Economics 493/593 - History of Economic Thought

The Church Fathers On Usury, 400-444

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The Church Fathers had already taken a stand on the question of usury in the fifth century, but loans on credit were not widespread transactions during the barbarian conquest.

St. Jerome on Usury, 400: If you gave to a prosperous person you should not have done so: but if (even so) you gave it as to a needy person, why should you demand more on the score of his being prosperous? Some lenders are wont to take small gifts of dilferent value, not realizing that whatever is received over and above what was given is called usury and superabundance. They ought not to take more, however much it be, than was originally given by them.

Pope Leo the Great, 444: Neither do we think that it should be lightly passed over that some people, seized with the desire for filthy lucre, put out their money at usury in order to become rich thereby. And we have to complain of this not only with regard to those in clerical office but we likewise grieve to see that it holds true of lay people who wish to be called Christians. We decree that this should be severely punished in those found guilty, so that all occasion of sin may be washed away.

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Source: From: J. P. Migne, ed. Patrologiae Cursus Completus, (Paris, 1845), Vols. XXV, p. 177, CLXXXVII, p. 959, reprinted in Roy C. Cave & Herbert H. Coulson, A Source Book for Medieval Economic History, (Milwaukee: The Bruce Publishing Co., 1936; reprint ed., New York: Biblo & Tannen, 1965), pp. 170-171.

Louis the Pious: Duties of the Coloni, 817

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C.13. As to the coloni, they either serve as serfs of the Church or make some kind of fixed payment: this is the agrarian tax according to the opinion of the steward. The steward sees to it that each gives according to what he has; out of thirty muids he gives three muids, and each pays pascuarium according to the custom of the district. He is to plough, sow, enclose, harvest, haul, and put away the crops from the regular enclosures---which are four ten-foot measuring rods in width and forty in length. He is to enclose, reap, gather, and put away one arpent in meadow. Every colonus ought to collect and put away corn to the value of a triens for seed. He is to plant, enclose, dig up, extend, prune, and collect the harvest of the vineyards. They each pay ten bundles of flax. Four hens they must pay also. They give palfreys or go where they are ordered. They do carriage service with a cart up to fifty leagues; to go further is not expected. They are assigned to the demesne houses, haylofts, farms; they have a reasonable amount of land for earning the tax, and when necessary they pay it in a lump sum.

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Source: From: J. P. Migne, Patrologiae Cursus Completus, (Paris, 1862), Vol. XCVII, p. 412, reprinted in Roy C. Cave & Herbert H. Coulson, A Source Book for Medieval Economic History, (New York: The Bruce Publishing Co., 1936; reprint ed., New York: Biblo & Tannen, 1965), p. 28.

The Regulations of the Weavers' Gild of Stendal, 1233

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The weavers' law, granted by the city of Stendal, regulated the number of spindles to be used by a craftsman, membership of the gild, and the quality of the work.

The Consuls of Stendal . . . wish it to be known that we have taken the advice of our leading citizens and officials, and have passed the following decree:

1. If any of our burgesses should wish to practice the craft of weaving he ought to have one spindle or as many as two, and he should place them in his house, and for every spindle he should pay three solidi on entry into the fraternity. But if he should not pay the denarii within the said time and he afterwards cease to be of the craft he cannot regain it except with twenty-three solidi.

2. Whoever is not of the fraternity is altogether forbidden to make cloth.

3. But if any brother should make cloth against the institutions of the brethren, and of their decrees, which he ought on the advice of the consuls to observe, he will present to the consuls by way of emendation one talent for each offense or he will lose his craft for a year.

4. But if any one be caught with false cloth, his cloth will be burned publicly, and verily, the author of the crime will amend according to justice.

5. Should any foreigner wish to practice this craft he will first acquire citizenship and will afterwards enter into fraternity with the brethren with twenty-three solidi.

6. But if the heir of any craftsman cease to exercise his father's craft, he will pay three solidi on entrance.

7. Also we decree that every brother will dry his cloth where he can.

8. We concede also that if any one have this craft and cannot set up his implements by any chance, let him prepare and make his cloth on the spindle of another.

9. If any one should marry a widow whose husband was of the craft, he will enter the fraternity with three solidi.

10. And every one who would be of this craft will receive it in the presence of the consuls.

11. Whatever is collected in fines and received in entrance fees will be put to the use of the city, and be presented to the consuls....

Class Materials for Lecture 2

Brief Outline of Topics Covered in Lecture 2:

Mercantilism (ch. 3)  pgs. 43-49
Physiocrats (ch. 3) pgs. 50-51

Source Material - Chapter 3

Author	Work
Richard Cantillon	Essay on the Nature of Commerce in General, 1755 Part1, Part 2, Part 3
David Hume	Political Discourses, 1752
Bernard Mandeville	The Fable of Bees, 1714
Thomas Mun	England’s Treasure by Forraign Trade, 1664
Isaac Newton	Principia Mathematica, 1687
François Quesnay	Tableau Économique, 1758
William Petty	Political Arithmetic, 1690

Video:

Lecture 2 [Media Player] - Fall 2007
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Economics 493 Lecture 2

Lecture 2 Wiki

This is an area you can edit as you wish [edit password=lecture2].

Additional reading:

The Grumbling Hive: or Knaves Turn'd Honest

Lecture 1 Video - Fall 2007

Covers:
Introduction
Chapter 3,  pgs. 43-49

Alternate: Google video - click to launch
 

Lecture 1 (Windows Media File)

Download Lecture 1

Class Materials for Lecture 1

Brief Outline of Topics Covered in Lecture 1:

Introduction
Mercantilism (ch. 3)  pgs. 43-49

Video:

Video [Media Player] for Lecture 1
Video [Google] for Lecture 1

 

Economics 493 Lecture 1

Lecture 1 Wiki

This is an area you can edit as you wish [edit password=lecture1].

Additional reading:

Serfs Up!, by Paul Krugman: James Surowiecki writes fine columns, and  this one is no exception. But he's got the story of the effects of the Black Death on serfdom backwards. He - and anyone else curious about history - should read  Evsey Domar's  classic 1970 paper "The causes of slavery or serfdom: a hypothesis." (Sorry, doesn't seem to be available online.)

Here's what Surowiecki says: "The Black Death helped undermine feudalism. The population decline was so severe that the individual’s labor grew more valuable, which enabled serfs to abandon their lords and become tenant farmers or urban workers. " That sounds plausible, but it's not the way it happened. According to Domar, serfdom actually withered away before the Black Death, as European population grew close to its Malthusian limit. The puzzle is why serfdom wasn't reinstituted after the Black Death.

Domar was motivated by his knowledge of Russian history. Serfdom in Russia, he knew, wasn't an institution that dated back to the Dark Ages. Instead, it was mainly a 16th-century creation, contemporaneous with the beginning of the great Russian expansion into the steppes. Why?

He came up with a simple yet powerful insight: there's no point in enslaving or enserfing a man unless the wage you would have to pay him if he was free is substantially above the cost of feeding, housing, and clothing him.

Imagine a pre-industrial society where population is pressing on limited land supplies, and the marginal product of labor - and hence the real wage rate under competitive conditions - is barely at subsistence. In that case, why bother establishing property rights in human beings? It costs no more to hire a free worker than to feed an indentured laborer. Indeed, by 1300 - with Europe very much a Malthusian society - serfdom had withered away from lack of interest.

But now suppose that for some reason land becomes abundant, and labor scarce. Then competition among landowners will tend to push up wages of free workers, and the ruling class will try, if it can, to pin peasants down and prevent them from bargaining for a higher standard of living. In Russia, it was all about gunpowder: suddenly steppe nomads were no longer so formidable, and the rich lands of the Ukraine were open for settlement. Serfdom was an effort to keep peasants from taking advantage of this situation. (And if I've got it right, those who were venturesome enough to run away and set up outside the system became Cossacks.)

Meanwhile, the New World opened in the west. Sure enough, the colonizing powers tried various forms of indentured servitude - making serfs of the Indians in Spanish territories, bringing over indentured servants in Virginia. But eventually they hit on a better solution, from their point of view: importing slaves from Africa.

Here's the puzzle. In Europe circa 1100, with population scarce, serfdom was useful to the ruling class. By 1300 it wasn't, and had been allowed to drift away. But after 1348 it should have been worthwhile again. Yet it wasn't effectively reimposed. There were attempts to restrain wages and limit labor mobility, as well as attempts to tax the peasants (Wat Tyler's rebellion fits into all this.) But all-out feudalism didn't return. Why?

And an even bigger question: why hasn't indentured servitude made a comeback in the modern era? Yes, I know, human rights and all that - but if it was profitable to have indentured servants in the modern world, I'm sure that Richard Scaife's think tanks would have no trouble finding justifications...

Anyway, have to get back to real work. But try to find a copy of Domar's paper and read it.

Originally published on the Official Paul Krugman Page, 5.8.03

Syllabus for Fall 2007

[Syllabus in pdf format]

Course: Economics 493/593: The Evolution of Economic Ideas

Professor: Mark Thoma
Office: PLC 471 on T/Th 2:00-3:00 p.m.
Phone/Email: (541) 346-4673, [email protected]
Web Page: http://darkwing.uoregon.edu/~mthoma/ 

Text: The History of Economic Thought, 4th ed., by Landreth and Colander.

Prerequisites: Economics 311 and 313, or the equivalent.

Tests and Grading: There will be two midterms and a final. The midterms will be given on Tuesday, October 16^th and Thursday, November 8^th. The final will be given on Monday, December 3^rd from 8:00 a.m. – 10:00 a.m.  Each midterm is worth 30% and the final is worth 40%.  Grades will be assigned according to your relative standing in the class.

Homework: Problem sets will be assigned periodically. These are not graded, but it is strongly recommended that you do them since exam questions will be based, in part, upon the problem sets.

Tentative Course Outline:

Introduction
The Mercantilists and the Physiocrats	ch. 3
Adam Smith	ch. 4
Ricardo, Malthus, and Say	ch. 5
Bentham, Senior, and Mill	ch. 6
Marx and His Critique of Classical Economics	ch. 7
Jevons, Menger, and Marginalism	ch. 8
Edgeworth, Clark, and Marginalism	ch. 9
Marshall and the Neoclassical School	ch. 10
Walras and General Equilibrium	ch. 11
John Maynard Keynes	ch. 15
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