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CEBRIG Working Paper Revisiting Graeber in the light of a medieval debt-enforcement custom: being hostage in an inn for a debt in the Low Countries between ca. 1250-1350 Jean-Luc De Meulemeester, David Kusman In this paper, we attempt to apply Graeber’s model of “baseline communism” to a medieval financial custom that was widespread in the former Low Countries: the Inliggen custom. This custom implied that a well-off debtor (often a high aristocrat) could send pledges (often his vassals and councillors) in an inn, to remain hostages as long as his creditor was not reimbursed. Inns offered far more than just lodging facilities, and providing food and drinks; they were information hubs, providing the guest with banking services, brokerage facilities and commercial storage, hence, their intimate relationship to medieval bankers such as the Piedmontese moneylenders. Within the institutional framework of the Inliggen custom, the inn was at the centre of a social network linking the creditor, the debtor and his pledges and the hosteller. Bearing close resemblance to the Pilgrimage economy of the late Middle Ages, the sojourn of hostages in an inn as pledges had a positive impact on the urban economy: the pledges were supposed to eat, drink and sleep in a high-standing inn, following the patterns of a conspicuous consumption, the town administration levied fruitful taxes on the wine excises and the pledges could also entertain ties with the local merchants aiming at buying luxury products such as clothes or jewels. All in all, elements of a “baseline communism” surfaced within this extended credit network: the loaned capital often fuelled the urgent needs of a high aristocrat; the practice both relied on the hospitality custom and on the collective solidarity of the pledges for their overlord. Finally, the ambiguous position of the hosteller (host, broker and partner of the Piedmontese moneylenders) shows that the financial custom was a by-product of aggressive profit-seeking strategies for both the lenders and the hostellers. In this sense, and as recognised by Graeber himself, it was no naïve communism but rather a crucial component of the exchanges in a highly commercialised urban society. Ultimately, this custom could be viewed as a primitive contract-enforcement mechanism (CEM). But to prove its efficiency we need to collect a broader sample of quantitative data that is not easily available for the time span of our study. Keywords custody for debt, inn economy, financial intermediaries, credit information, baseline communism. JEL Classifications G14, K12, N23. CEBRIG Working Paper N°21-010 July 2021 Université Libre de Bruxelles - Solvay Brussels School of Economics and Management Centre Emile Bernheim de Recherche Interdisciplinaire en Gestion ULB CP114/03 50, avenue F.D. Roosevelt 1050 Brussels BELGIUM [email protected] - Tel : +32 (0)2/650.48.64 Revisiting Graeber in the light of a medieval debt-enforcement cus- tom: being hostage in an inn for a debt in the Low Countries be- tween ca. 1250-1350 Jean-Luc De Meulemeester (CEBRIG-ULB), David Kusman (UR SOCIAMM-ULB) Abstract In this paper, we attempt to apply Graeber’s model of “baseline communism” to a medieval financial custom that was widespread in the former Low Countries: the In- liggen custom. This custom implied that a well-off debtor (often a high aristocrat) could send pledges (often his vassals and councillors) in an inn, to remain hostages as long as his creditor was not reimbursed. Inns offered far more than just lodging facilities, and providing food and drinks; they were information hubs, providing the guest with banking services, brokerage facilities and commercial storage, hence, their intimate relationship to medieval bankers such as the Piedmontese moneylend- ers. Within the institutional framework of the Inliggen custom, the inn was at the cen- tre of a social network linking the creditor, the debtor and his pledges and the hostel- ler. Bearing close resemblance to the Pilgrimage economy of the late Middle Ages, the sojourn of hostages in an inn as pledges had a positive impact on the urban economy: the pledges were supposed to eat, drink and sleep in a high-standing inn, following the patterns of a conspicuous consumption, the town administration levied fruitful taxes on the wine excises and the pledges could also entertain ties with the local merchants aiming at buying luxury products such as clothes or jewels. All in all, elements of a “baseline communism” surfaced within this extended credit network: the loaned capital often fuelled the urgent needs of a high aristocrat; the practice both relied on the hospitality custom and on the collective solidarity of the pledges for their overlord. Finally, the ambiguous position of the hosteller (host, bro- ker and partner of the Piedmontese moneylenders) shows that the financial custom was a by-product of aggressive profit-seeking strategies for both the lenders and the hostellers. In this sense, and as recognised by Graeber himself, it was no naïve communism but rather a crucial component of the exchanges in a highly commercial- ised urban society. Ultimately, this custom could be viewed as a primitive contract- enforcement mechanism (CEM). But to prove its efficiency we need to collect a broader sample of quantitative data that is not easily available for the time span of our study. Keywords: custody for debt, inn economy, financial intermediaries, credit infor- mation, baseline communism JEL-codes: G14, K12, N23 1 Revisiting Graeber in the light of a medieval debt-enforcement cus- tom: being hostage in an inn for a debt in the Low Countries between ca. 1250-1350. David Kusman, Centre de Recherche Arts et Culture des Sociétés anciennes, médiévales et mo- dernes (SOCIAMM)-Université libre de Bruxelles and Jean-Luc Demeulemeester, Faculté Solvay/ Brussels School of Economics and Management-Université libre de Bruxelles. This paper was presented at the online European Social Science History Conference in Leiden, 24 March 2021, in the session 'Creditors, Debtors, and Early Financial Markets (c. 1300-1800) ', organised by Elise Dermineur and Jaco Zuijderduijn. In custody for debt in an inn. When high-finance meets the feudal world During medieval times, credit practices were characterised by a chronic lack of trust- worthy financial information. Moreover, there were no professional commercial courts in the modern sense of the word in the former Low Countries. To enforce their loan con- tract titles, creditors had either to resort to private transactions or to aldermen’s courts where they could register their financial transactions and recover any debts owed to them. A legal tool existed among feudal lords to enforce their agreements (peace trea- ties, marriages, huge land transactions…): exchanging hostages. It was a crucial feature of these agreements to ensure that both parties would abide by their obligations. During the early thirteenth century, merchants and moneylenders adopted this feudal custom to enforce payment owed to them by high aristocrats. A good example is provided by the indebtedness of the count of Guelders vis-à-vis the Piedmontese moneylender Tadeo Cavazzone in 1282: This is the painful complaint of the count of Guelders against the count of Flanders (…). Be it known that the count of Guelders, for his custody and for the custody of his courtiers and their debts and the debt that he owed to the count of Flanders, had to pawn his estates and all his properties to the count of Flanders, and such a practice has rarely been seen among territorial lords. And the count of Guelders agreed to this because of the special trust he put in the count of Flanders, his father-in law, whose daughter had given him many children. And because of his trust in the count of Flanders, he pawned his estates, his castles and his revenues. 1 1 Excerpt of a letter of complaint from the count of Guelders to the king of France, roughly translated from the Old French, ca. 1296, complaining how badly he was treated by the count of Flanders because he was indebted to him, edited in Meihuizen 1953, appendix 1, p.107, original letter in the Archives Nationales de France, sect. J 522, n°22, document dating from circa 1296. 2 In this striking example, the count Reginald I of Guelders attempts at contrasting his support of traditional aristocratic ethos with the more mercantile values that the count of Flanders and his entourage— made up of merchants, legal councillors, knights and bankers—supposedly embodied. Of course, we have to stress here that in this letter to the king of France Philip IV, rhetoric played an important role for count Reginald of Guelders. After all, he had lost a great deal of his incomes during the 5 years that his es- tates had remained under Flemish tutelage (1291-1295). Reginald of Guelders had obvi- ously a card to play in convincing the king of France to condemn the lack of chivalric ethos of his vassal, the count of Flanders, Guy de Dampierre at a time when the count of Flanders contemplated entering into the English party of the Low Countries princes, supporting Edward I. 2 What was the rationale behind this “custody for debt” custom mentioned in the com- plaint of the count of Guelders? Around the beginning of the 1280ies, the count of Guel- ders embarked on an ambitious territorial enterprise to conquer the duchy of Limburg at the expense of the duke John I of Brabant. The loaned capital fuelled probably the need of the prince to win allies by his side in his political conflict with Brabant for the succession of the duchy of Limburg. Reginald of Guelders asserted that he was the sole legal prince in Limburg through his marriage with his first wife, Ermengarde, last heir- ess of the house of the dukes of Limburg.