Manorialism and Chartalism
By Graham Noblit
May 10, 2021
A Disclaimer: I am interested in political economy and political evolution so unsurprisingly, I read a fair bit of history and ethnography. Chartalism/neochartalism deeply interests me because it is one of the few attempts, that I am aware of, to deeply understand the construction of some of the key institutions of history – money, markets, and the state. I like the neochartalist story because it fills a niche I generally see ignored. I do not know enough fiscal history to determine whether it is faithful to history. Being more interested in institutional design than institutional history, I also do not feel compelled to do the incredible amount of work, only properly done by a historian, required to assess its historical veracity. Similarly, I am neither a historian nor an economist – heterodox or otherwise – but instead a cultural evolutionist. I think about how institutions evolve (generally political ones) and how they impact psychology and behavior. I read history and economics but do not do them which means that I’m not in the weeds on these topics.
This morning I read a piece by Sarris (“The Origins of the Manorial Economy: New Insights from Late Antiquity”, 2004) on the origins of manorialism or what are referred to as bipartite estates. These are estates whereby tenants directly cultivate a lord’s land as well as hold possession of the tenements that they cultivate themselves and maintain control over its proceeds and are generally associated with the manorialism and feudalism of the Middle Ages. The question Sarris is interested in is whether bipartite estates emerged in late antiquity or were a novel institutional innovation of the early Middle Ages. In this discussion, Sarris makes some points I thought were interesting for the evolution of political economy.
I quickly sketch out Sarris’ argument first:
The Diocletian Reforms of the 3rd century construct new imperial posts which provincial powerholders could fill should they spend the money on education and patronage. This in turn extended their hold over their local society while integrating them into the social world of imperial life. Simultaneously, the senate of Constantinople grew, and the newly minted imperial bureaucracy fills it, strengthening provincial-imperial relations but also empowering provincial powerholders with imperial authority and political, social, and material resources. These increases in authority permitted powerholders to dominate their respective local political scenes. Patronage networks consolidated through these individuals with local landowners or peasants attaching themselves to political powerhouses to lessen their tax-burden (tax-evasion). This created fiscal problems for the state such that in 360 Constantinus II attempted to ban such patronage networks with similar efforts made throughout the 4th and 5th centuries. Finally, in the 5th century, the state legitimizes already committed land seizures.
Importantly, there are economic consequences. The major landowners wanted money and large amounts of it. They did not produce goods on their lands autarkically consume. Why is this? They were involved in the imperial urban social scene. To compete with their peers, they needed to engage in conspicuous consumption. Powerholders built large landholdings and used them to produce a surplus to be sold at market for money. That money was used by powerholders to engage in euergetism (the distribution of wealth such as through imperial games or parades) and conspicuous consumption. This, Sarris suggests, is a major source of aggregate demand and thus growth. Downstream, commodification of agriculture appears to have been associated with technical innovations as well as increasing integration of regional economies, measured by the distribution of North African Red Slip ware.
There are a few things to highlight here:
The Role of the State
The state is a prime mover in institutional construction. Because of its privileged role, it can construct an imperial bureaucracy. Creating this bureaucracy has network consequences for the broader society – it permits local and somewhat regionally constrained powerholders to connect to imperial and urban networks. Consequently, local agents can grow their power.
This story is pretty chartalist but not intentionally so. One of my issues with chartalism is that it is not (and perhaps has little interest in being?) a historical story but is more of a functionalist or stylized story. When I see chartalism explained it is usually in a manner that I find unconvincing with respect to a historical sequence of events – it requires far too much foresight from the state. The state knowingly constructs taxes and markets such that it can acquire resources. A better formulation would explain how the state or sets of actors with the privileges we identify with the state (elite coalitions can serve identical roles or even privileged informational actors who set others’ beliefs) construct money and markets blindly or unknowingly because of pursuing more obvious objectives. Alternatively, the states which do construct modern money will do so because of some contextual or culturally/historically specific reason. In other words, chartalism always feels like it is missing something to me. That something is the answer to the question of “why did THIS state at THIS point in time construct modern money while other states couldn’t figure it out?” Seaford’s Money and the Early Greek Mind is an attempt to do this. Be warned – he is a particularly dense and difficult writer.
Prestige Transmission
Preferences are socially constructed and not innate. They are a function of what might be modeled as cultural evolutionary processes – social interaction and learning. Although the field of cultural evolution has a little discussed problem whereby there are too many ways in which we learn from each other, one of the most important transmission mechanisms is prestige transmission. Prestige transmission can be painted in a variety of lights and often is by various authors (this mutability is concerning methodologically) but the gist of it is that we learn from those who are successful according to some metric. Because cultural learners are naive with respect to the details of what they need to learn, we generally use who others pay attention to as a cue of expertise (prestige). I am going to use prestige a bit more liberally to just mean relative attention. In the Roman story above, euergetism or the throwing of games might earn an individual such prestige and attention relative to their peers. If Marcus throws a larger parade than Cornelius then Marcus gets more attention. Why? Because in throwing the larger parade he has signaled he can recruit broader networks, more wealth, etc. than Cornelius could. Conspicuous consumption demonstrates one’s access to all the resources valued within such wealthy circles. Note that such resources are not only the material ones like land-proceeds but also social networks or the skills required to manage and commandeer such resources to one’s own or collective goals. Prestige however is somewhat limited. Individuals must compete for prestige and status.
According to Sarris, this conspicuous is what drives growth! But the consumption is nothing innate. It emerges because of a particular historical (or rather, cultural and institutional) moment. Moment is deceptive – a better word would be history. Because wealthy individuals compete among their class for status they are driven to increasingly “consume” (really, disperse goods) in increasingly visible and ostentatious ways (so that they will be noticed above their competing peers and thus derive the benefits of attention).
The powerholders compete for prestige and access to centers or roles of power. To do this, they participate in conspicuous consumption. Therefore, they produce. They do not produce for personal consumption nor for profit per se. Profit instead exists for a political or socio-political purpose – to achieve status. This is a story about how aggregate demand relates to the origin of preferences and I must say, I find it quite an interesting one! Growth ultimately stems from a very specific institutional and socio-political arrangement. There are a lot of dominos in this chain, however. For instance, if Europe were China and wet-paddy rice were the dominant crop rather than dry grain crops, such as wheat and barley, manorial farms defined by the cheap management of labor would be impossible and aggregate demand would not see the same expansion and perhaps the Roman senatorial families would never achieve the same degree of wealth and power (I refer the reader to Francesca Bray’s “Rice Economies”)!
Causal Chain for Conspicuous Consumption
The state constructs a bureaucracy composed of local actors who then use their new roles to grow their political prestige and power. A part of this is to consume ever larger and more visible amounts. The state has a role here – through its executive organizational action it grants authority to its agents. Its agents however are the ones to both expand demand through conspicuous consumption for both money and for real resources.
This somewhat contradicts the typical chartalist story which highlights the state as directly constructing demand for money (through taxation) and as recruiting resources. Instead, the powerholders who fill the imperial bureaucracy do this. They drive demand for money through the sale of goods at market (note this is certainly not a story about the origin of the demand for money). Similarly, taxes do not drive production of real resources (what the state ultimately wants). Instead, taxes drive the political processes (tax evasion!) that constructs the hyper-powerful landed class which constructs demand and monetization. Again, Sarris’ story is quite late in history and that money and markets have already long existed in Imperial Rome.
I have been thinking recently about what the “role” of the state is in neochartalism. All the state is doing is using its privileged position of having direct access to the entire community to solve a key coordination issue. Money like all institutions or coordination games has this annoying startup problem. If institutions require coordination (multiple people assuming the correct roles) then how do any new institutions emerge? If I want to use a dollar to purchase a good, then I need the recipient to want that dollar. If the dollar does not already have some value, nobody will accept it. The state solves this issue with taxation. The state arbitrarily says everybody owns them fifty cents on the first of the month constructing demand for dollars. Why do taxes construct demand? Because of enforcement and sanctions – if you do not pay your fifty cents you get your hand loped off and presumably, we value having our hands. This is the incentive part of the story – why individuals “want” (willing is a better word) to pay their taxes.
However, we do not actually need any entity we recognize as a “state” to directly solve these issues. Anything that correlates behavior or preferences among a population can do this (prestige transmission serves can achieve such correlation). Sarris makes this clear – local power brokers faced identical incentives across Rome because of the construction of the bureaucracy. But local power brokers are doing all the work in constructing demand for resources and money, work that the state is directly trying to obstruct, for centuries! In Seaford’s “Money and the Early Greek Mind”, religious institutions and community sanctions but not the state play the same roles – individuals value the antecedent of money “obols” because they are what were contributed at ritual events (a tax). Avoiding the “tax” by not participating in these rituals was not really an option because presumably one would suffer reputationally (the sanction). In both cases, what we generally refer to as the “state” is not doing all or any of the work. However, I read both Sarris’ and Seaford’s stories vindicate the form of chartalism’s hypothesis about the origins of money. In any case, some set of agents drives demand for a unit of account and the production of resources because of its unique privileges with respect to coordination and enforcement.