Notes on Competition and Justum Pretium Theory and Practice in Medieval Italy

• DOI: 10.1177/0003603X18780558
• Date: 01 September 2018
• Author: Marco Claudio Corradi
• Published date: 01 September 2018

Article

Notes on Competition

and Justum Pretium Theory

and Practice in Medieval Italy:

Lessons for Modern

EU Competition Price Theory?

Marco Claudio Corradi*

Abstract

Medieval Italian Comuni are often considered as one of the cradles of the modern capitalist spirit.

Comuni introduced economic legislation in an attempt to counteract restrictions to competition on the

one hand and to control the price of certain goods and services on the other. Price control of basic

commodities was often motivated by reasons of public order – such as preventing commoners’ riots.

Despite some loose analogies with the modern European Union competition law approach to pricing –

namely in the area of excessive pricing – the Italian medieval Comuni pricing theory and practice

substantially differed from the modern European Union one. Medieval theory struggled in reconciling

market mechanisms with costs analysis and missed the distinction between efficiency and distribution.

Moreover, medieval Comuni market variables were substantially divergent from the modern European

ones. Despite Comuni being the wealthiest areas in Europe in those days, their consumers had sig-

nificantly lower buying power, they were affected by different cognitive biases than modern consumers

and they were highly segmented from a gender perspective. Medieval producers, that is artisans, did

not enjoy the degree of market power that characterizes modern oligopolists. Artisans produced

goods for merchants who were the main promoters of trade and economic development. Merchants

often succeeded in squeezing artisans’ profits, granting consumers lower prices for manufactured

goods, at times also thanks to free trade policies pursued by Comuni administrations.

Keywords

Italian medieval law, EU competition law, price theory, free trade, competition

*Senior Research Associate at the Stockholm Centre for Commercial Law, Stockholm University, Stockholm, Sweden

Corresponding Author:

Marco Claudio Corradi, Stockholm Centre for Commercial Law, Stockholm University, SE-106 91, Stockholm, Sweden.

Email: marco-claudio.corradi@juridicum.su.se

The Antitrust Bulletin

2018, Vol. 63(3) 330-349

ªThe Author(s) 2018

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DOI: 10.1177/0003603X18780558

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I. Introduction

In his De Oratore, Cicero outlined his conception of historia magistra vitae.

1

Does history provide us

with useful lessons on how to handle complex economic, legal, and political issues? More specifically,

can we rely upon concepts and solutions we find in the history of business law to draw inspiration for

potential solutions to problems we encounter in modern competitionlaw or antitrust law? Keeping these

questions in mind, this article proposes a few ideas on price theory and practice in medieval communal

Italy and compares them to modern EU competition law and economics rules and scholarship. In doing

so, it focuseson the gap between medieval canonic(or civil law) and merchant lawtheory and practice as

developedin a very peculiar environment—theItalian Comune.

2

The sources on the l aw, economics, and

politics of the ItalianComune are often fragmentedand difficult to retrieve.

3

Instead of conductingan in-

depth analysis of those sources, the following pages focus on a few examples that provide insights on

Italian medieval jurists’ thought. It compares medieval jurists’ thought with the attitudes of medieval

merchants, artisans, and consumers toward price—as embedded in a complex institutional setting.

This analysis relies mostly upon sec ondhand historical sources. I did not carry out any direct

analysis of ancient manuscripts, which would have required knowledge of medieval paleography. I

have, however, read the medieval legislation in Latin, as extracted from original manuscripts and

reported in transliteration in modern anthologies. The notes in this article are mainly based on the

research of preeminent nineteenth-, twentieth-, and twenty-first-century American and European

experts of Italian medieval history.

This article first describes the peculiar environment of the Italian medieval Comune.Itthen

sketches a few meaningful traits of the fragmented theoretical and practical approach to fair-pricing

theory and practice in that particular historical environment. Subsequently, it provides a few comments

on certain aspects of the present state of the art of theory of price in EU competition law and

economics. It draws some conclusions on potential analogies and differences between the modern

EU and the medieval Comuni approach. It seeks to clarify whether there is any trait d’union between

Italian Comuni medieval legal theory and practice and the modern EU competition law approach.

Given that dynamic innovation is an important component of modern price theory, this article also sets

out in detail some aspects of the modern and medieval innovation systems.

II. The Italian Comune: Its Kaleidoscopic Social, Legal, and Economic

Environment and Its Institutions

Medieval Italy, in particular its Comune system, is often considered as the cradle of modern Western

capitalist mentality

4

—although the Comune environment has different traits to the later protestant

1. MARCUS TULLIUS CICERO,DEORATORE,II, 9, 224-25 (trans. Edward William Sutton & Harris Rackham, 1942) (Historia vero

testis temporum, lux veritatis, vita memoriae, magistra vitae, nuntia vetustatis—“history is witness of the times, light of truth,

life of memory, life’s teacher, messenger of the ancient times”).

2. On Italian “Comune,” see generally DANIEL PHILIP WALEY &TREVOR DEAN,THE ITALIAN CITY REPUBLICS (2013); Stephan

Epstein, The Rise and Fall of Italian City-States,in AC

OMPARATIVE STUDY OF THIRTY CITY-STATE CULTURES, 277–94 (Mogens

Herman Hansen ed., 2000); Stephan Epstein, Town and Country: Economy and Institutions in Late Medieval Italy,46E

CON.

HIST.REV. 453, 453 (1993); 2 GINO LUZZATTO,STORIAECONOMICA D’ITALIA:IL MEDIOEVO (1967); 68 SERGIO BERTELLI,ILPOTERE

OLIGARCHICO NELLO STATO-CITT`a MEDIEVALE,LANUOVA ITALIA (1978). On specific Comuni and City-Republics, see generally

VENICE RECONSIDERED:THE HISTORY AND CIVILIZATION OF AN ITALIAN CITY-STATE, 1297–1797 (John Martin & Dennis Romano

eds., 2002); WILLIAM BOWSKY,AMEDIEVAL ITALIAN COMMUNE:SIENAUNDER THE NINE, 1287–1355 (1981). On the end of Italian

Comuni, see generally PHILIP JONES,THE ITALIAN CITY-STATE:FROM COMMUNE TO SIGNORIA (1997).

3. This depends Comune to Comune. In fact, some Comuni preserved an incredible amount of commercial records, such as

contracts and accounting books. An example is the Genoa Comune, which preserved a significant number of sources. See

QUENTIN VAN DOOSSELAERE,COMMERCIAL AGREEMENTS AND SOCIAL DYNAMICS IN MEDIEVAL GENOA 13–21 (2009).

4. Arthur Clegg, Craftsmen and the Rise of Capitalism,4HIST.WORKSHOP RUSKIN C. 243, 244 (1977).

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