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• IV: Iv Economic Schools and Analysis
• Ancient Greek Economic Thought
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Scholastic Economic Thought

Julius Kirshner

• University of Chicago

“Raymond de Roover on Scholastic Economic Thought.” In Business, Banking, and Economic Thought. Edited by Julius Kirshner. Chicago: University of Chicago Press, 1974.

Scholastic economic thought has frequently been characterized as a forerunner of nineteenth-century socialist economics and a barrier to the development of medieval economic freedom. Others have claimed that the economic teachings of the Scholastics were totally irrelevant to the course of medieval economic history. Max Weber and Richard H. Tawney popularized the belief that medieval men disliked competition, condemned personal profit, and scorned acquisitive activity as a necessary evil. Raymond de Roover's scholarship reveals a far different picture of economic thought and practice during the Middle Ages. De Roover stressed the continuity of Scholastic economic thought with modern views on such topics as monopoly, value, price, and usury.

De Roover places Adam Smith's attack on monopolies within a tradition embracing Aristotle, Roman law, and the Schoolmen. Scholastic monopoly theory rests on the doctrine of just price. The “just price” is the competitive market price, subject to some government regulation. Because monopoly-creating agreements were often thought to result in artificial scarcity and price inflation, monopoly appeared to sin against brotherly love.

The concept of just price, in turn, rested on a subjective theory of value equating value with the relative scarcity of a good and its ability to satisfy wants. In the 1960s de Roover discovered that Scholastic economic writers such as St. Bernardine and St. Antonine had borrowed this concept of utility from a Franciscan, Peter Olivi who lived a life of poverty and led the spiritual party of his order. In addition to a subjective theory of value, Scholastic writers like John Buridan identified and attempted to solve the “paradox of value.”

De Roover challenged Tawney's charge that Aquinas was a precursor of Marx. Aquinas, with most of his contemporaries, held that the just price was the market price. Moreover, this equation was extended to cover wages as well, and Scholastic writers vigorously criticized the medieval guilds for their monopolistic practices.

For de Roover the weakness of Scholastic economics was opposing usury. Yet even here the Schoolmen developed several doctrines that, in effect, allowed loans at interest. One of these was based on a two-tiered theory of money which distinguishes (sterile) pecunia from (fertile) capitale. Since capitale, unlike pecunia, has a seminal quality of generating profit, writers like Olivi, Bernardine, and Antonine countenanced loans of capitale being repaid with interest. A more controversial doctrine, lucrum cessans, allowed a lender to claim a return beyond principal if to make the loan he had given up an opportunity to invest his capital in what appeared to be a profitable enterprise. Finally, the banking and exchange system was used to circumvent the usury doctrine by claiming that the exchange transaction was a buying and selling of foreign currency, not a loan.

Profit, Tawney and Weber notwithstanding, was not viewed as evil per se. Business was a legitimate activity if it performed a socially useful role by manufacturing, transporting, or distributing goods. Profit was seen as compensation for the labor and risks undertaken by the businessman. Schoolmen such as Aquinas, Scotus, Bernardine, and Antonine only condemned the craving of profit as an end in itself.

In sum, de Roover's revisionist portrait of medieval economic thought should lead to a substantial revision of the historical development of economic theory.