One of the driving forces behind my attempting to learn as
much as possible is that I simply didn’t give my own education the seriousness
it deserved before attending college. In so many ways, I read and learn so as
to catch up.
However, as an Austro-libertarian, one of the challenges of
reading, say, a history book is that the author’s worldview and analytical
framework when discussing a particular subject may not jibe with my own. While I’m
always open to the possibility that I can profit from reading an author with a
different perspective, it can sometimes become difficult to glean from such works
what I should actually take away from them.
To provide a small example of what I mean, I’m currently in the process of reading Tudor England by John Guy, a British historian and biographer who currently teaches at Cambridge University. A particular passage, relating to Cardinal Wolsey’s service as Henry VIII’s Lord Chancellor from 1515 to 1529, highlighted this very challenge.
The passage in question is the following:
“… [Wolsey] attacked from star chamber[i] the abuse of private traders in civic markets, doing so in the interest of social responsibility. The ‘just price’ was still the main consideration in agricultural marketing, but traders were businessmen who, necessarily, made money at the consumer’s expense. At a stroke Wolsey hauled seventy-four provincial graziers before the Council along with dozens of London butchers, but this crackdown was not followed up – nothing happened. He also issued proclamations prohibiting profiteering in grain and enforcing traditional statutes regulating vagabonds and labourers. Yet when in 1520 six grain speculators from Buckinghamshire were reported to him for action, he referred the compliance back to the locality, being too busy to deal with it. Another swoop on traders led to one documented conviction, while only two cases were brought to Wolsey on the strength of his proclamations.”[ii]
For the most part, this passage appears to provide a relatively accurate description of Wolsey’s actions relating to curbing what he saw as market abuses. However, from an Austro-libertarian perspective, there are two aspects of the passage that are fascinating.
The first aspect is Guy’s comment that businessmen necessarily make their money at the
expense of consumers. On the one hand, it is not surprising for a scholar
specializing on Tudor England to hold the same opinion as those he studied. As
Murray Rothbard observed, Guy’s (and Wolsey’s) view was typical of
mercantilists in the sixteenth-century, who held that “in any trade, one party
can benefit only at the expense of the other—that in every transaction there is
a winner and a loser, an ‘exploiter’ and an ‘exploited.’”[iii]
In fact, such a view remains popular to this day.
However, that doesn’t mean that it is right. As Rothbard
“Both parties undertake [an] exchange because each expects to gain from it. Also, each will repeat the exchange next time (or refuse to) because his expectation has proved correct (or incorrect) in the recent past. Trade, or exchange, is engaged in precisely because both parties benefit; if they did not expect to gain, they would not agree to the exchange.”[iv]
The second fascinating aspect of the passage is Guy’s criticism of the effectiveness of Wolsey’s policy, not because it was erroneous to challenge prices derived through free trade. Rather, Guy was critical of Wolsey not following through and achieving the goal he established for himself.
What Guy appears to not recognize is that, regardless of how
aggressively a regime may enforce price limits, they never work. As Ludwig von
“History is a long record of price ceilings and anti-usury laws. Again and again emperors, kings, and revolutionary dictators have tried to meddle with the market phenomena. Severe punishment was inflicted on refractory dealers and farmers. Many people fell victim to persecutions which met with the enthusiastic approval of the masses. Nonetheless, all these endeavors failed. The explanation which the writings of lawyers, theologians and philosophers provided for the failure was in full agreement with the ideas held by the rulers and the masses. Man, they said, is intrinsically selfish and sinful, and the authorities were unfortunately too lax in enforcing the law. What was needed was more firmness and peremptoriness on the part of those in power.[v] …
“Economics does not say that isolated government interference with the prices of only one commodity or a few commodities is unfair, bad, or unfeasible. It says that such interference produces results contrary to its purpose, that it makes conditions worse, not better, from the point of view of the government and those backing its interference. Before the government interfered, the goods concerned were, in the eyes of the government, too dear. As a result of the maximum price their supply dwindles or disappears altogether. The government interfered because it considered these commodities especially vital, necessary, indispensable. But its action curtailed the supply available. It is therefore, from the point of view of the government, absurd and nonsensical.”[vi]
Therefore, it is no surprise whatsoever that Wolsey failed to
curtail high prices in certain goods.
Once these two aspects are addressed, an Austro-libertarian
can take this passage closer to what it is: yet another example of a state
attempting to control the prices of certain goods, only to not succeed.
The Star Chamber was an English court of law, comprised of Privy Councillors
and common-law judges, which supplemented the judicial activities of the
common-law and equity courts in civil and criminal matters. Wikipedia
contributors, “Star Chamber,” Wikipedia, The Free Encyclopedia, https://en.wikipedia.org/w/index.php?title=Star_Chamber&oldid=871309890 (accessed
February 20, 2019).
John Guy, Tudor England (Oxford:
Oxford University Press, 1980), 94.
N. Rothbard. The Library of Economics and
Liberty, “Free Market.” https://www.econlib.org/library/Enc/FreeMarket.html
(accessed February 19, 2019).
von Mises, Human Action (Auburn, Alabama:
Ludwig von Mises Institute, 1998), 753.
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