Economic Functions of the State

Economic Functions of the State

Another group of ideas held by the scholastics concerned the economic functions of the state. In general the independent domestic economy idea was applied to a large group, or, in other words, the state was re­garded as a sort of great private or domainal economy. The position of taxation illustrates the situation. In the twelfth and thirteenth centuries, at least, the office of the ruler seems to have been regarded as private property. His revenues came from his estates and certain prerogatives, and there was no system of taxation in the modern sense, for that represents more modern economic thought.

The particular functions proper to government were the maintenance of population and provision for the poor, the establishment of safe and free roads — a Roman conception backed by citations from the Bible, a system of weights and measures, and a special coinage. The argument for the main­tenance of weights and measures was that it would decrease quarrels and litigation, and that the Bible says, "God has ordered all things by number, weight and measure."

The duty of the medieval ruler to provide an exact and un­changing coinage was constantly emphasized. One reason ad­vanced by Aquinas why a prince should provide money was that he could thus get food for his subjects in time of war. Vir­tually without exception the right of coinage and monetary control was possessed by him, and many laws were passed to prevent counterfeiting and clipping. The exportation of coin, as also the circulation of foreign coins, was frequently forbidden. This regulation of money was a logical concomitant of the doc­trine of just price: the supply of money being small, relatively slight changes in its quantity might affect prices, and the diffi­culties of transport made readjustments slow.

It is not to be supposed, however, that the medieval ruler was generally efficient and socially minded, or that the various laws referred to were effective. Public administration was often corrupt and inefficient, and had little power to enforce its rules. Weights and measures as well as coinage, were actually in a chaotic condition. Under Feudalism and towns, the economic life of the state was disintegrated. Transportation and exchange were burdened with tolls and duties. Each town sought to restrict and control its market ("staple") for the benefit of its own trade.