The Legacy of Scholasticism in Economic Thought: Antecedents of Choice and Power

Description

This book studies the development of ideas on freedom, coercion and power in the history of economic thought.

Horvat, Return to Order ch. 32 "An Organic Economic Order: A Passion for Justice", § "Just Price and Markets" (ref:78.10) cites Langholm, Legacy of Scholasticism in Economic Thought, 85 (PDF p. 96):

The modern mechanistic conception of the market as a suprapersonal force setting the terms to which an individual exchanger must submit was foreign to the medieval masters. Their frame of reference was a moral universe that obliged any buyer or seller to act for the common good and agree to terms of exchange accordingly, regardless of the advantage granted him by the forces of the market.

see: "Who first argued that market forces determine just pricing?" Answer: St. Albert:

Identifying the just price with the price obtaining in the market under certain conditions was not, in itself, a controversial issue in scholastic economics. […] Long before Buridan [✝1358] and Bartolus [✝1357], [St.] Albert the Great [✝1280], in his commentary on the Sentences, defined the just price as that "which the goods sold can be valued at according to the estimation of the market at the time of the sale," a phrase frequently to be repeated in one form or another.34

34. Comm. Sent. , IV, 16,46: 638: "Iustum autem pretium est, quod secundum æstimationem fori illius temporis potest valere res vendita."

cf. Langholm ch. 5 Price and market manipulation pp. 77-99 (PDF pp. 88-110).

07/31/25: 74

The [4] main ones [arguments against usury] were [1] a theological argument from the sale of time (the usurer sells time, which belongs to God), [2] a legally inspired argument from ownership (according to the definition of a mutuum , ownership of money borrowed passes to the borrower and any profit obtained with it belongs to him), [3] the Thomistic argument from consumptibility (money is consumed in use and therefore has no use separate from its substance - and hence no use value), [4] the Aristotelian argument from the sterility of money (somewhat questionably based on the reading of a phrase in the Politics to mean that metal cannot breed, but later developed so as to apply to money as a fungible rather than to money as an inanimate object),15 as well as the argument from compulsion.

08/01/25: 78

all profit of economic activity involving capital is the fruit of human management of money and not of money as such.

08/01/25: 80

If the usurer is a kind of robber, it would seem that he does not become owner of the money extorted from the borrower.

interesting point

07/25/25: 90

the Latin languages, where "can" is a word on the same stem as "power": potest/potentia; puo/potenza, pent/puissance,

Why is this?

07/25/25: 96

Until a few decades ago, it was not uncommon in critical studies to encounter the suggestion that the medieval scholastics simply permitted the forces of the market to run their course and accepted the resultant "common estimate of the market" as the just price. More recently, this liberalistic interpretation has been challenged by a younger generation of scholars, with whose arguments, as far as they go, I fully agree.

07/26/25: 105

In the Politics, Aristotle recounts the story of Thales, the philosopher, who rented all the olive presses of Miletus and Chios and let them out at a large profit when the season arrived. The medieval Latin translator called this monopolia, rendering the Greek word literally. Aristotle adds a second example, where a successful monopolist (in iron) was expelled from Syracuse for interference with the tyrant's affairs, for monopolies are favored means of raising revenue for the government.63 The Latin commentators all mention these state monopolies.

07/26/25: 106

Thomas Aquinas joins in; what Thales did should be attributed to wisdom, not to avarice.65

07/26/25: 109

"When the sellers form a monopoly," Domingo de So to teaches, "the buyers may likewise justly use their prudence in the opposite direction, as though driving back force with force (quasi vim vi repellentes)"80 - an early expression of the principle of countervailing power.

07/26/25: 109

obligarint). They could have kept the goods for another time or brought them to another place, or even destroyed them, without injury to anyone, because they had absolute ownership of them.

destructive capitalism

07/27/25: 111

Some scholastics, in all earnestness, recommended that the government fix prices of all necessaries.

!

07/27/25: 112

The farmer needs not only shoes, but also the aid of the shoemaker. The shoemaker needs food, but also, and therefore, the aid of the farmer. Division of occupations is the reason and the everyday sign of such mutual needs of reciprocal services.

07/27/25: 112

a prominent place in the city is given to the temple of the Graces.3 This last line inspired Albert the Great to the most charming characterization of exchange in all of economic literature: It is "a flowing back and forth of graces" (fluxus et refluxus gratiarum) .4

07/27/25: 113

John Duns Scotus to state his famous doctrine of economic exchange as involving an element of gift.

07/27/25: 113

The premise of all economic theory is that each party to a given exchange benefits by it in a certain sense, for otherwise he would not have chosen to exchange.

07/27/25: 113

Aristotelian just equality therefore cannot refer to utilities. Both parties experience a utility surplus. This principle was frequently and firmly stated by scholastic authors before Scotus.8

07/27/25: 114

Exchange between men would be difficult if the parties did not intend reciprocally to remit some of that rigorous justice, so that, insofar as they do, a gift may be said to accompany every contract.

07/27/25: 114

it is sufficiently probable that the parties, if they are mutually satisfied, intend to mutually remit the difference if something is lacking from the justice which they seek.9

07/27/25: 114

Roman law principle of laesio enormis. According to the latter, buyers and sellers were allowed to outwit or "deceive" one another within the limits of one-half below and above the just price.10

07/27/25: 114

there was a tendency in the Middle Ages to generalize this principle and apply it to most kinds of economic contracts. The "deception" in question did not include regular fraud, though some of those who opposed it may have misunderstood it on this point. Short of fraud, however, each party could use his wit and his bargaining position to his own advantage. The early theologians would have nothing of this. Thomas Aquinas expressed the common sentiment. Human law accepts this principle for practical reasons, but divine law leaves nothing unpunished that is contrary to virtue, and it insists on just equality.11

07/27/25: 114

8 Most explicitly by Richard of Middleton, a confrere and immediate precursor of Scotus and (allegedly) one of his teachers; cp. Comm. Sent., 111,33,3,4: pp. 389-90; Quodl 11,23: Vat. Borgh. 361, ff.98va-101vb.

07/27/25: 115

As a pure ideal, it is one of the noblest bequests of the scholastics to economic thought. In a spirit of mutual benevolence, buyer and seller can come to terms that are just because they satisfy both.

07/30/25: 125

Comm. Sum. theoL, to 11-11,77,1 [Whether it is lawful to sell a thing for more than its worth?]: IX,148-50.

Cajetan. Is this the article that says a prostitute can justly receive payment? No, that's in II-II q. 62 a. 5 ad 5: "when a woman receives payment for fornication […] she may keep what she has received."

07/30/25: 126

To sum up this account of Cajetan's teaching in Aristotelian terms, what he suggests is, in effect, that the tradition from Ethics, III, on compulsion and the voluntary, is best abandoned in favor of the tradition from Ethics, V, on justice as equality.

07/30/25: 126

modus rather than causa determines the just price.55

07/30/25: 127

Cajetan's doctrine represents a first step (deliberate or not) toward the depersonalization of economic ethics that characterizes postscholastic thought.