THE ORIGINS AND IMPACT OF MAGNA CARTA

On 15 June 1215, English King John, in the meadow of Runnymede beside the Thames between Windsor and Staines, sealed the document now known as the Magna Carta. It is a document some 3,550 words long written in Latin. Some of its chapters seem of minor importance but there are also chapters which are still  clearly relevant. In the Charter, the king declared that, “To no one will we sell, to no one will we deny or delay, right or justice.” The Magna Carta put forward the rule of law. For the first time, a king was beneath the law, the law the Charter itself was making. He could no longer treat his subjects in an arbitrary fashion. To commemorate the 800^th anniversary of the sealing of the Magna Carta, Hugh Harley, Financial Services Leader at PWC and Magna Carta enthusiast, Anya Poukchanski, a Sydney lawyer, and Human Rights Commissioner Tim Wilson addressed The Sydney Institute on the legacy of the Magna Carta

THE ORIGINS AND IMPACT OF MAGNA CARTA

HUGH HARLEY

Thank you so much for the opportunity to speak to you this evening.

Seeking to understand the origins and impact of Magna Carta has been a labour of love for me over the past two years or so, full of surprises. I had started this journey with a rather conventional assumption of England in this era as a static and essentially feudal society but, in fact, England of the 1100s and 1200s turns out to be much more dynamic than I had supposed.

Certainly there was significant technological change at the time, including in agriculture (for instance, the first use of the horse for ploughing), energy (the windmill was invented in England around 1185 and coal was first used for industrial purposes in the early 1200s), and the cam shaft was being used for the first time revolutionising the production of wool cloth. What we might now call “high street banking” has its origins at that time – the first confirmed use of the word “capitale” dates to 1211.

It was this rush of innovation which has led scholars like Jean Gimpel and Fernaud Braudel in recent decades to describe this era as the first industrial revolution. In England, this was associated with economic growth. For instance, improvements in agriculture assisted rapid population growth. It was also a period of urbanisation, with 57 new towns established in England between 1180 and 1230, a pace of urbanisation not achieved again until the 1800s. Foreign trade and the minting of currency were also rising strongly.

What turns out to be even more surprising is not just the pace of technology and economic change but also the extent of market relations prevailing in England at the time.

In part, this was because it was a time of rapid of urbanisation and of course by definition urban dwellers lived outside traditional feudal arrangements, by their own commercial wits.  The common law recognised that a serf who managed to live in a borough for a year and a day became a freeman.  In other words, there was both legal and economic substance in that expression “town air makes you free”.

Likewise, the common law gave townspeople much more discretion than others in making wills, rationalised as encouragement for them to accumulate wealth in the first place.

But the real kicker in this argument is the substantial body of evidence, collected in particular by Alan MacFarlane, that the large land-holders preferred the higher productivity and flexibility which came from using wage-labour rather than an indentured labour force.  In turn, the increasing scope for mechanisation gave greater opportunity for production during less busy seasons, with the surplus sold on the open market.  Just as we see rapid growth in towns in the 1100s, we also see rapid growth in market days.  Macfarlane estimates as much as half the English population may have been involved in wage relations by the mid-1200s.  Macfarlane summarises his conclusions in these terms:

… the majority of ordinary people [in England] from at least the thirteenth century were rampant individualists, highly mobile both individually and socially, economically “rational”, market-orientated and acquisitive, ego-centred in kinship and social life.

As one English writer of the era put it, “No one who wanted to make money need ever die poor.”

In this regard, England does seem quite different from Continental Europe. I have certainly become persuaded by the view of writers such as Danziger and Gillingham in their book 1215  that Magna Carta was very much the product of a society accustomed to dealing with the problems and privileges of freedom. That in turn suggests an intriguing hypothesis about why England eventually led the way into the truly modern era.

Let me turn to a second surprise for me, again one which carries implications for the broad sweep of history – this is the critical importance of a few good men.  We are brought up on the idea that Magna Carta was the product of bad men – bad King John vs the greedy barons.  In fact, two wise men are at the heart of the story.

The first is Stephen Langton, Archbishop of Canterbury, who conceived of the idea of a negotiated settlement based on legal rights and obligations to respond to the long list of barons’ grievances.  His ability to persuade the barons to this outcome, barely 50 years after the origins of the common law, is extraordinary. But this achievement also points to a sophisticated society in the first place.

The other person to call out is William Marshall, who supported the King through 1215, and who became Regent in October 1216 upon King John’s death and the ascension of Henry III at the age of nine.  One of his first acts was to issue an updated Magna Carta. The fact that William Marshall did this, even though he had sided with the King rather the barons in 1215, speaks to the practical and beneficial nature of the reforms in Magna Carta.

Even more telling is that in 1217 William Marshall re-issued Magna Carta together with a new Charter, the Forest Charter. One of the great issues of the day was public access to the King’s forests – this was an issue on which King John had been able to hold his ground in 1215.

The Forest Charter of 1217 was much closer to the barons’ demands of 1215, and indeed provided a degree of economic protection for free men not seen again until the early 1700s. This to William Marshall’s eternal credit, and indeed it was this economic issue which was fundamental to keeping Magna Carta alive in its first 100 years.  By 1314, Magna Carta was being relied on by courts and, in a sense, the rest is history.  Importantly, yet again, we see this link between Magna Carta and the evolution of economic freedoms.

My final set of reflections relates to just how many echoes of this era of Magna Carta sound today. An obvious candidate for this is the point I made above about the extent of market relations prevailing in England at the time.

Another obvious – and less happy – candidate is that the era of Magna Carta was also the peak of Crusades and the conflict between the Christian and Moslem worlds. And I hardly need mention the importance and relevance of the rule of law to today’s society, nor that Magna Carta was fundamental in establishing that.

Perhaps more surprising is the question of elections. King John’s penultimate concession in an attempt to retain power was an agreement in May 1215 – five weeks before signing the Magna Carta – to let the Corporation of London elect its own Mayor.  So far as I can tell – and I would happily stand corrected – this is the first concession to election by a ruling English Monarch. In the long sweep of history towards Western democracy we can regard this as a first pivotal step.

Some people have argued that the final clauses of Magna Carta which set up a council of barons to oversee Magna Carta can be regarded as the origins of modern parliament. This I think is a step too far. Churchill was on much stronger ground to describe the Provisions of Oxford in 1258 and the Provisions of Westminster in 1259 as the seed-beds of modern parliament.

Nonetheless, within the space less than 100 years we have the origins of the common law in the 1160s, of the election of public leaders and of parliament, as well as Magna Carta itself. It was an era of extraordinary institutional change.

It is also worth noting that the origins of the concept of the modern corporation also springs from this time – the body corporate was first conceived as a mechanism for London and the other boroughs to exchange payment to the monarch in return for privileges in the late 1100s.

Then of course there is the question of technological change – as I have argued, we can fairly regard it as the first industrial revolution, associated, as we have seen, with profound institutional change, just as the Industrial Revolution of the 1700s and 1800s was associated with profound institutional change.

This gives this month’s 800^th anniversary of Magna Carta special significance not just because profound relevance for 800 years is a fine achievement by any measure, but because we are now living through a period of technological change likely to be just as dramatic as any before it.

What is particularly interesting to me is that the digital revolution is fundamentally going to the heart of how trust – and hence economic value – is created. For the first time, technology is enabling individuals to amass and access objective measures of reputational trust which are widely accessible to other (anonymous) individuals rather than simply to institutions (either governments or corporates). Airbnb is a good example of this, as are the more sophisticated peer-to-peer lenders.   Indeed as the Bank of England noted recently:

For more than 800 years, depositing and lending were the preserve of high street banks.  Yet we may be about to enter an era where banking, too, becomes virtual.

This shift in trust has particular significance in the context of Magna Carta given that the rule of law – the most important enduring legacy of the Magna Carta – is the foundation of trust in modern society.

I believe that the lesson of history is that today’s extraordinary changes in technology will create sufficient stresses to require us to rethink our institutional frameworks once more.  The good news here is that by understanding that our current suite of freedoms and market relations has a heritage more like 800 or 900 years rather than the 200 or 300 years quoted much more frequently we will have a much better chance of preserving those freedoms which we value so highly.