Notes on Competition and Justum Pretium Theory and Practice in Medieval Italy

Abstract

Medieval Italian Comuni are often considered as one of the cradles of the modern capitalist spirit. Comuni introduced economic legislation in an attempt to counteract restrictions to competition on the one hand and to control the price of certain goods and services on the other. Price control of basic commodities was often motivated by reasons of public order – such as preventing commoners’ riots. Despite some loose analogies with the modern European Union competition law approach to pricing – namely in the area of excessive pricing – the Italian medieval Comuni pricing theory and practice substantially differed from the modern European Union one. Medieval theory struggled in reconciling market mechanisms with costs analysis and missed the distinction between efficiency and distribution. Moreover, medieval Comuni market variables were substantially divergent from the modern European ones. Despite Comuni being the wealthiest areas in Europe in those days, their consumers had significantly lower buying power, they were affected by different cognitive biases than modern consumers and they were highly segmented from a gender perspective. Medieval producers, that is artisans, did not enjoy the degree of market power that characterizes modern oligopolists. Artisans produced goods for merchants who were the main promoters of trade and economic development. Merchants often succeeded in squeezing artisans’ profits, granting consumers lower prices for manufactured goods, at times also thanks to free trade policies pursued by Comuni administrations.