Scholastics Competition and Price Theory

The Views of the Scholastics

Competition, Supply and Demand, Price

Whether as a result of the arguments of the scholastic philos­ophers, or due to the static nature of economic life generally, prices remained fixed until the close of the Middle Ages. Essen­tial foods were sold at prices controlled by the public authority, especially in England. In England, too, the courts exercised some authority in setting wage scales for labor. Generally speaking, however, it was the guilds which determined prices and stand­ards of quality for most commodities, in addition to prescribing conditions of work and regulating the supply of materials.

Regardless of the teachings of the ecclesiastics and the power of the guilds, the market had to be reckoned as a force controlling prices. Droughts, wars, and disease were natural factors which influenced both the supply and the demand for goods. The tendency for prices to rise or fall as a consequence of any of these could not be denied. For example, the Black Death, occurring about 1350, so decreased the working force that wages rose pre­cipitously. Local magistrates were empowered to set wages and to enforce the terms of existing contracts. In spite of legal restric­tions and the heavy penalties inflicted for violation, wages and the prices of commodities continued to rise. The information available on the general course of agricultural prices from the 13th to the 18th centuries indicates that prices were constantly fluctuating during these years. Devaluations in currency brought about by monarchs in their efforts to increase the state's revenue also affected the price level, causing prices to rise several hundred percent during the course of a few centuries.