The Mediaeval Rise of Free-Market Universities

Life in mediaeval universities has been an abiding interest, and so it was serendipity itself that a recent column by The Telegraph’s Simon Heffer extolled the virtues of a BBC Radio 4 programme ‘In Our Time’. Its host is the Labour peer Melvin Bragg who, along with a guest panel each week, discusses a variety of that would normally be categorised as ‘high culture’; in Heffer’s words, ‘it informs, educates and entertains.’

I scrolled through the comprehensive list of available episodes — which may prove material for future postings — and found one from a month ago, ‘The Medieval University’.

It was a fascinating account about the rise and consolidation of universities in what is considered the High Middle Ages, from the twelfth to thirteenth centuries: how they arose out of nowhere from the demands of churchmen and statesmen for educated assistants, becoming intellectual centres in the study of theology, law, and medicine.

The system of university education was so successful that it remains a powerful force to this day in the arts and sciences. In this broad category we owe the notion of the artes liberales — the ‘liberal arts’ — disciplines pursued not as means to an ulterior goal (the ‘servile arts’ or artes serviles) but as ends in their own right.

In our day, the term ‘liberal’ has come to have many meanings, oftentimes diametrically opposed to each other. Contemporaneously it has become synonymous with activist government promoting social welfare policies, a far contrast with its popular usage originating in the Enlightenment to mean less State interference and more personal freedom.

Yet listening to Lord Bragg and his guests these same impulses can be attributed to the rise of mediaeval universities, which ought to come as no surprise to anyone aware of the Austrian School of Economics and its efforts — successful to my mind — to rehabilitate the liberal, market advances that were pioneered during the Middle Ages. ¹

The most noticeable free market characteristic of the rise of mediaeval universities is their ‘spontaneous order’ à la Friedrich von Hayek by ‘an invisible hand’ à la Adam Smith, without any originating central planning or oversight from either Church or State.

Universities in large urban centres, such as Paris, enjoyed an early advantage over smaller colleagues in less populated areas; as Adam Smith would describe in The Wealth of Nations:

As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for (I.iii.1).²

Population size impacted the development and variety of business opportunities, with greater numbers influencing a greater selection of trades — one of which was education; at the university level, this meant that a greater number of students would seek a greater choice or ‘supply’ of subject-courses, necessitating the ‘demand’ for a greater diversity of teachers, and the die was cast in favour of innovation and specialisation.

Aspects of free trade were also in existence, as masters and students travelled from one university to another across the European continent and into the British Isles, searching for the ‘university product’ — whether it be salary, tuition costs, or programme of study, that met their needs — with Latin as the ‘gold standard’ of academic discourse. A standardised canon and licentiate also ensured that university graduates could offer their learning with credentials that were widely recognised and accepted.

Universities could not have arisen without the widespread use of money, as more primitive methods of exchange would have been unfeasible in this international enterprise. Private wealth itself was a contributing factor — although some Italian universities were financed by the towns in which they took root — as it was the bounty of the rich and their endowments that allowed the universities to take shape, and whose benevolence supported both their own offspring and the worthy poor. Voluntary charity and noblesse oblige, then, funded the great spread of universities in the high Middle Ages. This fact is borne out by the Oxbridge college system.

Competition, too, was the rule, not only within the university between masters and masters, students and students, and masters and students, but also between the universities themselves, in their rivalry to attract leading scholars and the best scholarship of the time so as to entice the best young students. Then, as now, a rising reputation translated into increased financial support and patronage.

Likewise, students were ‘sovereign consumers’ (in the terminology of Austrian economics), whose desire and demand for the teaching of specific subjects influenced the development of the curricula and the promotion or rejection of the teaching staff. What is taken to be a new marketing ploy of student-centred activities and outreach is rather very old indeed.

Throughout this free-market rise of universities, though, can be seen the ‘visible’ hand of ‘Tory’ interests; that is, the interventions of both Church and State in imposing order upon divergent, disparate action; the granting of charters and setting up the formal university structure, both in infrastructure and in the establishment of curricula and degrees: universitas is synonymous with the corporate guilds that help to define the Middle Ages.

‘Town-Gown’ conflicts and riots called forth the firm control the law. Unacceptable topics of scholastic debate, oftentimes in opposition to the powers that be, were suppressed by ecclesial and secular authorities.

In time, too, with the decline of organic Christendom and the development of the nation-state, universities grew less ‘free’ and more the instruments of national will, serving the interests of their local communities and of their royal patrons.

Factions also were to be found among the hallowed halls themselves; sometimes this was beneficial, as when a group of scholars decamped from the University of Oxford after such a dispute and took up residence in remote Cambridgeshire. Oftentimes the results were less inviting, as when academia became the instrument of stifling dissent. The trial of Joan of Arc, under partial supervision of faculty from the University of Paris, is one example. (In our own time, we can point to ‘political correctness’ and the pressures exerted against freedom of speech as trends against the animating spirit of the original universities.)

Here, too, is evidence of why universities slowly lost their predominance and influence in the later Middle Ages: an exhaustion with the curricula set in, aided in part by frustrations induced by the burgeoning internal bureaucracy and the demands of special ‘cloistered’ interests. Masters and students, unable to teach or to be taught as they pleased, escaped to cities where innovation was welcomed, authority less strict, and the new Humanism was taking hold of Renaissance minds.

Universities, of course, didn’t pass away, and their continuing relevance is witnessed by the liberal arts colleges that thrive in the United States. But their dominance has waned and been superseded in many respects by the ‘think-tank’ phenomenon and by private research organisations.

Yet universities may be the only significant institutions serving as repositories of Western civilisation, charged with the preservation and transmission of culture. While they may no longer assume the leading role in its creation, the university ideal of universality, of the artes liberales, is unique in to-day’s world of partisan and applied research.

Many may recoil from a free-market interpretation of universities, yet their mediaeval origins owe much to the free interplay of individuals and ideas implied by the free economy. By continued emphasis upon innovation and competition — by ensuring that they can be the best that they can be — can universities ensure their success for another millennium.


ENDNOTES

1. See, for instance,‘The Major Contributions of the Scholastics to Economics (Mises Daily, 3 December 2010)’ by Gerard N. Casey, ‘The School of Salamanca Saw This Coming (Mises Daily, 26 August 2009)’ by Jerzy Strzelecki, ‘The World of Salamanca (Mises Daily, 27 October 2009)’ by Llewellyn H. Rockwell Jr., and volume 1 of Murray N. Rothbard’s history of economic thought, Economic Thought Before Adam Smith, especially chapters 2-5 inclusive.

2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, R.H. Campbell and A.S. Skinner, eds. Glasgow Edition of the Works and Correspondence of Adam Smith. Vol. 2a. Indianapolis: LibertyClassics, 1981.

Resurrecting Mediaeval Political Economy

‘Whither conservatism in the 21st century?’ asks Neil Reynolds in an intriguing column for The Globe and Mail, ‘It takes a conservative to revive a community’. He focuses on one recent development from the right which takes as its exemplar mediaeval society, which Phillip Blond, director of the British think-tank ResPublica, calls ‘Red Toryism’ (which shares few characteristics with its Canadian cousin).

In his Globe review, Reynolds draws upon ‘Does Red Toryism Have an American Future?’, my own perspective on Blond and his political programme. In making his valid and thoughtful appraisal, however, Reynolds presents just one view of mediaeval economics which was to evolve during the late Middle Ages; thus, a wider overview may be in order, especially as much of organic Toryism is dependent upon this mediaeval framework.

Organic Toryism is itself not unmindful of the limitations of a strict adherence to mediaeval practices, but for all that is committed to those elements that remain vibrant. Some of the positive aspects arising from a communal sensibility are examined in my essay ‘Society, Our Natural Route to the Common Good’ and on ‘The Free Economy Plus’ site—where, I might add, can be found assurances that such organic society does not ‘supplant socialism’ (make your own inferences). For now, I shall focus on features of the free economy that have their origins in the late Middle Ages.

Reynolds opines, for example, that a mediaeval revival in political economy means ‘to restrict capitalist competition and to advance an entrenched sense of community’.

Yet it is arguable, prima facie, that restrictions are already in place (as proponents of the free market scoff at naysayers who point to unfettered markets), since capitalist competition is already restricted by the rule of law. Such reasoning is the Red Tory detractor’s ‘red herring’ if you will, as the alternative to existing conditions—a true unfettered market—is the sort of anarcho-capitalism advocated by libertarian theorists like Ayn Rand and Murray Rothbard. No doubt an intriguing view of economic society, but one which is by no means mainstream among academics and laymen.

There are, of course, varying degrees of restriction from which to choose, and defining what consists of fair and unfair, supportive and hindering, levels of interference is the stuff of political debate: culminating in defining one as either a classical liberal or a democratic socialist—with an organic or ‘progressive’ conservative somewhere in-between, aligning himself with one group or the other as circumstances warrant (for instance, if the times demand a defence of liberty or an expression of communal adhesion), and more often with the former than with the latter.

For many such conservatives, it is appropriate to paraphrase Churchill: that capitalism as an economic system exhibits social inadequacies, but it is better than all the other systems that have been tried and found wanting.

So, while the mediaeval guild model is tempting for its advocacy of private property and communal responsibility, it isn’t perfect. ‘The guilds,’ Reynolds writes, ‘entrusted the price of bread (for example) to bakers alone.’ Morris Bishop detailed this impediment to capitalism in The Middle Ages:

The purpose of the craft guild, like any trade union, was to promote the economic welfare of its members and guarantee full employment at high wages by restricting membership. It held a local monopoly of its product, discouraged competition among guildsmen, and suppressed scab labor. It regulated work procedures and hours of labor. It set wages, but maximum, not minimum wages. It standardized the quality and price of the product and opposed innovation. It forbade price cutting, overtime work, public advertising, overenergetic salesmanship, the introduction of new tools, the employment of one’s wife or underage children. The guild’s aim was regularization, the preservation of the status quo. Hence it failed to adjust to technological progress, which took place outside the guilds.

Anyone with a passing knowledge of capitalist theory can readily identify the conflicting zeitgeists: monopoly enterprise, aversion to innovation, static prices and wages. The modern era is epitomised by their very opposites: by a plethora of entrepreneurs competing amongst themselves to offer consumers better and newer products, at prices that challenge the business acumen of their rivals.

But one must not assume that this guild model is the only one to be drawn from an epoch that stretches across a millennium. English historian George Holmes observed that the homogenous economic environment of the mediaeval towns and villages was a major contribution to the rise of cities (and capitalism) in the nascent Renaissance. His obituary in The Telegraph paid tribute to the fact that

...Holmes suggested that the late medieval universities, far from being creative centres of new ideas, were outclassed by the dynamism and originality of cities without universities, such as Venice, Florence and London. The case may have been overstated, but the work was memorable for its demonstration of his intellectual courage and range.

His vision of the later middle ages differed profoundly from the oppressive opulence evoked by the great Dutch historian Johan Huizinga.

Holmes emphasised instead the new cultural energies released by the combination of economic crisis and political accident that allowed the emergence of a distinctive urban culture in this period, largely free of princely or ecclesiastical control.

It is in these later decades of the ‘dark ages’, throwing off feudal authoritarianism, that the bonds of accepted communal mores began to loosen, encouraging a burgeoning interest in the science of economics. Many of these discoveries would be forgotten until several centuries later, but the record indicates that much of the novelty of Adam Smith and classical liberalism had an overlooked mediaeval provenance.

The Spanish university of Salamanca was one intellectual centre in ferment, and in ‘The World of Salamanca’, Llewellyn Rockwell sketches a brief overview:

The real founders of economic science actually wrote hundreds of years before Smith. They were not economists as such, but moral theologians, trained in the tradition of St. Thomas Aquinas, and they came to be known as the Late Scholastics. These men, most of whom taught in Spain, were at least as pro-free market as the much-later Scottish tradition. Plus, their theoretical foundation was even more solid: they anticipated the theories of value and price of the ‘marginalists’ of late 19th-century Austria.

One breakthrough that had been lost to the sands of time concerned the theory of value, replaced by a Smithian-Ricardian-Marxian notion comprising factors of production and expended labour.

Recalling Cardinal Juan de Lugo’s assertion that ‘the “just price” depends on so many factors that it can be known only to God’—‘Pretium justum mathematicum licet soli Deo notum’—Jerzy Strzelecki, former Polish undersecretary of state, explains in ‘The School of Salamanca Saw This Coming’ that

In the theology of the scholastics at Salamanca, ‘just price’ was thus tantamount to the market price, resulting naturally from interactions between buyers and sellers. Attempts at setting a ‘just price’ to replace a natural market price, whether by civil or ecclesiastical authorities, were viewed with deep skepticism: weren’t such attempts usurpations of God’s knowledge?

These usurpations, of various kinds, were the mainstay of conventional economics until Carl Menger cleared a path through the confusion and formulated his theory of marginal utility. ‘For this reason, the justness of a price is not dictated by how much the item costs or how much labor went into acquiring it,’ notes Rockwell.

All that matters is what the common market value is in the place and at the time it is sold. [...] It seems like such a simple point, but it was missed by economists for centuries until the Austrian School rediscovered this ‘subjective theory of value’ and incorporated it into microeconomics.

Salamanca was on the forefront of this economic revolution: principles outlining liberty in international trade, the removal of barriers to interest charges (and prohibitions against usury), currency exchange, and laisser-faire policies regarding the State—all owe their origins to this Spanish School.

What, then, are some mediaeval economic teachings to which even Reynolds could subscribe? Again, three that leap immediately to mind are a respect for private property, an aversion toward monopoly, and a celebration of spontaneous order.

To be fair, the scrutiny to which Reynolds subjects the neo-mediaevalists is not entirely unwarranted: an organic Tory, unlike libertarians, does not view these economic concepts as necessarily absolute, but rather as minor ends in service to a greater end, the common good. ‘If liberty of purchase and of sale, of mortgage and of inheritance was restricted,’ wrote Hilaire Belloc in The Servile State, ‘it was restricted with the social object of preventing the growth of an economic oligarchy which could exploit the rest of the community.

The restraints upon liberty were restraints designed for the preservation of liberty; and every action of Mediæval Society, from the flower of the Middle Ages to the approach of their catastrophe, was directed towards the establishment of a State in which men should be economically free through the possession of capital and of land.

In contemporary terms, owners of private property have charitable responsibilities to the poor, single-source utilities may be in the control of private or public owners, with regulatory oversight to safeguard consumer welfare—with these regulations, as a component of the legal system, acting as a brake and moderating influence on pure spontaneity.

Belloc’s catastrophe for the modern organic Tory is the lack of equilibrium, with society seemingly enthralled to the individual or the State, one or the other, but infrequently and haphazardly balancing the two.

The organic alternative may be a reasonable connotation of what progressive conservatism is all about: a willingness to use legitimate means to effect social change, whether through the communal instincts of civil society or the powers exercised by the State; the alternative is the unalloyed, self-interested solipsism of individualism. If this sounds like a caricature, it gives credence to and underlines Aristotle’s axiom that man is a social animal.

Yet even libertarians should welcome a reinvigorated faith in community for, motivated by a true spirit of voluntary co-operation (and not coercion), it would supplant the State as the pre-eminent socialist ideal of collective action.

Were these few principles of organic Toryism to enjoy a sympathetic hearing, in which the symbiotic mediaeval relationship between the individual and his wider community are allowed to flourish, then perhaps it could really become, as Reynolds suggests, ‘the dominant political philosophy of the next generation.’