THE LEGACY OF THE ECONOMIC SCHOOL OF SALAMANCA: A REVIEW FROM THE PRESENT

Abstract

Abstract: The name “School of Salamanca”, by which a group of catholic moralists and theologians of the 16th and 17th centuries are known for their contribution to economics is less than exact. They neither did all study at the University of Salamanca nor did they all teach there. More exact would be ‘late Scholastic political economists’. No matter. The name is now in general use and calls attention to the contributions of a distinguished group of clerics and laymen who, with their achievements and despite their shortcomings, applied the theology and philosophy of the Schools to solve the moral problems set by trade and finance in the Renaissance economy. Their controversies in the matter of prices, of money and inflation, of exchanges and interest rates, should attract the attention of today’s economists, who often remain on the surface of ethical questions. Also, they could help us re-examine our analytical instruments, since an excessive formalism often leads us to forget how the free market works.

Keywords: Scholastic Philosophy; Aristotelic ethics; nominalism v. realism; economic liberalism; gold and silver from the Indies; secular inflation; the two Gresham laws; fair price; usury and interesse; damnum emergens and lucrum cessans; Kings’ bankers; international commerce; coins’ exchange; quantitative theory; inflation as a tax.

JEL Classification: B11; B25; E4; H10; P16.