An Essay on Mediaeval Economic Teaching Part 9

[Footnote 4: _Ibid._]

-- 4. _The Just Price of Labour_.

Particular rules were laid down for determining the just price of certain cla.s.ses of goods. These need not be treated in detail, as they were merely applications of the general principle to particular cases, and whatever interest they possess is in the domain of practice rather than of theory. In the sale of immovable property the rule was that the value should be arrived at by a consideration of the annual fruits of the property.[1] The only one of the particular contracts which need detain us here is that of a contract of service for wages (_locatio operarum_). Wages were considered as ruled by the laws relating to just price. 'That is called a wage (_merces_) which is paid to any one as a recompense for his work and labour. Therefore, as it is an act of justice to give a just price for a thing taken from another person, so also to pay the wages of work and labour is an act of justice.'[2] Again, 'Remuneration of service or work ... can be priced at a money value, as may be seen in the case of those who offer for hire the labour which they exercise by work or by tongue.'[3] Biel insists that the value of labour is subject to the same influences as the value of any other commodity which is offered for sale, and that therefore a just price must be observed in buying it.[4]

[Footnote 1: Caepolla, _de Cont. Sim._, 78; Carletus, _Summa Angelica_, lxv.]

[Footnote 2: Aquinas, _Summa_, II. ii. 114, 1.]

[Footnote 3: II. ii. 78, 2, ad. 3.]

[Footnote 4: _Op. cit._, IV. xv. 10. Modern Socialists caricature the correct principle 'that labour is a commodity' into 'the labourer is a commodity'--a great difference, which is not sufficiently understood by many present-day writers. (See Roscher, _Political Economy_, s.

160.)]

This, according to Brants,[1] is essentially a matter upon which more enlightenment will be found in histories of the working cla.s.ses[2]

than in books dealing with the enunciation of abstract theories; nevertheless, it is possible to state generally that it was regarded as the duty of employers to give such a wage as would support the worker in accordance with the requirements of his cla.s.s. In the great majority of cases the rate of wages was fixed by some public--munic.i.p.al or corporative--authority, but Langenstein enunciates a rule which seems to approach the statement of a general theory. According to him, when a man has something to sell, and has no indication of the just price from its being fixed by any outside authority, he must endeavour to get such a price as will _reasonably_ recompense him for any outlay he may have incurred, and will enable him to provide for his needs, spiritual and temporal.[3] It was not until the sixteenth century that the fixing of the just price of wages was submitted to scientific discussion;[4] in the fourteenth and fifteenth centuries there is little to be found bearing on this subject except the pa.s.sage of Langenstein which we have quoted, and some strong exhortations by Antoninus of Florence to masters to pay good wages.[5] The reason for this paucity of authority upon a subject of so much importance is that in practice the machinery provided by the guilds had the effect of preserving a substantially just remuneration to the artisan. When a man is in perfect health he does not bother to read medical books. In the same way, the proper remuneration of labour was so universally recognised as a duty, and so satisfactorily enforced, that it seems to have been taken for granted, and therefore pa.s.sed over, by the writers of the period. One may agree with Brants in concluding that, 'the principle of just price in sales was applied to wages; fluctuations in wages were not allowed; the just price, as in sales, rested on the approximate equality of the services rendered; and that this equality was estimated by common opinion.'[6]

Of course, in the case of slave labour it could not be said that any wage was paid. The master was ent.i.tled to the services of the slave, and in return was bound to furnish him with the necessaries of life.[7]

[Footnote 1: _Op. cit._, p. 103.]

[Footnote 2: An excellent bibliography of books dealing with the history of the working cla.s.ses in the Middle Ages is to be found in Brants, _op. cit._, p. 105. The need for examining concrete economic phenomena is insisted on in Ryan's _Living Wage_, p. 28.]

[Footnote 3: _De Cont._ We have here a recognition of the principle that the value of labour is not to be measured by anything extrinsic to itself, _e.g._ by the value of the product, but by its own natural function and end, and this function and end is the supplying of the requirements of human life. The wage must, therefore, be capable of supplying the same needs that the expenditure of a labourer's energy is meant to supply. (See Cronin, _Ethics_, vol. ii. p. 390.)]

[Footnote 4: Brants, _op. cit._, p. 118.]

[Footnote 5: The pa.s.sages from the _Summa_ of Antoninus bearing on the subject are reprinted in Brants, _op. cit._, p. 120.]

[Footnote 6: _Op. cit._, p. 125.]

[Footnote 7: Brants, _op. cit._, p. 116, quoting _Le Lime du Tresor_ of Brunetto Latini.]

-- 5. _Value of the Conception of the Just Price_.

It is probably correct to say that the canonical teaching on just price was negative rather than positive; in other words, that it did not so much aim at positively fixing the price at which goods should be sold, as negatively at indicating the practices in buying and selling which were unjust. 'The doctrine of just price,' according to Dr. Ryan, 'may sometimes have been a.s.sociated with incorrect views of industrial life, but all competent authorities agree that it was a fairly sound attempt to define the equities of mediaeval exchanges, and that it was tolerably successful in practice.'[1] The condition of mediaeval markets was frequently such that the compet.i.tion was not really fair compet.i.tion, and consequently the price arrived at by compet.i.tion would be unfair either to buyer or seller. 'This,'

according to Dr. Cunningham, 'was the very thing which mediaeval regulation had been intended to prevent, as any attempt to make gain out of the necessities of others, or to reap profit from unlooked-for occurrences would have been condemned as extortion. It is by taking advantage of such fluctuations that money is most frequently made in modern times; but the whole scheme of commercial life in the Middle Ages was supposed to allow of a regular profit on each transaction.'[2] There might be some doubt as to the positive justice of this or that price; but there could be no doubt as to the injustice of a price which was enhanced by the necessities of the poor, or the engrossing of a vital commodity.[3] Merely to buy up the whole supply of a certain commodity, even if it were bought up by a 'ring' of merchants, provided that the commodity was resold within the limits of the just price, was not a sin against justice, though it might be a sin against charity.[4] If the authorities granted a monopoly, they must at the same time fix a just price.[5] A monopoly which was not privileged by the State, and which had for its aim the raising of the price of goods above the just price was regarded with universal reprobation.[6] 'Whoever buys up corn, meat, and wine,' says Trithemius, 'in order to drive up their price and to ama.s.s money at the cost of others is, according to the laws of the Church, no better than a common criminal. In a well-governed community all arbitrary raising of prices in the case of articles of food and clothing is peremptorily stopped; in times of scarcity merchants who have supplies of such commodities can be compelled to sell them at fair prices; for in every community care should be taken that all the members should be provided for, and not only a small number be allowed to grow rich, and revel in luxury to the hurt and prejudice of the many.[7] Thus the doctrine of the just price was a deadly weapon with which to fight the 'profiteer.' The engrosser was looked upon as the natural enemy of the poor; and the power of the trading cla.s.s was justly reckoned so great, that in cases of doubt prices were always fixed low rather than high.

In other words, the buyer--that is to say, the community--was the subject of protection rather than the seller.[8]

[Footnote 1: _The Living Wage_, p. 27.]

[Footnote 2: _Growth of English Industry and Commerce_, vol. i. p.

460.]

[Footnote 3: Endemann, _Studien_, vol. ii. p. 60.]

[Footnote 4: Lessius, _De Just.i.tia et Jure_, II. xx. 1, 21.]

[Footnote 5: _Ibid._]

[Footnote 6: Langenstein, _De Cont._; Biel, _op. cit._, iv. xv. 11.]

[Footnote 7: Quoted in Janssen, _op. cit._, vol. ii. p. 102.]

[Footnote 8: Roscher, _Geschichte_, p. 12.]

It must at the same time be clearly kept in mind that the seller was also protected. All the authorities are unanimous that it was as sinful for the buyer to give too little as for the seller to demand too much, and it is this aspect of the just price which appears most favourable in comparison with the theory of price of the cla.s.sical economists. In the former case prices were fixed having regard to the wages necessary for the producer; in the latter the wages of the producer are determined by the price at which he can sell his goods, exposed to the compet.i.tion of machinery or foreign--possibly slave--labour.[1] According to the _Catholic Encyclopaedia_: 'To the mediaeval theologian the just price of an article included enough to pay fair wages to the worker--that is, enough to enable him to maintain the standard of living of his cla.s.s.'[2] 'The difference,'

says Dr. Cunningham, 'which emerges according as we start from one principle or the other comes out most distinctly with reference to wages. In the Middle Ages wages were taken as a first charge; in modern times the reward of the labourer cannot but fluctuate in connection with fluctuations in the utility and market price of the things. There must always be a connection between wages and prices, but in the olden times wages were the first charge, and prices on the whole depended on them, while in modern times wages are, on the other hand, directly affected by prices.'[3] Dr. Cunningham draws attention to the fact that the labouring cla.s.ses rejected the idea of the fixing of a just price for their services when, from a variety of causes, a situation arose when they were able to earn by open compet.i.tion a reward higher than what was necessary to support them according to their state in life.[4] Nowadays the reverse has taken place; unrestricted compet.i.tion has in many cases resulted in the reduction of wages to a level below the margin of subsistence; and the general cry of the working cla.s.ses is for the compulsory fixing of minimum rates of wages which will ensure that their subsistence will not be liable to be impaired by the fluctuations of the markets. What the workers of the present day look to as a desirable, but almost unattainable, ideal, was the universal practice in the ages when economic relations were controlled by Christian principles.

[Footnote 1: Ashley, _op. cit._, vol. i. pt. i. p. 129.]

[Footnote 2: Art. 'Political Economy.']

[Footnote 3: _Growth of English Industry and Commerce_, vol. i. p.

461.]

[Footnote 4: _Christianity and Economic Science_, p. 29.]

-- 6. _Was the Just Price Subjective or Objective_?

The question whether the just price was essentially subjective or objective has recently formed the subject matter of an interesting and ably conducted discussion, provoked by certain remarks in Dr.

Cunningham's _Western Civilisation_.[1] Dr. Cunningham, although admiring the ethical spirit which animated the conception of the just price, thought at the same time that the economic ideas underlying the conception were so undeveloped and unsound that the theory could not be applied in practice at the present day. 'Their economic a.n.a.lysis was very defective, and the theory of price which they put forward was untenable; but the ethical standpoint which they took is well worth examination, and the practical measures which they recommended appear to have been highly beneficial in the circ.u.mstances in which they had to deal. Their actions were not unwise; their common-sense morality was sound; but the economic theories by which they tried to give an intellectual justification for their rules and their practice were quite erroneous.... The attempt to determine an ideal price implies that there can and ought to be stability in relative values and stability in the measure of values--which is absurd. The mediaeval doctrine and its application rested upon another a.s.sumption which we have outlived. Value is not a quality which inheres in an object so that it can have the same worth for everybody; it arises from the personal preference and needs of different people, some of whom desire a thing more and some less, some of whom want to use it in one way and some in another. Value is not objective--intrinsic in the object--but subjective, varying with the desire and intentions of the possessors or would-be possessors; and, because it is thus subjective, there cannot be a definite ideal value which every article ought to possess, and still more a just price as the measure of that ideal value.' In these and similar observations to be found in the _Growth of English History and Commerce_, Dr. Cunningham showed that he profoundly misunderstood the doctrine of the just price; the objectivity which he attributed to it was not the objectivity ascribed to it by the scholastics. It was to correct this misunderstanding that Father Slater contributed an article to the _Irish Theological Quarterly_[2]

pointing out that the just price was subjective rather than objective.

This article, which was afterwards reprinted in _Some Aspects of Moral Theology_, and the conclusions of which were embodied in the same writer's work on Moral Theology, was controverted in a series of articles by Father Kelleher in the _Irish Theological Quarterly_.[3]

[Footnote 1: Pp. 77-9.]

[Footnote 2: Vol. iv. p. 146.]

[Footnote 1: 'Market Prices,' vol. ix. p. 398 and vol. x. p. 163; and 'Father Slater on Just Price and Value,' vol. xi. p. 159.]

Father Slater draws attention to the fact that Dr. Cunningham overlooked to some extent the importance of common estimation in arriving at the just price. He points out that, far from objects being invested with some immutable objective value, their value was in fact determined by the price which the community as a whole was willing to pay for them: 'As the value in exchange will be determined by what the members of the community at the time are prepared to give, ... it will be determined by the social estimation of its utility for the support of life and its scarcity. It will depend upon its capacity to satisfy the wants and desires of the people with whom commercial transactions are possible and practicable. Father Slater then goes on categorically to refute Dr. Cunningham's presentation of the objectivity of price: 'All that that doctrine a.s.serts is that there should be, and that there is, an equivalent in social value between the commodity and its price at a certain time and in a certain place; it says nothing whatever about the stability or permanence of prices at different times and at different places. By maintaining that the just price did not depend upon the valuation of the individual buyer or seller the mediaeval doctors did not dream of making it intrinsic to the object.'

In the work on Moral Theology, to which we have referred, expressions occur which lead one to believe that Father Slater did not see any great difference between the mediaeval just price arrived at by common estimation and the modern normal or market price arrived at by open compet.i.tion. Thus, in endeavouring to correct Dr. Cunningham's misunderstanding, Father Slater seems to have gone too far in the other direction, and his position has been ably and, in our judgment, successfully, controverted by Father Kelleher.

The point at issue between the upholders of the two opposing views on just price is well stated by Father Kelleher in the first of his articles on the subject: 'We must try to find out whether the just and fair price determined the rate of exchange, or whether the rate of exchange, being determined without an objective standard and merely according to the play of human motives, determines what we call the just and fair price.'[1] We have already demonstrated that the common estimation referred to by the mediaeval doctors was something quite apart from the modern higgling in the market; and that, far from being merely the result of unbridled compet.i.tion on both sides, it was rather the considered judgment of the best-informed members of the community. As we have seen, even Dr. Cunningham admits that there was a fundamental difference between the common estimation of the scholastics and the modern compet.i.tive price. This is clearly demonstrated by Father Kelleher, who further establishes the proposition that the modern price is purely subjective, and that no subjective price can rest on an ethical basis. The question at issue therefore between what we may call the subjective and objective schools is not whether the sale price was determined by compet.i.tion in the modern sense, but whether the common estimation of those best qualified to form an opinion on the subject in itself determined the just price, or whether it was merely the most reliable evidence of what the just price in fact was at a particular moment.

[Footnote 1: _Irish Theological Quarterly_, vol. ix. p. 41.]

Father Kelleher draws attention to the fact that Aquinas in his article on price did not specifically affirm that the just price was objective, but he explains this omission by saying that the objectivity of the price was so well and universally understood that it was unnecessary expressly to restate it. Indeed, as we saw above, the teaching of Aquinas on price left a great deal to be supplied by later writers, not because he was in any doubt about the subject, but because the theory was so well understood. 'Not even in St. Thomas can we find a formal discussion of the moral obligation of observing an objective equivalence in contracts of buying and selling. He simply took it for granted, as, indeed, was inevitable, seeing that, up to his time and for long after, all Catholic thought and legislation proceeded on that hypothesis. But that he actually did take it for granted, he has given many clear indications in his article on Justice which leave us no room for reasonable doubt.'[1] As Father Kelleher very cogently points out, the discussion in Aquinas's article on commerce, whether it was lawful to buy cheap and sell dear, very clearly indicates that the author maintained the objective theory, because if the just price were simply determined by what people were willing to give, this question could not have arisen.

[Footnote 1: _Irish Theological Quarterly_, vol. x. p. 165.]

Nor is the fact that the just price admitted of a certain elasticity an argument in favour of its being subjective. Father Kelleher fully admits that the common estimation was the general criterion of just price, and, of course, the common estimation could not, of its very nature, be rigid and immutable. Commodities should, indeed, exchange according to their objective value, but, even so, commodities could not carry their value stamped on their faces. Even if we a.s.sume that the standard of exchange was the cost of production, there would still remain room for a certain amount of difference of opinion as to what exactly their value would be in particular instances. Suppose that the commodity offered for sale was a suit of clothes, in estimating its value on the basis of the cost of production, opinions might differ as to the precise amount of time required for making it, or as to the cost of the cloth out of which it was made. Unless recourse was to be had to an almost interminable process of calculations, n.o.body could say authoritatively what precisely the value was, and in practice the determination of value had perforce to be left to the ordinary human estimate of what it was, which of its very nature was bound to admit a certain margin of fluctuation. Thus we can easily understand how, even with an objective standard of value, the just price might be admitted to vary within the limits of the maximum as it might be expected to be estimated by sellers and the minimum as it would appear just to buyers. The sort of estimation of which St. Thomas speaks is therefore nothing else than a judgment, which, being human, is liable to be slightly in excess or defect of the objective value about which it is formed.'[1] As Father Kelleher puts it on a later page, 'There is a sense certainly in which, with a solitary exception in the case of wages, it may be said with perfect truth that the common estimation determines the just price. That is, the common estimation is the proximate practical criterion.'[2]

[Footnote 1: _Irish Theological Quarterly_, vol. x. p. 166.]