Tim says, of speculation in foodstuffs:

Imagine we had no speculation at all? Not even physical hoarding.

You don’t have to imagine. As I pointed out in a post a year ago, this was exactly the situation during much of the Middle Ages, when regrating was at times illegal and always condemned by the Church. Regrating means:

To buy in large quantities, as corn, provisions, etc., at a market or fair, with the intention of selling the same again, in or near the same place, at a higher price, — a practice which was formerly treated as a public offense.

The consequence was word formation; they had to invent a new word, “caristia”, to denote the shortage of labourers that would occur from year to year because so many people had died the previous season from malnutrition. This isn’t the Black Death, just year on year fluctuations in labour supply caused by death from starvation.

I find it interesting that those who object to commodities speculation today consider themselves to be radical when they are in fact reactionary. They consider themselves to be motivated by morality and in a way that’s true. But it’s the morality of the medieval Catholic Church.

That’s why I think these folks are right wing, not left wing.

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  • Hexe

    Speculation needs a huge infrastructure to be effective, safe and productive. That just was not available in the MA.

    So, I think there is a lot more to the regrading ban than just blind dogma and stupidity — for one, there is advice in the bible to store grains against famine (storing and selling being two different things of course) so, why did the church ban the practice rather than monopolise it? (it’s not as if they didn’t have an astute eye for power and business and much need for lots of cash…)

    Back then, people had a lot more kids, the church would have probably figured out that keeping them peasants starved (thus culling the old who have the knowledge and experience to ‘organise’) keeps them managable(as the crusades were also going on, the policing powers were vastly reduced). so, low numbers and the psychology of hunger was a boon. Peasant revolts were quite common in the MA, and they happened whenever those people reached a critical mass of people, culture and know-how(raising a peasant takes a very short time, as opposed to the long time it takes to raise a knight to police them). So keeping their numbers and spirits down with famine is quite a smart move.

    Also, before and after Charlemagne, trade was very difficult because every small robber baron on the way wanted a cut — making it nearly impossible to trade. (this was the situation everywhere, it’s just that C showed that there is an alternative, what a shame he never managed to pass his thinking on to later generations)

    And as a result, there just wasn’t the competition around to stop monopolies either (no easy transport etc), and so I think the church did have a legit concern here too.

    The church probably thought that allowing large trades would bring a huge number of novel problems that were unnecessary, the current mode of doing things being ‘good enough’ and life was just ticking over nicely without being even more tedious, complicated and vicious than it was already.

    Ps.: right/left wing no longer really are concepts that work as such, politics and morals have all taken a walk on the wild side as of late. ;-D

  • Peter Risdon

    I’m talking about the period, roughly, 12th to 15th centuries, much later than Charlemagne. Trade was pretty common then, in fact by about 1400 a full credit-based trading economy had emerged in Europe. They weren’t trading, and speculating, enough to smooth out variations in supply the way we can today but they still did it and in ways that must have been remarkable to see: tens of thousands of cattle would be driven from eastern Europe to the markets in what are now the Low Countries – tens of thousands at a time.

    The issue of peasant revolts and living conditions is complicated and I can’t comment much beyond noting that there weren’t that many revolts and they tended to be based among more prosperous peasants. But while I give way to nobody in my contempt to medieval Catholicism, I really doubt the deliberate plan was to starve people. It’s more likely to have been a misplaced sense of morality, as it is today.

  • Farmers never produced all that much surplus in the west because growing food here is so labour intensive and the weather is rather hostile too. To give you an idea, as late as 1950 in Germany the average small holding only fed 4 extra people (other than the farm workers and the farmer).

    That subsistence output will have even been worse earlier with their old breeds and puny cultivars, which is why the tithes and taxes, although they seem low were actually quiet steep.

    Where you could mass produce food was in the forests with pigs eating the acorns for example (the Gauls had quite an industry going) and geese for a while were also profitable mass producers, but I really doubt there were ever enough cattle to rival the US in their cowboy era prime (3000 heads of cattle would be quite a sizeable herd to drive, and that is the open land we’re talking about not Europe. See http://librivox.org/the-log-of-a-cowboy-by-andy-adams/) also cattle are slow to come up to numbers. Pigs are far more useful here (and can feed on almost anything and kept in a back yard) and a sow puts out 6 piglets in 6 month whereas a cow has one calf per year.

    So, in a way, even if they wanted to, there just was no surplus in any meaningful amounts that actually could be traded back then, and even if so, the value thereof would have been too low to turn a good profit. Another thing to remember is that wheat was so precious that it was verboten in Bavaria (the breadbasket of Germany) to brew wheat beer (which was a great seller and much enjoyed by the rich) in order to ensure that the peasants have enough to eat in the 1500’s.

    What I meant the church did by not providing the logistics and guidance that would have enabled people to store food was not purposeful extermination. By not doing certain things that would have perhaps prevented disaster, because it was too complex or would have opened up yet more Pandora’ boxes they chose one possible (and quite moral) path of action (after all if you believe in God then trusting in Karma comes naturally). That is very different to a deliberate policy.

  • Murray

    Who exactly is trying to ban speculation? A lot of organisations are calling for transparency, exchange trading or limits on non-commercial (ie purely financial) speculation. This would help ensure markets function effectively and ensure they fulfill their price discovery function based on the fundamentals of the underlying asset. This article is a poor mis-representation of the arguments on commodity speculation.