The Promise of a Pension Received by a King

Payment to the King of England

King Louis XI of France paid King Edward IV of England, who had landed on his shores, to withdraw. This was in the year 1475. The promise made in the Treaty of Picquigny was for an immediate payment of 75,000 écus and an annual pension of 50,000 écus.

The king's way of fighting was to crush his enemies with gold rather than with arms. Even in his conflict with the powerful Duke of Burgundy, Charles the Bold, the king did not seek a decisive battle himself. He provided subsidies to the Swiss and set them against the duke. The duke fell to the Swiss army at Nancy on January 5, 1477. The king defeated his enemies with armies woven from gold and with bribery. The pension he paid to his foe was part of that strategy.

Financial Practices Carried North

In history, we can see another form of pension: the pension as a financial mechanism.

There was an era when merchants, artisans, and capital moved from the southern cities to the northern provinces. A whole set of tools that had supported the century of Antwerp, contained within people's minds and account books, was carried north. Among these, alongside bills of exchange and bookkeeping, were the "practices of pension financing."

Amsterdam, which became the recipient, saw its population swell from about 30,000 around 1585 to approximately 105,000 in a 1622 survey. The capital and technology brought by immigrants were among the factors that supported the city's great leap forward.

A Measure of the Weight of Life

The pension we know today refers to a system of receiving a fixed amount of money periodically after old age or disability. There are public pensions run by the state, and private ones accumulated by individuals or their employers.

A promise a king pays to an enemy nation. A practice in financial transactions. And a system to support one's livelihood. The same word, "pension," has been used with different meanings depending on the era and context.

What all these pensions have in common is the aspect of regular payments over the future. However, their value cannot be understood by the face value alone. The amount written on a notice is the nominal amount. Unless you look at the real value, adjusted for prices, you cannot understand the weight of life.