Sacred Trust: The Medieval Church as an Economic Firm [Hardcover]

Robert B. Ekelund (Author), Robert D. Tollison (Author), Gary M. Anderson (Author), Robert F. Hï¿1/2bert (Author), Audrey B. Davidson (Author), Aubrey B. Davidson (Author)

Book Description

Publication Date: October 31, 1996

Without meaning to be irreverent, it is fair to say that in the Middle Ages, at the height of its political and economic power, the Roman Catholic Church functioned in part as a powerful and sophisticated corporation. The Church dealt in a "product" many consumers felt they had to have: the salvation of their immortal souls. The Pope served as its CEO, the College of Cardinals as its board of directors, bishoprics and monasteries as its franchises. And while the Church certainly had moral and social goals, this early antecedent to AT&T and General Motors had economic motives and methods as well, seeking to maximize profits by eliminating competitors and extending its markets.
In Sacred Trust: The Medieval Church as an Economic Firm, five highly respected economists advance the controversial argument that the story of the Roman Catholic Church in the Middle Ages is in large part a story of supply and demand. Without denying the centrality--or sincerity--of religious motives, the authors employ the tools of modern economics to analyze how the Church's objectives went well beyond the realm of the spiritual. They explore the myriad sources of the Church's wealth, including tithes and land rents, donations and bequests, judicial services and monastic agricultural production. And they present an in-depth look at the ways in which Church principles on marriage, usury, and crusade were revised as necessary to meet--and in many ways to create--the needs of a vast body of consumers. Along the way, the book raises and answers many intriguing questions. The authors explore the reasons behind the great crusades against the Moslems, probing beyond motives of pure idealism to highlight the Church's concern with revenues from tourism and the sale of relics threatened by Moslem encroachment in the holy lands. They examine the Church's involvement in the marriage market, revealing how the clergy filled their coffers by extracting fees for blessing or dissolving marital unions, for hearing marital disputes, and even for granting permission for blood relatives to wed. And they shed light on the concept of purgatory, showing how this "product innovation" developed by the Church in the twelfth century--a form of "deferred payment"--opened the floodgates for a fresh market in post-mortem atonement through payments on behalf of the deceased. Finally, the authors show how the cumulative costs that the faithful were asked to bear eventually priced the Roman Catholic church out of the market, paving the way for Protestant reformers like Martin Luther.
A ground-breaking look at the growth and decline of the medieval Church, Sacred Trust demonstrates how economic reasoning can be used to cast light on the behavior of any complex historical institution. It offers rare insight into one of the great historical powers of Western civilization, in a analysis that will intrigue anyone interested in life in the Middle Ages, in church history, or in the influence of economic motives on historical events.

Editorial Reviews

Review

"Sacred Trust is a breakthrough work, an example of how economic models can illuminate all kinds of phenomena which hitherto we would not have approached with economics in mind."--Andrew M. Greeley, Professor of Social Science, The University of Chicago

"This is a courageous and fascinating book. It is always difficult to apply critical scrutiny to institutions that have long been held to be sacrosanct. But scientific honesty suggests that we take explanatory insights to the limit and often against our romantic yearnings."--James M. Buchanan, Center for Study of Public Choice, George Mason University

"Sacred Trust goes beyond the traditional spiritual, political, and social interpretations of the theory and practice of the medieval church to offer a provocative, if not somewhat controversial, economic interpretation."--Journal of Church and State

About the Author

Robert B. Ekelund is Lowder Eminent Scholar in Economics at Auburn University. Robert D. Tollison is Duncan Black Professor of Economics at George Mason University. Gary M. Anderson is Professor of Economics at California State University, Northridge. Robert F. H�bert is Russell Foundation Professor of Entrepreneurial Studies at Auburn University. Audrey B. Davidson is Assistant Professor of Economics at the University of Louisville.

Product Details

• Hardcover: 224 pages
• Publisher: Oxford University Press, USA; First edition (October 31, 1996)
• Language: English
• ISBN-10: 0195103378
• ISBN-13: 978-0195103373
• Product Dimensions: 9.6 x 6.4 x 0.9 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.5 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #1,036,074 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

14 of 18 people found the following review helpful:

2.0 out of 5 stars silly book; interesting, but not serious, April 3, 2004

By 

I. Gimlet "i_gimlet" (Honolulu, HI USA) - See all my reviews

This review is from: Sacred Trust: The Medieval Church as an Economic Firm (Hardcover)

Although "Sacred Trust" is a fascinating idea, it is not carried through in a useful or meaningful way. Perhaps, it is an interesting example of how contemporary economic models might be used to investigate organizations with stated non-economic purposes, but it definitely does not come to any useful conclusions with regard to the Catholic Church in the medieval period.

The authors state, on page 6, that they intend to "model the Church as a corporation that marketed and 'sold' a set of indentifiable 'products' in a rational, cost-concious, 'profit'-maximizing manner. ...[on the theory that] it improves our understanding of many complex (and seemingly irrational) historical events."

In this model, the "product" sold is "salvation", which the authors define as a "credence good", which apparently is an economic term for a product which the buyer purchases without there being an objective confirmation of its value. The Church is a so-called "M-firm", which means that it is a franchising corporation, more or less.

All fine and good, although one might argue that there is considerable value to peace-of-mind, which purchasers might know they've received or not, and which, today, represents a considerable portion of our economy in the form of Psychoanalysis, and thus we can derive a cost-comparison. However, the silliness of the book is not revealed in this moment.

First of all, although the book defines the Church as an M-firm, it does not make a consistent discrimination between "downstream" franchise profits and "upstream" profits. Indeed, in one of the very few moments when the authors actually produce numbers, they assert that the income of the "Church" was 200,000 florins in the early 15th century, plus 100,000 from control of the alum monopoly.

This is nonsense. To begin with, if this were so, it would mean that the Church, as a whole, in possession of fully 1/3 the land of Europe, had an annual income equal to 1/5th that of the Venetian Republic, and 1/3rd of that for France and less than 1/2 of that for England for the same time-period. This strikes me as highly unlikely.

What, in all likelihood, is going on here is that the authors took note of the liquid-income stream to Rome itself per annum, which, of course, was quite a bit less than the annual receipts for the entire Church. For example, it was illegal in England in the 15th Century, for specie to be exported. Therefore, all funds collected by the Church in England would not be transferred to Rome except through bills of exchange and no merchant house would likely be able to meet all the Church revenues in England, nor, given the regulation, would they be likely to want to. Moreover, it does not include all those immoveable assets like buildings, land and the commodities one can derive from land that were accruing to the Church. Since these lands were not the property of the local ecclessiastical authorities--although the usufruct of them might temporarily be--but rather really that of the Papacy, it would seem that with some research, one might be able to come to an average income of the Papacy in order to make later economic deductions. The authors make no such attempt.

Beyond this, the authors make no attempt to determine the value of the Church brand, being so important to purveyors of credence goods, as opposed to their other income-producing efforts like the products of lands, court services such as contract disputes, broadcasting (in the medieval period with low literacy rates, the church was the most effective disseminator of information or disinformation), and banking.

The authors furthermore regard the Church as a monopoly organization, and speak to its conflicts with secular authorities in this vein. While it is absolutely true that the Church came into conflict with secular authorities, the authors decide to sidestep the two most important historical events in this regard: the investiture controversy and the establishment of the Hospitallers and Knights Templar. How they could decide to ignore the two most important examples of the conflict in their study, I have no idea.

An investigation into the investiture controversy, for example, might have helped the authors deal with the question of the Church's regulation of marriage. The authors state that the 6th century Church extended the prohibition of endogamy to "marriages between fifth cousins--at a time when secular law contained no prohibitions against marraige between first cousins." (p. 93) True, but then, in the 6th Century the Church was an arm of the State, and remained so well into the investiture controversy (and in certain instances arguably until well after it). The distinction implied, therefore, between secular and ecclesiastical, only really applied to those subjects or citizens who were not Catholic. Perhaps it served to benefit Church revenues, but absolutely not at the expense of the State, which the authors define as a competitor. Indeed, in all likelihood, the prohibition was imposed at the behest of the State.

There are too many examples of this type of unseriousness to mention here. I seriously doubt whether the authors submitted their manuscript for review by a serious scholar of the medieval period or, if they did, I imagine that they decided to publish without taking into consideration his observations. They explicitly state that the work is not exhaustive, but, if Henri Pirenne could put together a serious work about the economy of medieval Europe in under 200 pages, I imagine they could about the economy of the Catholic Church.

In short, should you have the time for a mildly entertaining short work which suggests a number of irreverant ways of looking at the Church's economy without providing convincing cases for any of them, this is the book for you. I wish that a serious economic historian, someone as astute as Carlo Cipolla for example, would take a look into the issues presented by Sacred Trust, because they are certainly worth serious investigation. The authors apparently did not feel it was worth the effort.

It does contain a fairly useful bibliography, on the other hand.

4 of 6 people found the following review helpful:

5.0 out of 5 stars Ground-breaking and paradigm-shifting, January 21, 2003

By 

Glenn McDorman (Denver) - See all my reviews
(VINE VOICE)    (REAL NAME)   

This review is from: Sacred Trust: The Medieval Church as an Economic Firm (Hardcover)

Ekelund and his team of microeconomists have put together a convincing argument that the Catholic Church operated as an M-firm during the medieval period. Although the book comes in at just under two hundred pages, it contains several excellent examples of the Church making decisions and opperating in this capacity. Much recent economic scholarship has been aimed at using contemporary microeconomic models to analyze organizations that do not fit into the traditional boundaries of economics; Sacred Trust follows this trend, but takes it to a new level. Rather than look at modern institutions (e.g. the U.S. Army and the Soviet Union) Ekelund and his team have gone back over a millenium to examine an institution which most people (historians included) have virtually ceased to analyze. In doing this they have not only broken new academic ground, they have shifted one of the most rigid paradigms in academia. The authors state throughout Sacred Trust that their work is by no means comprehensive, but that they simply wanted to show what could be done with the latest economic models. Hopefully the work will be incouraging to other economists and historians, who can indeed take the work further. Sacred Trust is well worth your time and your money.

Note to historians: do not be discouraged -- it is possible to ignore the annoying MLA format.

3.0 out of 5 stars VALUE OF THE CONCLUSIONS ARE LIMITED, August 22, 2011

By 

A.J. Deus (Vancouver, BC, Canada) - See all my reviews

This review is from: Sacred Trust: The Medieval Church as an Economic Firm (Hardcover)

The Sacred Trust is interesting in its approach and execution. Unfortunately, the analysis starts with the train already rolling in the Middle Ages. In order to understand the force of religion, economists must start at the very beginning and study its economic doctrines and outcomes through time. To do this, a significant rewrite is necessary because much of the extant material is fraudulent. This is very difficult and prone to new errors. When I look at the conclusions in the Sacred Trust, Islam is staring at my face that there must be a paradox in claiming the Catholic Church as a driver in economic growth in its self interest to protect and expand its mercantile monopoly. It is like a husband beating up his wife and then claiming to having positively contributed to her growth by bringing her to the hospital. Hence, the value of the conclusions in Sacred Trust is limited.

After exhaustively going through Judaism, Christianity, and Islam, The Great Leap-Fraud (my publication) comes to the conclusion that the economic growth was collateral damage from an increasing loss of authority. The church jump started the economy unintentionally and at a very specific time. I do not know whether this theory is closer to reality. Economists have a minefield ahead of them to explore.

AJ Deus, author of the Great Leap-Fraud