Monopoly and Market Irregularities in Medieval Economic Thought: Traditions and Texts to A.D. 1500

In a study of pre-classical monopoly theory published in 1951, Raymond de Roo ver started by briefly examining the doctrines held by the medieval scholastics. His analysis met with favorable response and was confirmed and further developed by later historians. The most satisfactory statement may still be that of Barry Gordon in his monograph on early economics. The consensus of these scholars can be summarized as follows. Medieval authors looked askance at the attempts by the guilds to establish minimum prices. They recognized the expediency of government grants of monopoly and regulation of prices of certain commodities. They strongly condemned private monopolies established for personal gain, as well as collusion among sellers for that purpose, price discrimination, engrossing, forestalling, regrating, and other forms of speculation. The just price was the current, competitive market price, free of all irregularities of these kinds and free of fraud and duress. Gordon adds that the schoolmen also sometimes referred to labor and cost factors, rather than the market, as estimates of the just price. These estimates were not necessarily contradictive but mutually supportive. They applied when the market was not working smoothly and when there was no market in operation at the time and place of the sale. When an exchange is concluded in a competitive market under normal circumstances, the going price can hardly be said to be unjust. It may sometimes seem uncharitable. There will always be some who cannot afford to pay the competitive price. Poor relief in medieval society, however, was mainly a matter of almsgiving. Unlike commutative justice, charity is not a workable ethical norm in the marketplace.