by Murray N.
Rothbard
One of the most
powerful influences in the legal and political thought and institutions of the
Christian West during the Middle Ages was the Roman law, derived from the
republic and empire of ancient Rome. Roman law classically developed in the 1st
to the 3rd centuries AD. Private law developed the theory of the absolute right
of private property and of freedom of trade and contract. While Roman public
law theoretically allowed state interference in the life of the citizen, there
was little such interference in the late republic and early empire.
Private-property
rights and laissez-faire were therefore the fundamental heritage of the Roman
law to later centuries, and much of it was adopted by countries of the
Christian West. Though the Roman Empire collapsed in the 4th and 5th centuries,
its legal heritage continued, as embodied in two great collections of the Roman
law: influential in the West, the Theodosian Code, promulgated by the Emperor
Theodosius in 438 AD, and, in the East, the great four-volume Corpus Juris Civilis, promulgated by the Byzantine
Christian Emperor Justinian in the 530s.
Both collections
emphasized strongly that the "just" price (justum
pretium) was simply any price arrived at by free and voluntary
bargaining between buyer and seller. Each man has the right to do what he wants
with his property, and therefore has the right to make contracts to give away,
buy, or sell such property; hence, whatever price is freely arrived at is
"just."
Thus in the Corpus, several leading Roman jurists of the 3rd
century quoted the early 2nd century jurist Pomponius in a classic expression
of the morality of laissez-faire: "In buying and selling natural law
permits the one party to buy for less and the other to sell for more than the
thing is worth; thus each party is allowed to outwit the other"; and
"it is naturally permitted to parties to circumvent each other in the
price of buying and selling." The only problem here is the odd phrase,
"the thing is worth," which assumes that there is some value other than free bargaining that expresses some
"true worth," a phrase that would prove to be an unfortunate
harbinger of the future.
More
specifically, the Theodosian Code was crystal clear: any price set by free and
voluntary bargaining is just and legitimate, the only exception being a
contract made by children. Force or fraud, as infringements on property rights,
were of course considered illegal. The code held explicitly that ignorance of
the value of a good by either buyer or seller was insufficient ground for
authorities to step in and rescind the voluntarily agreed contract.
The Theodosian
Code was carried forward in Western Europe, e.g., the Visigothic law set forth
in the 6th and 7th centuries, and the Bavarian law of the early 8th century.
Bavarian law added the explicit provision that a buyer may not rescind a sale
because he later decides that the agreed price was too high. This laissez-faire
aspect of the Theodosian Code later became incorporated into Christian canon
law by being included in the collection of "capitularies" (decrees)
by St. Benedictus Diaconus in the 9th century AD.
While the
Justinian Corpus, promulgated in the
East, was equally devoted to laissez-faire, it included a minor element that
was later to grow and justify attacks upon free bargaining. As part of the
Justinian discussion of how courts can appraise property for payment of
damages, the code mentioned that if a seller has sold his property for less
than half "the just price," then he suffers "great loss" (laesio enormis), and the seller is then entitled either
to get back the difference between the original price and the just price from
the buyer, or else get his property back at that original price. This clause
was apparently meant only to apply to real estate and to compensations for
damages, where authorities must somehow assess the "true" price, and
it had no influence on the laws of the next centuries. But it was to yield unfortunate
effects in the future.
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