Do Goods Have an Inherently Just Price?

As economies developed, the idea that a commodity has an inherent just price faded away. We now think of the value of a thing as being a price on which a buyer and seller agree. But the legacy of this idea of a just price lingers in the popular imagination. It is an odd lingering notion, however. If asked, few people would be able to explain when a price is just.
paying dollar cash to the waiter in cafe

Today’s essay is the second of four in a series by James E. Hartley on what literature can teach us about economics. You can read the first here.

Now comes deceit betwixt merchant and merchant. And thou shalt understand that merchandise is in many sorts; that one is bodily, and that other is ghostly; that one is honest and lawful, and that other is dishonest and unlawful. Of that bodily merchandise that is lawful and honest is this: that, whereas God has ordained that a reign or a country is sufficient to himself, then is it honest and lawful that of the abundance of this country, men help another country that is more needy. And therefore there must be merchants to bring from that one country to that other their merchandises. That other merchandise, that men exercise with fraud and treachery and deceit, with lies and false oaths, is cursed and damnable.

—Chaucer, “The Parson’s Tale”

Last week, we looked at the current discussion of the nature of wealth by exploring the very old idea that wealth is not distributed properly. As we saw, that idea was as common in ancient Athens as it is today. We also saw that to a significant degree, the proper distribution of wealth hinges on the question whether high levels of wealth are acquired in an appropriate manner or not.

Everyone knows that some fortunes are made by illicit means, and few (if any) defend thieves. But, is wealth acquisition by people engaged in perfectly legal business ever immoral? For example, if the price of oil rises because of a disruption to the supply chain or production, there are loud cries of price gouging. The accusation of price gouging hinges on the idea that there is an inherently “just price” that the seller is departing from. Price gouging is thought to be immoral because buyers are being charged far more than the appropriate price. One implication of this view is that making a profit (especially a large one) is wrong because it probably means that the seller is charging far more than the good’s “just price.”

This idea that selling goods for more than the just price is immoral is ancient, and it was expounded by a variety Christian thinkers beginning with the Church fathers and culminating in Aquinas. Chaucer’s The Canterbury Tales illustrates this view, giving examples of how greed and desire for profit are morally blameworthy. As we will see, the “just price” framework doesn’t map neatly onto economies, but its legacy lingers on anachronistically in today’s economic debates.

The accusation of price gouging hinges on the idea that there is an inherent “just price” that the seller is departing from.


The Just Price

When Chaucer describes the pilgrims in the “General Prologue,” he labels them by their job titles rather than their names. Chaucer’s age was a time of great change in the economic life of Europe. Earlier generations primarily comprised rural, agricultural workers. In those days, life was inextricably tied to the land. One worked outside, and a person’s willingness to work hard was an essential part of his or her moral character. Chaucer portrays this earlier age through his ploughman, a common rural laborer, who is a model of hard work and impeccable Christian virtue.

Chaucer’s contemporaries would have recognized the ploughman as a relic of a bygone era. By Chaucer’s time, economic life was becoming increasingly dominated by the towns. Craftsmen had begun to eclipse ploughmen as the paradigmatic profession. As craftsmen grew in importance, they organized themselves into guilds, associations that regulated both the method of production and the products sold. To work in a medieval town meant to join a guild whose power over what you could do was great. Specialization was the rule, and jobs were rigidly defined. Chaucer includes a quintet of guildsmen among his pilgrims, whose characters are clearly antithetical to the ploughman’s. Rather than quietly committing to work hard, the guildsmen are obsessed with status. These guildsmen are also obviously all prosperous. Interestingly, for all their moral shortcomings, there is no hint that their professions rely on scams or cheating. Chaucer does seem to condemn the guildsmen’s desire for gain and their avarice. But their occupations themselves are seemingly innocuous.

In this historical era, then, economic life is rigidly divided into specific professions. Hovering on the fringes of this economy, though, was a profession that was inherently morally suspect: the merchant. Merchants were people who would buy goods from one person with the intention of selling them to another. By buying an item for a lower price and selling it for a higher price, the merchant could make some profit.

As everyone at the time knew, any individual who buys a good to resell it for a profit was worthy of great condemnation. For example, the sixth-century Roman statesman Cassiodorus declared that merchants were an abomination. Similarly, in remarks falsely attributed to St. John Chrysostom explaining why Christ cast people from the temple in Matthew 21, we read: “He that buys a thing in order that he may sell it, entire and unchanged at a profit, is the trader who is cast out of God’s temple.”

As everyone at the time knew, any individual who buys a good to resell it for a profit was worthy of great condemnation.


Condemnations like those in the preceding paragraph strike the modern ear as rather odd. After all, reselling products is exactly what retail stores do all the time. To understand why the activities of the merchant are inherently problematic, we need to look back at medieval economic theory, beginning with the idea of the just price. All goods have an inherent price; the price of the good is, in essence, a property of the good, much like the color and shape are properties of the good.

Because each item has a just price, it is inherently unjust to sell an item for more than its true value. As Aquinas explains, “Therefore if either the price exceed the quantity of the thing’s worth, or, conversely, the thing exceed the price, there is no longer the equality of justice: and consequently, to sell a thing for more than its worth, or to buy it for less than its worth, is in itself unjust and unlawful.” It is thus not only unjust for a seller to demand more than the just price for a product, it is immoral for someone to pay less than the just price for a product. To demand more or pay less than the just price is a form of theft.

Merchants have long been considered dishonorable because their practice tended toward injustice of this sort. Plato notes, “all that relates to retail trade and merchandize, and keeping of taverns, is denounced and numbered among dishonorable things.” Similarly, Aristotle would ban any merchants from the state, since “such a life is ignoble and inimical to virtue.” The early Church Fathers completely agreed: Ambrose, Tertullian, Leo the Great, and others roundly condemned the activities of merchants because their activities inherently tended toward cheating, lying, and enhancing greed.

By the time we get to the thirteenth century, the idea of the just price was well established. Aquinas follows Augustine in finding some exceptions to the blanket prohibition on selling a product for more than the price for which it was acquired. But any merchant whose motive is solely to enrich himself by his trading activity is acting in a thoroughly immoral and completely indefensible manner; this latter sort of trading is “justly deserving of blame, because, considered in itself, it satisfies the greed for gain, which knows no limit and tends to infinity.”

When we first meet the Merchant in The Canterbury Tales, we know immediately from the description of him into which category he falls.

A merchant was there, on a high-saddled horse:
He’d a forked beard, a many-coloured dress,
And on his head a Flanders beaver hat,
Boots with expensive clasps, and buckled neatly.
He gave out his opinions pompously,
Kept talking of the profits that he’d made,
How, at all costs, the sea should be policed
From Middleburg in Holland to Harwich.
At money-changing he was an expert;
He dealt in French gold florins on the quiet.
This worthy citizen could use his head:
No one could tell whether he was in debt,
So impressive and dignified his bearing
As he went about his loans and bargaining.
He was a really estimable man,
But the fact is I never learnt his name.

(This and following: David Wright translation)

A contemporary of Chaucer would immediately recognize that the Merchant is a villainous fellow. The forked beard makes us think of the forked tongue of a serpent, much like that in the Garden of Eden, which was “more crafty than any other best of the field” (Genesis 3:1, ESV) and inherently deceitful. His dress indicates great wealth, he talks of nothing but his profits, and his financial dealings are sometimes illicit. This particular merchant is thus constructed in a way to alert the reader that he does not meet any of Aquinas’s exemptions to the prohibition on trading; the Merchant is clearly profiting far beyond necessity, using the profits to buy luxurious goods for himself, and obviously trading with the sole intention of making such profits. Indeed, the Narrator concludes by noting with an air of sarcasm that while the Merchant was obviously an esteemed figure, the Narrator never even learned his name; never once on the pilgrimage does the Narrator stoop to a conversation with this despicable fellow. The Merchant is clearly the outcast.

The Merchant’s tale adds an element of comedy to the situation. The Merchant begins his tale by relating his marital problems; stating that he finds it too depressing to talk about his own life, he launches into a story of another’s problems in marriage (though it’s obvious this “other” person’s marital problems are actually the Merchant’s own).

The “Merchant’s Tale” is a story of “fraud and treachery and deceit, with lies and false oaths” to which the protagonist, January, is subjected by his wife May and her lover Damian. January is literally blind for much of the story, and his wife takes advantage of him. As the pilgrims’ host notes in the epilogue to the tale.

‘Now God have mercy on us!’ cried our host,
May the Lord keep me from a wife like that!
Just look what stratagems and subtleties
There are in women! Busier than bees
To diddle us poor fellows. On my oath,
They never miss a chance to twist the truth
That’s clear enough from this good merchant’s tale.’

This is not merely an accurate summary of the “Merchant’s Tale.” If you switch “a wife” and “women” to “merchants” in that passage, you would have a very good summary of the complaints about merchants’ activities in the fourteenth century. The “Merchant’s Tale” is thus an elaborate joke on the Merchant himself. The reader, knowing that merchants are full of deceit and will never pass up the opportunity to cheat another, are regaled with a tale told by the Merchant himself in which the Merchant is subjected to the very fraud he habitually practices on others.

Chaucer’s equating of the activity of merchants with adultery and infidelity is not unique to “The Merchant’s Tale.” It runs throughout The Canterbury Tales. If objects do indeed have a just price, then as the Roman Catholic Church once decreed, it is impossible for a merchant to attain salvation without first abandoning such an abhorrent occupation.

The Legacy of the Just Price

As economies developed, the idea that a commodity has an inherently just price faded away. It is, for example, difficult to determine a just price for a good with a very complicated production process. We now think of the value of a thing as being a price on which a buyer and seller agree. But, the legacy of this idea of a just price lingers in the popular imagination. It is an odd lingering notion, however. If asked, few people would be able to explain when a price is just. Yet, when the price is high, they do not hesitate to call it “unfair price gouging.”

The act of buying low and selling high is not inherently immoral, but cheating and deception are still quite wrong.


But what about when the price is unusually low? Is it immoral to buy a good for a really low price? If there is a just price for a good, then charging more or paying less than that price is equally immoral. This lingering notion of a just price has an odd modern feature. When a seller profits from a high price, it is wrong, but when I profit by buying something at a low price, it is simply shrewd dealing?

Chaucer’s comparisons of the activities of merchants to adultery is a useful way of separating merchant activity itself from immoral activity. It is not the sexual act itself that makes adultery wrong, but rather the context of sex that can make it wrong (i.e., sex with someone other than one’s spouse). Similarly, the act of buying low and selling high is not inherently immoral, but cheating and deception are still quite wrong.

Are the wealthy in modern society as inherently morally suspect as the Merchant in Chaucer? Clearly not. Nonetheless, even though Chaucer is still instructive in many ways, insofar as the complaints about wealth are a vestige of the old complaints about merchants engaged in buying low and selling high, they are relying on an economic paradigm that is just no longer here.

Obviously, our discomfort with exorbitant profiteering has little to do with people who get wealthy by running retail sales outlets. Maybe there is some other source of wealth that undergirds the suspicions about the morality of wealth. We will discuss that in a future essay.


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