Debt (84 page)

78.
In Goody 1996:91.

79.
M. Lombard 2003:177–79.

80.
Burton’s translation; 1934 IV:2013.

81.
And what’s more, officials employed their own person bankers, and themselves made extensive use of credit instruments such as
suftaja
both for transfer of tax payments, and the secreting away of ill-gotten gains (Hodgson 1974 I:301, Udovitch 1975:8, Ray 1994:69–71.)

82.
“For Mohammed this natural regulation of the market corresponds to a cosmic regulation. Prices rise and fall as night follows day, as low tides follow high, and price imposition is not only an injustice to the merchant, but a disordering of the natural order of things” (Essid 1995:153).

83.
Only very limited exceptions were made, for instance in times of disaster, and then most scholars insisted it was always better to provide direct relief to the needy than to interfere with market forces. See Ghazanfar & Islahi 2003, Islahi 2004:31–32; for a fuller discussion of Mohammed’s views on price formation, see Tuma 1965, Essid 1988, 1995.

84.
Hosseini 1998:672, 2003:37: “Both indicate that animals, such as dogs, do not exchange one bone for another.”

85.
Hosseini 1998, 2003. Smith says he visited such a factory himself, which may well be true, but the example of the eighteen steps originally appears in the entry “Épingle” in Volume 5 of the French
Encyclopedie
, published in 1755, twenty years earlier. Hosseini also notes that “Smith’s personal library contained the Latin translations of some of the works of Persian (and Arab) scholars of the medieval period” (Hosseini 1998:679), suggesting that he might have lifted them from the originals directly. Other important sources for Islamic precedents for later economic theory include: Rodison 1978, Islahi 1985, Essid 1988, Hosseini 1995, Ghazanfar 1991, 2000, 2003, Ghazanfar & Islahi 1997, 2003. It is becoming more and more clear that a great deal of Enlightenment thought traces back to Islamic philosophy: Decartes’
cogito
, for example, seems to derive from Ibn Sina (a.k.a. Avicenna), Hume’s famous point that the observance of constant conjunctions does not itself prove causality appears in Ghazali, and I have myself noticed Immanuel Kant’s definition of enlightenment in the mouth of a magic bird in the fourteenth-century Persian poet Rumi.

86.
Tusi’s
Nasirean Ethics
, in Sun 2008:409.

87.
Ghazanfar & Islahi 2003:58; Ghazanfar 2003:32–33.

88.
So for example among Ghazali’s ethical principles, we find “the buyer should be lenient when bargaining with a poor seller and strict when transacting with a rich seller,” and “a person should be willing to sell to the poor who do not have the means and should extend credit to them without the expectation of repayment” (Ghazali
Ihya Ulum al Din II
:79–82, cited in Ghazanfar & Islahi 1997:22)—the latter of course recalling Luke 6:35.

89.
Ghazali in Ghazanfar & Islahi 1997:27.

90.
Ibid:32.

91.
Ibid:32.

92.
Ibid:35. On postmen in Medieval Islam: Goitein 1964. Ghazali’s position here recalls and is no doubt influenced by Aristotle’s
Nicomachean Ethics
(1121b): that since money is a social convention meant to facilitate exchange, diverting it into usury defies its purpose; but its ultimate thrust is quite different, closer to Thomas Aquinas’ argument that money is basically a measure and that usury distorts it, and Henry of Ghent’s argument that “money is a medium in exchange and not a terminus”—unsurprisingly, since Aquinas was likely directly influenced by him (Ghazanfar 2000).

93.
It’s hard to overstate this. Even the famous “Laffer Curve,” by which the Reagan Administration in the 1980s tried to argue that cutting taxes would increase government revenue by stimulating economic activity, is often called the Khaldun-Laffer curve because it was first proposed, as a general principle, in Ibn Khaldun’s 1377
Muqaddimah
.

94.
Goitein 1957 for the rise of the “Middle Eastern bourgeoisie.”

95.
“Crying down” acted as a de facto tax increase, since one would now need to pay more ecus to make up a tax rate fixed in shillings. Since wages were fixed in pounds, shillings, and pence, this also had the effect of raising their value, and hence it was usually popular. “Crying up”
by contrast had the effect of lowering the effective value of the units of account. This could be useful to reduce a king’s—or his allies’—personal debt measured in such units, but it also undercut the income of wage-earners and those on any sort of fixed income and so was often protested.

96.
Langholm 1979, Wood 2002:73–76.

97.
On the patristic literature on usury: Maloney 1983; Gordon 1989; Moser 2000; Holman 2002:112–26; Jones 2004:25–30.

98.
Matthew 5:42

99.
St Basil of Caesarea,
Homilia II in Psalmum XIV
(PG 29, 268–69).

100.
op cit.

101.
op cit.

102.
Ambrose
De Officiis
2.25.89.

103.
Ambrose
De Tobia
15:51. See Nelson 1949:3–5, Gordon 1989:114–118.

104.
Though not entirely. It’s worthy to note that the main supply of slaves to the empire at this time came from Germanic barbarians outside the empire, who were acquired
either
through war or debt.

105.
“If each one,” he wrote, “after having taken from his personal wealth whatever would satisfy his personal needs, would leave what was superfluous to those who lack every necessity, there would be no rich or poor”
(In Illiud Lucae
49D)—Basil himself had been born an aristocrat, but he had sold off his landed estates and distributed the proceeds to the poor.

106.
Homilia II in Psalmum XIV
(PG 29, 277C). The reference is to Proverbs 19.17.

107.
Summa
8.3.1.3: “since grace is freely given, it excludes the idea of debt … In [no] sense does debt imply that God owes anything to another creature.”

108.
Clavero (1986) sees this as a basic conflict over the nature of the contract, and hence the legal basis of human relations in European history: usury, and by extension profit, was denounced, but rent, the basis of feudal relations, was never challenged.

109.
Gordon 1989:115. “What is commerce,” wrote Cassiodorus (485–585), “except to want to sell dear that which can be bought cheap? Therefore those merchants are detestable who, with no consideration of God’s justice, burden their wares more with perjury than value. Them the Lord evicted them from the Temple saying, ‘Do not make my Father’s house into a den of thieves” (in Langholm 1996:454).

110.
On the Jewish legal tradition concerning usury, see Stein 1953, 1955; Kirschenbaum 1985.

111.
Poliakov 1977:21.

112.
Nelson (1949) assumed that the “Exception” was often held to apply to relations between Christians and Jews, but Noonan (1957:101–2) insists that it was mainly held to apply only to “heretics and infidels, particularly the Saracens,” and by some, not even to them.

113.
Up to 52 percent with security, up to 120 percent without (Homer 1987:91).

114.
Debtor’s prisons, in the sense of prisons exclusively for debtors, existed in England only after 1263, but the imprisonment of debtors has a much longer history. Above all, Jewish lenders seem to have been employed as the means of transforming virtual, credit money into coinage, collecting the family silver from insolvent debtors, and turning it over to royal mints. They also won title to a great deal of land from defaulting debtors, most of which ended up in the hands of barons or monasteries (Singer 1964; Bowers 1983; Schofield & Mayhew 2002).

115.
Roger of Wendower,
Flowers of History
252–53. Roger doesn’t name the victim; in some later versions his name is Abraham, in others, Isaac.

116.
Matthew Prior, in Bolles 1837:13.

117.
Or even, for that matter, Nietzsche’s fantasies of the origins of justice in mutilation. Where one was a projection onto Jews of atrocities actually committed against Jews, Nietzsche was writing in an age where actual “savages” were often punished by similar tortures and mutilations for failure to pay their debts to the colonial tax authorities, as later became a
most notorious scandal in Leopold’s Belgian Congo.

118.
Mundill (2002), Brand (2003).

119.
Cohn 1972:80.

120.
Peter Cantor, in Nelson 1949:10–11.

121.
It was a firm from Cahors, for instance, who received the property of the English Jews when the latter were finally expelled in 1290. Though for a long time, Lombards and Cahorsins were themselves dependent on royal favor and hardly in much better position than the Jews. In France, the kings seemed to expropriate and expel Jews and Lombards alternately (Poliakov 1977:42).

122.
Noonan 1957:18–19; Le Goff 1990:23–27.

123.
There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men profit from one another. The most hated sort, and with the greatest reason, is usury, which makes a profit out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term “interest”
(tokos)
, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. “Wherefore of all modes of getting wealth this is the most unnatural” (Aristotle,
Politics
1258b). The Nicomachean Ethics (1121b) is equally damning. For the best general analysis of the Aristotelean tradition on usury: Langholm 1984.

124.
Noonan 1957:105–12; Langholm 1984:50.

125.
The technical term for the lost income is
lucrum cessans:
see O’Brien 1920: 107–10, Noonan 1957:114–28, Langholm 1992:60–61; 1998:75; Spufford 1989:260.

126.
As German merchants also did in the Baltic cities of the Hanseatic alliance. On the Medici bank as a case in point, see de Roover 1946, 1963, Parks 2005.

127.
The situation in Venice, a pioneer in these matters, is telling: there was no merchant guild, but only craft guilds, since guilds were essentially created as protection against the government, and in Venice, the merchants
were
the government (MacKenney 1987; Mauro 1993:259–60).

128.
They were accused of both heresy and sodomy: see Barber 1978.

129.
One cannot “prove” the Islamic inspiration of European bills of exchange, but considering the amount of trade between the two sides of the Mediterranean, denying it seems bizarre. Braudel (1995:816–17) proposes that the idea must have reached Europe through Jewish merchants, who we know to have long been using them in Egypt.

130.
On bills of exchange: Usher 1914; de Roover 1967; Boyer-Xambeu, Deleplace, and Gillard 1994; Munro 2003b:542–46; Denzel 2006. There were innumerable currencies, any of which might at any time be “cried up,” “cried down,” or otherwise fluctuate in value. Bills of exchange also allowed merchants to effectively engage in currency speculation, and even get around usury laws, once it became possible to pay for one bill of exchange by writing a different bill of exchange, due in several months’ time, for a slightly higher sum. This was called “dry exchange” (de Roover 1944), and over time the Church became increasingly skeptical, causing yet another round of financial creativity to get around the laws. It’s worthy of note that the rates of interest on such commercial loans were generally quite low: twelve percent at the highest, in dramatic contrast to consumer loans. This is a sign of the increasingly lower risk of such transactions (see Homer 1987 for a history of interest rates).

131.
Lane 1934.

132.
“In very many respects, such as the organization of slave labor, management of colonies, imperial administration, commercial institutions, maritime technology and navigation, and naval gunnery, the Italian city-states were the direct
forerunners of the Portuguese and Spanish empires, to the shaping of which the Italians contributed so heavily, and in the profits of which they so largely shared” (Brady 1997:150).

133.
They appear to have used Greek serfs at first, and sometimes Arabs captured in the Crusades, and only later, Africans. Still, this was the economic model that was eventually transported by Portuguese merchants to Atlantic islands like the Canaries, then eventually to the Caribbean (Verlinden 1970, Phillips 1985:93–97, Solow 1987, Wartburg 1995).

134.
Scammell 1981:173–75.

135.
Spufford 1988:142

136
On the notion of adventure: Auerbach 1946, Nerlich 1977.

137.
Duby (1973) makes this point. The “round table” was originally a type of tournament, and especially in the 1300s, it became common to make such tournaments explicit imitations of King Arthur’s court, with knights entering the contests taking on roles from them: Galahad, Gawain, Bors, etc.

138.
Also at a time when technological changes, especially the invention of the crossbow and the rise of professional armies, were beginning to render knights’ role in combat increasingly irrelevant (Vance 1973).

139.
Kelly 1937:10.

140.
See Schoenberger 2008 for a recent and compelling take: comparing the role of war mobilization in creating markets in Greece and Rome to Western Europe in the High Middle Ages.

141.
Wolf 1954.

142.
A point originally made by Vance (1986:48). The similarity is more obvious in the German poet Wolfram von Eschenbach’s
Parzifal
, written perhaps twenty years later, in which knights “roam freely over Spain, North Africa, Egypt, Syria, to Baghdad, Armenia, India, Ceylon” (Adolf 1957:113)—and Islamic references are legion (Adolf 1947, 1957)—that is, areas known to Europeans of the time only through trade. The fact that actual merchants, on those rare occasions when they appear, are never sympathetic characters has little bearing.