Magna Carta and Business

Article written by Founder of the Rule of Law Education Centre, Robin Speed.

Much has been written about the Magna Carta and how it has come to be regarded as the foundation stone of democracy. Lord Denning for example is frequently quoted as saying:

“the greatest constitutional document of all times- the foundation of the freedom of the individual against the arbitrary authority of the despot”

But in all this writing it is hard to find anything written by a businessman or indeed anything about the relationship of business to the Charter. This is a great pity as the Magna Carta is first and foremost a business document, driven by businessmen for the benefit of business.

In modern day terms it is a free trade agreement, not between countries, but between business and the government of the day. For business wanted in the 13th century what business wants in the 21st century: the freedom to trade unhindered by onerous taxes and restraints, the freedom to make contracts with competent courts to uphold them, the freedom from appropriation by the government, and above all certainty in government action.

I will elaborate on this later, but first I would like to capture in everyday terms what it was like to be a businessman at the time of the Magna Carta, 800 years ago. All too frequently we assume that our problems are more complex than in prior generations and that after all, they were not as “civilised” as we are. A 13th century businessman was equally time poor, worried about the global economy, cheap imports and political unrest as we are in the 21st century.

The daily life of a businessman

You would have thought that a businessman in 2015 would have nothing in common with one in 1215, the time of the granting of the Magna Carta. But this is not so.

Imagine it is 1215 and William Marshall, an importer, awakens to a new year. He yawns, stretches and pushing aside the sheets and quilts that kept him warm throughout the night, puts on his woollen dressing gown. He shivers slightly for it was the custom in the 13th century to sleep naked.

There is no need to bathe as last night he bathed in a wooden vat brought into his bedroom by a servant who washed him down with soap made of mutton fat, wood ash and caustic soda followed by herb-infused water and finally with rose water. Running water through a tap was a luxury only known by a few; King Henry II in the 12 century had running water through pipes to his bedroom that drew water from a well many feet below.

It was still dark outside, as it is mid-winter and sunrise is not for an hour. Several candles in his bedroom have been alight all night and a servant comes in, and lights the others.

He goes over to the glass windows, a recent addition to the house, and peers out to the other London houses, most of which are similarly lit.

Then with the help of a servant, William takes off his dressing gown and begins to dress. First he puts on underpants (something ladies did not wear in the 13th century) and then his new silk stockings. Next a linen shirt with long sleeves, which according to the fashion of the day his servant sews tightly on. Over this he puts on a woollen tunic secured by a belt and brooch; as the tunic has no pockets he attaches a purse to his belt to carry coins and other valuables. Finally he puts on his brand new leather shoes, crafted in England from Spanish leather with thin soles. Even if one’s bank balance was low it was important in the 13th century as is often the case in the 21st century, to be dressed in the latest European fashion. William cleans his teeth with a twig from a hazel tree, combs his hair and trims his beard, admiring himself in a mirror; he is 5’7” tall, the average height of a male in 1215. 

William says his morning prayers and then goes down stairs for a light breakfast. 

He is not yet married and eats in silence a meal of bread, butter, cheese and eggs, with an assortment of meats.  He washes this down with a fine French wine from the Bordeaux region.  William smiles to himself that at least King John has done one thing right by fixing at a low price, the price at which French wine could be sold. 

Whilst having breakfast he thumbs through a book which was at the time all the rage in London: “The Book of the Civilised Man” by Daniel of Beccles. 3  It lists in detail how a gentleman should behave, his table manners, how often to have sex, how to behave in a brothel and how to live a long and happy life.  The following are extracts:  

“While food is visible in your mouth, let your mouth savour no drink; while food is hidden in your mouth, let your tongue not minister to words.  The morsel placed in an eater’s mouth should not be so big that he cannot speak properly if he needs to do so.” 

“Sitting at table as a guest, you should not put your elbows on the table.  You can put your elbows on your own table, but not on someone else’s.” 

“When there is something you do not want people to know, do not let your wife know it” 

“Do not hunt for fleas on your arms or bosom in front of the patron or in front of the servants in the hall…. In front of grandees, do not openly evacuate your nostril by twisting your fingers” 

Daniel of Beccles has so many lessons for the modern businessman or woman, but I will have to leave that for another article. 

The breakfast dishes are cleared away and William goes back to his bedroom and sits not on a chair, as they were not frequently found in 13th Century bedrooms, but down on his bed, to organise his business for the day. 

William is in the business of importing woven garments from China and re-selling them in England.  He first goes through the monthly accounts of his business prepared by his accountant.  William can read and write in English, French and Latin and can readily understand the accounts.  Many businessmen in London at the time were highly educated and were able to enter complicated business arrangements in multiple languages.  An accomplishment that few of today’s businessmen or woman could boast of today.   

William’s business involves his making trips to Egypt to trade with the Muslim traders who controlled the silk market.  This he did by sea, taking just over two weeks. 

The celebrated and noble city of London  

William reflects on how lucky he is to be living in 1215 and in London, the second largest city after Paris. 

In the early 1170’s William FitzStephen had written the following about London: 

“Among the celebrated and noble cities of the world, the city of London, the throne of the English kingdom, is more widely famed than any other, and sends its wealth and merchandise further afield.  It is blessed in the strength of its defences, the honour of citizens, and the chastity of its wives.  The inhabitants of other cities are called citizens, but of London they are called barons.  They are known everywhere for the elegance of their manners, dress and cuisine.” 

This was not, however, a universal view as Richard of Devizes, a monk had written in the 1190’s of London: 

“Whatever evil or malicious thing can be found anywhere in the world can also be found in that city.  There are masses of pimps.  Do not associate with them.  Do not mingle with the crowds in the eating-houses.  Avoid dice, gambling, the theatre and the tavern.  You will meet more braggarts there than in the whole of France.  The number of parasites is infinite.  Actors, jesters, smooth-skinned lads, Moors, flatterers, pretty boys, effeminates, pederasts, singing and dancing girls, quacks, belly-dancers, sorcerers, extortioners, night-wanderers, magicians, mimes, beggars, buffoons.” 

Williams thinks that there is much truth in what both men have written. 

London had become the leading city in England, but it was certainly not alone, with Winchester, York, Lincoln and others all competing for the position.  It was now largely self-governed, with its own mayor and aldermen. 

Long before the Golden Arches and KFC, all manner of 24 hour “fast food” shops existed in London selling ready-cooked meals of fish, meat, venison and poultry.  

London was the place for a businessman such as William to live and work, a place considered truly civilised by the people of the early 13th century. 

England was in the view of English writers at the time, “a land of untold riches” where “no one who wanted to make money need be poor”.  William certainly hoped this was true, as he was the third son of a Lord with much property, but as was the custom, he was to inherit none of it.  All went to the eldest son.  He was, however, well-educated having studied in Paris, art and law.  Whilst there he attended lectures by the great Stephen Langton, who was to become the Archbishop of Canterbury and played a leading part in the granting of the Magna Carta.  After Paris, William completed a course at the recently established business school at Oxford University.  He had little capital but much ambition and education with useful contacts, and importantly while in London, he could live in his father’s city house. 

London was a great international market place where goods of all kinds were bought and sold.  Goods from basic grain to luxury items from all over the known world, gold from Arabia, oil from Babylon and most importantly for William, woven goods from China. 

The impact of Boroughs and Silver Coins 

England was no longer seen as an overwhelmingly rural country.  Urbanisation was everywhere.  The English historian William of Malmesbury wrote of the times:  

“Whereas in Ireland the cultivators of the soil are so poor, or rather so unskilful, that the people live in rustic squalor, the English and the French, with their more cultivated way of life, live in towns and carry on trade and commerce.” 

Land ownership was encouraged with leaseholds being available for resale, mortgage and being able to pass on in death.  Other privileges included allowing a person who lived in the “borough” for a year and a day to be a free man.  But most importantly the rent of a plot of land was low, typically a shilling a year.  One way landowners made money from their land was to have towns created on their land and to subdivide the block. This produced in time total rents ten times more than the rent of vacant rural land. 

In proclaiming Liverpool as a “borough” the King promised that those who took up land there would enjoy all the liberties and free customs of any other free “borough” on the sea coast of England.  These liberties and customs may appear nothing to us today, but were important at the time.  For instance, nobody paid rent at the weekly markets in Liverpool or markets elsewhere in England owned by the King.  This meant that the retailer was able to sell their goods without 10-20% of their turnover being paid out in rent. 

The King was in the business of subdividing land for profit.  But it was not only the King who was able to do this.  As the clergy owned about one quarter of all the land in Britain, they were also in the business of subdividing land for profit. In 1196 the Bishop of Worcester turned the village of Stratford-on-Avon into a “borough” and in no time the village became a thriving town with a population of over 1,000.    

In 1215 trade was booming, facilitated by a tremendous growth in money supply.  The median of this supply was the silver coins minted in England with a standard weight of at least 1.3 grams of silver in each penny.  Over 4 million silver coins were minted annually.  Each coin had a cross on one side so that it could be cut in half to produce a half penny or a quarter to produce a farthing. 

The creation of “boroughs” and the money supply opened up the British economy.  People took up the challenge, and small and large businesses were quickly created, the demand feeding on itself.  Trades and professions also quickly grew to meet the demand, and feed further demand.  By the beginning of the 13th Century, England had become a trading nation of shopkeepers and entrepreneurs.  These business owners need the freedom to operate their business, freedom from onerous taxes and certainty in actions from the King. 

Business Concerns at the time of the Magna Carta 

Trade overseas was also booming now that the threat of Muslim attacks had abated.  For since Saladin, the leader of the Muslims who had united them in a holy war against the west, had died over twenty years earlier the treaties negotiated by him and King Richard the Lionheart, the predecessor of King John, were generally observed.  They allowed Christian pilgrims free access to Jerusalem. 

The strange result of the largely unsuccessful crusades was the increased number of people travelling to Spain, Italy and the Middle East, including English traders keen to buy goods for which there was a ready market in England. 

William, after reflecting on this writes down what he has got to do during the day.  The list is long and he feels greatly pressured for time. He wishes for simpler times of rural Britain.   

In a rush he puts on his heavy woollen coat and goes outside to meet with the up-and-coming importers, financiers, lawyers and clerks. 

Daily networking is essential to William and his business.  The interchange of personal contacts provides news on all sorts of matters and information relevant to an up and coming businessman.  In an amazing shortness of time William hears news from around the world and at home. He learns what is happening in France, Italy, Spain, Holland and abroad, from Egypt and China, directly from people who have returned from abroad or third hand.  London is a real international centre and is abuzz with news. The great difficulty is to seek out the truth from the gossip and more importantly the relevant from the mass of irrelevancies.   

Today he desperately wants to hear news of Genghis Khan’s attack on China and the breakthrough of the Great Wall of China.  He worried how this would affect the supply of woven silk. 

After catching up on the news, talk inevitably gets round to the government of the day, in the form of King John.  He had lost Normandy and Anjou and much of Aquitaine in 1204.  And since then had found all sorts of means to raise over 30 million silver pennies, one half of the coins in circulation.  He then proceeded to lose all of this in 1214 when attempting to win back the French provinces.  He was viewed as a “loser” and bad for business.  But there is no mechanism to vote him out as King, only the extreme of removing him by force which involves civil war, and civil war, unlike war overseas, is bad for business.  

A revolutionary middle course is discussed; curb the King’s actions by having him agree in writing to the demands and have an internal mechanism of enforcement.   

A far reaching agreement about money  

What is often overlooked in considering the Magna Carta is that it is first and foremost a document about the extraction of money by the government of the day from a rebellious people. 

We are only too aware of the need for a written agreement when it concerns money, no less when governments are concerned.  The consequential level of detail to have certainty reduces the document to the grievances of the time, which in another time might make the document appear historically quaint, but of no relevance. 

The relevance is found in looking past the particular grievances and seeing the extent to which the agreement operated and in looking past the particular interested parties and seeing the extent to which the agreement applied to all.  On this measure the Magna Carta is a marvellous document, a unique document, to suggest that it is all about money is to debase it.  The Charter is about the freedom to live and trade with minimum government interference. 

It is easy to assume that there were only two parties to the Magna Carta, the King and the Barons, with each having separate interests.   

The King had a great number of Barons on his side and in addition had a vested interest in fostering more trade as a means of extracting more taxes.  The Barons who opposed the King, on the other hand, could not have done so without the support of the Church, Knights and Cities, each having different interests, had to be rewarded for its support.   

In addition to this mix was added the cross interests of the parties, for example, the Barons to ensure that any restriction on the King to tax them was not multiplied further down the chain so that Barons lost the right to tax others.  This is exemplified by criticism in “Dialogus de Scarcario” pp 162 – 163 of Knights who had so far “degenerated from the dignity of their status” to make money from trade. 

Further it might be thought that the Church would be above all this self-interest but it was not, holding one-quarter of all the land in Britain and seeking to prevent the King from interfering with its internal affairs, it had a real interest. 

To  make matters more difficult the groups of Barons, Church, Knights and Cities were divided among themselves as to what they wanted; that left the negotiations between them and by them extremely difficult. 

More than a Surrender Document 

It can be seen that the Magna Carta was not a surrender document imposed upon a conquered King.  It was above all an agreement made at a time of war by the King, and those who opposed him, to deal in the most minimal way possible, with a list of grievances on the one side, and a backdrop of  great armies readying to make war with each other on the other side. 

The parties saw the Magna Carta as a means of avoiding conflict, not as a surrender by one, or victory by another.  The Barons, the Church and the Cities each had a vested interest in agreeing, and so did King John.  All negotiated to protect his own interests as strongly as possible. There was nothing wrong in that; it would have been unnatural if it had been otherwise. 

The role of business in the Magna Carta 

To understand the role of business in the Magna Carta, one has to understand England and London at the time. 

By 1215 England had become a trading nation.  Like Australia, many centuries later, wool was exported mainly to Flanders to supply the cloth industry.  This was not to say that woollen goods were not manufactured in England. They were, but high quality cloth was manufactured abroad and imported into England, and this represented England’s chief import, largely from France. 

In 1215 London had a population of about 40,000.  This is approximately the size of present day Orange or Tamworth.  It was the principal centre of business in England, owing its pre-eminence to its location.  Ships could sail all the way up the Thames from the sea and goods could be unloaded and loaded well inland.  From there goods flowed to and from the south and north of England.  It was a money market, having a monopoly in minting coins, and this gave rise to sterling silver. 

This is not to say that London was the only city in England. There was also Winchester, Bristol, Norwich and York, for example, each a centre of business competing with London for pre-eminence. 

London had a voice, and a powerful voice, for business, with its own elected Mayor and being self-governed.  It owed its existence to businesses and the people who made up London were businessmen, large and small, from mighty barons to small shopkeepers.  What brought them together was one thing – making money from trade. 

London was not just a business centre and transport hub, it was a walled city with great fortifications. 

The King had recognised London’s importance by moving the Exchequer there from Winchester. 

In 1215 when the rebels arrived at London they entered the city without opposition and this lead, shortly thereafter, to King John’s granting the Magna Carta.  Like business today, they did not welcome one-sided policies openly. 

London and other cities represented what is always the strength and weakness of business.  They were an organised group that the government could readily tap for high taxes and they generally suffered in silence, working on the old principle that you grumbled and took no action because you could pass on the taxes to customers, rarely publicly supporting one side or other of policies, preparing to have a bet both ways.  However, when sufficiently stirred they did speak up, with a powerful voice. By 1215 business had had enough of the government, represented in the form of the King, and they wanted a change to the way England was governed. 

One only has to read the Charter to see the direct relevance to business. 

Take clause 41 of the Charter. 

“ All merchants are to be safe and secure in departing from and coming to England, and in their residing and movements in England, by both land and water, for buying and selling, without any evil exactions but only paying the ancient and rightful customs, except in time of war and if they come from the land against us in war.  And if the latter are found in our land at the outbreak of war, they are to be attached without harm to their bodies and goods, until we or our chief justiciar know how merchants of our own land, who are then found in the land against us in war; are being treated, and if ours are safe there, the others are to be safe in our land.” 

This clause was tremendously important to the English businessman living in 1215. 

It was a public declaration that England was open for business, domestically and internationally. 

It was addressed to “all merchants”.  Not just those who were barons or lived in London or sold particular goods or paid prescribed fees to the King.  It applied to the class of persons who were described as “merchants”; large and small, whether they sold the products they made or acted as middlemen.  It included virtually all businessmen of the day. 

It also applied to foreign merchants from any country, as it was very much in the interests of English businessmen to buy from foreign merchants. They brought fur from the Baltic countries, oil, spices, wine, gold, precious stones, silk and the like and resold them in England at a profit.  It must not be assumed, however, that English merchants were prepared to have foreign merchants compete with them in England.  Cities such as London frequently limited the activities of foreign merchants to act as wholesalers and permitted only English merchants to sell to the public.  Free trade was good – but not that good. 

English businessmen also wanted to travel overseas and sell goods made or produced in England (such as English wool) and to obtain a similar protection provided by this clause from other countries.  Reciprocity of treatment in foreign countries was something that the English businessmen considered as important.  Regardless of the ever-changing relations between England and other countries they wanted free movement, both in England and elsewhere. 

Clause 41 declared that all merchants were to be free from all taxes, levies and other extracts and were to pay only what was the custom.  This did not specify the quantum of the extracts but left it unspecified. 

Clause 33 of the Charter provides: 

“ All fish-weirs are in future to be entirely removed from the Thames and the Medway, and throughout the whole of England, except on the sea-coast.” 

This clause is often sniggered at as demonstrating how primitive traders were in 1215.  But far from being a trivial matter, these fish-weirs presented a serious problem to the free flow of business at the time and the removal of the weirs was seen as an essential means of opening up trade. 

It was especially important to have free movement on the River Thames.  For London had become the major port in England and any obstruction, particularly up-stream, prevented the free flow of timber and building materials. 

Clause 35 of the Charter provides: 

“ There is to be one measure of wine throughout our kingdom, and one measure of ale, and one measure of corn, namely the quarter of London, and one breadth of dyed, russet and haberget cloths, that is, two ells within the borders; and let weights be dealt with as with measures.” 

This clause says nothing about prices.  Not because that was not thought of, but because King John had already sought to impose price controls and they were largely ineffective. 

The specificity of the clauses in the Magna Carta mixed with vagueness i.e. the reference in clause 41 to the “ancient and rightful customs” is the magic which made the document possible and what glued it together.  The parties and the draftsmen had to decide how far to go in detailing their complaints.  Sometimes as with the Church they did not spell out their liberties, relying instead upon the unstated threat of Rome and God to enforce compliance4. Others clauses simply established a principle and expected the mechanism of the enforcement clause in the Magna Carta to remedy any breaches.  The drafting of these clauses and balancing all the competing grievances would have required tremendous judgment and skill.  As a lawyer myself, I uphold the legal mastery and wording of the Magna Carta and wish to also possess such judgment and skill when preparing all legal documents. 

Enforcing the Agreement 

It is therefore a myth to think of the Magna Carta as agreed upon by King John immediately after it was demanded by the Barons. 

Holt “The Making of Magna Carta” pp 219 – 224 has suggested that the Magna Carta was the work of a small committee slowly reaching common ground over a period of a fortnight. 

Businessmen are fully aware of this painstaking process of reaching an agreement in a written form.  Often things are written with the intention of being clearly and precisely stated whilst others are written with the intention of being ambiguous to reach agreement, whilst others are intentionally omitted. 

Attention needs to be given regarding how the Charter was to be enforced.  In the past the King having granted a charter, considered he had a right to undo what he had granted, whenever he wished.  But the Magna Carta was to be different; the King was to have no right to undo what he granted. 

The method of enforcement was contained in clause 61, which is by far the largest clause in the Charter, occupying about one ninth of total. 

The thinking which inspired the clause must have been well developed by business before the Magna Carta was drafted.  It represented thinking far beyond its time (presumably of Stephen Langton, the Archbishop of Canterbury who was influenced by businessmen at the time). 

The introductory part to the clauses stated diplomatically that the clause “is provided for the full future enjoyment and lasting strength” of the provisions of the Magna Carta, as if it was natural for clause to be there. 

If the King breached any provision a complaint could be brought by any person before any four of twenty-five barons appointed for the purpose.  If the four barons decided there was a breach then the matter would be referred to the King to fix the breach.  If the King did not fix the breach within forty days, the four barons were obliged to refer the matter to the rest of the twenty-five barons to decide whether or not the King should be required to perform.  If they decided unanimously or by majority that the King should perform, the possession of the King’s castles, lands and possessions could be taken as compensation for the breach. But no personal action could be brought against the King, Queen or their children. 

To understand the Magna Carta you need to get into the minds of those who were involved at the time, deciphering the code by which it was thought and written, and recognising that often clauses dealt with competing instructions and unstated assumptions. With this understanding, we can work out the relevance of the Magna Carta for today’s context. 

Conclusion 

I have sought in this short essay to avoid technical or detailed historical descriptions.  I have sought rather, to acquaint businessmen and women in the 21st century with the Magna Carta and with what underlies and underpins it; the rule of law, giving freedom to live and trade with minimum government interference. 

The modern businessman and woman will do well to learn some business lessons from the Magna Carta.  To appreciate the broad sweep of the Magna Carta and the importance of business working with and, if necessary, supporting calls for the government or would-be governments to ensure that the rule of law in all its manifestations is observed: not only out of self-interest of freedom to trade, but of freedom to live.