LAW, LANGUAGE, AND LIABILITY: The Persona Ficta of the Corporate Person in Theology and Finance

“Quite often, in fact, we find bankers accused of buying counterfeit coins as well as stolen valuables such as gems and silver belts. As we have seen … sometimes they themselves were discovered to be partners in the production and distribution of counterfeit coins, or they were found to have ordered the wholesale clipping and filing of mint coins, even though culling was a criminal activity.”

—Reinhold C. Mueller1

THERE IS A JOKE GOING AROUND in the wake of the vast fraud committed by the banking and securities communities over the past few years: “I’ll believe that corporations are persons,” says our anonymous interlocutor, “when the state of Texas executes one of them.” In some versions of the joke, the names of the corporations—J.P. Morgan-Chase, Goldman Sachs, and a host of others—top the list of those on “corporate death row.” Of course, in the audience there is always a lawyer or two who objects that the wholepurpose of corporations is to limit personal liability for the misdeeds of a corporation or its officers.

But it was not always so, and indeed, the original basis of the doctrine of the corporate person is theological, and the whole point of the theological version of the doctrine was precisely to make sure that an individual could be morally culpable for someone else’smisdeeds. So how did we get from the theological doctrine to the current state of affairs? How did we start with a doctrine whose whole purpose was to hold humanity corporately responsible and morally culpable for an individual’s misdeed, and arrive at the present, when the corporate person can, and has, gotten away with fraud on a massive scale, while many corporate officers presiding over the fiasco have actually given themselves bonuses for their “performance”?


The theological part of this story begins with a mistranslation made by St. Jerome in the Latin Vulgate, and with how St. Augustine of Hippo Regius, on the basis of that mistranslation, formulated the Western Church’s doctrine of “Original Sin.”

But first, some caveats.

The first caveat is this: to attempt to survey the vast amount of literature that has been written about the doctrine of corporate personhood as an adjunct of the Western Church’s doctrine of original sin in a few mere pages in a chapter is an impossibility. Whole tomes have been written about the subject, and all that can be accomplished here is to show the basic theological concepts, their roots, interconnections, and a few of the sweeping implications of that doctrine for the formation of Western culture, jurisprudence, and finance.

The second caveat flows from those previously mentioned roots, interconnections, and implications, for the doctrine as the Western Church came to hold it—in one form or another, and in varying degrees of “severity”—was precisely a western doctrine, unique to the medieval Latin Church, and therefore in its conceptual roots unique to the Protestant churches that broke from it. It was not, and is not, the doctrine of the Eastern Orthodox churches, which do not even refer to the doctrine as “original sin” but as “the ancestral sin.” As we shall discover in this short excursus, the western doctrine is intimately related to the notion of the “infinite debt” that mankind supposedly owes God, and to the Western Church’s interpretation of the sacrifice of Christ as a kind of “infinite sacrifice” balancing the divine account books.

1. The Central Verse and Crux Interpretum

a. The Greek and the King James

The easiest way to approach this complex subject in our theologically illiterate culture is by examining just one verse in the New Testament, a verse that is, so to speak, the foundation for the doctrine of original sin. That verse is Romans 5:12. In our exposition of this verse, it is important for the reader to remember that we are compacting centuries of analysis and theological interpretation, and thus, the reader will have to learn a bit of theology, and a little Greek and Latin, along the way. We cite the verse here in the translation of the Authorized (King James) Version, for reasons that will become apparent shortly:

Wherefore, as by one man sin entered into the world, and death by sin; and so death passed upon all men, for that all have sinned.

Before we proceed with complex analysis, it should be noted that the verse does not say that “sin nature” or even “guilt” passed upon all men, but that death did.

Now let us begin to look at this verse, and particularly the last clause of the verse—“for that all have sinned”—very closely. In the original Greek, this reads  and the two words that concern us here are  (or “eph ho,” to transliterate it), which the King James translators have very carefully (as we shall see) translated “for that.” The interesting thing about this expression——is that it is capable of three different interpretations all at the same time (after all, this is Greek!). These two little Greek words are, in the first instance, an idiomatic expression, meaning simply “because.” Thus, the first meaning of the verse in the Greek is this:

Wherefore, as by one man sin entered into the world, and death by sin; and so death passed upon all men, because all have sinned.

However, it is when we consider the meaning of the two Greek words  ω—eph ho—separately that the meaning becomes more specific. The second of these words, ω, or ho, is a masculine singular reflexive pronoun, referring, obviously, to a masculine singular antecedent in the previous parts of the sentence. The first word, εφ, or eph, is a preposition, which in this grammatical construction means “for that reason” or “because of which.” Notably, by adopting the translation “for that,” the King James translators were being scrupulously faithful in trying to preserve not only thefirst meaning—“because”—but also the other two possible meanings—“because of which” or “for that reason”.

So the question at this point becomes “what is the antecedent of the masculine singular pronoun ω, or ho?”

In the previous parts of the verse, there are only two possibilities in the Greek, the “one man and death .

If one takes the first antecedent, the “one man,” then the meaning of the verse becomes this:

Wherefore, as by one man sin entered into the world, and death by sin; and so death passed upon all men, because of the one man all have sinned.

But there is a problem with this reading, and many Greek church fathers saw it immediately. The problem is that in such constructions, the normal rules of grammatical exegesis infer that reflexive pronouns refer, not to the farthest antecedent, but to the nearest, which in this case, is not the “one man,” but death. Thus, the more specific reading of the verse is this:

Wherefore, as by one man sin entered into the world, and death by sin; and so death passed upon all men, because of death all have sinned.

What this means is that on the first reading of the verse—“so death passed upon all men, because all have sinned”—is that death is a punishment for individual personal sin, whereas on the third reading of the verse—“so death passed upon all men, (and) because of death, all have sinned”—it isdeath, i.e., physical and spiritual corruption, that is passed from Adam and Eve to their descendants, but not the moral culpability for their sin. In other words, it is the consequence of their action—death—that is passed on, but not the moral responsibility for someone else’s misdeed. Indeed, it is largely the first and the third reading that the Greek church fathers favored, and hence, there is no notion within Eastern Orthodoxy that one inherits a moral culpability for Adam and Eve, or a “sin nature” as is often stated in the western version of the doctrine.

This close reading of the verse had enormous consequences for how the Eastern Church interprets other texts relating to this issue, and also had enormous consequences for legal and cultural developments in the East, not the least of which was that within Orthodox cultures it is not the Crucifixion of Christ that is the central liturgical event, but the Resurrection of Christ that is the central liturgical and cultural event. The reason is simple: the basic problem of mankind, on this view, is not so much a moral one (and hence, not a problem of infinite debt), but, so to speak, aphysical one that only God Incarnate, through the conquest of death, can repair.2

Note something very important here, for it will be crucial to understanding how the Western doctrine is in fact a doctrine of inherited guilt or moral culpability based on the doctrine of corporate personhood. In the Greek, death is indeed a natural consequence, that is to say, it inheres in the common human nature passed on from parent to child, and thus, in the Orthodox Christian view, from Adam and Eve to the rest of humanity. But in the Orthodox view sin remains a personal choice, and hence, the moral culpability is only ascribed to the individual person committing the act. Thus, a very clear distinction is drawn between person and nature, a distinction that, as we shall now see, dissolves in the Western version of the doctrine.3

b. The Latin Vulgate and All Other English Translations

It is when we turn to the Latin Vulgate translation of St. Jerome that we see the origins of the western doctrine that will become codified by St. Augustine of Hippo Regius, for here, there is clearly an implied doctrine of a “corporate person.” In the Vulgate, Romans 5:12 reads this way:

Wherefore, as by one man sin entered into the world, and death by sin; and so death passed upon all men, in whom all have sinned.

The Latin of the last phrase is quite clear, emphatic, and insistent: en quo omnes peccaverunt, opting to translate only the second possible meaning of the Greek , a reading that, as we saw, was not favored by the Greek fathers nor really even consonant with normal rules of grammar.

Now we must “parse” this reading somewhat, again compacting massive amounts of theological writings of the period, and massive amounts of analysis. Our guide here will be the two crucial categories of person and nature, and the third metaphysical category so essential to theological dogmatics, the category of natural operation. We may get a glimmer of what each of these categories are designed to do, by noting the questions they are designed to answer:

1)Person answers the question who is doing something?

2)Natural operation answers the question what is it that they are doing? and

3)Nature answers the question what are they that they are doing these things?

We can gain an appreciation of the second and third questions from the old adage “if it looks like a duck, walks like a duck, and quacks like a duck, all natural operations of ducks, it’s a duck, i.e., possesses the common nature of duckdom.” We get close to an understanding of the difference between person and nature here by noting that ordinary language maintains it. We say “I am a person (person)” but “I have a soul” (nature), and thus, the rational faculties of human nature and soul are distinct from the person itself.As we shall see, it is customary for those in the West’s culture to make the mistake of identifying person with soul and thus to reduce person to the soul’s rational and volitional faculties, for reasons we shall get to shortly, reasons closely allied to the doctrine of an inherited moral culpability, the corporate person, and the peculiarly and uniquely western doctrine of “original sin” as distinct from the Eastern doctrine of ancestral sin.

It is these three categories of metaphysical distinctions—person, natural operations, and nature—and the three questions associated with them that form the basis of trinitarian theology, the doctrine of the Incarnation, and theological anthropology. It is worth pausing to take a short look at the first two, before passing on to a consideration of what happens to these three categories when viewed in the context of the implied doctrine of inherited guilt and the theological anthropology of the Western reading of Romans 5:12. It is important to note that our sole purpose here is not to defend the truthfulness or falsity of these doctrines, but merely to elucidate the general method of thinking behind them.

With respect to the database or dataset of the first two fields—trinitarian theology and the Incarnation—the texts of the canonical New Testament became, of course, the basis on which the questions were posed. For example, if in the New Testament the fathers saw Christ uttering phrases with the words “I am”—the name of God in the Old Testament—and performing miracles or forgiving sins, and if the Holy Spirit could be blasphemed against, then the clear implication was that the “Whos” that were “doing these things” had the same common “divine” nature. Hence, three personsdoing common operations of a common underlying nature.

With respect to Christ, the same order of asking questions in terms of the categories led to a different result. There, one person was performing two entirely different sets of natural operations: “divine” ones like healing the sick, forgiving sins, and so on, and human ones like walking, talking, and so on. This led to the famous Chalcedonian definition in 451 that he was one Person in two natures. In both the trinitarian and christological instances, it is important to note that the distinction of the three categories has been maintained.

Now let us return to the Western version of Romans 5:12 and parse what is going on in terms of the categories of person, natural operation, and nature, to see what has happened. First, let us recall the reading of the Vulgate itself:

Wherefore, as by one man sin entered into the world, and death by sin; and so death passed upon all men, in whom all have sinned.

Note now the implied steps of the metaphysical “logic” here:

1)The person of Adam—the “one man” of the verse—sins;

2)Sin is a personal use of the natural operation or exercise of the human will, which is a property common to human nature;

3)But the moral culpability of that choice passes to all his descendants (in whom all have sinned); thus,

4)The natural operation of the will and its personal use now defines the content of all persons common to the inherited nature. In other words, person has been confused with nature on the basis of one, or several, persons using their common faculty of will in the same or similar ways. This common functional use thus implicitly defines the very person itself, and consequently makes possible the conception of a “group” or “corporate” person conceived precisely in terms of this common functional use of the will.It is this step, in other words, which informs the corporate logic so many people find frustrating, namely, the formation of corporate “group think” cultures. Such a phenomenon is built into, and an inherent component of, the underlying corporate logic of the doctrine of original guilt.

In other words, the distinction between person, operation, and nature has been completely blurred,4 and what has arisen as a consequence is a kind of “group person”—the Protestant theologians would sometimes call it a federal person or “the federal Adam”—which is defined by the assumed common functions of the will and its involvement in a universal guilt. Persons engaged in common functions—in this case, “sin”—defined the group, or corporate, person in this case, all of humanity descended from, or “in” Adam: “in whom all have sinned.” It is this step that forms the theological basis of the doctrine of corporate personhood in law.

Finally, in its own way, this doctrine is deeply rooted to the Western Church’s understanding of the Atonement of Christ as being the payment of an infinite debt.5 In one sense, the understanding of “original sin” as an inherited guilt or culpability in someone else’s moral choices, by dint of the human nature all share in common, means that “sin,” perceived as a “debt” owed to God, begins both to “accumulate,” and to be a systemic problem. And since God is “infinite” and “infinitely righteous,” this means that the debt is infinite, and beyond the ability of mankind to repay, hence God, who is infinite according to this logic, had to become man in the Incarnation, and slaughter himself to himself, to repay the debt in an infinite death to abolish the “principle.” Notice that in this version of the doctrine, the ancient “topological metaphor” of the medium, which began as a metaphor of fecundity and creativity, as an open system of virtually limitless creation of information, was transformed into a zero-sum game and a closed system, for no matter how much information was created, that information was always in the form of debt, which only the top echelon of the metaphor—God—could pay off. We will encounter the metaphor, and its transformation within this closed system approach, yet again in this chapter, so for the moment, it is important to note how the closed system interpretation has roots deep within the western theological tradition.

2. The Corporation, or Partnership, in Medieval Italian Law

With this all-too-short and clumsy theological analysis in mind, we return to the main story, for we can see the role of this theological formulation nowhere more clearly than in the high medieval formulations of the liability of corporate partnerships, for it is here that we see clearly how the conceptions previously outlined entered into secular jurisprudence … and finance.

In his superlative study The Medieval Super-Companies: A Study of the Peruzzi Company of Florence, Edwin S. Hunt makes the following observations, which are directly germane to our survey here.

1)The medieval super-companies—with which we shall be dealing in the remainder of this chapter—were organized as semi-permanent partnerships;6

2)The intended semi-permanent or permanent nature of these partnerships was attested to by their use of a company logo, “such as the golden pears on a blue background in the case of the Peruzzi and the diamond-shaped heraldic design of the Bardi”;7

3)These partnerships were formed and dissolved entirely at the whim of the partners themselves, with such dissolutions being normally for the purpose of effecting new shareholdings of the partners themselves. Normally, upon such dissolutions and shareholding realignments, profits (or losses) were distributed among the partners/shareholders on a prorated basis;8

We now come to the crux of the matter, and the link to the theological basis of the doctrine of the corporate person. Hunt writes:

4)The “money values” that reflected the stake or share that a partner held in the company “entitled each owner to a share of profit or loss prorated to the percentage of this contribution to total company capital. Thus, the word ‘shareholder’ can be used interchangeably with the word ‘partner.’The companies were partnerships in the sense that each shareholder was subject to unlimited liability against all of his personal possessions in the case of bankruptcy.”9

Note that unlike the modern corporation, the medieval conception still holds the persons who constitute the shareholders of the “group person” of the corporation as personally liable for the losses or failure of the corporation or partnership itself. In other words, thetheological doctrine is still fully effective in secular conceptions. With this, we may now turn to the financial part of the story, and the rise and collapse of the great Florentine medieval super-companies, and lurking behind it all, the role of the financial oligarchs of Venice. And once again, in doing so, we will encounter in a new guise the “topological metaphor” of the medium.


1. General Considerations and Aspects of the “Super-Companies”

It is worth noting at the outset that the rise of the great Florentine “super-companies,” the Bardi company and the Peruzzi company, in the 14th century was closely synchronized with the demise of the previous great bankers to western Europe, the Templar order, in 1312. Like the Templars, the Bardi and Peruzzi quickly came to fill the role as “bankers” to the kings and princes of Europe with whose territories their enterprises had dealings. One might go so far as to speculate that there is some sort of connection between the demise of the one, and the rise of the others. Such speculation will, however, have to be tabled until later, when we examine once again the role of the Serenissima Republica of Venice in the demise of the great super-companies of Florence. In considering the possible role of Venice in their demise our catalogue of “oligarchical techniques of manipulation” will be considerably expanded, as we shall see.

But why the term “super-company” at all?

Again, in his critical study of this period and of these companies, Edwin Hunt notes that the modern term “multi-national” company would be misleading, since the nation states of that era were themselves not the sprawling bureaucratic edifices we see today, nor, in many cases, were they very large. The same problem holds true with the term “mega-company,” which conjures images of corporations with vastly larger amounts of capital, personnel, and other resources than was actually the case. Hence, the term “super-company” simply denotes an entity dealing on an international scale, with sufficient economies of scale to do so, but with a much narrower basis of operating capital and personnel than would be the case with a modern multi-national corporation.10 In Hunt’s own words, “The medieval super-company is defined here as a private profit-seeking organization operating several lines of business in a very large volume in multiple, widespread locations through a network of permanent branches.”11 It is this breadth of operation, sitting on top of a small base of capitalization, that in part tells the story both of their rise, and their collapse,12 but, as we shall see, only part of the reasons. The other part of the story must be carefully pieced together from a consideration of the academic monographs. When this is done, the black shadow of conspiratorial competition once more looms over the historical landscape.

There is another aspect that distinguishes these medieval “super-companies” from the modern multinational corporation, and that is that the medieval versions remained much more tightly in the control of the families—for our purposes the Bardi and Peruzzi, though there were a few others—that founded them. Indeed, Hunt observes that the company names are derived from the founding families, such that it becomes problematical “to distinguish between the activities and motivations of such companies and those of the eponymous families.”13 In the case of the Peruzzi company, though it relied upon many shareholders, control of the company was always firmly in the hands of the family, and the capo or “CEO” of the company was always a Peruzzi.14

As a matter of course, these medieval super-companies relied upon a careful “philosophy of management,” for given the slow nature of communications of the day, this meant that strategic decisions effecting the long-term goals of the company remained in centralized family control, but operational decisions had to be left in the hands of local factors, or “branch managers,” who were trained in the central offices in Florence. In branches of extreme importance, these factors were often members of the founding and controlling family itself.15

As a further means of retaining familiar control over the strategic functions of the partnership, all staffing of the branches was overseen by the central offices in Florence, that is to say by the founding and controlling families,16 and as a further means of retaining control, personnel in the various branch offices and locations were routinely rotated.17 All of this, of course, also required that the companies maintain consistent intelligence gathering, communications, and courier systems.18

In any case, with the Bardi and Peruzzi we are once again perhaps looking at that transference of families from Rome and its environs northward that began during the decline and collapse of the Western Empire. As I have noted elsewhere, this may be significant, for many of these families that moved northward to found the communities that would become the great Italian city-states of Genoa, Florence, Milan, and of course, Venice, were brought to the Roman Empire and to suburbican Italy from “Chaldea,” that is, from Mesopotamia, upon the Roman annexation of the region.19 In the case of the Peruzzi family, the subject of Hunt’s study, the family appears to be of ancient Roman descent, however, by the same token, its lack of mention in annual lists of Florentine noble families prior to 1280 suggests that it was not an ancient family.20 Here, as elsewhere, the truth probably lies in hidden family records, though as we shall see, with Venice we are in a slightly more favorable position.

Like the Templars before them, the Bardi and Peruzzi companies of Florence established lucrative trading monopolies over certain commodities within various European states, most notably the England of Edward III in order to finance the beginnings of the Hundred Years’ War, and thus effectively became “bankers” to monarchs. It is here that our story, and our analysis, must begin, for the standard academic interpretation of the causes of the demise of the Bardi and Peruzzi is that when Edward III defaulted on his loans, these companies, caught in a “liquidity crisis,” themselves collapsed in the 1340s.21 But as Hunt observes, this is largely an academic myth that scholars continue to repeat, for the exposure to Edward III by the Bardi and Peruzzi companies was not nearly as large as scholars originally thought, and thus the causes for their demise must be sought elsewhere. Hunt’s study is an attempt to do precisely that, to find that “elsewhere”22 and the real reasons for the sudden and spectacular collapse of these companies.

2. A Catalogue of Techniques: The Rise of the Peruzzi Company, and Mercantilism

A glance—and it can only be a glance—at the rise of the Peruzzi company will demonstrate just how quickly the medieval super-companies mastered all the techniques that many would now ascribe to the conspiratorial machinations of modern banksters, corporations, and groups like the Bilderbergers, the Council on Foreign Relations, the Trilateral Commission, and so on.

One of the standard modern techniques—the winning of special monopolistic concessions from the various governments in whose territories it was conducting business—was practiced by the Peruzzi and other medieval super-companies, and with a vengeance. Hunt makes a very important observation, an observation in which we see a familiar practice of the financial elites beginning to emerge. “The Peruzzi records,” he observes, “show that different members of the family followed different career paths—military, diplomatic, political, ecclesiastical, professional, and entrepreneurial—and many generated their own sources of wealth.”23 This penetration into the loci of public power—the church, professional occupations, military, and the organs of domestic and international politics—became the “playbook” for financial elites ever after, and, as we shall discover later within this chapter and have already seen, the Venetians perfected this strategy to a very fine art.

One of the key areas of such penetration was, of course, to gain influence or control over the actual issuance of money itself, i.e., to gain influence or control over the various national mints with which they dealt, beginning, of course, with Florence itself.24 The Peruzzi company began its rise to power by exploiting the situation between southern and northern Italy in the late 1200s and early 1300s. Namely, the Kingdom of Naples was, at that time, the grain supplier to the small city-states of northern Italy, and in return, was an importer of textiles and other manufactured goods from northern Italy and the rest of Europe, a fact that required the super-companies to have high capitalization.25 The Bardi and Peruzzi became the middlemen in this commodities trade, and thus, their corporations made much of their income on the commodities market. As a result of this type of trade, the super-companies, much like their modern counterparts, became involved in all aspects of the trade, from production and manufacturing, shipping, and of course ultimately the issuance and exchange of currency itself.26

Thus, by 1316, the Peruzzi company had joined a consortium or syndicate of the other great Florentine companies—the Bardi, and Acciaiuoli, later joined in 1330 by the Buonaccorsi—to operate the mints of the kingdom of Naples, collect the taxes, and pay various bureaucrats and troops.27 In other words, the Florentine super-companies had essentially formed a cartel for the purposes of coordinating and controlling their activities in the Kingdom of Naples, a move doubtlessly induced in part by the need to present a powerful front to the government, and to enforce repayment of loans. This is a point to which we shall return momentarily. But for the moment, one should also note that similarly, for a short period of time, the Peruzzi had gained influence over the mints of France in Paris, Troyes, Tournai, and Sommières.28

How was such influence and even control gained?

This may be understood through close consideration of Hunt’s research and comments on the relationship between the Peruzzi company and the Angevin kingdom of Naples. Hunt notes that by large loans to the Neapolitan crown, which specified precise details on when, where, and how the payments would be loaned to the crown, and more importantly how they were to be repaid:

Repayment was achieved mainly by diverting to the lenders certain revenues of the crown designated in the loan contracts, such as general tax receipts from a city, province, or the whole kingdom, or from gabelles and customs. Frequently, repayment was made through the waiver of the export tax on grain … The companies looked to currency exchange and fees for transporting cash for some profit but obtained most of their earnings in the form of “gifts” from the king … mostly they were in the form of tax exemptions, franchises, and valuable privileges, the most coveted of which was the right to export grain.29

This short quotation, summing up the practices of the Peruzzi company, is a textbook catalogue of the standard methods of private financial oligarchy to obtain influence, and eventually control, over the institutions of a sovereign government via economic privilege.

Before we comment further on this, however, let us look at another example of this pattern with the behavior of the Bardi and Peruzzi toward King Edward III’s England. The Peruzzi company, like the Bardi company, gained trading privileges from the English monarchy in return for large loans, which were “the price of admission to the wool trade,”30 at that time under a royal monopoly. At this juncture of history, such nations were too large and powerful for any one company to force an exclusive monopoly over such privileges, and indeed, Edward III preferred to disperse such privileges to a narrow group of firms, though, as we saw, a syndicate or cartel of sorts was created by the Florentine companies to present a more united front to the Kingdom of Naples. Thus the pattern is repeated: the “gifts” from monarchs or states that were of the most value to the super-companies were tax exemptions and privileged trading positions in the commodities and manufactured goods that were the core of their business.31 In the case of the Kingdom of Naples, the large loans advanced to the Kingdom, specifically to King Charles II at the beginning of the fourteenth century, gained for the Peruzzi company various special privileges, among them the ability to open a bank in Naples, control of the taxation of grain exports (!), and the right to have civil cases involving the company “put before the Court of Appeals, not the ordinary tribunals.”32 In other words, they obtained special juridical privileges or, to put it somewhat differently, the creation of special courts or special jurisdiction to hear cases involving the Peruzzi.33 Notably, throughout all of this, there was no direct challenge to the maritime powers, Genoa and above all Venice.34 Note that what has actually happened is that the super-companies had:

(1)negotiated that some of the kingdom’s tax revenues had to be specifically earmarked as loan repayments, in other words, they negotiated a lien on certain revenues of the kingdom, and

(2)negotiated their own tax collection prerogatives in order to ensure those obligations would be fulfilled. In short, they had negotiated away the sovereignty of the Kingdom of Naples.

Or, to put all these points more succinctly, they had acquired the sovereignty of the Kingdom of Naples by achieving control of essential state functions through the extension of loans and the imposition of what modern international banks call “conditionalities.”

Now let us catalogue the “playbook of techniques” of the super-companies as it has emerged thus far:

1)Retain familial control over the strategic operations of the company by maintaining controlling interest in the shares of the company;

2)Penetrate or infiltrate the key institutions and operations of the state—diplomatic, governmental, and above all, the mints or currency issuance—by training family members and close associates in those fields, with the goal being to make government institutions and bureaucracies fronts for corporate activity;

3)Work within existing legal constraints—in this period, the Church prohibition against usury—by negotiating privileged positions for the company in trading rights, tax exemptions, and even tax-collecting;

4)Control, or at least influence, the entire range of the company’s activities, from shipping, to manufacture and production, to currency and commodity exchange affecting those operations

In short, what one is looking at is classical mercantilism, rather than “capitalism” per se.

We would err, however, if we assumed this exhausted the playbook of techniques.

a. Control Both Sides of a (Dialectical) Conflict

Hunt reports that in 1312, the Peruzzi company negotiated a large loan to the grand masters of the Knights Hospitallers order, for the then-astronomical sum of 191,000 florins.35

This money, as Hunt notes, was to be employed for the construction of fortifications and other buildings, with the security on the loan provided by “all the order’s possessions in all countries.”36 With this, we may add a very modern technique of financial elites to our inventory of techniques:

5)Collateralize the infrastructure of nations themselves, particularly if that infrastructure is being constructed on the basis of loans made by the corporation.

It was inevitable that the super-companies, given their large scale and international base of operations, would be drawn into local or regional conflicts and wars. From 1302–1304, and again in 1314, there were local revolts of the Flemish populations from France. The Peruzzi, of course, found themselves caught in the middle, since their lucrative wool trade involved the looms of Flanders (in what is now Belgium), and we have already seen their penetration and influence in French mints.

They solved this political dilemma by acting as collectors of Flemish debts for the French monarchy, while simultaneously floating loans—with the customary negotiated privileges of course—with local Flemish authorities to “help make the payments possible.”37 Similarly, the Peruzzi, while gaining lucrative privileges in the Kingdom of Naples, were gaining similar privileges from Naples’ great rival, the Kingdom of Sicily.38 To be sure, these were accidents of history and consequences of the international extent of the company, but the Peruzzi response to the Flemish situation demonstrates just how quickly this high medieval financial elite learned the lesson that profits could be made from both sides in a conflict provided the corporation maintained the veneer of public neutrality. So we may add to our catalogue of techniques:

6)Maintain careful posture of public neutrality in cases of political conflict, while continuing to act as financial agents for both sides.39

It is important to notice a significant thing here: at this stage in history, while the super-companies and their intellectual descendants fully appreciated the utility of “being on both sides” of a conflict, they had not yet come to the insight that their modern counterparts would realize later in history, a realization that such figures as the great “closet Hermeticist and Magus” Hegel40 would make possible, namely that profit could be generated and extended through the creation of conflict. In short, the medieval super-companies in this respect, unlike their modern counterparts, arereactive rather than proactive.

But there were other sophisticated techniques as well, and with them, we begin to see the hints of something much darker …

b. Accounting and Exchange Techniques

As Hunt observes, the Peruzzi company has often been referred to in scholarly histories of accounting, and in particular, of the invention of double-entry accounting, as being in part responsible for its development.41 Indeed, Hunt devotes a whole chapter to the subject, but our purposes are not a history of accounting but rather an attempt to inventory the techniques of financial and corporate oligarchies and elites as they emerged in the Middle Ages.

In this respect, Hunt makes a number of statements that are well worth careful consideration. The first of these is that the Peruzzi company, like the other medieval super-companies, kept “secret books.”42 However, before we spring into the “conspiracy mode” of thinking, it is worth having a closer look at exactly what this means, and to do so we must cite Hunt directly:

The Assets Book and the Secret Book combine to produce something that at first glance appears broadly similar to the consolidation account of a modern multinational corporation. They contain what look like the opening balances of the new company carried forward from the old company,43and they deal with certain items of income and expense, especially interest, not carried in the subsidiary books. But their primary function is to house the individual accounts of depositors and borrowers controlled by the Florence Office, mainly nonshareholders (sic) in the Assets Book and shareholders in the Secret Book.44

Thus, with this explanation, the possibility of “double-bookkeeping” and “conspiratorial possibilities” recedes, for the Secret Book was simply the register of shareholders and their capital exposure in the company.

But elsewhere, Hunt reveals precisely what is taking place, using the example of Giotto d’Arnoldo Peruzzi, who maintained a capital investment in the company from 1300 until 1315, when he began to draw on the company for personal needs.45 On the closing of the books in November 1324, however, Giotto’s indebtedness to the company of 22,018 lira a fiorino was cleared by crediting it with dividends he was owed and the elimination of “his capital contribution liability”46 of 11,000 lira a fiorini. Hunt comments, “This cleanup has the look of what is now called the year-end ‘window-dressing’ applied by modern corporations and banks, and might imply that Giotto’s normal deep indebtedness to the company was being hidden from the nonfamily shareholders.”47 Similarly, Hunt observes that the company actually handled the disbursements to the Peruzzi “family fund.”48 In other words, the two sets of books really functioned as yet another layer of familial control of the company, for the family’s benefit, and as a means, if not ofdisguising family dealings from non-family shareholders, then at least of obfuscating them.

But there are even deeper possibilities of obfuscation, and with them we approach, once again, the Venetian part of the story. In the example of Giotto Peruzzi referred to above, the units of money were the lira a fiorino, and these were “not a currency at all, but a fictive unit of account employed by the Florentine business community.49 In other words, given the international extent of operations of such companies and the Bardi and the Peruzzi, special “units of account” were created by which companies converted local currencies and managed their books.

When one considers the addition of the sale and re-sale of bills of exchange, and the bi-metallic ratio of gold to silver bullion, then all sorts of possibilities for manipulation begin to occur, as we shall discover when we consider the Venetian part of this story.

The story of the collapse of the Bardi and Peruzzi super-companies, in 1343 and 1346 respectively, is intimately tied, as we have observed, not so much to the default of Edward III of England, to whom both companies had advanced many loans, but to the machinations of Venice to expand and secure her position as the pre-eminent north Italian city-state and hub of a vast maritime trading empire.

The story—and the conspiratorial possibilities—begins as most such stories do, with “discrepancies.” Penetrating beyond the standard academic line that the Bardi and Peruzzi were bankrupted after Edward III’s default, Hunt notes that the Florentine records on the Peruzzi company’s bankruptcy are “mystifying,” and to such an extent that they leave “the impression that we are being presented with a charade.”50 Indeed, Hunt also notes that the Peruzzi family “somehow managed to distance itself from the ruin of the company,”51 and even to retain their wealth and political power within Florence. (Perhaps those two sets of books had something to do with it, and perhaps there were once records that, for whatever reason—deliberate or accidental destruction—are no longer extant.)

But there are even more anomalies in the collapse of the Peruzzi company, and the deeper one digs, the more anomalies accumulate. These make the standard line that the collapse of the Bardi and Peruzzi was due solely to Edward III’s default even more problematic, making the academic bewilderment more acute, and making the ground for speculative possibilities, like deliberate conspiracy, more fertile.


1Reinhold C. Mueller, The Venetian Money Market: Banks, Panics, and the Public Debt, 1200–1600 (Baltimore: Johns Hopkins University Press, 1997), p. 70.

2I am well aware that the meaning of “death” for the Greek fathers implied both a physical and spiritual corruption, but am stressing the “physical” aspect of it for western audiences unaccustomed to thinking of such issues in other than moralistic and thus purely spiritual terms, in order to show that there is no notion of an inherited moral, or “legal,” culpability or guilt for someone else’s sin.

3It should also be noted that the King James alone of all English translations achieves a translation rending most of the subtleties of the underlying Greek text, whereas other translations opt to translate only one meaning, and the simplest one at that.

4It is worth pointing out that this blurring of distinctions also occurs in western trinitarian theology, as the Eastern Church pointed out consistently once the peculiar formularies of Augustine of Hippo became known to it. This blurring of the categorical distinctions also played a major role in the recurrent western controversies over predestination and free will. I have outlined these two points previously in my published theological works.

5See Farrell and de Hart, Grid of the Gods, pp. 201–217.

6Edwin S. Hunt, The Medieval Super-Companies: A Study of the Peruzzi Company of Florence (Cambridge University Press, 1994), p. 76.

7Hunt, The Medieval Super-Companies, p. 76. This point may seem confusing, given the fact that these partnerships were formed and dissolved by the partners. But one may gain an understanding of what is actually taking place by the modern corporate analogue. The partnerships of the various medieval super-companies were formed under the sponsorship of the prominent families—the Bardi, the Peruzzi—forming them. Thus, several formal partnership or shareholding arrangements could be sponsored by the family under the corporate logo and the “company” would constitute, over time, several such realignments of shareholdings. The formation and dissolution of partnerships would be analogous to the sale of shares between shareholders of a modern corporation, the only difference being that in the modern corporation, the corporate charter is no longer formally dissolved and re-registered each time such a realignment of shareholdings occurs.


9Hunt, The Medieval Super-Companies, p. 76, emphasis added.

10Hunt, The Medieval Super-Companies, p. 2.

11Ibid., p. 38.

12See Hunt’s remarks on the problems of cash flow that the super-companies had to confront, ibid., p. 65.

13Ibid., p. 11.

14Ibid., p. 25.

15Ibid, pp. 77, 85, 100.

16Ibid., p. 89.

17Ibid., p. 95.

18Ibid., p. 73, 83.

19See my Babylon’s Banksters, pp. 267–272.

20Hunt, Medieval Super-Companies, p. 16.

21Ibid., pp. 1, 6.

22Ibid., p. 6.

23Ibid., p., 12.

24Hunt notes that Tommaso Peruzzi was an official of the Florentine mint in 1311 (see ibid., p. 28). Of course, similar representation was accorded to the Bardi and other entrepreneurial families in Florence, effectively making the Florentine mint not so much a branch of government but an extension of the companies. This is a pattern, as we shall see, replicated in Venice, and raised to new orders of magnitude.

25Ibid., p. 39.


27Ibid., p. 49. It should be noted that the Florentine companies, being land-locked, perforce had to lease ships from Venice and Genoa to conduct their business.

28Ibid., p. 131.

29Ibid., p. 54.

30Ibid., p. 61.

31Ibid., p. 64.

32Ibid., p. 134.

33For further discussion see ibid., pp. 42, 47, 58–59.

34See the discussion on ibid., p. 55.

35Ibid., p. 136.

36Ibid., emphasis added. Hunt notes on pp. 137–138 that such large sums might indicate that the Peruzzi company was acting as an agent for the papacy. It is also worth noting, though it is a story that can only be taken up adequately in modern times, that the papacy was vital in providing the aura and cachet of probity to the super-companies. See Hunt, op. cit., p. 62. In this, we see a continuation of the pattern of association of financial with religious elites that I first discussed in Babylon’s Banksters.

37Ibid., p. 146.

38Ibid., p. 182.

39It should be noted that like many prominent Italian families of the era, the Peruzzi had both Guelph (pro-papal) and Ghibelline (pro-imperial) parties, so much a part of the complicated politics of the day, and about which so many reams have been written, that any attempt to survey it here is impossible. See ibid., pp. 19–20. Another way of viewing this is, of course, that behind the public veneer of passionate political differences lay the desire to be on both sides of a conflict.

40By referring to Hegel as a closet Hermeticist and magus, rather than simply as a philosopher, I am referring to recent trends in academic analysis. See Glenn Alexander Magee’s excellent study, Hegel and the Hermetic Tradition (Ithaca: Cornell University, 2001).

41Hunt, Medieval Super-Companies, p. 101.

42Ibid., p. 7.

43Lest this point seem obscure, it is to be recalled that the capitalization of each formal organization of the company reflects the relative investments by each partner, and hence, when the amounts of each partner’s contribution to the organization of the company changed, the prior partnership arrangement was dissolved (and profits and losses distributed among the partners), and a new arrangement was created and formalized.

44Ibid., p. 108.

45Ibid., p. 152.

46Ibid., p. 153.

47Ibid., pp. 154–155.

48Ibid., p. 154.

49Ibid., p. 7, emphasis added.

50Ibid., p. 231.

51Ibid., p. 28.

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