Another aspect of proto-capitalism that has often been overlooked in mainstream economic histories is the notion, even way back then in the Middle Ages, of what the neo-liberals economists of today call the “trickle-down” effect. Trickle-down economists believe that letting the rich stay rich, in fact, letting the rich get even richer, is best for society as a whole, because allegedly the rich, by spending and investing their wealth, will naturally let that wealth percolate down the social strata to the benefit of us all. What did the thirteenth-century equivalent of this idea sound like? According to the schoolmasters, making a profit could be perfectly legitimate, because this gave a merchant or banker the chance to make charitable donations, in effect to be a philanthropist, as the late nineteenth and early twentieth-century model capitalist would be, and thereby being useful to society. According to this argument, a medieval merchant-banker was not just being socially useful by importing and trading goods or making money available to rulers, tradesmen and to other merchants, thereby fuelling the cycle of economic growth, but a merchant-banker was also socially useful by re-distributing wealth to those who had less.
“The scholastic approval of a person who, in a case of urgent and extreme necessity takes what he needs from someone else, has to be seen in this context; it is not a blanket approval of the poor stealing from the rich. In the words of [Thomas] Aquinas, ‘he who suffers from extreme need can take what he needs from another’s goods if no one will give them to him’. This is hardly a programme for social revolution; it is more a reminder of the continuing responsibility of those who have to share with those who have not.” 
We can therefore see the beginnings of the justification for trickle-down economics in medieval scholastic thought. Providing you re-distribute some of your wealth in a philanthropic manner some of the time, it is perfectly sound, morally, ethically and economically, to make a profit from exploiting people the rest of the time. What makes the situation worse in today’s terms is that the religious underpinning that provided at least a modicum of such morality back in medieval times hardly a factor any longer: back then the fear of eternal damnation and hellfire at the very least had one positive effect, in that it was the regulatory force, if you like, that compelled merchant-bankers to donate to charity, found almshouses or hospitals and similar. One of the big ideas of recently re-elected UK prime minister David Cameron is branded under the name of “Big Society”. He would do well to take a look at this medieval model of philanthropy, for it is such a social model that his big society is most reminiscent of.
Cameron’s model of the big society cynically portrays cuts as opening “opportunities” for charities and local communities and privatisation as a means of facilitating “greater local democracy.” The big society is supposed to be, in Cameron’s words, about “voluntarism, philanthropy, social action”, and would “open up public services to new providers like charities, social enterprises and private companies.” The vagaries and uncertainties of so-called welfare provision by non-governmental institutions can be amply demonstrated by a look back at history: from medieval almshouses to Victorian workhouses, social philanthropy has always been more about the person of the philanthropist and only secondarily about the people who were meant to be helped. But what long ago was an advance on the lack of any kind of “welfare” provision, namely a concern for one’s Christian duty to one’s neighbour for the sake of one’s own soul, must however be seen strictly in the light of its proper place in history: what was right for, say, the thirteenth century, is not necessarily right for the twenty-first.
So you may well ask what relevance or significance could the writings of a bunch of medieval theologians possibly have to the contemporary situation? They provide deeper historical insight, to be blunt. The fact that eight centuries ago people were pondering the effects of the free market shows that the idea of capitalism, in its early forms, or proto-capitalism to be more precise, has been around for longer, and most importantly, that the problems of capitalism have been around for longer than most modern commentators think. The theories of the just price can be interpreted as early attempts at regulation, at curbing the excesses of the free market, to use a modern phrase. Precisely because the scholastic intellectuals did not advocate a “programme for social revolution”, they focussed on regulatory measures instead. And that is the very crux of the matter: no matter how well-defined (or badly defined) a theory of fairness, just price or similar appeals to moral conscience may be, it has failed in the long run of imposing effective limits on capitalist exploitation.
Six hundred years before Adam Smith the cream of intellectuals and moralists wrote extensively on ideas of how to regulate, control and impose “just” prices onto the free market, and despite these centuries of injunctions capitalism grew, developed and flourished, that fact should provide food for thought. If attempts at control or regulation of the free market have been unsuccessful in this long view, then perhaps control or regulation of the market from within will rarely work and will generally be doomed to failure. Or to express it another way: reforms of a system from within that system, in this case capitalist economics, may have had short-term individual successes, such as in the Middle Ages persuading the occasional merchant-banker to found an almshouse or hospital for the deserving poor, or in modern times the institution of national health services and pension schemes, but longer-term these “successes” appear as blips on the trajectory of capitalism’s graph of hegemony. If anything, this little excursion into a lesser-known area of economic and philosophical history may permit one to draw the conclusion that reformist approaches to make capitalism “better” might temporarily improve the lot of individual people, such as those lucky few who may have been provided with a place in a medieval almshouse. But after a period in more recent history – the nineteenth and twentieth centuries – when working people had been able to achieve a series of improvements through reforms, the parameters have changed: with the rise of globalisation, the power of the nation state and with it the once progressive role of old-school capitalism has been seriously undermined. It is with bitter irony one must observe that as in the UK various cultural and civic bodies celebrated the two-hundredth anniversary of Charles Dickens’ birth, as a society we are well on track to returning to these Dickensian conditions of poverty. One could argue the clock is being wound back even further than Victorian times, to the era of the merchant princes of later medieval Europe.
But alongside the picture presented of a religiously-inspired philanthropy that David Cameron wishes us to return to, one should be aware that history, and historical awareness, is not so one-sided. There was a much earlier recognition that the wealth of the upper classes is based on the labour of the lower classes. Let’s leave the last word to Theodulf, who way back, at the turn of the eighth to ninth centuries, commented on the common origin of all people, regardless of social, economic or political standing. He may have couched it in religious language, but he was still reminding the rich and powerful that their status was only made possible through their exploitation of the lower orders: “Sweat and labour of the people have made you rich. The rich person becomes rich through aid of the poor. But nature has subjected you both to the same law.” 
 Quotation from: Lester K. Little, Religious Poverty and the Profit Economy in Medieval Europe, London: Elek, 1978, p. 179. Thomas Aquinas (c. 1225-1274) wrote about the concept of “extreme need” as justification for what in other circumstances was termed theft in his key text, the Summa theologia (2a 2ae, q. 66 art. 7), a text which for all its obscurity to most non-medievalist readers has, interestingly, surfaced occasionally in modern times in that very context.
 Quotation from: Pierre Riché, Daily Life in the World of Charlemagne, trans. Jo Ann McNamara, Philadelphia: University of Pennsylvania Press, 1978. Theodulf was bishop of Orléans from 787; the original Latin is in his Contra judices, in MGH Poetae Latini medii aevi, vol. I, p. 516.