THE EVOLUTION OF SUBJECTIVITY IN TERMS OF FINANCIAL LAW

TOMÁŠ HULKÓ

Masaryk University, Faculty of Law, Czech Republic

Abstract in original language

Počas feudalizmu prebiehalo prerozdeľovanie spoločnosťou vyprodukovaných statkov podobným spôsobom,
ako dnes. Už od ranného stredoveku môžeme hovoriť o existenncií systému vzťahov, ktoré disponovali
znakmi finančnoprávnehosystému. Za dobové "daňové ráje",by sa dali považovať rôzne šlachtické a
cirkevné výsady.

Key words in original language

Feudalizmus; pohanské náboženstvo; finančnoprávny subject.

Abstract

Under  feudalism  the  redistribution  of  material  possessions  produced  by  the  society  was
taking  place  in  a  similar  way  like  today.  Already  since  early  Middle ages  we  may
speak  about  the  existence  of  a  system  of  relations  having  attributes  of  a  financial
legal  system.  Various  privileges  of  the  nobility  and  church could  be   considered  to  be
the  "tax  paradise"  of  the period.

Key words

Feudalism; pagan religion; financial law subject.

1. introduction

Since  ancient  times  the  perception  of  money  and   finance   throughout    history
underwent   many changes. When comparing the financial and legal subjectivity or institutes close
to financial and legal subjects in various periods we may ascertain that the first big breakthrough
in perceiving these institutes happened sometimes between the ancient times and the Middle Ages.

Similarly significant was also the change of the way of perceiving the financial and legal
subjectivity in the period when the New Ages and Modern Ages met.

When investigating the development of subjectivity in financial law it is necessary first of all to
concentrate on two crucial points in the way of perceiving the subjects and subjectivity in
financial law.

Special attention is being paid to materialized changes regarding the financial and legal
subjectivity in the geographical region of Upper Old Hungary. The conditions of modern times
arranged according to the Old Hungarian Law  were transformed after the first world war following
the laws of the first Czechoslovak Republic. Due to the interdisciplinary character of the range of
problems as well as due to language prerequisites necessary to an unbiassed elaboration of the
given range of problems, the mentioned range of problems is rather demanding to process.

The situation is more complicated also by the fact that it is a period that was so far not
satisfactorily documented. Among other things the completion of the missing literature in this
field is important from the aspect of comprehensive perception of development of our contemporary
social system.

2. THE METHOD

In compiling this contrtibution a combination of historical and comparative method was applied.As
for materials, in considerations of philosophical type I was relying on the generally known facts
from the history as well as on the works of ancient philosophers from the period of Constantine the
Great.

In the part concerning the analysis of the turning point of the New Ages and Modern Times I was
using scientific publications regarding the position of nobility on the territory of Upper Old
Hungary. In view of the fact that the period of turning point of New Ages and Modern Times in the
geographical region of Upper Old Hungary is not sastisfactorily processed, the providing of
factographic documents for elaborating this range of problems represented the most exacting part of
the work as far as time is concerned.

In this context I wish to quote one of the existing publications on this topic that proved to be
especially helpful in the process of putting together this contribution. It is the proceedings of
the interdisciplinary conference that took place in Martin /Slovakia/ in 2009: „Yeomanship in
Slovakia, part I-II."[1]

In the part concerning the legal arrangement of the nobility possessions within the limits of the
first Czechoslovak Republic I was primarily proceeding from the laws of the Czechoslovak Republic
and public documents from the given time horizon, coming from the collections of land register
offices as well as from the collections of the Ministry of the Interior of the Slovak Republic, the
State Archive.

3. THE FINANCIAL CONSEQUENCES OF PATRISTICS

„Do not accumulate treasures on the earth, where they are destroyed by moles and rust and where
thieves burgle and steal. But accumulate treasures in the heaven where they are not destroyed by
moles and rust and where thieves do not burgle and steal. Because where is your treasure, there
will be also your heart...“ [2]

In the period when the ancient world was drawing to its end, the people were turning away from
their pantheon and thanks to Constantine the Great the new ideology was spreading in the whole
empire. Altghough the assessment of his influence is controversial it cannot be denied that he was
a true titan of history. Constantine the Great made the foundations on which the whole system of
government was built.

The ancient way od perceiving wealth and the attitude to money was diametrically different from
that of the Middle Ages. The mentioned quotation should be understood in the historical context.
The ideas expressed by the Apostles especially on gospels represented a novelty because they were
in contradiction with the preceding way of perceiving the world.

The above-mentioned jump is closely connected with the ideological changes of the period. The
perceiving of material values underwent big changes. It was caused by turbulent historical times.
The decomposition of the Roman empire and the beginning of migration of peoples represented the end
of an era but simultaneously the beginning of something new.

3.1 FINANCES IN THE SERVICE OF THE LORD

„Nobody can serve two lords because either he will hate the one and love the other or he will hang
on one and he will scorn the other. You cannot serve both the God and Mammon.“ [3]

The high degree of corruption was one of the big problems of the decaying Rome. It was not rare
that the officials while „serving the Mammon“ were neglecting their official duties or even they
were improving their financial situation by bribes.

Constantine the Great was concentrating on making the state administration more efficient. He
reorganized it, he introduced primogeniture of the highest clerical posts. In this way he wanted to
prevent the misappropriation of public finances. Hereditory clerks were esteeming their poition
more and therefore they were more difficult to be bribed.

He strongly supported the Christian church. Under his rule magnificent palaces were built. Church
dignitariers were promoted to high posts.

He gave orders to collect high taxes from artisans and merchants. He imposed a tax also on the
population of Rome what was recerived with considerably negative reaction .

On the other hand, he granted privileges and immunities to church dignitaries. He even exempted the
church from paying taxes. He granted a similar position also to his friends whom he granted the
prestigious title of patricius. Their position was roughly equal to the position of high nobility
under feudalism.

Under his rule there was established an institute similar to serfdom. By his decrees he ordered the
sons to continue the craft of their fathers. He prohibited the peasants to quit the cultivated soil
hired from large landowners.

3.2 THE PRIVILEGED SUBJECTS IN ANCIENT TIMES

At the first glance it may seem that the demanding social reforms of Constantine the Great were
expensive. However, his influence has to be perceived in a wider context.

The aim which Constantine the Great followed by his social reform was namely to provide financial
means for running a permanent operational army. The hectic period required frequent deployment of
army

Although to some officials he provided tax exemption, it was applied predominantly to the members
of the city councils called curials /curiales/. The city councils controlled the functioning of the
city, mainly the tax collection. In view of the fact that the city councils were paying
considerable finances anyway, the non taxation of its members was rather a rationalization measure
than providing a privilege that would burden the Treasury.

In case the state needed extra finances it did not reduce the salary of the curials but gave them
orders to collect more taxes.

The exemption of church from taxation may also act as a measure burdening the Treasury. When
comparing the „operational costs“ of pagan religions with the Christian church we definitely get a
positive balance.

The main reasons of advantageousness of christianity from the point of view of public finances may
be summed up followingly.

      1.  According to Christian mythology there exists only one God, therefore for the church the
only God is sufficient.

      2.  The operation of a Christian temple /church/ is relatively cheap.

      3.  Unlike with several pagan religions, the performing of sacrificing in christianity is
very undemanding and hygienic.

      4.  The ideological contents of christianity leads people to restrained way of life. The

Christian church was propagating restraint and modesty. In comparison with the ideological contents
of some pagan religions, for example of the Dionysius cult it is evident that the influence of the
Christian belief on the residue of domestic product must have been positive.

Constantine the Great this way created a model of the system of estates. He was granting privileges
to a selected part of population and he was decreasing their tax burden. On the contrary, as for
simple peasants and craftsmen he was increasing their tax burden and he was limiting their freedom.

4. PRIVILEGED AND NON - PRIVILEGED SUBJECTS OF FIN ANCIAL RELATIONS IN THE MIDDLE AGES AND IN THE
NEW AGES

The system founded by Constantine the Great remained essentially unchanged up to the end of the New
Ages. The increase of numbers of privileged subjects was a continunuous trend during the whole
period from the beginning of the Middle Ages. In other words it meant the enlargement of the strata
of non- payers of taxes.

The serves were the primary subjects of taxes of all kinds. As the lowest stratum of society they
had to endure high tax burden. A whole gamut of taxes was collected from them. The tax registers of
the period illustrate the complexity of the tax system.

In the tax registers the form of tax payment was determined whether to pay in cash or in kind. In
case the taxes were paid in kind it was exactly specified which tax should be paid in kind as well
as where and when to hand it in. Also working on the lands of nobles was considered to be a tax.
Merchants and craftsmen living in towns were enduring equally high tax burden.

Altghough the predominant part of the population /approximately 95%/ belonged to two categories
subject to taxation, the remaining part of population not subject to taxation had the biggest
income. The same part was entitled to collect taxes from ser- ves as well as from the inhabitants
of non- free cities.

At the same time the nobles were disposing of all political rights which in the given period did
not belong neither to the sovereign nor to the church. A considerable internal differentiation of
this stratum is well illustrated by the enlargement of the stratum of non- payers of taxes.

The authors already enumerated the categories of noblemen on the territory of Upper Old Hungary in
the New Ages. The nobles were divided: quot.:              „to two basic groups, the higher one
/magnates/ and the lower nobility /nobiles/ which were then further on differentiated. At that time
also the representatives of the highest clergy belonged to the highest nobility, i.e. prelates,
further on counts, barons and all the other proprietors of castle dominions. They were entitled to
be addressed „magnificus“.The structure of the nobility on state and local level was dominated by
medium level nobles with the title egregius, later on generosus dominus who were financially
satisfactorily ensured /bene possessionati/. They had decisive influence in the region. The deputy
district governors came most frequently from among them. In the absence of the main district
governor they had real power in the region. They stemmed from the most respected aristocratic
families. Apart from the economic field they often made career in the military or church
domaine.The small curial nobles /nobiles unius sessiones, curialistae/ constituted the most
numerous part of the nobility. They were owning lands in the size of a big homestead. Due to the
fact that they were subject to taxation by the military tax, they were also called nobiles taxati.
Due to their poverty they were called also poor nobles /nobiles pauperes/. In the intitulation they
had the title nobilis /noble, distinguished"[4]

4.1 THE SUMMARIZATION OF THE DEVELOPMENT

The big number and internal differentiation of privileged subjects on the territory of Upper Old
Hungary in the New Ages is in sharp contrast with the clearly arranged number of privileged
subjects under the rule of Constantine the Great. Whereas in ancient times the granting of
privileges had a rather rationalizational character, in the New Ages nothing similar existed.

It was also the consequence of the fact that the nobles were unscrupulously exerting their
political rights in order to exercise their will in the society.

In order to gain bigger privileges, they were exerting their influence upon the king. On the other
hand, they were often properly not fulfilling their duties, mainly in the military field.

Merely theoretically, they were supposed to pay taxes for their privileges „by own blood“. In other
words, in case of menacing danger they were obliged to mobilize on the command of the king.

Nevertheless, history showed that armies created by insurrection roughly speaking by calling the
nobles to arms was not sufficient for defending the country. Maroš Mačúch, a historian specializing
in the historical phenomenon of insurrection and cavalry army, described the strength of the army
created this way followingly: „The fighting value of the military units comprising predominantly
people accustomed to settled life was low. The cavalry system was obsolete already under the rule
of king Sigismund and in the first phases of the war was often ineffective. Already under the rule
of Hapsburg Albrecht and Ladislao Jagello there were attempts to form a mercenary army and not to
rely on the insufficiently armed and slowly mobilizing provincial army.“ [5]

From the aspect of positive law the power position of the nobility was not justified. The cavalry
units were able just to suppress serves rebellions.

The consequences of failure of the cavalry army were devastating for the whole population. Most
significantly it was manifested at the intrusion of Tartars /1241-1242/ and by the battle at Mohács
as well as in the following long presence of Turkish occupants /1526-1699/. The disciplined
professional armies destroyed the cavalry army already in the phase of its mobilization.

5. THE EXTINGUISHMENT OF THE PRIVILEGES

Already before the first world war it was evident that the privileges of nobility became archaism.
The majority of them was abolished already after the revolution and fight for freedom in the
1848-1849 years.

The so called family tutelage was a special institute which survived. It represented a property
destined to maintain a certain living standard of noble families.

This institute started to develop in our country in the beginning of the 17th century as a
privilege of the high nobility. The inventory of property belonging to the tutelage must have been
deposited with the court. Actually it was a sort of shared ownership typical for the feudal period.

The tutelage was established by the high nobility with its family property. Such property was not
subject to heritage. This institute prevented splitting up, stealing and burdening of the tutelage
property.

In other words, it was a privilege that survived the longest time, up to the twenties of the 20th
century.

5.1 THE TERMINATION OF TUTELAGE IN THE FIRST CZECHOSLOVAK REPUBLIC

The legal regime of abolishment of tutelage was stipulated by Act No. 179/1924 about the
abolishment of tutelage. According to paragraph 2, section 1 of the Act, quot.: „ The holder of
tutelage, persons in waiting and the guardian of the descendants - it is up to them to arrange the
relations of the vacated tutelage property by agreement.“

The legal adjustment exactly stipulated who is considered to be a person in waiting and to be
holder or guardian of the tutelage. In paragraph 2, section 1 of the Act No. 179/1924 we may read
quot.: „ The persons in waiting are those who on the day when the act comes into force are called
to succession in tutelage according to the founding document and are already alive or at least are
considered to be born (§ 22 of the Civil Code). However, the limitations of the founding documents
which contradict the legal order established after October 28 1918 by abolishing nobility (due to
unequal marriage, insufficiency of noblesse or a certain number of noble ancestors) are not taken
into account.“

In paragraph 2, section 1 of the Act No. 179/1924 there is provided the circle of persons which had
to participate in the mentioned agreement in order to make it valid quot.:“ It is sufficient that
there is the consent of the holder of the tutelage and of three closest persons in waiting. If they
do not exist it is the guardian of the tutelage descendants. If the tutelage is vacated by the
death of the holder, it is sufficient to have the consent of the successor called by the founding
document and of two closest persons in waiting as far as the guardian of the descendant is
concerned. The direct descendants of these persons in waiting are not taken into account.“

The Act on abolishment of tutelage further on stipulated the duties of the subsequent approval of
the agreement by the respective court. According to paragraph 2, Act No. 179/1924, quot.: „ The
agreement must be achieved up to six months from the day when this Act comes into force, it must be
submitted to the respective tutelage court, it must not contradict the purpose of this Act and it
requires approval by the respective tutelage court § 16. The court will hear the participating
persons, namely the persons in waiting mentioned in section 2 provided their signature is not
verified on the document as well as the tutelage guardian. Apart from that it will in- form the
persons in waiting who are staying on the terriotory of the Czechoslovak Republic and made an
appeal on the court board by a notice and also in an official letter and alternatively also in
other letters the persons in waiting whose stay is not known or they are in abroad as well as those
who according to the founding document could make claim on succession in tutelage. They have to
express their attitude before the court in the determined time limit . This time limit will be
determined by the court to thirty days from the day when the notice will be published in an
official letter. In the infomation and in the notice the substantial data of the agreement must be
mentioned together with a warning that it is supposed the consent with the agreement and those who
will not appear on invitation and will not express their opinion.“

The consequence of the mentioned complicated procedure was that the subsequently issued documents
are trustworthy and may be used as a proof by proving the original ownership of lands and real
estates.

6. summary

By not paying taxes the nobles ruined the feudal system. Despite the fact they were using the
common wealth and consuming a large portion of the domestic product, they were unwilling to
contribute to this system.

Today's international bank corporations show many in common with the nobles back then by behavior.

Also institutions existing within the gaps of  the state organization that have common marks with
the nobles are local governments and other organizations using also public finance. In this
relation I would like to tie up to a publication from “Dny prava 2009”, where the point of the
observation is the issue of liability while managing public finance qout: “As the entrepreneur
operates with the goal of achieving profit, is highly motivated to observe the economical
profitability of his actions. In the worst case he could bankrupt and would be eliminated from the
competition as a direct result of his actions... ...If somebody is managing public finance
uneconomically, he is not only jeopardizes public interest, but he is in fact not endangered by any
penalty. We may say that the provisions of inner state character in case of Slovakia and partially
of the Czech Republic are not sufficient to motivate the officers towards real economic management
of public finance.”[6]

Also I would like to compare the medieval privileges to the abuse of tax heavens, as in both cases
organizations which should pay the highest taxes are actually trying to bypass taxation as such.

The most interresting results come by comprahension of the privileged subjects of the middle ages
and the international bank organisations. Practically they are collecting tax from everyone, who is
citizen in a country, which owns money to some of the organizations.

If we look closer at the IMF and the World Bank, it becomes clear, that the intervetions of both
organisations are mostly not welcomed, by the citizens of the given state. Although both
organisations like to position themselves in the wiew of the public, as a humanitarian helpers, who
are lending money to those, who are in need.

But, they undertaken effort mostly resolves in highering the interest rate of the depth of the
given country.

For example in Hungary, the IMF "helped" to solve to country´s heavy economical problems resulting
partially from the bad social-democratic goverment, but primarilly resulting out of the high
interest rates, which are slowli drowning the economy of hungary.

The IMF lent money to the hungarian state, so they coud pay of the interest rates of their
international depth. The problem is, that the state of hungary is paying the biggest ammount of the
interest rates yearly directly to the IMF. They practically helped to solve a problem, which
without their former actions, probably woud not even appear!

The activities of both organisations, in the end, always result in more depth. By these actions,
they are not producing anything of value.

Is the globalized world on the same path, as the feudal system on the beginning of the modern ages
?


Literature:

-    Augustínová E. Kovačka M. Mačuha M., Zemianstvo na Slovensku, zväzok I-II (Yeomenship in
Slovakia, part I-II)

-    Matthew´s Gospel

-    Mačúch M., Branná povinnosť šlachty v novoveku na príklade Turčianskej stolice

-    Hulkó T., Malý J. Osobitné črty zodpovednosti vo finančnoprávnych vzťahov, (Specifical
features of responsibility in financial law)

-    Alföldi, A. The Conversion of Constantine and Pagan Rome. Translated by Harold Mattingly.
Oxford: Clarendon Press, 1948.


Contact – email

hulko@mail.muni.cz, hulko@dlmu.sk

________________________________

[1] As for the publication „Yeomenship in Slovakia, part I-II“, it is necessary to mention, namely
from the point of view of comprehensibility that in spite of the fact that it is a publication
processed on high professional level, it is affected by changing personal names typical for Slovak
historical literature. However, it is not the fault of  the authors because the Ministry of Culture
of the Slovak Republic directly demands that the authors slovakize the proper names of persons and
of geographical names. The mentioned trend is negatively perceived by the professional public in
abroad /especially by the German one/. It causes disunity, partial incomprehensibility as well as
it makes the incorporation of Slovak publications into international context more difficult. It is
appropriate to appreciate the positive effort of the authors to reduce the impact of changes by
quoting original names in the name index with reference to the changed form. For example : part I.,
page 397 : Széchényi, see Séčéni or part I., page 394 Révay see Révai. The second mentioned example
shows clearly that seemingly negligable changes may cause inclarity because in Old Hungary there
were both the Révay and Révai family lines.

[2] Matthew´s Gospel, chapter 6, p. 19-21.

[3] Matthew´s Gospel, chapter 6, p. 24.

[4] Yeomanry in Slovakia, part 1, p. 3(Zemianstvo na Slovensku, časť1,str. 3)


[5] Mačúch M., Branná povinnosť šlachty v novoveku na príklade Turčianskej stolice p. 2


[6] Hulkó T., Malý J. Osobitné črty zodpovednosti vo finančnoprávnych vzťahov, (Specifical features
of responsibility in financial law) p. 8