Breaking the piggy bank: What can historical and archaeological sources tell us about late‑medieval saving behaviour?
By Jaco Zuijderduijn and Roos van Oosten (both at Leiden University)
Using historical and archeological sources, we study saving behaviour in late-medieval Holland. Historical sources show that well before the Reformation – and the alleged emergence of a ‘Protestant ethic’ – many households from middling groups in society reported savings worth at least several months’ wages of a skilled worker. That these findings must be interpreted as an exponent of saving behaviour – as an economic strategy – is confirmed by an analysis of finds of money boxes: 14th and 15th-century cesspits used by middling-group and elite households usually contain pieces of money boxes. We argue this is particularly strong evidence of late-medieval saving strategies, as money boxes must be considered as ‘self-disciplining’ objects: breaking the piggy bank involved expenses and put a penalty on spending. We also show that the use of money boxes declined over time: they are no longer found in early-modern cesspits. We formulate two hypotheses to explain long-term shifts in saving behaviour: 1) late-medieval socioeconomic conditions were more conducive for small-time saving than those of the early-modern period, 2) in the early-modern Dutch Republic small-time saving was substituted by craft guild insurance schemes.
Circulated by NEP-HIS on 2015-06-20
Review by Stuart Henderson (Queen’s University Belfast)
Thrift is a central tenet of Max Weber’s Protestant-ethic thesis. That is, characterised by a new asceticism, Protestantism, and specifically Calvinism, encouraged capital accumulation by promoting saving and limiting excessive consumption. However, a recent paper by Jaco Zuijderduijn and Roos van Oosten, and distributed by NEP-HIS on 2015-06-20, challenges this notion. It suggests that a saving ethic was already evident in Holland in the late‑medieval period – well before the Reformation years, and then actually diminished with the coming of Protestantism.
Such contradiction with the Weberian thesis is common in the literature, with recent scholarship finding no Protestant effect (Cantoni, forthcoming) or proposing an alternative causal mechanism (Becker and Woessmann, 2009). However, Zuijderduijn and van Oosten’s work adds a fresh perspective by focusing on savings and saving behaviour, and by employing a pre‑versus‑post investigation strategy. Notably, in relation to saving, the literature has generally been more sympathetic to the Weberian thesis, with Delacroix and Nielsen (2001) finding a positive Protestant saving effect, and more recent work by Renneboog and Spaenjers (2012) suggesting that Protestants have a heightened awareness of financial responsibility. Furthermore, the idea of a pre-Protestant ethic, as raised in this paper, has also been advocated in other inquiry. For example, Anderson et al. (2015) suggest that the Catholic Order of Cistercians propagated a Weberian-like cultural change in the appreciation of hard work and thrift before the coming of Protestantism – an analogy which Weber himself noted, and highlight how this had a long‑run effect in development.
In their novel approach, Zuijderduijn and van Oosten utilise both historical and archaeological sources to examine savings and saving behaviour over a period which envelopes the coming of the Reformation. This enables them to deal with two principal issues: first, the size and social distribution of savings by utilising tax records for the Dutch town of Edam and its surrounding area, and secondly, whether saving was strategic (or instead due to an inability to spend) by utilising archaeological evidence on the prevalence of money boxes in cesspits for several Dutch towns. Both sources yield complementary results.
The tax records reveal that middling groups were generally accumulating savings in excess of several months of a skilled worker’s wage well in advance of the Reformation. However, between 1514 and 1563, with the coming of Protestantism, the proportion of households holding cash actually fell, despite a rise in average sums held. Unsurprisingly, cash holding was consistently more common among the wealthier groups in society across all years. See figure 3 from the paper below.
While these tax records reveal the extent of saving, it is the archaeological evidence on money box prevalence which provides a means to link this cash holding with saving behaviour due to the disciplining process involved. Breaking the money box meant incurring an expense, and thus penalised spending. Complementing the historical evidence, Zuijderduijn and van Oosten find that, despite their early prevalence, money boxes decline and eventually disappear by the early‑modern period. Moreover, wealthier households, as gauged from the type of material lining the cesspit, tended to save more than poorer households. See figure 6 from the paper below. (Note: brick-lined cesspits were relatively expensive, wood-lined cesspits were less expensive, and unlined cesspits were least expensive.)
Though Zuijderduijn and van Oosten place considerable emphasis on religion in their work, they posit two alternative explanations for the transition in saving behaviour. First, they suggest that a shrinking share of middling groups in conjunction with prices rising quicker than wages (and even possibly a shortage of small change) may have reduced the ability of persons to engage in saving. In addition, they note the rise of craft guild insurance schemes which could have acted as a cushion against sickness or old age much in the same way that saving would have functioned in their absence. Given this, more work needs to be done on ascertaining the role of religion versus these other hypotheses, or alternatively making religion a less central theme in the paper. One potential avenue could be to attempt to identify if households were more likely Protestant or Catholic, or by utilising an alternative source where religious affiliation could be linked with financial holdings. While difficult, this would help to clarify the statement posed by Zuijderduijn and van Oosten in their introduction – “saving behaviour does not come naturally, and requires discipline. Did a Protestant ethic help converts to find such discipline?” Moreover, Zuijderduijn and van Oosten write in their conclusion that their evidence “suggests that the true champions of saving behaviour were the late-medieval adherents to the Church of Rome, and not the Protestants that gradually emerged in sixteenth‑century Holland” – a statement on which I need further convincing.
Further elaboration is also needed on historical context. In particular, the paper would benefit from further clarity on the evolution of finance in Holland during this period. For example, van Zanden et al. (2012, p. 16) suggest that cash holdings fell between 1462 and 1563, but due to investment in other financial asset alternatives. Furthermore, they comment that the capital markets were used a great deal during this period for investing savings (as well as obtaining credit) – in what would surely be a more profitable pursuit for rational Protestants as opposed to earning zero return holding cash.
Nonetheless, the interdisciplinary and natural-experiment-type approach adopted in this paper has provided inspiration for economic historians on how we can potentially use alternative methodologies to further our understanding of important questions which have previously gone unanswered. While this has been refreshing, the use of such sources demands a comprehensive understanding of historical context for accurate inference, and especially to differentiate between correlation and causation. Zuijderduijn and van Oosten have provided initial persuasive evidence pointing to a decline in saving behaviour in Holland at a time when Weber’s Protestant ethic should have been fostering thrift, but more work needs to be done to disentangle the effect of religious transition from an evolving capital market.
Anderson, Thomas B., Jeanet Bentzen, Carl-Johan Dalgaard, and Paul Sharp, “Pre‑Reformation Roots of the Protestant Ethic,” Working Paper (July 2015): http://www.econ.ku.dk/dalgaard/Work/WPs/EJpaper_and_tables_final.pdf.
Becker, Sascha O., and Ludger Woessmann, “Was Weber Wrong? A Human Capital Theory of Protestant Economic History,” Quarterly Journal of Economics, 124 (2009), 531–596.
Cantoni, Davide, “The Economic Effects of the Protestant Reformation: Testing the Weber Hypothesis in the German Lands,” Journal of the European Economic Association, forthcoming.
Delacroix, Jacques, and François Nielsen, “The Beloved Myth: Protestantism and the Rise of Industrial Capitalism in Nineteenth-Century Europe,” Social Forces, 80 (2001), 509–553.
Renneboog, Luc, and Christophe Spaenjers, “Religion, Economic Attitudes, and Household Finance,” Oxford Economic Papers, 64 (2012), 103–127.
van Zanden, Jan L., Jaco Zuijderduijn, and Tine De Moor, “Small is Beautiful: The Efficiency of Credit Markets in the Late Medieval Holland,” European Review of Economic History, 16 (2012), 3–23.
Weber, Max, The Protestant Ethic and the Spirit of Capitalism (London, UK: Allen and Unwin, 1930).