1000 years of economic irrationality

A belated attempt at catching up on the IHR seminars, which in March saw Laurent Feller from Paris talking about ‘Accumulation, redistribution and exchange in the early Middle Ages’. Here’s my take on it, though with the proviso that Professor Feller was cutting the paper as he went along, so if there are bits where it doesn’t entirely hang together, that may be my misunderstanding, or it may be one of the bits he skipped. He was looking at the processes of enrichment of the social elite from the Carolingian period onwards. His starting point was the question about whether this elite had a rational attitude to economics, and looking at the interface of historical and anthropological attitudes towards such processes.

He started from some obvious basics for the period. Firstly, there was no autonomous economic sphere, but instead economic practice was embedded in societies. Secondly, that wealth was not the only form of capital: social capital also mattered. On the other hand, wealth was one criterion for belonging to the social elite and hence people adopted methods to maintain this.

Professor Feller pointed out that the polyptychs show systematic attempts to collect details of estates and income and that even dead saints knew the value of presents given (and did nasty things to donors who tried to substitute a present cheaper than promised). He then went back to late Merovingian/early Carolingian times to look at the will of Abbo of Provence. He argued that it showed that Abbo was carefully accumulating land around four central points that supported his power, aiming for contiguous estates and also reconstructing a family patrimony (he acquired land mostly from his kin). In other words, behaving entirely rationally in an economic/political sense.

Professor Feller’s next case study was Peredeo, bishop of Lucca in 779-788, whose will made two churches his main heirs. In turn, one of these churches was given to the cathedral and the other to the monastery of San Columbano. These gifts consecrated Peredo’s wealth into inalienable form, while strengthening his family’s link to the land even though they no longer held it. (I presume that it’s the two stage process here that he saw as distinctive).

Professor Feller then went onto Bishop Meinwerk of Paderborn, whose vita includes details of a large number of his transactions with local notables (also discussed by Timothy Reuter, Property transactions and social relations between rulers, bishops and nobles in early-eleventh century Saxony: the evidence of the Vita Meinwerci. In Property and power in the early Middle Ages, edited by W. Davies and P. Fouracre. Cambridge: Cambridge University Press (1995).) People give gifts to Meinwerk and get counter-gifts. These counter-gifts are often substantial, but Tim had argued these weren’t economic exchanges, but a way of creating relationships with the bishop. Professor Feller agreed it was a non-commercial system (for example, the lands that Meinwerk get given are never described, suggesting that wasn’t necessary information), but wondered whether in some cases we were looking at ‘life annuities’ in the counter-gifts, providing some long-term economic provision. Thus donors could maintain their living standards, while also getting prestige from the donation. He also drew parallels to cases where donors gave all their estates to a monastery, but kept a life interest.

Professor Feller’s final comments were about redistribution, pointing out that accumulation wasn’t seen as an end per se, but only a prelude to some form of redistribution. He talked specifically about episcopal and monastic charity, which required considerable funding. He saw a complex attitude by the church to wealth, with accumulation and good administration by them being justified, and their wealth a proof of their godliness. (This bit all seemed fairly obvious to me, but I think he was trying to contrast it to the rather different views seen in St Francis).

What I was left wondering about was how we could get beyond binaries of economic rationality v irrationality and gift v market. Recent events have made the idea of the current era as one of economic rationality rather tricky to maintain. And most of the ‘irrational’ or non-market exchanges visible in the early Middle Ages still exist today. Gifts have not disappeared; nor has spending to acquire social capital, or donations to churches and other charities. The Carolingian period wasn’t one of Stone Age economics or a completely non-market economy, but demonstrating economic rationality in particular areas still doesn’t make it much like our world.

The most productive approach seems to me to come from one comment of Tim Reuter’s on the Vita Meinwerci that Professor Feller didn’t pick up on (p 181):

In the kind of society we are dealing with here, the anonymity and absence of ongoing relations between the partners implicit in the modern contrast between a sale and a gift is meaningless: you do not sell to your enemies or people whom you do not know any more than you give to them.

If you look at transactions not in terms of economic rationality, but in terms of the strength of the relationship between the parties involved, then you do get useful distinctions. At one end is the gift, in which, ideally, the exactly correct thing for a specific person is offered (whether to suit their taste or their status); at the other end, is the kind of anonymous transaction summed up in a tender for a contract, where you buy from whoever can provide goods of a particular specification at the cheapest rate. What is useful is that this formulation reminds us of how often modern day transactions are not entirely impersonal. If you buy your groceries at the local shop, if you have a preferred supplier because you find them reliable, if you always buy brand X because it makes you feel good, then relationship elements are entering into your economic calculations. This is not necessarily economically irrational: after all, much of the current economic crisis originated in the wish of banks to offer mortgages to people, without establishing a long-term relationship with that customer. It seemed more profitable to sell someone a subprime mortgage and then hastily pass the debt on to another anonymous financial organisation.

In these terms, the early Middle Ages looks pretty heavily weighted towards the strongly personal end of the transaction scale. But there is one complication to this. Mostly, what we judge early medieval transactions on are land transactions; these are the only ones which are frequently recorded. But it’s possible that these may have stayed personal for longer than other transactions. After all, if you’re selling/exchanging/donating land, it’s most often going to be with someone who’s your neighbour or at least lives in your local area and so who you need and want to get on with. (Even if they’re not your neighbour to start with, they may well be once they’ve bought your field). Impersonal or one-off transactions might be more likely to develop with regional markets for produce. Do you buy your wine/salt etc from the same person/institution each time or are there rivals you might choose between on cost? If we’re looking for traces of ‘modern’ economics, the butcher, brewer or baker whose regard for their self-interest is more important than their benevolence, land transactions may not be the ideal place to start.

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3 thoughts on “1000 years of economic irrationality

  1. This is very interesting and I think your development of the ideas is spot-on; I may have to borrow it 🙂 (And I think the reason the analysis of the Church attitude to wealth seems obvious to you is that it’s basically set out by David Ganz in the first article in Property and Power.)

    Personally, I can point at at least two wealthy families in my area who have every appearance of behaving with at least a patrimonially rational strategy when it comes to disposing of their goods, and several clerical wills that show a care to negotiate a path through the requirements of their cathedral for the disposal of the benefices they hold. This looks like one of those things I hadn’t realised there was an article in! But I imagine Prof. Feller has a wider-ranging scope than I could manage. I wish I’d made it to this one. Thankyou for the report!

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  2. Seminary XLVI: Agatha Christie and Edward the MartyrThe last Earlier Middle Ages seminar of term at the Institute of Historical Research saw a rare event, viz. a visit from a Cambridge academic, something which doesn’t happen as often as it perhaps should. (If you wanted to know about one of the e…

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  3. That demmed elusive rational economic medieval actorWhile some of the paper-writing pressure was off I punctuated my reading with some of the stored-up PDFs I’ve stashed at various points, having followed web-links and gone, “that looks interesting and potentially relevant!” and one of…

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