Wednesday, June 16, 2010

The Scolastics: A Forgotten History II

This essay by Lew Rockwell highlights some of the roots of free market ideology as expounded on by the late Scholastics at the School of Salamanca in the 16th Century. I understand that since most of the founders were anti-papists that many seem to doubt the influence of Roman Catholic thinking on American Creation. Nonetheless, the fact that much of this thought was produced in famous European universities would seem to point to it being in the air when many of the ideas that finally took root in the founding were being formulated. Either way, this essay directly challenges Goldstone's view of what the central characteristics of European history and culture were as quoted in one of my recent posts.

Here is a taste:

"Students of free enterprise usually trace the origins of pro-market thinking to Scottish professor Adam Smith (1723-90). This tendency to see Smith as the fountainhead of economics is reinforced among Americans because his famed book An Inquiry into the Nature and the Causes of the Wealth of Nation was published the year of American independence from Britain.
There is much that this view of intellectual history overlooks. The real founders of economic science actually wrote hundreds of years before Smith. They were not economists as such, but moral theologians, trained in the tradition of St. Thomas Aquinas, and they came to be known collectively as the Late Scholastics. These men, most of whom taught in Spain, were at least as pro-free market as the Scottish tradition came to be much later. Plus, their theoretical foundation was even more solid: they anticipated the theories of value and price of the “marginalists” of late-nineteenth-century Austria.[1]
If Italian city-states began the Renaissance of the fifteenth century, Spain and Portugal explored the new world in the sixteenth, and emerged as centers of commerce and enterprise. Intellectually, Spanish universities spawned a revival of the great Scholastic project: drawing on ancient and Christian traditions to investigate and expand all the sciences, including economics, on the firm ground of logic and natural law.
Because natural law and reason are universal ideas, the Scholastic project was to search for universal laws that govern the way the world works. And though economics was not considered a separate discipline, these scholars were led to economic reasoning as a way of explaining the world around them. They searched for regularities in the social order and brought Catholic standards of justice to bear on them.
The University of Salamanca was the center of Scholastic learning in sixteenth-century Spain. The first of the moral theologians to research, write, and teach there was Francisco de Vitoria (1485-1546). Under his guidance, the university offered an extraordinary 70 professorial chairs. As with other great mentors in history, most of Vitoria's published work comes to us in the form of notes taken by his students.
In Vitoria's work on economics, he argued that the just price is the price that has been arrived at by common agreement among producers and consumers. That is, when a price is set by the interplay of supply and demand, it is a just price. So it is with international trade. Governments should not interfere with the prices and relations established between traders across borders. Vitoria's lectures on Spanish-Indian trade—originally published in 1542 and again in 1917 by the Carnegie Endowment—argued that government intervention with trade violates the Golden Rule."

Maybe the Enlightenment did not drop in out of nowhere to set all the backwards Christians straight as some seem to imply? It also makes me wonder what the world would be like today if the great explorers of the 16th Century would have listened to Las Casas and his predecessors? Cortes had the chance and dropped out.

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