was a partial and contradictory freedom at that. In the Athens of Pericles, during the fifth century bce, no more than 40–50 thousand people participated in the polis: slaves, women and foreigners were excluded. Free men took care of the res publica and did not work; work was considered a disvalue reserved for slaves. The inhabitants of the polis could take any decision regarding the life of the city. The positive freedom to want could violate the negative freedom to act. According to Benjamin Constant (1819 [2011]: 6): “Among the Spartans, Therpandrus could not add a string to his lyre without causing offense to the ephors. In the most domestic of relations the public authority again intervened. The young Lacedaemonian could not visit his new bride freely”. And Lord Acton (1907: 12) remarked,

On a memorable occasion the assembled Athenians declared it monstrous that they should be prevented from doing whatever they chose. No force that existed could restrain them; and they resolved that no duty should restrain them, and they would be bound by no laws that were not of their own making. In this way, the emancipated people of Athens became a tyrant.

Greece was “already and not yet” Europe. It was “already” Europe because it introduced and experienced an ideal of freedom and citizenship. The Greeks felt free because they were subject to the law and not to the will of a capricious despot. The freedom they recognised was the positive one of participating in collective deliberations. But it was “not yet” Europe because the positive freedom was reserved for the few, with the exclusion of women and workers (as well as foreigners), and it was a freedom of “want” that compressed – to the point of abuse and arbitrariness – the individual negative freedom of “act”. Perhaps it is no coincidence that Alexander the Great’s (Hellenistic) empire developed in the East, only partially touching the lands of today’s Europe.

“Greece invented Europe”, said Febvre, who concludes “But the Greek world was not a European world”.

In 146 bce, the Roman Republic destroyed Corinth, beginning the conquest and then the transformation of Greece into a Roman province.

The Roman civitas was more inclusive and a rights guarantor compared to the Greek polis. Anyone could become a Roman citizen, even the inhabitants of the provinces, as long as they respected the law, and no citizen could be convicted without first being tried by a Roman court.

The Roman libertas was wider than the Greek eleutheria: it was at once more positive (extension of political rights) and more negative (extension of civil rights). But it was still the freedom of the ancients: manual labour was in fact reserved only for slaves and positive freedom prevailed over negative freedom. Constant (1819 [2011]: 6) wrote: “In Rome, the censors cast a searching eye over family life. The laws regulated customs, and as customs touch on everything; there was hardly anything that the laws did not regulate”.²

The cultural and political revolution began with Christianity, and in particular with the words spoken by Jesus during His last visit to the temple: “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s”. They conveyed a new view both of freedom and community and of authority (auctoritas) and power (potestas). “Render unto God the things that are God’s”, meaning that every person is worthy of being free simply because she/he is the daughter/son and image of God (Imago Dei) and as such a citizen of a new civil community (communitas) that breaks down the narrow juridical boundaries of both polis and civitas. “Render unto Caesar the things that are Caesar’s”, meaning that authority is sacred and must be exercised, without violating God’s space, to promote the good of all individuals.

Saint Paul was perhaps the best interpreter and witness of the Christian revolution. In his Letter to the Galatians, he enunciated a new principle of freedom and equality: “There is neither Jew nor Greek, there is neither slave nor free person, there is not male and female; for you are all one in Christ Jesus”. In his Letter to Philemon, written between 58 and 60 ce, he affirmed a new idea of authority in asking Philemon, a rich pagan converted to Christianity, to forgive and welcome his own slave, Onesimus, as a brother in faith. Paul did not condemn the institution of slavery (Caesar’s authority) but de facto abolished it by introducing a greater principle of brotherhood (the authority of God). Moreover, he pronounced the famous sentence “nulla potestas nisi a Deo” (“there is no authority except from God”) that has been interpreted (and can be intended) either as “all authorities come from God” or, on the contrary, as “since authority comes from God, the ruler cannot abuse it”.

In the third century, the territorial expansion of Rome ceased and a structural economic crisis began. The main cause of the crisis was a reduction in the workforce both internally (due to demographic decline) and, above all, externally, as a result of the reduced influx of slaves. The first effect was a growing insecurity (with barbarians at the gates) and a flight from the cities to the rustic villae. The economy contracted and fragmented into rural, closed, self-sufficient units with too little money in circulation.

Rome responded to the crisis with the extension of the right of citizenship, the division of the Empire into two parts (pars Occidentis and pars Orientis) ruled by two Caesars and the recognition, in 313, of the freedom of religion for Christians and for everyone...

Table of contents

• Cover
• Half-Title Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Towards a Global and Comparative History of Economic Thought
• 1 Medieval Economic Thought and the Birth of Europe
• 2 Mercantilism and Physiocracy in the Making of a Europe of Absolute Monarchies (1517–1776)
• 3 Classical Political Economy and a Europe of Liberal Nation-States (1776–1870)
• 4 Neoclassical Economics vs. Etatism and a Europe of Empires (1871–1918)
• 5 Neoliberalism(s) and Corporatism: A Europe of Sovereign Nations and Its Failure (1919–1943)
• 6 The Invention of Functionalism and the “Separated Unification” of Europe (1944–1973)
• 7 Decline of Etatism, Rebirth of Neoliberalism and United Europe (1974–2007)
• 8 Crisis of Neoliberalism, the Greatest Recession and Unfinished Europe (2008–)
• Conclusion
• Bibliography
• Index