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Usury Restrictions in a Mercantile Economy

Published online by Cambridge University Press:  07 November 2014

Jelle C. Riemersma
Jelle C. Riemersma*
Affiliation:
University of Toronto
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Extract

Our present social sciences, with their concepts of “culture” and “personality,” have made us vividly aware of the interrelatedness of the particular aspects of human behaviour in societies. It comes no longer as a surprise that religion and economic expansiveness are interconnected.

In his famous study, The Protestant Ethic and the Spirit of Capitalism, Max Weber developed the idea that ascetic Protestantism in some way prepared the way for the calculating spirit of modern, rational capitalism. Here an ideal factor was regarded as an independent variable in history. Although the main thesis has found fairly general acceptance, important criticisms have been levelled at particular points of Weber's essay. While Weber demonstrated the affinity between such ideas as the religiously coloured “calling” and “innerworldly asceticism,” and the more utilitarian and secular economic ideas of later times (Franklin), he did not carefully analyse the precise nature of the influence of the earlier ideas. For that purpose, a detailed study of the economic structure of early modern Europe would have been necessary, and, at least within The Protestant Ethic, Weber abstained from such a study.

Type
Research Article
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 18 , Issue 1 , February 1952 , pp. 17 - 26
Copyright
Copyright © Canadian Political Science Association 1952

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References

1 Weber, Max, The Protestant Ethic and the Spirit of Capitalism, trans. Parsons, Talcott (London, 1948), 67.Google Scholar

2 Rastell, John, Les Termes de la Ley (1629), 305. (1st ed., 1527.)Google Scholar

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9 Religion and the Rise of Capitalism, 54.

10 Great Britain, Public Record Office, Rerum Britannicarum medii aevi scriptores, no. 57, Matthaei Parisiensis, Chronica Majora (1216–1239), III, 328: “… usura sub specie negotiationis palliantes….Google Scholar”

11 Postan, “Credit in Medieval Trade,” 246.

12 Calendar of Plea and Memorandum Rolls, A.D. 1413–1437, ed.Thomas, A. H. (Cambridge, 1943), 107.Google Scholar

13 Thomas, , Calendar, 109.Google Scholar

14 Roover, Raymond de, Gresham on Foreign Exchange (Harvard University Press, 1949), 101: “The uncertainty of the banker's profit justified the exchange contract in the eyes of the canonists and most of the churchmen.” The evidence is given pp. 313–17.Google Scholar

15 Mosse, Miles, “The Arraignment and Conviction of Usurie” (1595) Tudor Economic Documents, ed. Tawney, R. H. and Power, Eileen, III (London, 1924), pp. 379–80.Google Scholar

16 Tawney, R. H., ed., Thomas Wilson, A Discourse upon Usury (1572), 216. Tawney remarks in his introduction that “the essence of usury was that it was certain,” but he does not develop the implications. The linking of usury and certain gain is to be found already in St. Thomas, who, around 1270, said that “the lender must not sell that which he has not yet [namely the benefits accruing from the use of money] and may be prevented in many ways from having.” The full passage is: “Recompensationem vero damni quod consideratur in hoc quod de pecunia non lucratur, non potest in pactum deducere: quia non debet vendere id quod nondum habet et potest impediri multipliciter ab habendo.” A pre-arranged reward (“in pactum”) is condemned, because there is a vivid realization of uncertainty. Sancti Thomae Aquinatis … Opera Omnia (Rome, 1847), Summa Theologica, T. IX, Qu. LXXVIII, Art II, 159. In the Ordinance of London of 1390 we find: “si ascum apreste ou mette en mayns dascuny or ou argent, pur gaigner eut recevire ou promys en certeigne sans aventure, eit la punissement pur usurers….” Georg Schanz, Englische Handelspolitik (Leipzig, 1881), I, 556. The same theme occurs again in the English usury prohibition of 1487: any bargain is void in which “eny certeyn somme shall be lost by eny covenaund or promys betwyx eny persone or persones.” Tudor Economic Documents, II, 135–6. The ecclesiastical authorities assembled at the 5th Lateran Council (1517) also linked usury and certain gain. See article “Wucher” in Lexicon für Theologie und Kirche, ed. M. Buchberger, X, 977.Google Scholar

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19 According to E. A. J. Johnson's careful analysis in his article: “The Mercantilist Concept of ‘Art’ and ‘Ingenious Labour,’ ” mercantilist authors had an interest in production, and used the concept of “art,” now no longer used in the same meaning, to indicate what we would describe as “productive skills in general.” The mercantilists wanted for instance to encourage new manufactures by introducing skilled artisans from abroad. See Economic History (A Supplement to the Economic Journal), II (1930–1933), 234–53.Google Scholar

Johnson's qualification does not contradict my main point. The fact that “art” remained an undifferentiated concept and that its distinct aspects were not analysed and discussed shows the rudimentary character of the mercantilists' preoccupation with a theory of production. At the very beginning of his main work, Adam Smith made a break with them by breaking the conception of “art” into separate parts, and discussing particularly the division of labour. The mercantilists had passively taken skills as existent, as there to be utilized, in the same way in which they had taken products of various regions for granted.

20 The Merchants Avizo, by I. B. (Browne, John), Merchant of Bristol (London: Richard Whittaker, 1640), 63–4.Google Scholar

21 The Wealth of Nations (Modern Library, 1937), 402–3.Google Scholar

22 Bede Jarrett, O.P., Social Theories of the Middle Ages, 1200–1500 (Boston, 1926), 150–1. quoting Humbert de Romans, and indicating similar passages in other authors.Google Scholar

23 Decker, Sir Matthew, An Essay on the Causes of the Decline of the Foreign Trade (London, 1744), 67. The same idea is expressed in Josiah Tucker, An Essay on Trade, ii.Google Scholar

24 The absence of large capitals among medieval merchants, and the pluralistic and egalitarian character of medieval commercial organization have their exceptions, but we should remember that the difficulties of historical documentation would tend to lead to an over-estimation of the large capitalists in comparison with lesser merchants. Very often the existence of large capitals tied up in commercial enterprises is ephemeral. (Elaborate evidence for fifteenth-century German cities is given by Franz Bastian, Das Runtingerbuch, I. Darstellung (Regensburg), 457–74. Conclusion on p. 456.) In England after 1350, as Eileen Power remarks, no wool merchant ever rose to a position of such overwhelming financial superiority as that enjoyed by De la Pole, Pulteney, Picard, Tideswell and their like.” The Wool Trade in English Medieval History (London, 1939), 121. The particular form of English commercial organization tended to preserve the pluralistic character of trade; it excluded certain people from its ranks, but on the other hand prevented the total dominance of the extremely wealthy. Thus Friis, Astrid has concluded that the Merchant Adventurers and similar companies “in some degree acted as a check in the development of capitalism.” Alderman Cockayne's Project and the Cloth Trade (Copenhagen, 1927), 99.Google Scholar

25 Dillen, J. G. van, ed., History of the Principal Puhlic Banks (The Hague, 1934).Google Scholar

26 Roover, Raymond de, “The Commercial Revolution of the Thirteenth Century.” Bulletin of the Business Historical Society, XXVI, no. 2, 1942, 34–9.Google Scholar

27 Mercantile profit earned by effort—the scholastic industria—was justified by secular and religious authorities alike. See on this subject Rüstow, Alexander, “Das Versagen des Wirtschaftsliberalismus als religionsgeschichtliches Problem,” Istanbuler Schriften, XII, 1945, 114, where the ethical evaluation of mercantile activity is discussed.Google Scholar

28 Ehrenberg, Richard, Das Zeitalter der Fugger (Jena, 1912), II, 328.Google Scholar

29 Riemersma, J. C., “Government Influence on Company Organization in Holland and England (1550–1650)” Journal of Economic History, Supplement X, 1950, 31–9.CrossRefGoogle Scholar

30 Tawney, Religion and the Rise of Capitalism, chap, iv, note 67, points to the Dutch usury controversy, raging mostly in academic and official circles, during the years 1635–43. The customary views on this controversy are based on the account in Ernst Laspeyres, Geschichte der volkswirtschaftlichen Anschauungen der Niederländer und ihrer Literatur zur Zeit der Republik (1863), 256–70. The best treatment of this and related issues in Holland is: Beins, Ernst, “Die Wirtschaftsethik der Calvinistischen Kirche der Niederlande, 1565–1650,” Nederlandsch Archief voor Kerkgeschiedenis, XXIV, 1931, particularly pp. 152–3. Beins concludes that the debate of 1635–43 was touched off by opportunistic considerations, by an attempt to change the relative areas of influence of state and church—a perpetual issue in the Republic. The ethics of economic conduct was hardly a matter of popular or even academic interest; compared with their English colleagues, Dutch ministers hardly ever touched the problem of usury.Google Scholar

31 Tawney, , Religion and the Rise of Capitalism, 178.Google Scholar

32 Ibid., 199.

33 The condemnation of monopoly by the scholastics belongs in the same sphere. See Roover, Raymond de, “Monopoly Theory prior to Adam Smith: A Revision,” Quarterly Journal of Economics, LXV, 1951, 492–524.CrossRefGoogle Scholar

34 Weber, , The Protestant Ethic, 175.Google Scholar

35 Tudor Economic Documents, II, 156.Google Scholar

36 Helleiner, Karl F., “Moral Conditions of Economic Growth,” Journal of Economic History, XI, no. 2, 1951, 97–116.CrossRefGoogle Scholar