1917 And The Pope’s Peace

“I think a curse should rest upon me – because I love this war. I know it’s smashing and shattering the lives of thousands every moment — and yet — I can’t help it — I enjoy every second of it.”

These words, spoken by Winston Churchill to Violet Asquith on February 22, 1915, suggest a soul dislodged from the fundamental attitude proper to a member of Christian civilization. This attitude towards a war that was wrecking the vestiges of Christendom is not really surprising when we consider Churchill’s well-known membership in the Order of Freemasonry (from 1895) and his also well-known, at least to historians, initiation into the Neo-Pagan Druid Order (from 1908).

The existence and influence of such men as Winston Churchill are the only explanations for the blind inhuman ferocity with which World War I was pursued by the belligerents during the years 1914-1916. The theological, philosophical, and ideological positions of Churchill, as First Lord of the Admiralty and chief architect of the Gallipoli landings in 1915, simply exemplify the general loss of a Christian consciousness on the part of the leaders of the great Western Powers.

This complete lack of adherence to even the most basic principles of traditional Just War doctrine, was simply incomprehensible to Pope Benedict XV. Why would a war be tolerated which, unlike all others up until that date in European history, seriously threatened to wipe out a vast percentage of the young men on the Continent? Why would not the leaders of Britain and France, chastened and awakened after suffering the loss of 624,000 men in the Battle of the Somme alone, enthusiastically take up consideration of any proposal for a reasonable peace? Why were most of the peace initiatives during the years 1917 and 1918, treated to bemused dismissal and scarcely hidden contempt?

Pope Benedict XV, during the most critical year in contemporary history 1917, found himself confronting men who, like Churchill, appeared to have jettisoned “outdated” humane and moral concerns. That this new non-Christian understanding of conflict and war was not just to characterize the conflict of 1914-1918, is shown by Prime Minister Winston Churchill’s and President Franklin Roosevelt’s drafting and signing of a version of the Morgenthau Plan at the Second Quebec conference of 1944 in which they pledged to turn the heavily urbanized and industrial nation of Germany “into a country primarily agricultural and pastoral in its character.”

What we can say with certainty is that July 1914 inaugurated a generation of political and military slaughtering which was often perpetrated for the sake of “Progress.” It was the dramatic end to an unparalleled era in European history, an era of civil and, on the whole, international peace. It is quite possible that the casualties of all European wars since the fall of Napoleon Bonaparte (1815) did not exceed in number the figure for a single day’s losses in any of the great battles of 1916.

War 1916: Stalemate , U-Boats, and Blockades

December 1916 marked a watershed in World War I. It was a moment when the increasing futility of the military stalemate on the Western Front, induced one side of the conflict – the Central Powers – to seriously consider a negotiated peace. Contrary to a certain simplistic understanding, a desire for a cessation of hostilities and negotiations does not necessarily originate from an experienced position of vulnerability and relative inferiority.

There was a definite long-range prudence and maturity revealed in the Central Powers’ (the German Empire, Austria-Hungary, Bulgaria, and the Turkish Ottoman Empire) efforts towards a negotiated peace late in 1916. Not all of it can be attributed to the accession of devote and eminently humane Karl I to the Austrian Imperial Throne and the Hungarian Royal Throne at the death of his great-uncle Franz Josef in November. This “maturity,” which I speak of, can be shown by the fact that these Powers were actually “winning” the war to an extent.

Their military position and advantage appeared for all to see with their knocking the Entente ally, Romania out of the war and conquering Bucharest itself in the beginning of December 1916. Seeking to compensate for the British attempt at a starvation blockade of food and supplies to the Reich, the German military had ordered submarine warfare. This new kind of warfare, which targeted both enemy and neutral shipping, was roundly condemned by Cardinal Pietro Gasparri, the Papal Secretary of State, in the autumn of 1915, speaking of it as “appalling and immoral.”

For the Germans, both during and after the war, this conflict on the open seas was only an attempt to offset the unrestricted blockade imposed by the Entente Powers, which was, also, contrary to established international law. The Great War thus became “as much a war of competing blockades, the surface and the submarine, as of competing armies.”

The German Peace Offensive

The complete stalemate in the Western trenches plus the ruthless warfare at sea, serves as the backdrop of the German Peace Note of December 1916. From the evidence, it appears that Kaiser Wilhelm II of Germany believed that everyone (i.e., the leaders of all of Great European Powers) secretly desired peace but that each belligerent was reluctant to be the first to admit it openly. The content of the German Note was simple and clear enough; some commentators called its tone “arrogant.”

Whatever the tone, the Note stated that the war was one of unprecedented fury that threatened to destroy the material and spiritual progress which the 20th century had such a right to be proud of. The Central Empires had amply demonstrated their might and would continue to fight boldly if this peace initiative was ignored. They were, however, desirous of putting an end to the bloodshed. If the Entente Powers agreed to immediate peace negotiations, the Central Powers would guarantee existence, honor, and freedom of development, and would do everything possible to restore lasting peace for the nations then engaged in conflict.

To this German Peace Note, there was no papal response. Benedict XV and Cardinal Gasparri would later, on March 7, 1917, explain, in a letter to the Cardinal-Archbishop of Cologne, that the reason for the coolness of the papal response to the peace gesture on the part of the German Kaiser was that a communication had been received from the British Government, which said that any intervention on the part of the Pope would be “ill-conceived” by Britain and France.

Benedict’s view was that if he offended the Entente Powers at that time, any future efforts would be met with outright antagonism. Moreover, since the Note lacked specific mention of a proposal for the reestablishment of independence for the Kingdom of Belgium, Benedict and Gasparri were not convinced of the usefulness of the initiative. So the Kaiser’s Peace Proposal came to naught. This German peace initiative is usually forgotten by conventional accounts of World War I.

What is also forgotten is the fact that it was only after the failure of this initiative that all restrictions on submarine warfare were lifted. German strategy in this war from the beginning was characterized by a great willingness to gamble. This appeared justified for the Germans at the time on account of the fact that the numbers, both in terms of man power and in terms of production capacity, were heavily skewed against them.

For example, the Entente enjoyed an immense economic superiority over the Central Powers with a combined national income 60% greater. The combined Allies also had 4.5 times as men as great a population as compared to the Germans, Austrians, and the Turks with 28% more men mobilized for the war effort. The policy of the Germans prior to early 1917 and the failure of their peace venture was to sink, without warning, ships believed to be carrying war supplies to Britain.

The German General Staff believed that such a gamble would bring about the defeat of Britain before the United States could make an effective military contribution to the war. This strategy was tried 3 times in 1915, when the Lusitania and Arabic were sunk. It was because of such actions that the German Empire found itself confronted with the outward, rather than just the covert, animosity of the American Republic.

The Pope’s First Moves

Even though British and French disapproval had prevented Pope Benedict XV from taking up the peace proposal made by the German Emperor in 1916 and identical pressure had persuaded him to remain officially aloof, although privately supportive, from the clandestine effort by Blessed Emperor Karl of Austria to establish a back-channel connection to France via his brothers-in-law, Prince Sixtus and Xavier of Bourbon-Parma, both Entente officers, Benedict and his Secretary of State were not inactive in pursuing what they say to be the only “solution” to the conflict, immediate peace and the restoration of the European status quo ante.

In this, they were joined by a whole menagerie of political groups and individuals who were moved by various motives, ideological principles, and, likely, simple human empathy to demand an end to the suicidal European conflict.

For those on the Left, this war was simply proving to be a capitalist enterprise in which the “military-industrial complex” was benefitting and capitalist nations were attempting to ruthlessly expand their markets. For the traditionalist Right, the war was proving to be just what many had, all along, feared it would be, the catalyst of European social, economic, and political breakdown. This rightist analysis seemed to be conclusively demonstrated by the February Revolution in Russia in 1917 in which the ancient Monarchy was toppled and a provisional parliamentary government put in its place.

It would be this unhistorical, rootless Russian parliamentary regime that the Communist coup d’état would topple in the famous October Revolution in that same year. We can perhaps see the mental make-up of the man when we realize that Woodrow Wilson became ecstatic when he heard the news of the fall of the Russian Imperial Dynasty and then naively stated that, “Now Russia is fit for a league of honor.” The US president, of course, meant that now Russia, having shed its age-old Monarchy, would continue the War as one of the “enlightened” Democratic Powers.

He, also, revealed, in this outburst, that his campaign theme of 1916 “He Kept Us Out of War,” was not to be taken as final. Within a month, the United States, also, would be in this enlightened and “liberating” League. Here, contrary to the implicit beliefs of the Democratists, it was the democratic republican government of Russia in 1917 that wanted to continue fighting the war against the Germans and Austrians. It was the Emperor Nicholas II who was of the view that peace must be concluded quickly for the survival of Russia.

It was for precisely this reason that Lloyd George, the war-enthusiast “Methodist Machiavelli,” who refused to accept the Russian Imperial Family into exile in Britain since the Prime Minister viewed Nicholas as a traitor to the Entente cause. Remember, the Russian general’s phone which ought be “smashed” in order not to receive from the Emperor any order contrary to the provocative mobilization ordered by Minister of War, Sukhomlinov and General Yanushkevitch in August 1914.

What was the immediate cause of a new and final papal effort to halt the slaughter was the efforts of a man who was well-known to the Vatican. The leader of the German Catholic Center Party, Matthias Erzberger was the primary agent of the Imperial Government in its efforts of 1915 to keep Germany’s former ally Italy out of the war.

In this mission, Erzberger had worked closely with the Vatican and had meetings with Pope Benedict himself. Now, Erzberger, in the summer of 1917 after the US declaration of war against Germany but before significant involvement in the European theater of American troops, had been “converted” to a non-annexationist position, that is one which held that Germany should conclude a peace based upon the pre-war borders.

Benedict XV believed that Germany was the key to a successful peace process. Unlike the Entente Powers, Germany and Austria were in control of large areas of occupied territory, most especially Belgium, whose restitution was for the Entente the sine qua non of any settlement.

Benedict began with the premise that only the indication of willingness on Germany’s part to evacuate occupied territory would persuade the Entente to come to the negotiating table. Benedict and Cardinal Gasparri made careful preparations, in the winter and spring of 1917, for what would become their historic peace initiative. In May, in anticipation of the Peace Note, the Pope made personal contact with Blessed Emperor Karl and Empress Zita of Austria.

The Pacelli Factor

If the Germans were the key to peace, Benedict would need a trusted and skilled envoy who could fashion, in conjunction with the Germans, a plausible proposal for peace to present before the Western Allied Powers. That young cleric was Eugenio Pacelli, the priest who would occupy the Papal Throne during the 20th century’s next conflagration – a conflagration, by the way, which was almost the direct result of the failure of the Allies to accept the peace carefully crafted by Archbishop Pacelli. Msgr. Eugenio Pacelli was not a unknown factor at the Vatican in 1917. The Pacelli family had long been involved in Vatican affairs.

The two-year old Eugenio had been brought to the death bed of Blessed Pius IX who is reported to have said, “Teach this little son well so that one day he will serve the Holy See.” He had attended the elite Instituto Capranica, the seminary attended by Benedict himself, and Pacelli, like Benedict, had become a protégé of Cardinal Rampolla during the Cardinal’s years as Secretary of State under Leo XIII.

For those who understand the importance of the Fatima message, it cannot be without significance that Eugenio Pacelli was consecrated as a bishop, and then given the honor of the pallium, on May 13, 1917 (the first day of the Fatima apparitions in Portugal) in a ceremony in the Sistine Chapel by Pope Benedict XV himself. The Pope wanted to give Msgr. Pacelli as much prestige as would be necessary in the royal courts of Germany for this most important peace venture.

If it were not for the eventual contemptuous dismissal of the Pope’s Peace, Archbishop Pacelli’s mission to Germany in this critical year of the war would have been a complete success. After arriving at the royal court of Bavaria (there very much used to be such!), Archbishop Pacelli found the opportunity of making a personal overture, in the name of Benedict XV, to Kaiser Wilhelm himself.

For a man who had been trained to display a complete self-control and dignified comportment, it was indicative of the Emperor’s frustration and emotion when he, with quivering lips, angrily responded to the papal letter which asked him to redouble his efforts to hasten the advent of peace even though it should be at the expense of some of the German objectives.

Wilhelm said that he could not conceal his annoyance at the fact that his own peace efforts of December 1916 had been “snubbed by Benedict XV in so unheard of a manner as not to have merited the courtesy of some reply.” While maintaining complete composure, Archbishop Pacelli stated that certain actions of Germany, for example the deportation of Belgian workers, did not give the Pope reason to attach much confidence to the peace overtures.

According to Walter H. Peters, “The Emperor seems to have taken this argument in good part. He admitted that although the action looked bad at first sight, it had not been against international law. He could not be forced to run the security risk of allowing civilians to remain behind German lines.” Despite the friction and voiced complaints, the meeting with Nuncio Pacelli seems to have made a very positive impression on the Kaiser.

In his autobiography published in 1922, after his abdication and during his exile in Holland, Wilhelm II described his impression of the young Archbishop Pacelli at this critical meeting — critical for what would become Pope Benedict XV’s most important intervention in the World War. The Kaiser describes Pacelli as having, “an aristocratic, likeable, and distinguished appearance, with great intelligence and impeccable manners, the perfect model of a high prelate of the Catholic Church.”

This favorable impression, and the potential within the papal appeal, led the Kaiser, within two weeks, to follow up on the issues discussed at this meeting. On July 12th, the Kaiser arranged a dinner meeting at which the German Chancellor was to present the final draft of a peace resolution which was to go to the German parliament, the Reichstag.

Wilhelm was pleased with the draft since it repeated the statement that the Emperor himself had made in his Address from the Throne of August 4, 1914, in which he stated, “We are not animated by any desire for conquest.” It, also, repeated the statement that Germany had taken up arms only to preserve her independence and to keep intact her possessions.

This was the basic text passed by the Reichstag, with some slight alterations made due to the increasing influence of Field Marshall Paul von Hindenburg and General Erich Ludendorff. On July 14, 1917, the revised peace resolution was laid before the Kaiser, along with a reply that was to be sent to the letter presented by Archbishop Pacelli.

The Kaiser, seeing that the letter was dated August 13 – meaning the Chancellor had intended to significantly delay the German response to the Pope’s letter – said, “Vier Wochen, das ist unhöflich gegen den alten Pontifex!” (“Four weeks, that is discourteous towards the aged Pontiff!). Archbishop Pacelli was delighted with the German response to the Pope’s proposals.

After meeting for two days with the German Chancellor, he returned to Rome on July 25th, with an understanding that the German government was now ready to accept papal peace proposals. Pope Benedict then used this occasion to present his very specific peace proposal to the British representative at the Vatican, Count de Salis.

The Holy Father gave him several sealed envelopes. Each contained a copy of the historical Papal Peace Note of 1917. The British Government was asked to forward the note to France, Italy, and the United States whose governments were not represented at the Vatican. The die was cast.

The Papal Peace Note of August 1917

The Papal Peace Note was very straight forward and apparently non-controversial. It does not seem possible that it could have received such a negative response from several of the warring parties. In the introductory paragraph, the Pope enumerated appeals he had previously made in general terms. He said that the time had come to propose concrete and practical propositions. The task of adjusting them and completing them he would leave to the nations themselves.

The specific proposals were seven in number: 1) Substitution of Moral Force of Right for Law of Material Force; 2) A Simultaneous and Reciprocal Decrease of Armaments; 3) The Establishment of International Courts of Arbitration to Adjudicate Conflicts between Nations; 4) True Freedom and Community of the Seas; 5) Reciprocal Renunciation of War Indemnities; 6) Evacuation and Restoration of All Territories Occupied During the War; 7) Examination in a Conciliatory Spirit of Rival Territorial Claims [e.g., the question of Alsace and Lorraine].

The National Responses to the Papal Peace Proposals were as follows:

Germany: “For a long time His Majesty [Wilhelm II] with profound respect and sincere gratitude had followed the efforts of His Holiness to assuage the sufferings of war…and to hasten the end of the hostilities. The emperor sees in this most recent step of His Holiness a new proof of the noble and humanitarian sentiments, he entertains the lively hope that…success may come to the papal appeal.”

Austria-Hungary: Blessed Emperor Karl I gave an enthusiastic endorsement to the Papal Peace Note.

Bulgaria (one of the Central Powers): King Ferdinand replied to the Peace Note on September 26, 1917, in terms of reverence and loyalty.

Ottoman Empire: The Sultan of the Turkish Moslem Empire, Mehmed V, in an autographed letter on September 30, said that he was “deeply touched by the lofty thoughts of His Holiness.”

France: No direct response to the Pope’s Note. Merely a sharply worded statement issued by Foreign Minister Ribot to the British Government indicating that they (the French) did not intend to have an official statement in writing communicated to the Holy See. The British Government was asked to, “discourage any further attempt on the part of the Papal Secretary of State in the direction of an official intervention between the belligerents.”

Italy: In an address to the Italian Senate, Baron Sydney Sonnino, Italian Foreign Minister, stated that the Note was nothing but the work of Germany and that the proposals were utterly impracticable.

Britain: Arthur Balfour, the British Foreign Minister (famous for the Balfour Declaration), responded in a very non-committal way: “His Majesty’s Government, not having as yet been able to take the opinion of their Allies, cannot say whether it would serve any useful purpose to offer a reply or, if so, what form such a reply should take. Although the Central Powers have admitted their guilt in regard to Belgium, they have never definitely intimated that they intend either to restore her to her former state or entire independence or to make good the damage she has suffered at their hands.”

Papal Peace Meets American Democratic Messianism

Wilson’s Intervention “What does he want to butt in for?” Here we have the unique first response from President Woodrow Wilson upon the presentation of the Pope’s Peace Note to him at the White House in August of 1917. The relations between the Roman Pontiff and the Presbyterian minister’s son from the Shenandoah Valley who sat in the White House had always been a bit tense. Contrary to pacific statements and neutralist campaign slogans, at the Vatican it was always understood that the United States, under its Democratic President Woodrow Wilson, was not actually a neutral and impartial player in the Great European Conflict.

The United States was clearly helping the Entente and for what the Vatican believed were selfish reasons. It was held that the US was committed to France and Britain because of economic ties. Benedict XV, in particular, deplored the United States’ arms trade with France and Britain, especially when it was carried on the passenger vessels, thus providing a causa belli against Germany. In light of this, it was as early as April of 1915, a full two years before official US involvement in the war, that Benedict called upon the United States to enforce an arms embargo against both sides.

This, of course, was never done. Included in this analysis of the American attitude towards the war, must have been a recognition that the tragedy of the sinking of the British liner RMS Lusitania, had been engineered to ease the United States’ entry into the war. This joint British-American operation had been executed at the expense of 1,198 human lives. Among the dead were 128 Americans.

On April 22, 1915, a week and a half before the liner departed, an announcement was issued by the German Embassy in Washington which warned passengers that Germany was in a state of war with Great Britain and, therefore, all ships sailing under her or her allies’ flag were subject to attack and that passengers were, therefore, traveling at their own risk. For some unknown reason, newspapers did not publish the warning until the day of departure. Some 8 miles off the coast of Ireland, a German U-20 submarine fired one torpedo at the liner. After the torpedo hit there was a second explosion. Within 18 minutes the ship sank, with the passengers in general panic.

As the Germans insisted at the time, and a 1960 investigation by an American John Light confirmed, the ship had been filled to the gills with contraband munitions making it a legitimate target according to international law. Included in this stock, were some 4,200,000 rounds of Remington .303 rifle cartridges.

This was also confirmed by later British documents that came to light along with the ship’s manifest, which had been given to Woodrow Wilson and was only released at the death of Franklin Delano Roosevelt. Allen Welsh Dulles, brother of the future Secretary of State John Foster Dulles, knew well of the engineering of the tragedy.

It would still be some 2 years until the United States officially entered the conflict. Perhaps, this was to get past the presidential election of 1916 in which Wilson barely, due to a narrow margin in the State of California, beat his Republican opponent Charles Evans Hughes, on a platform of neutralism and peace, “He Kept US Out of War!” It was immediately after the election that Wilson momentarily acted as the neutral observer of the horror of the European conflict.

On December 20, 1916, when the peace efforts of the Central Powers were well underway, the United States issued an appeal that included the statement, “The President is not proposing peace; he is not even offering mediation. He is merely proposing that soundings be taken in order that we may learn, the neutral nations [here he apparently includes the United States] with belligerents, how near the haven of peace may be for which all mankind longs with an intense and increasing longing.”

When, only 4 months after the “peace appeal,” Wilson broke off relations with the German Empire, clearly in preparation for a declaration of war, the Holy See attempted to heal the breach — seemingly due to the impression at the Vatican that the United States was merely reacting to individual acts of the German military and political authorities. Therefore, we can understand the shock experienced by the Pope when he heard the news of the United States’ declaration of war against the Central Powers in April of 1917.

This was understood by Pope Benedict XV to be an unmitigated disaster. His Holiness understood, with utmost clarity, that American intervention would extend the time of the conflict since there would be absolutely no reason for the Entente Powers to consider a cease-fire or armistice.

Even though it is difficult get into the mind of another man, particularly if that man is the Vicar of Christ, it appears that the Pope did not fully appreciate the extent to which the Presbyterian President viewed the war in Europe as a “crusade” for equality and democracy.

This is the only explanation for the blind-siding of the Pope in this case and in Wilson’s final and conclusive rejection of Benedict’s great peace initiative of August 1, 1917. Wilson believed that this war was one of the “enlightened” Powers of parliamentary and democratic regimes, recently stripped of the “embarrassment” of Nicholas II, against the dark “holdovers.”

Wilson’s throwing of America’s sword onto the scale of the Entente Powers, changed the conflict from a fratricidal conflict over Alsace-Lorraine and Flanders, to a global crusade against Monarchy and, what would show itself after the war, against Papal influence in the political affairs of the world. In other words, against historical Christendom.

It would not be stretching it to say that with the rejection of Pope Benedict’s Peace Note of August 1917, Woodrow Wilson became the grave-digger of Christendom. What might not have happened had not the war continued to its tragic end – the downfall of the Russian, Austrian, and Prussia monarchies? Can we venture Communist Russia, Lenin, Stalin, Hitler, World War II, the Cold War, Mutually Assured Destruction doctrine, Korea, Red China, Vietnam, the Social Revolution of the 1960s, and perhaps, Vatican II?

What we can be certain of is that these things would not have happened as they did if Wilson had not, “butted in.” It is only with this anti-monarchical and anti-papal attitude in mind that we can understand the patronizing and cool response of Woodrow Wilson, through his Secretary of State Robert Lansing, to the Papal Peace Note.

Robert Lansing prepared the world for Wilson’s fatal response by his own articulation of the fundamental principle of American foreign policy, both then and now: “No people can desire war, particularly an aggressive war. If the people can exercise their will, they will remain at peace. If a nation possesses democratic institutions, the popular will will be executed. Consequently, if the principle of democracy prevails in a nation, it can be counted upon to preserve peace and oppose wars…If this view is correct, then the effort should be made to make democracy universal.”

In a letter dated August 27, 1917, Robert Lansing, speaking for President Wilson, responded to the Pope’s Peace Note by stating the following, “No part of this program can be carried out. The object of this war is to deliver the free peoples of the world from the menace and the actual power of a vast military establishment controlled by an irresponsible government which having planned secretly to dominate the world, proceeded to carry the plan out. This power is not the German people. It is the ruthless master of the German people. It is no business of ours how that great people came under its control. But it is out business to see that the history of the rest of the world is no longer left to its handling…. They desire no reprisal upon the German people who have themselves suffered all things in this war which they did not choose. They believe that peace should rest upon the rights of the people, not the rights of governments….The word of an ambitious and intriguing government on the one hand and a group of free peoples on the other….We cannot take the word of the present rulers of Germany as a guaranty of anything that is to endure, unless explicitly supported by such conclusive evidence of the will and purpose of the German people themselves.”

Pope Benedict’s attempt to stop the war which would kill 9.4 million and open the Age of Totalitarianism ended with this rejection. The Entente Powers allowed Wilson to speak for them. As the great biographer of Pope Benedict XV, Walter Peters, states, “Wilson could not endorse Benedict’s plan because the prime premises of the two men differed so radically. Wilson was motivated by an urge to punish. In Wilson’s opinion, it was absolutely necessary that the ruling dynasties of Germany and Austria be forced to abdicate.”

Pope Benedict XV told one of his friends that it was the bitterest moment of his life when he heard of the rejection of the Note by Woodrow Wilson.

1918: Why The War Ended

When considering the failure of the peace initiatives of the Holy Father and others, we can understand why the war did not end. But why did it end? Did the Germans lose? Yes and No. According to the most recent historians of the period, it was the collapse of German morale on the Western Front, which brought about the defeat of Germany and Austria in the Great War.

Even after the failure of Ludendorff’s famous Michael Offensive in the Spring of 1918, the Germans and Austrians were still killing the Allies at a faster rate than they themselves were getting killed by the British and French (Note, the US Army was on the Western Front in substantial number only in the Autumn of 1918).

In the last 3 months of the fighting, for example, 63,500 British soldiers were killed, while 28,000 Germans were killed. It was not the Germans who elected to continue fighting who brought about the collapse of the Central Powers, it was those Germans who elected to surrender – or desert, shirk or strike – who ended the war.

This becomes clear, even by looking at the basic casualty count for the entire war 1914-1918: 9.4 million total casualties, 4 million dead from the Central Powers and 5.4 million dead from the Entente.

Most of the surrendering occurred at the end of the war, from August 1918 when General Ludendorff first started asking for an armistice and the second week of November when Kaiser Wilhelm II abdicated and went into exile in Holland. Probably the greatest chance Germany and the Austro-Hungarian Monarchy had of winning the struggle, was if Emperor Nicholas II had accepted, as early as 1915, a separate peace offer from the Germans and Austrians.

The Central Monarchies might well have won the war early and Russia would almost certainly have avoided Communism. When the Russians spurned these advances, the Germans went on to inflict total defeat on them, making the triumph of Communism possible. In 1919, the Versailles Conference met without the attendance of a representative of the Holy See.

Just as the Versailles Treaty was the first one since the early years of Christendom not to invoke the Holy Trinity, the Father of Christendom would have no place at the table which would profoundly rearrange the map of Europe. As Emperor Franz Josef stated at the end of his life, “Europe is dead.” It was the tragic fate of Pope Benedict XV, the man who loved Europe most, to weep at her tomb.

Peter Chojnowski is a professor, writer and currently teaches at Immaculate Conception Academy in Post Falls, Idaho.

The image shows, “Kaiser’s Got The Blues,” cover or sheet music from 1918.

Corporate Christianity And Conservative Inc.

“In the market economy the individual is free to act within the orbit of private property and the market. His choices are final” (Ludwig von Mises, Human Action).

When we read this text from the grandfather of modern Neo-Liberalism (hich manifests itself, in the United States, in the movements called Libertarianism and Neo-Conservatism), we are not surprised. Von Mises, culturally Polish and politically Austrian, but a practical atheist in his political philosophy, is concerned to render absolute, the only absolute (other than “market forces”) he seems to acknowledge as having any relevance for the affairs of mankind, the volitional determination of individuals. Nor are we surprised when he unfolds his basic conception of reality and applies it to the public actions of individuals.

Referring to the entire doctrinal and moral activity of Christian civilization and comparing it to his idea of the autonomous, self-interested, and willful individual, von Mises states, “In urging people to listen to the voice of their conscience and to substitute considerations of public welfare for those of private profit, one does not create a working and satisfactory social order [emphasis mine].”

In one sweeping statement, von Mises has negated Christendom and every social, economic, and moral teaching of the Catholic Church; this statement, also, renders “inoperative” the entire Classical moral and philosophical tradition.

Such statements by the hero of contemporary Libertarianism and Neo-Conservatism (read, Neo-Jacobinism), need not disquiet us at all if we understand it exactly as he meant it to be, a statement by one who upheld the modern Liberal, anti-Christendom world-view and denigrated the civilization, overall and in its detail, built by the Catholic Church.

This civilization, of course, was constructed in a certain way, on account of the Church’s attempt to conform the circumstances and the means of man’s life to the Eternal Law, which includes within itself the Providential Plan by which each created being is brought to a state of perfect fulfillment and satisfaction.

Christendom, unlike the “market forces,” presupposes real freedom; if man was not free and meant to be fulfilled in his freedom, Christendom would not be needed. “Freedom,” of course, is meaningless, and soon becomes bizarre (as in our own commercialist culture), if it is not directed towards a true “good” that fulfills human nature. If freedom does not achieve a true satisfaction of human nature, why is freedom “good?”

If, however, freedom is “good” because it genuinely fulfills human nature, economic “freedom” or the ability to sell goods made and to purchase goods made by others, must be subordinated to over-arching considerations of the “good.” Since we are speaking about a public “good,” we must speak about the “common good,” in which every private good is included.

The common good entails the fulfillment of human nature at large. If all of the above reasoning is valid, economic freedom to buy and sell must be ordered to the achievement of a truly fulfilled human nature, both individually and commonly.

Only those with the most animalistic conception of man would think that the ability to buy and sell things is the pivot around which should turn an individual life, a political ideology, or the efforts of the State. That “man does not live by bread alone” is not only a religious truth, but is, also, a bit of wisdom testified to by universal human experience.

It is the religious devotion of man, his virtuous moral actions, and his aesthetic and emotional appreciation and expression, which are the higher aspects of man’s being that mercantile trade is meant to facilitate and sustain.

In light of this, it is perfectly rational that the normal and traditional (i.e., non-Liberal) societies and governments of the past have tried to ensure that the buying and selling that went on amongst men, truly facilitated the genuine end of all economic relationships, the full and complete good of men, both individually and as, necessarily, living within a civic body. It was for this reason that such notions as “the just price” and the “the just wage” were normative, and limitations on the use and procurement of private property were instituted.

One point in favor of Ludwig von Mises, however, one not shared in by a number his disciples, is that he recognized that the whole bulk, theoretical and practical, of historical Christendom was against his understanding of the proper order of things. He, at least, recognizes that there was a very definite concept of “justice” in “medieval” Christendom.

He simply relativizes it. In pure Nietzschean fashion, he insists that claims about the “justice” of this or that social arrangement or economic condition, are merely an attempt by some to preserve an arbitrarily adopted “utopia:” “They call ‘just’ that mode of conduct that is compatible with the undisturbed preservation of their utopia, and everything else unjust.”

Von Mises, also, does not claim St. Thomas Aquinas as an early advocate of Liberal Capitalism and the “free-market economy.” He understands that St. Thomas, as a Catholic philosopher and theologian, held views profoundly at variance with his own, including in matters of economics.

With regard to the question of the “just price,” von Mises writes: “If Thomas Aquinas’ doctrine of the just price had been put into practice, the thirteenth century’s economic conditions would still prevail. Population figures would be much smaller than they are today and the standard of living much lower.”

The sentence following should, also, be of interest to those who would like to see the sharp distinction between von Mises’ Liberalism and the great tradition of the Christian World: “Both varieties of the just-price doctrine, the philosophical and the popular, agree in their condemnation of the prices and wage rates as determined on the unhampered market.”

If Aquinas was a capitalistic Pre-Liberal, von Mises certainly did not see it; in fact, he uses St. Thomas’s teachings as the embodiment of the very mentality and outlook, which he is rejecting.

De Roover’s Libertarian Dream

To base one’s ideas solely on conceptions prevailing in relatively current times, has never been a very attractive option. The American Whigs of 1787 looked to Republican Rome, and the French Democrats of 1789 could look to Democratic Athens.

Looking back 2,000 years for a political model is a genuine example of antiquarianism. At least Napoleon, with his later emulation of Charlemagne, only had to look back 1,000 years to find an example of a situation in which his newly chosen form of government, “worked.”

(We must keep in mind here that the reason people had not, for so long, adopted these first two old systems of government was because they were historically conscious enough to realize that they had not “worked”).

A number of Libertarians have felt the need to trace their ideas back to the established thought of Catholic Christendom. We can only speculate as to their motives. However, what is clear is this, within the second half of the 20th century and, even, into our own, there have been some Libertarians who identify nascent Capitalistic ideas – (I simply identify Capitalism here as the economic form of Liberalism – not to be confused with American Leftism) – as existing within the corporate organism that was Christendom, prior to the “dawning” of the Enlightenment.

There are some more reckless Libertarian thinkers who would even state that, not only are there Liberal anomalies within the paradigm of historical Christendom, but rather, that Liberalism is the Christian civilizational paradigm itself. The recurrent focus of such Libertarian “dreaming” is the late Renaissance Spanish School of Salamanca and Sts. Bernadine of Siena and Antoninus of Florence.

The main issue, although not the only one, is the one of the “just price.” Can it be that the later Scholastics, as represented by the School of Salamanca, along with the two Renaissance saints known for their sermons on economic concerns, should be identified as early advocates of Liberal Capitalism due to their, supposed, insistence that the “just price” which must be upheld by Church, State, and Society at large, is simply the one which is assigned to a product due to the interplay of producer supply and consumer demand?

If economic “justice,” at this most basic and essential level, is simply a matter of adhering, faithfully, to the “laws of supply and demand,” we can say that the view of these Catholic thinkers could, indeed, be characterized as an example of Early Economic Liberalism.

If there were something more to “justice” than the simple end result of the interplay of the free will of producer and the free choice of the consumer, than their thought could not be denominated as a early form of von Misesian Neo-Liberal/Libertarian conceptions.

When looking for an example of a Neo-Liberal who represents this attempt to find roots in the distant past for Liberal doctrines that seem quite modern, we can turn to Raymond de Roover who published an article entitled, “The Concept of the Just Price: Theory and Economic Policy” in Journal of Economic History (December 1958). Here it is interesting to read De Roover’s portrayal of the “typical” view of medieval thought as it relates to the topic of the “just price.”

In this article, we read, “According to a widespread belief – found in nearly all books dealing with the subject – the just price was linked to the medieval conception of a social hierarchy and corresponded to a reasonable charge which would enable the producer to live and to support his family on a scale suitable to his station in life. This doctrine is generally thought to have found its practical application in the guild system. For this purpose the guilds are presented as welfare agencies which prevented unfair competition, protected consumers against deceit and exploitation, created equal opportunities for their members, and secured for them a modest but decent living in keeping with traditional standards [emphasis mine].”

Such was the “idyllic” view of the Middle Ages upheld by the great German economist Max Weber and by the British author, controversialist, and historian, Arthur Penty. According to De Roover, another famous German economist, Werner Sombart, went even further: according to him, not only the medieval craftsmen but even the merchants strove only to gain a livelihood befitting their rank in society and did not seek to accumulate wealth or to climb the social ladder. This attitude, Sombart claimed, was rooted in the concept of the just price “which dominated the entire period of the Middle Ages.”

De Roover, however, has a different understanding of the common mind of the Christian Era as regards prices and economic activity in general.

Amidst the presence of many non sequiturs, confused and, even, contradictory historical claims, we find de Roover throwing out various red herrings such as, “Thomas Aquinas himself recognizes that the just price cannot be determined with precision, but can vary within a certain range, so that minor deviations do not involve any injustice. This…is not in accord with Marxian dialectics; but it agrees with classical and neoclassical economic analysis” [emphasis mine] So an obvious and balanced moral statement about a minor aspect of the just price issue, because it does not agree with the Marxist theory, makes St. Thomas’ economic position into one that “agrees with classical and neoclassical analysis.”

The bizarre and forced logic present in de Roover’s analysis can only be touched upon here. For example, one of the “naïve” economists, Werner Sombart cites Heinrich von Langenstein (1325-1397) to the effect that “if the public authorities fail to fix a price, the producer may set it himself, but he should not charge more for his labor and expenses than would enable him to maintain his status (per quanto res suas vendendo statum suum continuare posit).”

This is fully in accord with the “traditional” understanding of social and economic thinking in the Catholic Middle Ages. Langenstein continues in the same vein, “And if he does charge more in order to enrich himself or to improve his station, he commits the sin of avarice.” This position, of von Langenstein, was “regarded as a characteristic formulation of the scholastic doctrine of the just price,” according to de Roover. Having been cited by Sombart, de Roover insists that it was “copied by one author after another.”

De Roover tries to throw cold water on the enthusiasm, on the part of economic historians, for the writings of Langenstein, by stating that, “Langenstein was not one of the giants in medieval philosophy but a relatively minor figure.” This statement is, of course, totally irrelevant to the topic at hand.

The question was not whether or not Langenstein was one of the “giants” of medieval philosophy, but whether his statement of economic theory and practice can be seen as “characteristic.” Someone need not be a giant in order to be characteristic. “Giants,” of course, are not characteristic at all, but that is another point entirely.

When de Roover does treat a giant, St. Thomas Aquinas, we find contradictory statements interwoven with more than questionable deductions. With regard to St. Thomas, he focuses on the topic that he – de Roover – believes will confirm that the “majority of the [Scholastic] doctors” held that the “just price” did not correspond to cost of production as determined by the producer’s social status, but was “simply the current market price.”

Clearly, de Roover understood that if the just price meant something other than the Capitalistic “just the price,” his attempt to root Neo-Liberal Capitalism in Catholic social tradition and thought would fail. He had to prove that the “justice” of the price charged in the times of Christendom was nothing other than the price that the item could fetch on the open marketplace.

The plan was to portray St. Thomas as an early economic liberal and, then, indicate how later Scholastic thought followed him and, thereby, set the stage for Adam Smith and Capitalistic Manchester Liberalism.

De Roover starts his analysis of the position of St. Thomas on the question of the “just price” by stating that in the works of Aquinas, “the passages relating to price are so scattered and seemingly so conflicting that they have given rise to varying interpretations.” He then goes on to state, unambiguously, what St. Thomas definitely meant by the term “the just price.”

As he goes on “definitively” articulating St. Thomas’ position, he proceeds to contradict his own interpretation of and statements about this position. For example, de Roover states, “By selecting only those passages favorable to their thesis, certain writers even reached the conclusion that Albertus Magnus and Thomas Aquinas had a labor theory of value.”

In a footnote, on the same page, he states, “As a matter of fact, Aquinas comes close to saying that any exchange of two commodities should be based on the ratio between the amounts of labor expended on each.” Isn’t he affirming here that Aquinas had a “labor theory of value,” when he was just one paragraph above, chiding “certain writers” for reaching the conclusion that St. Thomas “had a labor theory of value”?

The Liberal scholar’s reasoning becomes somewhat more convoluted when we find him, at the beginning of a paragraph, stating that St. Thomas “nowhere puts the matter [of the just price] so clearly,” and by the end of the paragraph states that “this [single] passage [which is only a story addressing a very limited moral question] destroys with a single blow the thesis of those who try to make Aquinas into a Marxist, and proves beyond doubt that he considered the market price to be just.”

So, within a single paragraph, made up primarily of an illustrative story about a merchant selling wheat in a town when he knows that more wheat is on the way, we go from Aquinas the Ambiguous to Aquinas the Absolute. When we look for the passage cited by de Roover, in the Secunda Secundae of the Summa Theologica, we find that the article cited has absolutely nothing to do with the topic of the just price. It is from the question dealing with “Cheating” and the specific article is entitled, “Whether the Seller Is Bound to State the Defects of the Thing Sold?”

St. Thomas states here that a seller is acting rightly, from the view point of strict justice, if he merely accepts the amount offered for his wheat by the buyer, without informing the buyer of the greater amount of wheat to come. In other words, it is not unjust to fail to provide information that one could provide about the relative short-term worth of one’s products.

St. Thomas ends by saying, “If however he were to do so, or if he lowered his price, it would be exceedingly virtuous on his part: although he does not seem to be bound to do this as a debt of justice.”

From this short story concerning a very specific moral question, having nothing in itself to do with economic systems or the general topic of the just price, de Roover takes it as proven that “Aquinas upheld market valuation instead of cost,” thus beginning a pre-Capitalist tradition in moral theology, which bore fruit in the late Renaissance Salamanca School and in the economic related sermons preached by St. Bernadine of Siena and St. Antoninus of Florence in the 15th century.

Before treating the real attitude of the late Scholastics in Salamanca and the sermons of St. Bernadine of Siena and St. Antoninus of Florence, it is worthwhile to look at a simple reply to an objection, present in Question 77, “On Cheating, Which is Committed in Buying and Selling.” In Article 1, the same article from which de Roover draws his conclusions about the “free market” inclinations of St. Thomas, we read, in Reply to Objection 2, a line of reasoning that would, certainly, put St. Thomas outside the boundaries of any form of Liberal Capitalistic sympathies.

Here he cites St. Augustine who says, “th[e] jester, either by looking into himself or by his experience of others, thought that all men are inclined to wish to buy for a song and sell at a premium. But since in reality this is wicked, it is in every man’s power to acquire that justice whereby he may resist and overcome this inclination.

The example, cited by St. Thomas, which St. Augustine uses to illustrate this idea, is one of a man who gave the just price for a book to a man who through ignorance asked a low price for it. Here we see the virtuous buyer, who knows the real value of the book, ignoring the market value of the book (the one which was being asked by the seller of those wishing freely to buy), and, instead, justly compensating the seller for his loss.

St. Thomas concludes from this example that the “capitalistic” drive to buy as cheaply as possible and sell as dearly as possible – expressive, as it is, of an unlimited drive for acquisition and an overriding self-interestedness – can be overcome just like any vice is overcome. He acknowledges, however, that this self-interested attitude – which is, precisely, the attitude assumed by Liberal Capitalism – is “common to many who walk along the broad road of sin.”

Here we see clearly that economic attitude of Christendom contrasted with the economic attitude of Neo-Liberalism. Neither St. Augustine nor St. Thomas Aquinas are anything like Neo-Liberals. Clearly the “market price” is not, necessarily, the “just price.” To quote a phrase commonly used by Raymond de Roover, “This text…does not lend itself to a different interpretation.”

The Spanish Fairs and Renaissance Banking

To offer proof that the Scholastics, early or late, did not adhere to Libertarian principles of economic life, it is best to cite the historical works of the Neo-Liberals themselves. The two which draw our attention are, The School of Salamanca: Readings in Spanish Monetary Theory 1544-1605 by Marjorie Grice-Hutchinson, and Raymond de Roover’s San Bernadino of Siena and Sant’Antonino of Florence: The Two Great Economic Thinkers of the Middle Ages.

Our task can, also, be simplified if we can demonstrate, using the research of the Neo-Liberal scholars themselves, that the later Spanish Scholastics of Salamanca, along with the two above-mentioned saints, were fully within the great intellectual, social, and economic tradition of Catholic Christendom most particularly concerning the question of the “just price.”

If the “just price” is formulated in a way, which allows for many factors other than the exigencies of “supply and demand” (i.e., whether there is a social and moral aspect of the determination of price) and, especially, if there is a role for the “prince” in the determination of “market prices,” than we can safely reject the notion that these Catholic scholars of the past accepted a paleo-Capitalistic conception of the determination of price and, hence, of the entire economic life of society.

Even though Salamanca University was the most prominent place of higher learning in the European world at the time, it was Spain’s position as master of the New World that set the stage for a concentration on the problems of economics by the Scholastics of Salamanca.

The gold and silver coming from the mines of the Americas made Seville, the homeport of the treasure fleet, the economic center of and primary money market in Continental Europe during the middle of the 16th century. Here we have a place where there was a large circulation of money and a high price level.

Tomás de Mercado (d. 1585), a Dominican from Mexico who was present in Seville and preached on commercial morality, portrays the mercantile and financial situation that grew up in these conditions to us. According to Mercado, when the fleet comes in, every merchant puts into the bank all the treasure that is brought to him from the Indies, the bankers having first given a pledge to the city authorities that they will render good account to the owners.

The bankers served their depositors free of charge and used the money deposited with them to finance their own operations. Most of the gold and silver brought in by the fleet passed in this way through the hands of the bankers and served as a basis for credit. The opening for usury was occasioned, however, by these transactions.

As Mercado complained at the time, “money-changers sweep all the money into their own houses, and when a month later the merchants are short of cash they give them back their own money at an exorbitant rate.” In Spain, concludes Mercado, “a banker bestrides a whole world and embraces more than the Ocean, though sometimes he does not hold tight enough and all comes crashing to the ground.”

The above stricture, on the part of Mercado (who died on a ship in 1585 on his way back to Mexico), against the financial transactions of bankers and merchants, was an articulation of an idea that was of ancient origin. Interest paid simply for the use of money during a certain period of time was considered usurious and universally condemned.

Much of the moral thought about economics coming out of Spain during this period was, specifically, an attempt to grapple with the moral considerations occasioned by certain attempts to avoid the Church and State’s condemnation of usury.

The attempted circumventing of the usury laws occurred in a very subtle way. It originated in a seemingly legitimate attempt to deal with two practical difficulties encountered by merchants at the time.

First, there was there was, generally, a lack of cash available at the time, requiring merchants to set debts against one another at the merchant “fairs” held at various times, in various places, throughout the year.

Second, the merchants of the period, at the various fairs, had to act as money changers since, often, a debt was incurred in one place, say Seville, and paid in another, say Flanders. In this regard, it was generally agreed that the merchant who paid out money in one place and recouped himself in another was entitled to make a reasonable charge for his services.

Even with regard to this type of “financial service,” to charge a similar fee for bills transferring money from one Spanish fair to another was forbidden by a royal decree in 1551.

Clearly the Spanish Catholic Crown was even willing to “dislocate the whole business of the fairs” rather than allow merchants to become involved in unnecessary “financial servicing.”

There, also, developed situations in which borrowed money was not to be paid back at the next fair but at one years later. Due to the “fees” attached to such “financial services,” these became loans camouflaged as fees and involving a high payment of interest. According to Grice-Hutchinson, these met with “fulminations from both Church and State.”

It is when dealing with this question of the transference of funds from one fair to another, that Grice-Hutchinson, as representative of the Neo-Liberal Economic School, focuses on the question of “price” and the factors determining the “prices” of both money and goods.

The Function of Money and the Question of Foreign Exchange

Medieval ideas about the origin and functions of money are largely based on a few short passages in Aristotle’s Politics and Nicomachean Ethics. Here, Aristotle insists that the function of money was its use as a medium for the exchange of goods. Money was first invented to overcome the difficulties of transport and need that are bound to arise in a barter economy.

Money, therefore, is meant to serve as a common denominator that brings into line with each other things diverse in nature: “Making all things commensurable, equalizes them.” Along with rendering commensurable for the seller and buyer what is, by nature, qualitatively different, money can serve as “capital,” or as a store of value to be used at a future time.

Aristotle emphasizes the function of money as a man-made instrument by indicating that its value rests on custom and that it, “rests on us to change its value or make it wholly useless.” Averroes (1126-1198), whose commentary on the Ethics was translated into Latin early in the 13th century, follows Aristotle closely on the origin and functions of money.

Since St. Thomas Aquinas upheld this traditional view that money was invented for purposes of exchange, he held that it was unlawful to take payment for the use of money lent, which payment is known as usury. Here we have a reassertion of Aristotle’s own condemnation of usury.

St. Thomas himself applies this to our issue under discussion, gain on account of the foreign exchange of money, by condemning this practice outright.

Merchants who attempt to make money by lending money where money is plentiful and collecting it where money is scarce for a real financial gain, meet the following statement by St. Thomas, from his Commentary on Aristotle’s Politics, I, lvii: “Likewise the art of money or acquisition is natural to all men for the purpose of procuring food, or money with which to buy food, out of natural things such as fruit or animals. But when money is acquired not by means of natural things but out of money itself, this is against nature.”

This teaching concerning making money on the basis of the relative “price” of money in one place or another, appears again in 1532 when the Spanish merchants of Antwerp sent their confessor to Paris to get a ruling on the legitimacy of exchange transactions from the learned doctors of the University. They condemned forthright all exchange business.

The point that the Neo-Liberals, represented by Marjorie Grice-Hutchinson, would like to draw out of this incident is that, in this reply, the rate of exchange fluctuates according to the state of supply and demand and is not derived from the labor and costs incurred by the person in whose favor the bill is drawn. The assumption here being that that which all think should determine the “price” of money, is the same as what all think should determine the price of commodities.

This is an arbitrary assumption. Moreover, the doctors of the University of Paris are, apparently, merely speaking of a matter of fact. In itself, it by no means determines what the Scholastic doctors will say about the “just price” of things that ought be sold, namely commodities.

What we are truly left with from this reply is a further verification of a perennial teaching of the Christian Era; money should not be made off money. As St. Thomas states, such activity is justly deserving of blame, because, considered in itself, “it satisfies the greed for gain, which knows no limit and tends to infinity.”

The School of Salamanca and the Just Price

When considering what the, purportedly, innovative School of Salamanca said about this important question of the “just price,” the economic issue extraordinaire in the Middle Ages, I came across a text, included in The School of Salamanca by Grice-Hutchinson, which led me to hesitate for a moment.

Here, in a citation from Domingo de Soto’s book De Justitia et Jure published in 1553, we find the following in answer to the question, “Should prices be determined according to the judgment of the merchants themselves?”: “Firstly….excluding fraud and malice, we should leave merchants to fix the price of their wares. Secondly…. every man is the best judge of his own business. Now, the business of merchants is to understand merchandise. Therefore, we must defer to their opinion in settling prices. Thirdly, that a man may do as he likes with his own property. Consequently, he may ask and receive whatever price he can extort for his wares.”

“Now,” I said to myself, “we have a big problem.” “Domingo de Soto is an important figure in the history of the School of Salamanca. He was a Dominican, a contemporary of the School’s founder Vitoria, and considered to be one of its best writers on economic subjects.

In 1532 Soto was appointed to a chair of theology at Salamanca. His fame was such that, in 1545, the Holy Roman Emperor and King of Spain Charles V appointed de Soto, now regarded as the most eminent of the Spanish theologians after Vitoria, as his own representative at the Council of Trent. He became Charles’ own confessor 2 years later. Surely if this man held for the “free market” approach to commodity pricing, such must be a genuine teaching emanating out of Salamanca.”

After some uncomfortable consternation, it dawned on me what I was reading; rather than being de Soto’s own position and teaching on the matter these were the Objections to Soto’s own position, which always, of course, appear first in any properly organized Scholastic article. De Soto’s own teaching on the matter of the just and proper price is perfectly in line with what you would expect a Catholic theologian of a still flourishing and faithful civilization to say.

De Soto’s first “conclusion” with regards to this issue is to make a distinction that is the common-sense ground work for any discussion of prices: the price of a “good” (or commodity) is not determined by its essence (how the thing fits into the whole hierarchy of creation), but rather, “by the measure in which [it] serve[s] the needs of mankind.”

Here he affirms what was taught during this same period (1554) by another Salamancan scholar Diego de Covarrubias, “The value of an article does not depend on its essential nature but on the estimation of men, even if that estimation be foolish.” The “goods” we are citing here are “goods” which are good insofar as they service human needs.

These things, therefore, have a price insofar as they are valuable in the eyes of the citizens; these goods or commodities would allow the citizens to satisfy their human needs. De Soto concludes this foundational claim about prices by saying, “We have to admit, then, that want is the basis of price.”

Things are, therefore, more desirable, and therefore will go for a higher price, insofar as they more perfectly satisfy man’s desire for fulfillment and sustenance, irrespective of the place which the thing holds in the hierarchy of Creation. As St. Augustine states (City of God, Book 2, chapter 16), “a man would rather have corn than mice in his house”; this, even though mice are ontologically more perfect than grains of wheat.

When speaking of the “want” which is at the basis of all economic life and pricing, de Soto recognizes, in a very balanced way, that when we speak of “want” we must not exclude a recognition of the fact that the city needs “adornment”; even though such things are not necessary for human life, it is something which render life “pleasurable and splendid.”

In de Soto’s second “conclusion,” we find a statement which directly contradicts the Libertarian claims that the later Scholastics of Salamanca thought that nothing should be considered when calculating price, other than “supply and demand.”

De Soto lists supply and demand as one of the elements that go into determining the just price for an item. “Next, we must bear in mind the labor, trouble, and risk which the transaction involves. Finally, we must consider whether the exchange is, for better or worse, to the advantage or disadvantage of the vendor, whether buyers are scarce or numerous, and all other things which a prudent man may properly take into account.”

In other words, much to the consternation of those who would insist that the Salamanca School recognized nothing but the needs of “supply and demand,” we find one of its most prominent scholars asserting that the entire process and situation of production and sale must be considered when the just price is calculated. Social and economic prudence is truly queen here.

We find out in the next paragraph who it is, exactly, who is entitled to make a binding judgment, while employing this social and economic prudence. The answer to this question depends upon another Scholastic distinction. This distinction is between the “legal” price and the “natural” price.

These are, as de Soto states, the “two-fold” aspect of the “just price.” Here we find that “the just legal price” is that which is fixed by the prince. The “discretionary” or “natural price” is that which is current when certain prices are not legally controlled.

De Soto states that this distinction is one drawn by Aristotle in his Nicomachean Ethics (V, chapter 7). Notice, in this regard, de Soto is not making a “value judgment,” saying that the “legal price” is bad and the “natural price” is good. As we will find, the application of these two different types of prices depends upon what type of good or commodity we are speaking of.

The next few paragraphs of the passage we have been citing are very significant and are echoed by other scholars of the Salamanca School. De Soto states, “To understand the [above] Conclusion and to judge its validity, and to see why it is necessary for prices to be controlled, we must realize that the matter is a primary concern of the republic [in the sense of res publica or the commonweal] and its governors, who, in spite of the arguments repeated above [i.e., those “free market” arguments in the Objections], ought really to fix the price of every article.

But since they cannot possibly do so in all cases, the task [of “fixing” the price of those commodities which the prince has not fixed] is left to the discretion of buyers and sellers. The price that results is called the natural price because it reflects the nature of the goods, and the utility and convenience which they bring [emphasis my own].”

In proof that the term “legal price,” entails no negative judgment on this form of pricing, we can cite de Soto as stating, “When a price is fixed by law (for instance, when a measure of wheat or wine, or a length of cloth, is sold for a certain sum) it is not lawful to increase this price by even a farthing. If the excess be great, then it is mortal sin and a matter for restitution.”

Those prices, which are not regulated, especially the prices of commodities extraneous to the basic needs of the citizenry, can “enjoy a certain latitude within the bounds of justice.” Here we find that even the prices allowed to fluctuate, must be kept within the bounds of justice; “justice,” in this case, meaning the requirements of the common good.

The Complexity of the Just Price Reaffirmed

De Soto was, as was every Scholastic, an inheritor of a centuries-old tradition of scholarship and learning. His statements concerning the advisability of “fixing” prices, had antecedents deep in the heart of the Middle Ages. That characteristic, “non-giant,” the Viennese scholar Heinrich von Langenstein was an advocate of a strict system of price controls. He advises the prince, however, to fix prices in accordance with the customary price, which is determined by “the degree of human want.”

Moreover, Langenstein shows a completely balanced approach to the question of the just price. He acknowledges that there is an objective factor, in the sense that it should be fixed by some authority standing outside the market, and yet subjective as being the product of subjective factors. Some of those subjective factors that Langenstein mentions are: supply and demand, utility, cost of production, remuneration of labor, cost of transport, and risk.

All of these are to be taken into account when determining value. Just like St. Thomas Aquinas, Langenstein understood “supply and demand” to play a part in determining price.

Grice-Hutchinson herself recognizes this to be the generally held position of the Scholastic tradition, when she writes, “we have seen that the concepts of utility and rarity were placed high in the traditional list of factors determining value which accompanied scholastic discussions of the ‘just price.’” She, also, admits, “we have seen that our Scholastic writers regarded utility and rarity as the primary, though not the sole, determinants of value” [emphasis mine].

If we should look, specifically, for another member of the School of Salamanca who affirms de Soto’s teaching on the desirability of fixing prices, especially those of “staple” commodities, we come upon one Pedro de Valencia. In his Discurso sobre el precio del trigo, he states that, “those who allege that a thing is worth the price it will fetch must be understood as referring only to things that are not essential to life, such as diamonds, falcons, horses, swords, and also to other commoner things when there is no fraud, compulsion or monopoly, and when vendor and purchaser enjoy equal liberty or suffer equal need [emphasis mine].”

Recognizing, however, that in matters of real need the citizenry is at a distinct disadvantage in any exchange, he states, “in the case of bread, in years when it is dear – the vendor always enjoys liberty and plenty, and the purchaser always suffers urgent need and want.”

Now we come to the question of the just price, “The just price is not whatever a thing will fetch on account of the purchaser’s need, nor can such a price in conscience be demanded. No price is just or should be regarded as current if it is against the public interest, which is the first and principal consideration in justifying the price of things.”

Bernadine of Siena and Antonino of Florence: Saints Misconstrued

We ought to be very much surprised when we find a Neo-Liberal scholar like Raymond de Roover focusing our attention on two great saints, St. Bernadine of Siena and St. Antonino of Florence. It is, first of all, surprising to see that they are termed, “The Two Great Economic Thinkers of the Middle Ages,” when they lived their lives square in the heart of the blossoming Italian Renaissance.

That these thinkers are acclaimed as far-sighted prophets of the goodness of Liberal Capitalism is also surprising, since their attitude towards economics itself could not be farther away from the mentality of a von Mises, who would hold the laws of private property and the “free-market” to be adverse to the “heterogeneous” moral claims made by the divine and natural law.

Here it would be useful to recall von Mises statement that, “In urging people to listen to the voice of their conscience and to substitute considerations of public welfare for those of private profit, one does not create a working and satisfactory social order [emphasis mine].”

The only thing which the two great saints under consideration intended by their preaching and writing on economic issues was to “urg[e] people to listen to the voice of their conscience and to substitute considerations of public welfare for those of private profit.” They, also, held that only if such things were done, would a just and satisfying civil order be attained.

When we consider the moral teachings of St. Bernadine (1380 – 1444) as these relate to economic issues, what we are analyzing are 14 sermons, which are part of a larger collection of sermons entitled, De Evangelio aeterno (Concerning the Eternal Gospel).

These Latin sermons, as opposed to his Italian ones, were meant to be read rather than preached. Here we can see the continuation of a long tradition, echoed in our own age by men like Heinrich Pesch, S.J., of including economic questions within the larger framework of ethics. In these sermons of St. Bernadine (a Franciscan and the great apostle of devotion to the Holy Name of Jesus), we find the general teachings of the Church as regards economic life repeated anew.

As de Roover himself admits, the condemnation of usury was a prominent theme in St. Bernadine’s writings. Just as was the case with the other Scholastics, St. Bernadine was “preoccupied with another set of problems [as opposed to questions of “how the market operates”]: what is just or unjust, licit or illicit? In other words, the stress was on ethics: everything was subordinated to the main theme.”

Both St. Bernadine and St. Antoninus (Archbishop of Florence from 1445 to 1459), both frown upon acquisitiveness as leading to sin and eternal perdition. St. Antoninus deals with the whole topic of market transactions in section of his Summa theologica moralis that deals with the sin of avarice. Moreover, economics was discussed within the framework of contracts, as Roman law understood these.

The virtues that regulated the individual and collective economic actions of men were the virtues of distributive and commutative justice (i.e., the State giving to its citizens “their due” and citizens “giving to each other their due”). Let us face it, the only “due” that the Libertarians allow is the absolute claim that each man has to have the government and his fellow citizens respect his, already demarcated, private property right.

They forget what the Distributists remembered quite well, all men have a certain right to private property. Those who uphold the Social Teachings of the Catholic Church, better than their Libertarian antagonists, understand the role of private property in personal and familial fulfillment.

When we study de Roover’s book on these two, putatively, innovative saints, we find ourselves at a loss to find a significant teaching that is not firmly rooted in the wisdom of the Catholic past or one which is not clarified, in a purely traditional way, by the later Scholastics of the School of Salamanca.

As de Roover himself recognizes, St. Bernadine, like the Medieval Scholastics before him, understood price determination to be a social process. Price is not set by the arbitrary decision of individuals but collectively by the community as a whole. St. Bernadine makes this explicit when he states, “the price of goods and services is set for the common good with due consideration to the common valuation or estimation made collectively by the community of citizens [emphasis mine].”

According to de Roover, in the writings of St. Bernadine, there was “only minimal analysis of changes in demand or supply as this affects prices.

With regard to the above question of price, as we found earlier with his analysis of the economic thought of St. Thomas Aquinas, de Roover’s portrayal of the intellectual “innovations” of St. Bernadine is very forced and often involves the use of statements that do not at all prove his point, in fact, they often contradict it.

One example is his citation of a single sentence, from the “sermons” of St. Bernadine, which seems to indicate that the saint held to an idea of the “just price” which was convertible with the idea of “market valuation.”

In support of this view, he cites St. Bernadino as defining the “just price” as, “the one which happens to prevail at a given time according to the estimation of the market, that is, what the commodities for sale are then commonly worth in a certain place.”

As we have seen, however, with regard to this determination of price based upon “supply and demand” and “market conditions,” there was a solid moral tradition, passing into late Scholastic times, in which it was considered perfectly reasonable that prices of certain inessential items were allowed to “float” freely, their value being determined by how much someone, who did not absolutely need the item, was willing to pay.

De Roover himself seems to recognize that the language of “just price” as “prevailing market price” refers to just this situation and to these kinds of goods. And yet, that de Roover wants to insinuate that St. Bernadino equated the “just price” with the “one that happens to prevail at a given time according to the estimation of the market” in all cases, is clear. With his usual hesitant definitiveness, he says, “This statement [about just price and prevailing market price], it seems to me, is so clear that it does not admit any other construction.”

If, as he seems to say, St. Bernadino equated just price with market price, all prices should, for justice’s sake, be subject to the free flow of market forces – any interference would be, according to this view, an interference in the market’s setting of the “just price.”

That this is not St. Bernadine’s view is made clear, again by de Roover himself, when he admits that the Franciscan taught “prices may be fixed for the common good.” Society, then, is in charge of setting prices.

Who does not hear the echo of the entire economic ethos of Christendom in St. Bernadine statement that, prices may be fixed for the common good, “because nothing is more iniquitous than to promote private interests at the expense of general welfare.”

St. Antonino, the Just Price, and the Just Wage

St. Antonino of Florence was explicitly committed to the position that civil authority had the right and, often, the obligation to fix prices for the sake of the common good. Clearly the “common estimation” by which prices ought be determined, included the possibility of the State explicitly setting the price of items.

According to de Roover, “Sant’ Antonino…states that it might be desirable under certain circumstances to have prices of victuals and other necessities fixed by the bishop, or even better, by the civil authorities. If there is such regulation, it is binding and victuallers and other tradesmen may not, without sinning, raise the price above the legal minimum.”

Rather than being anything like a “free market” advocate, the Archbishop of Florence reaffirms the traditional condemnation of usury and monopoly. He, also, insisted upon there being a “just wage.” The calculation of what would constitute a “just wage” was a social and a complex process that would involve the consideration of many different elements. To quote de Roover’s citation of St. Antoninus, “Sant’ Antoninus states that the purpose of wages was not only to compensate the worker for his labor but also to enable him to provide for himself and his family according to his social situation.”

Moreover, “it was as unfair and sinful to pay less than the just wage because a worker had mouths to feed as it was unfair to pay less than the just price because of the seller’s urgent need for cash.” St. Antoninus clearly saw man as a whole, not just as a private property owning (or not owning) unit.

The whole talk about a “just wage” (not to mention a “just price”) means nothing unless we understand man to be a social creature and all of man’s activities and social interactions, including his economic ones, as having an orientation to the higher and more perfect good, at least the true and fulfilling good of human existence.

We see this over-arching teleological (from the Greek word telos or goal) understanding of the human good present in the following statement that de Roover makes concerning the teaching of St. Antoninus: “The purpose of a fair wage was to enable the worker to earn a decent living, the purpose of a decent living was to enable him to lead a virtuous life, and the purpose of a virtuous life was to enable him to achieve salvation and eternal glory.”

As we might expect, from what we have seen from the various Libertarian writers cited in this article, de Roover “summarizes” St. Antoninus’s position by overturning everything he had previously stated concerning the saints’ teaching: “St. Antoninus’s own wage theory according to which the just wage was set by common estimation, that is, by market forces without any reference to individual needs.”

Here he is asserting A and not A simultaneously. Here we have the manipulation of a classical Christian moral text by a Libertarian whose views on economics, logic, politics, society, and, even simple human psychology would be completely inexplicable to our saintly Renaissance bishop.

Restoration Economics

Why does all of this matter? Much of “conservative” and “libertarian” thought, in the United States, in the British Commonwealth, and on the Continent of Europe has attempted to find a way to, as Arthur Penty put it, “stabilize the abnormal.” What is truly needed is a return to the normal.

What we have seen when analyzing the actual statements made by the Medieval and Renaissance moral theologians on economic issues is a balanced portrayal of what the “normal” is. What has been amazing to see is not how innovative they were, in a Liberal direction, but rather, how traditional and deeply Christian they were.

That there was room for discussion on such questions as the worth of money as a result of foreign exchange is a perfectly normal manifestation of the Catholic desire for justice and a deep prudence that understands the multiplicity of situations in which human beings act.

Such prudence cannot be taken as a revolutionary innovation or for an opening to modern economic liberalism.

The basis of our current “abnormal” is an inflated and unnatural understanding of man as an individual, free to “create” his own “value system,” which, to a certain extent, means to “create his own world.” Liberalism, in its economic and political manifestations, has created a situation in which the ancient psychological, social, economic, and political tapestry of human societies has been unraveled.

By upholding an ethereal concept of “choice,” it has robbed us of our honor, our personal security, and our heritage. This entire conception of man and human existence is embedded in the Neo-Liberal equation of the “just price” with the “market price.” That Arthur Penty and many others would present the “just price” and its attainment as the primary purpose of the Medieval Guild System is testimony to the fact that the very social life of Christendom, in a very real way, pivoted upon this reality.

That “justice” should involve more than mere “freedom of choice,” rather including within the very term an idea and concrete historical reality expressive of a higher order and more fundamental and essential obligations, is testimony to the fact that the spiritual psychology of Christendom was profoundly different from the one we find possessed by all those who reject the ancient way, whether they be Socialists, Globalists, or Libertarians.

For those who would, correctly, seek for a life outside of the spiritually suffocating totalitarian Liberalism that we find ourselves immersed in, Penty warns them that any attempt to realize the dream of an independent rural existence without price controls put into place, would result, for most, in economic suicide for families and for individuals.

These are sobering words. Our struggle must then take on a more encompassing religious, moral, and even political dimension if our children and our children’s children are to live a life richer and, hence, more traditional than our own.

Dr. Peter Chojnowski is a professor, writer and currently teaches at Immaculate Conception Academy in Post Falls, Idaho.

The photo shows, “Savonarola Preaching Against Prodigality,” by Ludwig von Langenmantel, painted in 1879.