The usury doctrine and urban public finances in late-medieval Flanders (1220 - 1550): rentes (annuities), excise taxes, and income transfers from the poor to the rich
John H. Munro
The objectives of this study are three-fold. first is to rebut Charles Kindleberger’s famous dictum that usury ‘belongs less economic history than the ideas’; and in particular demonstrate resuscitation anti-usury campaign from early 13th century led a veritable financial revolution late-medieval French Flemish towns: one became ‘norm’ modern European states 16th (in England, 1693): shift public borrowing interest-bearing loans sale annuities, usually called rentes or renten. That had two major features: (1) decrees Fourth Lateran Council 1215, which provided harsh punishments – excommunication -- for both unrepentant usurers princes who failed suppress them; (2) establishment mendicant preaching orders: Franciscans (1210) Dominicans (1216), whose monks preached hellfire eternal damnation against all presumed including, course, anyone received any interest on government loans. There much evidence 1220s, many financiers towns, fearing their immortal souls, preferred accept far lower returns buying they would have earned These rentes, based 8th-century Carolingian census contracts, basic forms: life-annuities, by citizen purchased government, with lump sum capital, an annual income stream lasting lifetime, lifetime his wife as well; perpetual was indeed perpetual, until such time chose redeem at par. Initially, some theologians opposed sales subterfuges cloak evasion doctrine. But 1250-1, Pope Innocent IV declared them be non-usurious essentially because were not Subsequent popes 15th confirmed views character conditions: buyer rente could never demand redemption repayment, annuity payments (and ultimate redemptions) accordance actual rent contracts: i.e., funds derived products land. Ecclesiastical authorities soon agreed taxes consumption land sea) met test: beer wine (which always accounted largest share), bread, textiles, fish, meat, dairy products, etc. second objective measure importance 'rentes' civic finances terms revenues expenditures: town accounts Ghent (14th only), Aalst (1395-1550), where greater importance. related third burden excise master building craftsmen Aalst, tables values tax expressed real terms: first, equivalent number ‘baskets consumables’ form base Consumer Price Index), value money-wage incomes masons (for 210 days). This provides entirely new look ‘standard living’ controversy indications consumption-tax sometimes rose about 13,200 almost 30,000 days’ wage income, perhaps 3600 inhabitants (but obviously dramatic per capita basis). most strongly when, other indications, wages (RWI = NWI/CPI) also finally rising; thus possibly these gains largely eliminated. been if, course century, experienced same decline did small towns Brabant, east, order 25%, population varied 9% 28 %. In earlier publications I challenged widespread view era following Black Death, radical change land:labour ratio, came ‘Golden Age’ artisan labourer. contended instead frequent inflations eroded eliminated gains, periodic rises due steep deflations combined pronounced wage-stickiness. As calculated, English artisans 1340s 50% Flemish; but 1480s, narrowed gap (with inflation) 80%. probably even smaller, 1640s, when England’s Parliament imposed similar consumption.
RePEc: Research Papers in Economics