 Hi, I'm Peter Adamson and you're listening to the History of Philosophy podcast, brought to you with the support of the philosophy department at King's Hall in London and the LMU in Munich. Online at historyoffilocity.net. Today's episode, Greed is Good, Economics in the Italian Renaissance. Economics is one of those words that has wandered pretty far from its etymological origins, while retaining a connection to those origins. As any Renaissance humanist would be quick to tell you, it comes from the Greek οοικός, meaning house. So, the ancient works devoted to economics dealt with household management, and included discussion of such topics as the relation between man and wife, the raising of children, the ideal location to build one's home, and the handling of slaves. But economics in something like our modern sense did belong to this discipline too, since the householder's art also involved knowing how to handle money. Economic treatises advised on the sorts of property to invest in, the importance of balancing expenditure and income, and the division of tasks among family members and household staff. Equally important was to encourage an appropriate attitude towards wealth. An early example of the genre, written by Xenophon, is a dialogue featuring Socrates. At one point, Socrates is made to say that real wealth is having enough to satisfy one's needs, so that a richer man may be needier than a poorer one, if his desires are excessive. Xenophon's treatise was one of several ancient works on household management that came into circulation during the Renaissance, in this case because a manuscript was brought to Italy from Byzantium in 1427. A few years before that, Leonardo Bruni translated and commented upon another treatise on economics, which was falsely ascribed to Aristotle. This being 15th century Italy, it was only a matter of time before new works were composed in imitation of the ancient ones. One of them was produced by Leon Battista Alberti, who just featured in the last episode when I suggested that his writings on architecture might be seen as part of the tradition of Italian Utopias. He composed a dialogue called On the Family, featuring members of the Alberti clan. In keeping with the expectations of this genre, it devotes a lengthy discussion to the householder's relationship with his wife. The pata familias should oversee all things, like the spider at the center of a web, but delegate many tasks to the wife, since it is effeminate for a man to concern himself over much with this domain. But the wife should not be allowed to deal with financial affairs. The account books should be kept away from her, and the husband should never trust her with secrets. It's up to him to make the economically significant decisions. Alberti, or rather the lead character in his dialogue, has plenty of advice to give here. For instance, it is better to hold land than cash, since land can be enjoyed and is a secure investment, whereas money tends to wind up getting spent. A similar conception of the male householder can be found in another 15th century work on economics, written by Giovanni Caldiera. It compares the role of the husband to that of God overseeing the universe, or the ruler overseeing a city. Here Caldiera is thinking of the doge in his city of Venice, who was set up as a kind of autocrat over the city in a rather authoritarian, and at the time widely admired, example of the mixed constitution that we talked about when looking at theories of republican government. Paging through these works on household management, it's abundantly clear that the households in question are wealthy ones. Xenophon and other ancient writers thought, in the first instance, of a large estate in the country, with a sizable staff living alongside the family. The southern plantations of 19th century America would not be a bad comparison here, especially since slavery was involved in both cases. But in Renaissance Italy, the paradigm of the wealthy man was not necessarily the large landowner, but a denizen of the city, who made his money from trading and shrewd investments. Which inevitably calls to mind the Medici, a family whose political influence was based on their vast fortune, and whose vast fortune came from banking. Theirs was a European-scale venture, with branches of the Medici bank in such cities as London, Cologne, and Avignon, as well as many Italian cities, including Florence, of course, but also Rome, and Florence's rival city, Milan. This enabled them to become the most famous patrons of the Italian Renaissance, who lavished support on intellectuals like Ficino and artists like Michelangelo. Nor were they the only family that was quite literally enriching Florentine culture. There was also, for instance, the Rukelei family, which used its staggering wealth to hire the aforementioned Alberti to design a stunning palazzo that still stands today. The ancient genre of household management needed to be updated for this new reality. It was time for someone to put the economics into home economics. This someone turned out to be Benedetto Cottrulli, whose 1558 book On the Art of Trade, written during an epidemic like this episode, as it happens, combines traditional elements of the genre with advice for the man who wants to be a successful merchant in 15th century Italy. Cottrulli was not Italian, though. He hailed from Ragusa, which is modern-day Dubrovnik, but studied philosophy and law in Bologna and lived in a number of Italian cities, especially Naples. And he did write in Italian. A preface to the work explains his decision to write in the vernacular rather than Latin, to reach a wider audience. Familiar aspects of the treatise include his remarks on family life, for instance that a good relationship with one's wife should involve no violence, unfortunately followed by the advice that if you do find you must beat your wife, you should at least keep it secret to protect your reputation. This appalling passage notwithstanding, it seems that Cottrulli considers himself to be practically a feminist by the standards of his day. He boasts of his decision to have his own daughters highly educated. The more innovative aspects of the text are those that have to do with what Cottrulli calls mercatura, or trading, which he defines as an art, or rather, a discipline, practiced between qualified persons, governed by the law, and concerned with all things marketable, for the maintenance of the human race, but also in the hope of financial gain. It is an art learned especially through experience, which to Cottrulli's mind explains why no one has ever tried to lay down its principles in writing before, but thanks to his own hands-on knowledge, he is able to give his reader many useful pointers. One of them is particularly noteworthy, at least to those interested in the history of accounting. Cottrulli is the first to describe the practice of double-entry bookkeeping, where debts and credits are written down separately in two columns, though other documents show that merchants had already been doing this for a century and a half. He also offers practical, even psychological, tips about buying and selling, as in passages about negotiating favorable prices for one's wares while being careful not to scare off the buyer. But the topic on which Cottrulli has the most to say is ethical character. The merchant needs to have a reputation for honesty. Unlike Machiavelli, Cottrulli assumes that this will be achieved by actually being honest. To make money, the merchant must be willing to endure hardship, ignoring the needs of the body to make his sale while rigorously observing moderation, even in less pressing circumstances. Cottrulli thinks fortunes are built slowly and steadily, not by greedily snatching at every promising opportunity. Stability is his watchword. For this sake, he takes a leaf out of Alberti's book by recommending the acquisition of land outside the city. In fact, it's better to have two villas in the country, one to produce income, the other as a vacation home. Thanks, Benedetto, I'll make a note of that. Though I admit to being less impressed by the surprisingly long rant about how moral defects are shown by the way men wear their hats. Still, I had to take my hat off to Cottrulli for making such a long and impassioned case for the proposition that the pursuit of wealth and the pursuit of virtue make for a happy marriage, as happy as the one between the merchant and his demure ideal wife. He was not alone in this. You might remember that several Renaissance humanists accepted Aristotle's proposal that the so-called external goods, like health, family, and friends, should be part of the best life. Among those external goods was money. Great wealth makes possible great virtue, especially when it comes to generosity, though one might also think of the financial outlay required for military adventures and the glory they bring. Thus, Leonardo Bruni wrote in a letter, wealth should be striven after for the sake of virtue as an instrument, so to speak, for bringing virtue into action. He applied the same idea in his presentation of the work on economics, supposedly written by Aristotle, commenting in the preface to his translation, As health is the goal of medicine, so riches are the goal of the household. Or riches are useful, both for ornamenting their owners as well as for helping nature in the struggle for virtue. Money-making and, just as important, money-spending were part of the active, engaged life of practical virtue recommended by Bruni and other figures who espoused what Hans Baron called civic humanism. Salutati, another thinker whom Baron included in that movement, anticipated cottrulli by seeing the honest and energetic merchant as a paradigm of virtue, even calling such men most blessed for the service they give to the community, for without the merchant, the whole world would be unable to live. A similar note was struck by Christine de Pizan, who said that But there's an obvious problem here. It seems evident that the point of banking and trading is not really to achieve virtue or help the city. The point is to get rich. As even the moralizing cottrulli said in that definition of the merchant's art I quoted a moment ago, this art is practiced in the hope of financial gain. Even if economic activity is connected indirectly to virtue and is also vital to human activity, as he also says, it would be very implausible to say that merchants are motivated only by such high-minded concerns. Cottrulli walks a fine line here, allowing the merchant to seek wealth as an aim, but condemning the excessive love of wealth that goes by the name of avarice. Those who make gold and silver their god, he says, should be ejected from society, or still worse, have liquid gold and silver poured down their throats. Maybe the screenwriters of Game of Thrones are fans of cottrulli. A similar attitude may be found in Alberti's dialogue about family matters, which says that avarice is something one should wish on one's worst enemy, since it destroys both reputation and happiness. For him, the avaricious man is not miserly, but rather spendthrift. Alberti does accept the Aristotelian doctrine that external goods, including wealth, are indeed part of the best life, but he thinks the secret is to earn enough to live comfortably, while restraining one's outlay to the necessary expenses required to keep one's family in honorable condition. Actually, unnecessary expenses are allowable too, if they do no harm. Under this heading, Alberti naturally mentions beautiful books. Once a humanist, always a humanist. But even if profit-seeking was seen as an acceptable motive, there were constraints to observe. Preachers of the time campaigned against the wickedness of avarice, with one of the foremost figures in this crusade being San Bernardino of Siena. We have a series of sermons given by San Bernardino attacking greed and especially the sinfulness of usury and other dishonest financial dealings. These diatribes were part of a long-standing tradition, in which schoolmen and clerics laid down moral lines that merchants must not overstep. We looked at these restrictions back in episode 286, devoted to medieval scholastic treatments of economic issues. But again, this is the 15th century, when everyone's a critic, and the critics are getting criticized. The preaching of San Bernardino did not much impress Poggio Bracciolini, a humanist we've already met numerous times. You may remember how he rediscovered Lucretius, or failing that, you might remember how he got into a fistfight with George Chabizuntius. As Poggio explained in a letter to his friend Niccolò Nicolì, he felt that San Bernardino and other churchmen had not attacked avarice properly. He thought he could do better, which led him to write a dialogue called simply, On Avarice. The work is basically a greed sandwich. It starts and ends with speeches about the evils of lusting after money, but in the middle, there is a speech In Favor of Avarice. This startling material is delivered by Antonio Loschi, a secretary of the papal curia. His aim is to refute the opening diatribe against avarice, which presents itself as an improvement on the preaching offered by men like San Bernardino. The third speaker, who in turn refutes Loschi, is a theologian from the Greek-speaking East, who says that the defense of greed must have been a sort of rhetorical exercise. Poggio also has Loschi introduce that defense of greed by alluding to the academic skeptics who cultivated the skill of arguing on both sides of any issue. So on the surface level, it would seem that Poggio is sincere in his desire to warn the reader against avarice with the middle section included only, and quite literally, for the sake of argument. But I'll say it again, this is the 15th century, and humanists are delighting in the use of irony and literary gamesmanship, so readers have disagreed about Poggio's own attitude. The attacks on avarice can be read straight, or also as a kind of parody, with a pastiche of San Bernardino's moralizing disapproval set against a mock vindication of a more realist or cynical attitude. If Poggio really did want to reject avarice, then his work belongs to another genre, one I find even more interesting than treatises on household governance. I like to call it the philosophical own goal. This happens when authors present arguments for positions they want to reject, which readers find more compelling or intriguing than the position the authors want us to accept. There are plenty of examples. From antiquity, we might think of Simplicius quoting Philoponus so that he can refute him. Since modern readers find Philoponus far more interesting, there's an English translation that only keeps the Philoponus and jettisons all of Simplicius's replies on behalf of Aristotle. Speaking of whom, one might also mention Bertrand Russell's remark about his politics, I do not agree with Plato, but if anything could make me do so, it would be Aristotle's arguments against him. But the most influential philosophical own goal is probably Descartes' use of absolute skepticism in his meditations. Many more people have been convinced by his skeptical doubts than his way out of them. And so it is here, with the arguments given to Blosky in Poggio's On Avarice. Not only do they offer a refreshing break from predictable laments over greed, they are actually fairly convincing. A true commitment to avarice, says Loesky, requires many impressive qualities such as vigor, endurance, and intelligence. And plenty of admired rulers have had great appetite for wealth. Such appetite is, furthermore, natural, at least if we agree with St. Augustine that avarice is the desire to have more than enough. By this standard, pretty well everyone is avaricious, with the very occasional saintly exception, but this is a freak of nature, like a newborn human with the head of a pig. Moreover, avarice does not undermine society, as its critics claim. To speak with Gordon Gekko, greed is good, because it motivates people to acquire the wealth used in charity, patronage, and the building of churches. What are cities, states, provinces, and kingdoms, as Muskie, if not the workshops of avarice? And by the way, it's for the sake of wealth that people become experts in philosophy. This was certainly true in my own case. I got into philosophy and philosophy podcasting for the sake of the fast cars and champagne breakfasts. Fortunately, I am a patient man. It seems at any rate that economic theory is particularly apt to produce philosophical own goals. You may recall an example from late Byzantium, when Nicholas Cavasilas's treatise against usury gave a rather convincing devil's advocate case for allowing this practice. You might assume that in Renaissance Italy, the case for usury must have won out. Otherwise, how could the Medici and others get so rich off of banking? But not so. Even Crutuli, for all his praise of the merchant's life, condemns usury, which he succinctly defines as gain made on money loaned. But he also criticizes theologians who decry business practices that are perfectly acceptable, despite themselves having no expertise in the field, like a blind man with colors he scoffs. For Crutuli, the difference is made by risk. So long as an investor is taking a chance of losing his money, then he's morally in the clear when he profits from his investment. This would find agreement with none other than San Bernardino, who deems it acceptable to take reward from one's labor and also from a willingness to risk one's wealth. So it looks like merchants are mostly going to be in the clear. It's fine to profit from a trading expedition, since the boat you've helped to finance might sink. The bankers, too, have some cover, insofar as they, too, are investing money at risk. But what about the guaranteed interest they paid out on money invested in their banks? This looks patently usurious, but was often presented as a voluntary or discretionary gift generously given by the banker to the investor. A ludicrous suggestion, of course, but if a fig leaf was good enough for Adam and Eve, then it was good enough for the Medici. Interest on loans was also regularly concealed by changing money between the many currencies, then circulating in Europe and smuggling the interest into the exchange rate. The churchman Sant'Antonio of Florence called foul here, saying that the deals did not involve enough risk and thus constituted usury. As one historian has remarked, this was a rather strange attitude on the part of the Archbishop of the leading banking center in Western Europe. Clearly then, both the intellectuals and the financiers of the day were well aware that money itself has a value, and that this value can change. In fact, that was a way of defending the practice just described. A set agreement to exchange currencies at a future time was always risky because of fluctuating rates. Even without comparing different denominations, there was the phenomenon of inflation, which began to be noticed in our period. A treatise about coinage, written in 1588 by Bernardo Davanzati, noted that an influx of precious metal from the Americas was causing gold and silver to lose value. If this went on, Davanzati observed, some other bases of currency would need to be found, or one would have to resort to trade by bartering. Whether by barter or coinage, it was commonly accepted that there was a just price for each economic exchange. San Bernardino followed scholastic precedent by defining this in terms of community practice at a given time and place. The concept of just price is also discussed in Cottrulli's book of advice for merchants. He cites the Roman law, still in force in his day, that a sale is null and void if less than half of the just or fair price is offered. Of course, that leaves a lot of margin to cheat, as Cottrulli recognizes, but as he says, not everything immoral is also illegal. He wraps up many of the ideas we've just looked at in his definition of the reasonable profit a merchant should be aiming at. It is determined by, uncertainty of gain, a true and honest exchange between the parties without interest, acting only with diligence and prudence, in view of the risk and effort taken on. Before I myself wrap up, I want to mention one more philosophical own goal found in a Renaissance treatise on economics. It was written by Wieczak Dini, whom we have met as a historian and critic of Machiavelli's political thought. This versatile author also composed a dialogue on what we now call progressive taxation, that is, taking a larger percentage of income from rich people than from poor people. True to form as a defender of the more noble elements of his republican city, Wieczak Dini is totally against this. His spokesman in the dialogue says that taxation should not be used to ameliorate inequality between rich and poor. To the contrary, the government's aim should be to conserve each in his rank. Equality should indeed be a goal, but only equality before the law, not full social or economic equality. But readers may be more persuaded by the dialogue's proponent of progressive tax. He says that a flat taxation rate is unfair, because the poor can afford to pay a smaller percentage of their income without it impacting on their lifestyle. Ideally, this hypothetical opponent would like to see class distinctions eliminated altogether, which is reminiscent of the communist proposals in the utopias we looked at last time. But, even leaving aside such idealistic objectives, the opponent says that the progressive tax is in fact equal, because it causes an equal amount of discomfort to everyone. Actually, Wieczak Dini's mouthpiece does have an interesting response to this, which is that economic need is relative to one's status. It may be a real hardship for rich men to be unable to afford fine clothes, since such clothes are expected in the circles he moves in. A striking feature here is the tacit assumption that the total amount of wealth in a given community or in the world as a whole is fixed. The advocate of progressive tax in Wieczak Dini's dialogue offers a very Florentine image to illustrate. If you have a certain amount of cloth for a certain number of people, and use it to make elaborate robes for a few of these people, there won't be enough to clothe everyone. If the poor gain, the rich must lose, and vice versa. There is no hope here of a rising tide that might lift all boats. It's the economic equivalent of the zero-sum political world envisioned by Machiavelli and by Wieczak Dini himself. Power and resources move from some hands to others, but they never increase overall. Indeed, this was assumed even in the fantasy context of Renaissance utopias, which speak of wealth passing around freely from hand to hand, but not of everyone getting rich. Perhaps to achieve this, everyone would have to become a philosopher. Not because they would get fast cars and champagne breakfast after all, but for the reason given by Xenophon's Socrates. Philosophers know that true wealth lies in knowing what you really need, and in having no less than that. I realize you'll nonetheless be greedy for more, so you may be rather disappointed to hear that this is the last episode before our summer break. As it happens, this timing is pretty good, because with this look at Renaissance economics, we've finished off a mini-series of episodes focusing on political topics, which featured such figures as Savonarola and Machiavelli. When we return, we'll be kicking off another mini-series with its own fascinating protagonists like Pietro Pompanazzi and Jacopo Zabarella. In these episodes, we will address the question, what was going on in the universities of Italy, while all these historians and humanists were changing the face of philosophy? Plenty, as it turns out. Platonism and the Hellenistic schools were not the only ancient traditions being renewed and revived in the Renaissance. There was also Aristotelianism and its more dangerous intellectual offspring, the Varroism. It would be an excellent investment of your time, without any risk unless you count the occasional pun, if you join me again on September 13th, when we'll start to look at Aristotelianism in the Italian Renaissance, here on The History of Philosophy Without Any Gaps.