- - Friday, July 11, 2014


While researching and writing the story of Margery Kempe — the first autobiographer in the English language, 14th century visionary, mystic and pilgrim, and near-contemporary of Joan of Arc who was arrested by the same men whose leader later executed Joan — I was struck by some astonishing similarities between the 14th and 15th centuries and the modern world.

Like today, Europe in the 14th century endured a severe banking crisis and economic collapse. Powerful banking giants had dominated the landscape, banks owned by wealthy families in Florence and other Italian cities: the Acciaiuolis, the Bonaccorsis, the Cocchis, the Antellesis, the Corsinis, the Uzzanos, the Perendolis, the Peruzzis, and the Bardis.

Similar to what caused the recent financial crisis, these medieval bankers, too, blew a speculative credit bubble out of nothing, sketchy loans built on a fraudulent use of the portion of the money on demand deposit.

The boost in the money supply (in the form of loans that couldn’t be repaid) caused an artificial economic boom that melted down into a traumatic recession in the mid-14th century.

The downturn was triggered not only by “Neapolitan princes’ massive withdrawal of funds, but also by England’s inability to repay its loans,” notes Jesus Huerta de Soto of the Ludwig Von Mises Institute, as unfinanced wars and fiscal mismanagement had emptied the royal treasury.

Banks and businesses started folding, financial panic ensued, credit severely contracted (mancamento della credenza, or “credit shortage”), and a crisis of confidence and a recession took hold by 1346.

Sound familiar? Just like the shaky mortgage-backed bonds and other credit derivatives that bankers had sold, which helped blow a huge bubble last decade via a gigantic amount of leverage in the financial system. When that bubble blew up, it, too, led to a catastrophic downturn not seen since the Great Depression.

Just as economists have argued that what brought the U.S. out of the Great Depression was ramped-up business activity due to World War II, de Soto says what stopped the recession in the 14th century was, unfortunately, the Great Plague, which some estimates indicate sliced Europe’s population in half. “The devastating effects of the plague” drove down “the supply of cash and credit money per capita” to “its pre-crisis level,” but actually “laid the foundation for a subsequent recovery,” de Soto argues.

Contemporary accounts during the bubonic plague also indicate human beings felt they were in the end times, that they were seeing the destruction of mankind. Similar fears are felt today in the face of the threat of weapons of mass destruction, though some have argued the medieval individual experienced those fears more deeply than we have.

Similar to today’s fights over high taxation, England endured its worst tax rebellion in its history, the murderous Peasants’ Revolt in 1381, triggered by a series of three intolerable poll taxes on people as young as teenagers.

Like today, established institutions came under fire in the 14th century. The Catholic Church, the pillar of feudal society, came under siege, worsened by the Papal Schism of 1378. This is when the seeds of the Protestant Reformation were planted.

And just like the major advances of today—smart phones, computers, tablets, smart watches, the Internet, electric cars, robotics, drones, Google glass—Europe during the medieval era was also going through technological upheaval, which is why numerous historians call the period the Medieval Industrial Revolution.

Some of the inventions of that time: the printing press; screws and screwdrivers; blast furnaces; the long bow; the mechanical clock; eyeglasses; parachutes; devices to measure wind speeds; the Mariner’s astrolabe; double-entry bookkeeping; and the spinning wheel.

The medieval world also saw innovations in warfare. China made advances in firearms, fire arrows, cannons and cannonballs filled with gun powder. The period experienced, too, major advances in ship building, for instance, the Netherlands invented a new lock for its waterways, called a pound lock that is still in use today on many rivers and canals.

And just as the modern world has trading alliances between countries around the world, so did the Middle Ages. For instance, Margery’s hometown, back then called Bishop’s Lynn, was a major player in the Hanseatic League, a formidable trading alliance between England and countries that were the forerunners of Germany, Poland, the Baltic States, the Netherlands, Belgium and much of Russia. The Hanseatic League operated from the 13th to the 17th centuries, but its remnants are still with us today in Lufthansa Airlines, Hansabank, a bank which operated in Latvia, Lithuania, and Estonia, and the Hanze University of Applied Sciences, Groningen in the Netherlands.

But what struck me most about Margery Kempe’s story is how the people of medieval times—and their sense of humor — are similar to who we are today. Ordinary people revealed a country to itself because of their courageous mindset—a mindset that had the people of England challenging everything —and one that ushered in a new age, a new day.

Not unlike today.

Elizabeth MacDonald is the stocks editor for FOX Business and panelist on Forbes on Fox. MacDonald is the author of the new book, “Skirting Heresy: The Life and Times of Margery Kempe” (Franciscan Media, June 2014).

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