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Published by EH.NET (August 2003) 
 
Diana Wood, _Medieval Economic Thought_. Cambridge: Cambridge University 
Press, 2002. xii + 259 pp. $20.00 (paper), ISBN: 0-521-45893-5. 
 
Reviewed for EH.NET by Lawrin Armstrong, Centre for Medieval Studies, 
University of Toronto. <[log in to unmask]> 
 
 Medieval economic thought is a daunting subject. Not only has it generated a voluminous
modern literature but the primary sources on which the scholarship is based -- sermons,
pastoral care manuals, legal opinions and technical (and usually unedited) commentaries on
the theological, philosophical and juridical texts of the medieval university curricula --
are scarcely easy reading. Moreover, because scholastic thinkers preferred the abstract to
the empirical even when dealing with such matters as the economy it is often difficult to
see how they conceived the relationship between theory and practice. The objective of
_Medieval Economic Thought_, a recent contribution to the Cambridge Medieval Textbook
series by Diana Wood of the University of East Anglia, is to introduce students and
general readers to the key concepts of medieval economics and to suggest how they related
to wider developments in economy and society.
 
Two themes, choice and balance, structure Wood's treatment; choice because 
medieval economics was above all a matter of ethics rather than description 
or prediction, and balance because Aristotle's idea of virtue as a mean 
between extremes provided an analytical model for many of the theorists who 
discussed economic relations. _Medieval Economic Thought_ reviews how 
theorists interpreted ethical choice and balance in relation to property, 
wealth and poverty, money, standards of measurement, commerce, the just 
price and usury. Each topic is illustrated with concrete examples of 
economic practice drawn mainly from English sources. The whole is 
supplemented by an appendix of notes on the principal writers and primary 
sources referred to in the text and a glossary of specialized terms. 
 
Property represented a problem for medieval economic thinkers because both 
scripture and natural law sanctioned the community of goods. Wood reviews a 
range of responses from the mendicant and monastic exaltation of poverty 
and corporate ownership to various secular and ecclesiastical theories that 
tried to balance private rights and the common good (chapter 1). 
 
A closely related problem was that of poverty and wealth. Medieval society 
was one of gross material inequalities, and most writers considered avarice 
an impediment to salvation, although they also maintained that the moral 
risks associated with wealth could be obviated by liberality. However, as 
Wood emphasizes, discrimination between the "deserving" poor, such as 
clerics and rich people declassed through material adversity, and the 
"undeserving," such as beggars, the destitute and unemployed, meant that 
such largesse ultimately served to prop up the social order (chapter 2). 
 
Medieval conceptions of money were strongly influenced by Aristotle, who 
viewed money a measure of value and a sterile medium of exchange. Money 
functioned as a store of value when hoarded but the sterility doctrine 
meant that few theorists viewed money as a commodity whose value could 
fluctuate like that of any other (chapter 3). 
 
The integrity of the coinage and other metrological standards were of vital 
importance both to governments and to ordinary people, and theorists 
accordingly reserved some of their most damning criticisms for those who 
tampered with weights and measures or debased the coinage (chapter 4). 
 
Medieval reflection on economic issues was prompted by the "commercial 
revolution," the extraordinary growth of trade and markets and the 
associated monetization of the economy evident from about 1100. Wood traces 
changing attitudes towards the merchant from the wholesale condemnation of 
trade by the canonist Gratian in the twelfth century to the 
fifteenth-century defense of wealth proposed by the Florentine humanists 
(chapter 5). 
 
Wood dedicates three chapters to the just price and the usury prohibition, 
the topics readers will most readily associate with medieval economics. 
Although Aristotle's conception of justice required strict equality in 
exchange, it is now generally agreed that medieval theorists understood the 
just price to be nothing more than the price commanded by a thing under 
normal market conditions, that is, in the absence of monopolies or 
artificially-created scarcities. Most writers, however, accepted the right 
of public authorities to regulate or fix prices in the common interest. 
Governments periodically attempted to control the price of labor -- for 
example, during labor shortages that resulted from the plague -- but most 
analysts seem to have favored the principle of free bargaining over wages 
(chapter 6). 
 
Usury was defined as any charge for a loan of money or fungibles, that is, 
things whose use necessitated their consumption, such as wine or grain. 
Since the borrower acquired ownership of the thing lent, such charges were 
interpreted as a form of theft which could be rectified only through 
restitution. In the West the taking of usury was prohibited to both the 
clergy and the laity in the ninth century, and the sanctions against 
usurers were intensified by a series of conciliar decrees between 1179 and 
1311 (chapter 7). 
 
There were, however, circumstances under which a creditor could claim 
damages, as, for example, when a debtor failed to repay on time. 
Compensation was termed _interesse_ and several theorists extended the 
concept to include payments from the beginning of a loan in certain cases, 
for instance, when a merchant lent capital that he would otherwise have 
invested in trade. Such developments, however, were fiercely contested with 
the result that economic actors turned to agreements that were less exposed 
to censure than straightforward loans, such as bills of exchange, _rentes_ 
(annuities) and various kinds of risk-sharing partnership (chapter 8). 
 
The textbook format, as Wood admits, lends itself oversimplification. For 
example, not every reader will be convinced by Wood's view that the 
progressive monetization of the economy, the rise of national monarchies 
and the development of humanism fatally undermined the ecclesiastical 
critique of commerce and credit. There is evidence that even if the 
merchant eventually achieved a measure of toleration, commerce continued to 
be tainted by association with usury; indeed, the later Middle Ages 
witnessed an intensification of anti-usury measures. From this perspective, 
the Protestant reformers' virtually universal condemnation of usury was not 
an aberration but rather an extension of trends in late medieval economic 
thought. Similarly, Wood's emphasis on Aristotle reflects her debt to the 
work of Odd Langholm, who has published several authoritative studies of 
the economic ideas of scholastic commentators on the _Ethics_ and 
_Politics_. Greater attention, however, to legal, particularly canonistic, 
sources would have revealed a more complex, case-oriented approach to 
economics which even if it is analytically messier than that of the 
Aristotle commentaries is perhaps more revealing in practical terms. 
Limitations of space also make comprehensiveness impossible, but in several 
areas that Wood herself singles out as particularly crucial readers will 
want to supplement the bibliography with, for example, the work of Kirshner 
on usury and public debt in the Italian city-states, Todeschini on 
Franciscan economics, Grossi on concepts of property, Clavero on gift in 
scholastic thought, Sapori on merchants and usury, Schnapper on the theory 
and practice of _rentes_, Henderson on poverty and charity in Renaissance 
Florence, Spicciani on interest theory, Shatzmiller on Jewish money-lending 
and the work of Nicolini, Savelli and Muzzarelli on the _monti di pietà_. 
 
 Lawrin Armstrong is Associate Professor of Medieval Studies at the University of Toronto.
Recent publications include "The Politics of Usury in Trecento Florence: The _Questio de
monte_ of Francesco da Empoli," _Mediaeval Studies_ 61 (1999): 1-44, and _Usury and Public
Debt in Early Renaissance Florence: Lorenzo Ridolfi on the Monte Comune_ (Toronto, 2003).
He is currently editing Gerard of Siena's quodlibetal questions on usury and restitution
for the Toronto Medieval Latin Texts series.
 
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