II. Some Predecessors of the School of Salamanca

ENGLISH books on medieval monetary theory being few and far between, the following outline of the subject is intended to help students who do not read French or German easily. It need hardly be said that many of the ideas noted here as ‘medieval’ must, in fact, be even older, and others have far outlived the Middle Ages. Some particularly persistent doctrines appear to have been handed down intact from writer to writer until our own day and still leave their mark in our text-books. Others seem to have died down for a season, and then to have sprung up again in all their original seductiveness. But despite the distortion produced by the presentation of theory in a series of artificially separated historical layers, I have thought it best to give ‘medieval’ doctrines a short section to themselves, so as to throw into clearer relief the actual contribution made by our Spanish writers to the science of monetary theory.

THE ORIGIN AND FUNCTIONS OF MONEY

Medieval ideas about the origin and functions of money are largely based on a few short passages in Aristotle’s Politics and Nicomachean Ethics. The former contains Aristotle’s famous account of the transition of society from a barter to a monetary economy, a development he assumes to have taken place at some remote period in the history of mankind.¹ Aristotle goes on to note the most obvious function of money, its use as a medium for the exchange of goods. Money was first invented, he explains, to overcome the difficulties of transport that are bound to arise in a barter economy. Iron, silver, or some similar material, was adopted as being valuable in itself and yet easy to convey, and in course of time this metal came to be publicly stamped to save the trouble of weighing.

In the Nicomachean Ethics Aristotle mentions two other functions of money. In the first place, money is a ‘measure of all things’.² Aristotle does not appear to mean by this simply that money measures the value of goods, but rather that it serves as a sort of common denominator which brings into line with each other things diverse in nature: ‘money, like a measure, by making all things commensurable, equalises them’.³ Secondly, Aristotle observes that money may constitute a store of value. It is ‘a kind of security to us in respect of exchange at some future time. Suppose that we want nothing now, it ensures that we shall have it when we do, the theory of money being that whenever we offer it we can receive commodities in exchange. Of course, money too is liable to depreciation, for its value is not always the same. Still, it is of a more permanent nature than the commodities it represents.’⁴ And Aristotle went deeper than this. The real measure of goods, he says, is demand, ‘for if the parties were not in want at all or similarly of one another’s wares, there would not be any exchange, or at least not the same. And money has come to be, by general agreement, a representative of Demand; and the account of its Greek name nomisma is this, that it is what it is not naturally but by custom or law (nomos), and it rests with us to change its value or make it wholly useless.’¹

There is one other idea of Aristotle’s which, while it relates directly to goods, came later to be applied to money also: the doctrine that ‘the uses of every possession are two, both dependent upon the thing itself but not in the same way, the one supposing an inseparable connexion with it, the other not ; as a shoe, for instance, which may be either worn or exchanged for something else’.² This passage was often cited by the authors of the later Middle Ages in justification of foreign exchange transactions.

Aristotle’s doctrine was enriched (or, as some would hold, corrupted) by the Roman jurists, who expounded certain concepts proper to their calling. The most influential in the field of monetary theory seems to have been Paulus (c. 180–235), who stresses the use of money as a price, draws a sharp distinction between a barter and a monetary transaction, and in one passage sketches out the nominalist position.³

With the fall of the Western Empire, some part at least of Aristotle’s teaching was preserved by Mohammedan scholars, many of whom worked in Spain. The Cordoban philosopher Averroes (1126–98), whose commentary on the Ethics was translated into Latin early in the thirteenth century, follows Aristotle closely as to the origin and functions of money.¹ Translations of Aristotle now began to be made from the original Greek, the most celebrated being that provided by William of Moerbeke for his friend St. Thomas Aquinas (1225–74). This rediscovery of Aristotle, while it gave fresh stimulus to scientific thought in general, did little to modify the particular concepts which we are now considering. Yet these few simple ideas, though they changed so little with the centuries, came to play a very important part in medieval monetary theory. The strongly teleological character of Thomist thought focused attention on what was held to be the true end or purpose of money and on its three principal functions as laid down by Aristotle, more particularly its use as a medium of exchange. Since the loan of money at interest could not be classed under any of these three heads, St. Thomas regards the practice as clearly contrary to nature,¹ quite apart from Aristotle’s explicit condemnation of usury. St. Thomas also condemns foreign exchange transactions for the same reason.² Thus, ideas in themselves sound and reasonable proved in course of time a drag on the progress of theory.

In the later Middle Ages some authors tried to enliven their expositions by adding one or two new ‘uses’ to the list, such as that of gold and silver for adornment or for medicinal purposes. Oresme (c. 1360) after giving a particularly clear and vivid account of the inconveniences of barter, stresses the symbolical nature of money in very modern terms.³ Buridan (c. 1330) and Gabriel Biel (1430?–95), on the other hand, rather emphasize the use of money as a store of value.⁴ But on the whole very much the same concepts are handed down from author to author until well into the sixteenth century. Even Charles Desmoulins, who wrote as late as 1546 and who shocked his contemporaries by his bold defence of usury, still clings nervously to the hands of Aristotle and Paulus when he comes to consider the origin and functions of money.¹

THEORY OF VALUE

The search for a general theory of value applicable to both goods and money is not altogether peculiar to modern economics. Efforts to find such a theory have been made since early times, although many authors have assumed as a matter of course that the value of goods and of money are governed by different laws. As we shall see later, one of the more successful of these attempts to bring goods and money within the scope of a single theory of value was made by our Spanish writers. They based their doctrine on certain elements which they found in the work of their medieval predecessors, and in order to show the evolution of their ideas we shall have to consider medieval theories of value firstly as applied to goods, and secondly as applied to money.

The value of goods. Early theories of value, in so far as they concern goods, usually centre round the concept of the ‘just price’. The general idea of the just price has been traced to Plato,¹ who prescribes that the tradesman must name only one price, and, if he cannot obtain it, return home with his wares. Aristotle makes quite an elaborate attempt to analyse the principle of justice in exchange, and both the objective and the subjective aspects of value are reflected in his work. His famous little diagram showing how the builder and the cobbler may justly exchange the products of their skill² would seem to support a labour theory of value. On the other hand, his assertion that want, or demand, is the true basis of exchange³ was one of the chief sources of medieval subjectivism. Another forerunner of subjectivism was St. Augustine. In a very celebrated passage, which was quoted over and over again throughout the Middle Ages, St. Augustine says that according to the order of nature animate things are ranked above inanimate, and, among the living, the intelligent above those that have not intelligence. And he goes on to note the discrepancy that exists between this ‘natural’ scale of values and man’s valuation as reflected in the price-structure, the latter scale being based on utility.⁴

When we come into the great flowering-time of scholastic thought, the thirteenth century, we find the objective and subjective theories of value running side by side, very much as in Aristotle. Albertus Magnus (1206?–80) bases justice in exchange on equality of labour and ‘expenses’, and, at the same time, maintains that the primary object of exchange is the satisfaction of human wants.¹ St. Thomas Aquinas (1227–74) in his commentary on the Nicomachean Ethics observes: ‘The arts will be destroyed if the workman who has made some article does not receive for it another article similar in quantity and quality. One man’s labour must be compared with another’s if the exchange is to be just.’² And again: ‘Justice will be served if as many shoes be given in exchange for a house or for food as the builder or the farmer exceeds the cobbler in labour and costs.’³ Yet St. Thomas endorses Aristotle’s dictum that want is the real measure of value and makes Augustine’s doctrine of value his own.⁴ According to St. Thomas, supply and demand play their part in determining price. The price of bread rises in time of famine, gold is valuable because it is rare, and the price of wheat is likely to fall when fresh supplies are expected to come on to the market.¹ It follows that slight fluctuations in the just price were permissible, and later writers insist on this point.

There is some evidence to show that, as time went on, greater emphasis came to be laid on the subjective aspect of value. There was a moral reason for this. Medieval writers viewed the poor man as consumer rather than producer. A cost-of-production theory would have given merchants an excuse for over-charging on the pretext of covering their expenses, and it was thought fairer to rely on the impersonal forces of the market which reflected the judgement of the whole community, or, to use the medieval phrase, the ‘common estimation’. At any rate, it would seem that the phenomena of exchange came increasingly to be explained in psychological terms.²

Buridan (1300–58) says that ‘the value of goods is estimated by human want … and therefore the satisfaction of want is the real measure of saleable goods. But it would seem that this satisfaction is measured by want itself; for the satisfaction is greater when the want satisfied is great… as is shown by the fact that wine is dearer when it is scarce, because we need it more.’³ Like other medieval writers, Buridan insists that value is not measured by the need of the individual, but by ‘the common need of those who trade with one another’.¹ Otherwise, a rich man could buy his bread cheaper than a poor man, since his need is less.

The Viennese scholar, Henry of Langenstein (132583), whose treatise on contracts long remained the standard work on the subject, advocates a strict system of price-control but advises the prince to fix prices in accordance with the ‘customary price’, the latter being determined by the ‘degree of human want’. Langenstein goes on to analyse the whole subject of ‘want’ in a most subtle manner and draws a distinction between ‘extensive’ and ‘intensive’ demand, the former depending on the number of prospective purchasers, and the latter on the scarcity of the merchandise. Men feel only a slight degree of want for things that are abundant, but those which are scarce are highly valued. Thus, according to Langenstein, the just price is objective in the sense that it should be fixed by some authority standing outside the market, and yet subjective as being the product of subjective factors.² Yet even Langenstein, in another passage, states that each man can reckon for himself the price of his wares by calculating how much money he needs to support himself according to his status.³

To sum up, it would seem that supply-and-demand, utility, cost of production (including the remuneration of labour), and other factors such as the cost of transport and risk, were all to be taken into account in determining value. These apparent contradictions cannot be attributed to mere carelessness on the part of such skilled reasoners as the schoolmen. They rather imply a realistic acknowledgement of the dual aspect of price, and an anticipation of the intertwining of subjective and objective factors in modern theory.

If we are right in thinking that towards the end of the Middle Ages subjective factors came to be assigned an increasingly important role in the determination of value, then the extreme subjectivism of Saravia de la Calle (c. 1540), one of our earlier Spanish writers, may be regarded as the culmination of a gradual movement. Now, one of the most interesting things about the work of our Salamancans is the methodical way in which they set about applying the above well-established principles to the determination of the value of money as well as goods, laying special stress on the influence of supply and demand. Such a procedure is clearly likely to lead to some form of quantity theory, and, in fact, that is the very type of theory which our writers adopted. Before we can claim that their doctrine constituted a novelty, however, we must see whether any of their predecessors had worked along similar lines. The next section has been written with this object in view.

The value of money. Here we are on rather more treacherous ground. For the sake of convenience we may classify medieval theories into three main groups, holding respectively that money derives its value (a) from the proper fulfilment of its functions, (b) from the tale set upon it by the prince, and (c) from the market-value of its metal content. But often we find all three theories jumbled together in the work of a single author, and we may as well abandon at the outset any attempt to group writers into ‘schools’ and dub them nominalist, metallist, and so on, even though we are obliged thus to disentangle the doctrines themselves or we should not be able to describe them at all.

The first of our three theories—the idea that money derives its value from the proper fulfilment of its functions—makes only a slight advance on the teaching of Aristotle already considered, and it seems to have been quite widely held among the great schoolmen of the thirteenth century. Albertus Magnus says that the value of money consists in its use as a measure of goods,¹ and St. Thomas that ‘the virtue of money lies in the fact that a man may exchange it for whatever he needs’, adding that ‘since money resembles a measure, its value must be stable’.² With this sort of statement we may link up the fairly common notion that the use of money as a medium of exchange raises its value above the market-price of its metal content, money as money being valuable only within its area of circulation. Thus, Innocent IV declares that a prince may be allowed to make a small profit over the coinage ‘because of jurisdiction, and the authority and communal nature that money receives from the royal person or character’.³ Henry of Ghent, too, says that ‘money was made … to be a price ; and, even if it has in itself substance in weight and tale, it also, in so far as it is money with its own circulation, has a value not derived from substance’.⁴

This brings us to the second of our theories, nominalism. The turn of the thirteenth century saw the first of a long series of debasements of the currency (notably in France), which provided abundant material for discussion. The argument centred round the legal aspect of debasement: whether a prince has the right to debase the currency, whether he ought to make a profit over the coinage, whether debts should be reckoned in terms of the metal content of a given money, or in terms of its legal tale, and so forth. The legal right of the prince to alter the value of the currency, either by reducing the metal content of the coins or by raising their tale, was at first seldom questioned, although it was generally agreed that such a step should be taken only in case of extreme necessity.

Our third theory, metallism, crystallized in the course of this discussion, and was predominant towards the end of the Middle Ages. The effect of debasement on prices had by now been realized. Already in 1308 the jurist Pierre Dubois had complained to the king that prices were much higher as a result of debasement, since foreigners considered only the metal content of the coins.¹ The ‘intrinsic goodness’ of money came to be given more weight in the discussions of philosophers and jurisconsults. It was argued that the true value of money was the value of its metal content, and that prices would tend to rise as this content was reduced, or as the tale of the coins was raised while their metal content remained unchanged, a view that was still being vigorously defended in 1530 by the anonymous supporter of Albertine policy in the Saxon coinage controversy.¹ Another strong opponent of the policy of debasement was Buridan, who bases the legal value of money on its metal content, which he says must be clearly reflected in the tale. Money should be made of ‘noble and easily transportable material’ and should include coins of several denominations. At the same time, Buridan held that the real value of money lay in the proper fulfilment of its primary function as a medium of exchange, so that ‘money is not a sure measure of commodities except in the sense that both money and commodities are related to human want’.² Thus, we find a certain parallelism between the subjective and objective aspects of value, in monetary theory as in the more general medieval theory of value.

These three theories seek to account for the origin of the value of money. The quantity theory explains fluctuations in its value. As M. Gonnard has shown,³ the quantity theory is not incompatible with either nominalism or metallism, nor would it appear to conflict with the idea that money derives its value from the fulfilment of its functions. What traces of quantity theory, or at least of a simple supply-and-demand theory of the value of money, can we find in classical and medieval writers? We have seen that the influence of supply and demand on the value of goods was clearly understood. Were the same forces held to affect the value of money also ?

Considered as commodities and not as money, the precious metals were of course included in the general medieval theory of value. Already in ancient Greece Xenophon had counselled more efficient use of the Greek silver-mines because, while the price of commodities rises and falls with their increasing scarcity or abundance, the demand for silver is insatiable owing to the manifold uses to which it may be put as money. Xenophon continues: ‘If it be objected that gold is as useful as silver, I will not dispute it; but I am sure that abundance of gold always lowered its value and advanced the price of silver.’¹ It must be remembered that the currency of the period was based on silver, not gold. Xenophon thus seems to have held a supply-and-demand theory of the value of goods but hardly of money, since he thought that the quantity of money might be increased indefinitely without diminishing its value. St. Thomas says that ‘a very small quantity of the precious metals, on account of their rarity, is worth a great quantity of other things’.² Oresme develops the same idea more elaborately and applies it to the value of gold and silver used as money: ‘For just as gold is by nature nobler, more precious, and better than silver, and more difficult to find and obtain, it is very reasonable that a certain weight of gold should be more valuable and more highly estimated than silver—for example, in the proportion of twenty to one.’ The ratio might vary ‘if, for instance, less gold were to be found than before the institution of money, and in this case it ought to be dearer in comparison with silver, and its price and value might properly be changed’.¹

According to Schreiber,² Henry of Ghent and Duns Scotus taught that the value of money was determined by the same factors as that of goods, but the passages which he quotes in support of this assertion are not quite as convincing as usual. Copernicus (1526) in his treatise on debasement notes that ‘money usually depreciates when it becomes too abundant—for instance, when so much silver has been turned into money that there is more demand for bars than for coins’.³ But, apart from this brief statement, Copernicus bases the value of money on that of its metal content, and says that ‘prices fluctuate according to the quality of the money’ and that the high cost of living is caused by debasement.⁴

There was, then, a vague notion that the ‘estimation’ of money depended on its rarity; but, although the effect of debasement on prices was universally recognized, that of an alteration in the whole quantity of money in circulation was scarcely considered at all.

Many historians consider that the first author to state the essentials of the quantity theory was Jean Bodin in 1568.⁵ But this claim to originality, which Bodin himself advanced, was, in fact, mistaken: as we shall see, our Spanish writers forestalled him by about twelve years.

THEORY OF FOREIGN EXCHANGE

Aristotle makes no mention of the art of the money-changer. St. Thomas distinguishes between the ‘natural and necessary exchange whereby one commodity is exchanged for another, or money taken in exchange for a commodity, in order to satisfy the needs of life’, and ‘the exchange of money for money, or of any commodity for money, not on account of the necessities of life, but for profit, …’.¹ The former is commendable because it satisfies a natural need. The latter is justly deserving of blame, because, considered in itself, ‘it satisfies the greed for gain, which knows no limit and tends to infinity’. Nevertheless, gain is not in itself sinful ‘if it is directed to some necessary and virtuous end, such as the upkeep of the trader’s household, or the assistance of the needy’. Thus, St. Thomas in the Summa Theologica seems to give modified approval to the business of the money-changer so long as it is undertaken for some worthy purpose, but we have seen that in his ‘Commentary on the Politics of Aristotle’ he condemns exchange transactions as contrary to nature.

Henry of Ghent says that money must be exchanged for other money ‘according to equality of price’. He gives an ingenious explanation of the rate of exchange, based on the idea already current that money was more valuable within its own area of circulation. A coin may be bought outside this area at the market-value of its metal content, and the purchaser may then bring it into its own area of circulation and ‘put it into use’ at a higher value, the resulting profit being a reward for his labour.¹

Aegidius Lessinius, a follower of Aquinas, agrees that a money-changer deserves some reward for his labour, adding that the benefit enjoyed by the customer is greater than that which the money-changer himself derives from the transaction.² This view is repeated by the unknown author of the Summa Artesana (c. 1317), who mentions that the money-changer’s profit depends on the fact that money has a dual value, ‘according to the material of which it is made’, and ‘according to positive law’.³ Buridan regards the money-changer’s ‘profit’ as compensation for the labour and expenses he has incurred.⁴ We have already discussed Oresme’s explanation of the agio between the price of gold and silver.

This brings us into the fifteenth century, an age which saw a considerable advance in the theory of foreign exchange. In particular, the Italian schoolmen of the period were worthy masters of the great Italian economists of the seventeenth and eighteenth centuries—Davanzati, Serra, Montanari, and Galiani—whose work owes much to their writings. The theory of foreign exchange elaborated by the School of Salamanca was a development of the doctrine of two Florentine theologians, Laurentius de Rodolphis (whose treatise on usury was written in 1403), and St. Antonino of Florence (1389–1459).

In Laurentius we find the traditional classification of exchange transactions into cambium minutum, cambium per litteras, and ‘real’ and ‘dry’ exchange¹ with which our brief glance at the commercial practice of the sixteenth century has made us familiar. This classification was retained for over 400 years, since it continued to be presented as current doctrine in Roman Catholic manuals of theology until the end of the eighteenth century.

In the work of Laurentius and a few of his contemporaries we begin to find references to the ‘sale’ and ‘purchase’ of money, an idea that clashed (or at any rate was thought to clash) with the teaching of Aristotle. Laurentius mentions, as factors that helped to determine the price of money, the situation of the money in question (whether inside or outside its own area of circulation), the purity, weight, and market-value of its metal content, and the conditions of supply and demand ‘according to whether gold is worth more at one time than another, or florins are more sought after than ducats or vice-versa’. We find here a hint of a subjective or utility theory of money and of the concept of ‘estimation’ which was to play an important part in the theory of our Spanish writers.

St. Antonino¹ adopts the teaching of Laurentius with some minor elaborations. He contributed no very novel ideas to the theory of foreign exchange, but his delightful personality, wide learning, and clear style brought him many followers, and he remained one of the standard authorities on the subject until far into the Renaissance.

The sixteenth century saw a great revival of commercial activity all over Europe, and, with it, a corresponding increase in the number of foreign exchange transactions. As the century advanced the conflict between theory and practice grew more and more acute. At last, in 1532, the Spanish merchants of Antwerp sent their confessor to Paris to get a ruling on the legitimacy of exchange transactions from the learned doctors of the University. He took with him a Report on the merchants’ activities in which their case is cogently presented, but the same can scarcely be said for the Reply of the fifteen eminent experts who put their names to the document.² They were too alarmed by the events of their time to utter more than a forthright condemnation of all exchange business, and they failed to think out the fundamental principles involved. There is, however, one point of interest in the Reply: the assertion that the rate of exchange fluctuates according to the state of supply and demand and is not derived from the labour and costs incurred by the person in whose favour the bill is drawn. The Reply includes an opinion written at Salamanca by Francisco de Vitoria, the founder of the School of Salamanca. Vitoria dissents in certain respects from the opinion of the doctors of Paris, but he confesses that he is bewildered and dismayed by the complexity of the whole problem of commercial morality, and he makes no important contribution to the discussion.

The time has come at last for us to enter the University of Salamanca. Let us therefore follow Vitoria up the carved stone staircase, through the cloister, and into the lecture-hall of theology, which remains today just as it was in Vitoria’s time, with its little window high up in the white-washed wall, its dark gallery, its rostrum where the master commented upon the book that was read out by an assistant seated at his feet, and its rough oaken benches on which innumerable girls’ names have been carved by many generations of students.

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¹Polit. 1, 1257a.

²Nic. Ethics, v, 1133a.

³ Ibid., 1133b.

⁴ Ibid.

¹ Ibid., 1133a.

²Polit. 1, 1257a.

³ (a) ‘Buying and selling originated in barter. Once money did not exist, nor was price distinguished from merchandise, but each man exchanged what was useless to him for what was useful, according as the times and the goods made necessary. For it often happened that one man had a surplus of what another lacked.’ Quoted by C. Miller, Studien zur Geschichte der Geldlehre (Stuttgart, 1925), p. 61.

(b) For just as sale is distinguished from purchase, and a buyer from a seller, so is price distinguished from merchandise. In barter we cannot say who is the buyer and who the seller.’ (Miller, op. cit., p. 64.)

(c) ‘But, since it does not always (or indeed easily) happen that, though you have what I desire, I also have what you are willing to take in exchange, a material was chosen whose public and perpetual value should overcome by equality of quantity the inconvenience of barter. This material was publicly stamped, and its use and power are derived not so much from its substance as from its quantity.’ (Quantity here means tale.) Quoted by Wołowski, Traictie de la première invention des monnaies of Nicole Oresme, Paris, 1864, Pt. I (Introduction), p. xxxvii. See also Miller, op. cit., p. 63.

¹ Miller, op. cit., pp. 68–73.

¹ ‘Now money, according to the Philosopher (Ethics V. Polit. 1), was invented chiefly for the purpose of exchange: and consequently the proper and principal use of money is its consumption or alienation whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury.’ (St. Thomas Aquinas, Summa Theologica 2, ii, Quest. 78, Art. 1.)

² ‘Likewise the art of money or acquisition is natural to all men for the purpose of procuring food, or money with which to buy food, out of natural things such as fruits or animals. But when money is acquired not by means of natural things but out of money itself, this is against nature.’ (Com. Arist. Pol. 1, lvii, quoted by E. Schreiber, Die Volkswirtschaftlichen Anschauungen der Scholastik, Jena, 1913, p. 29.) St. Thomas is here specifically referring to the ars campsoria, or business of money-changing.

³Traictie de la première invention des monnaies, Ed. Wołowski, Pt. I (Text), p. ix.

⁴ A. E. Monroe, Monetary Theory before Adam Smith, Harvard Economic Studies, Cambridge, 1923, p. 22.

¹ ‘Money, in so far as it is money, is not merchandise … but measures the value of all things, as Aristotle says in Ethics V.… This is proved by the origin and institution of money. According to Aristotle … men created money by common agreement, to supply and represent necessary things, and that is why it is called numisma, because it is the product of law, not of nature, and we have the power to alter its value or to make it useless. The Jurisconsult is of the same opinion, and says … that [the value of money] resides not so much in its substance as in its quantity: that is, in the public price set upon it, which has recently come to be called its public and perpetual estimation,’ De mutatione monetae tractatus, reprinted by Budelius in his De monetis et re numaria, Cologne, 1591, p. 485.

¹ Schreiber, op. cit., p. 5.

²Nic. Ethics, v, 1133a.

³ Ibid.

⁴ ‘Of the different degrees of creatures, wherein profitable use and reason’s order do differ.

‘Now the esteem [of things] is as peculiar and different, as are their divers uses: whereby some senseless things are preferred before some sensitive, so far, that if we had power, we would root the latter out of nature, or (whether we know or know not what place therein they have) subordinate them to our profit. For who had not rather have his pantry full of meat than mice, or possess pence than fleas? No marvel: for man’s valuation (whose nature is so worthy) will give more oftentimes for a horse than for a servant, for a ring than a maid. So that in choice the judgment of him that respects the worth is different from that of him that respects his own need or pleasure: the former estimating all things by their place in nature, the latter by the degree to which they satisfy his needs; the one valuing them by the light of the mind, the other by the pleasure or use of the sense.’ (St. Augustine, City of God, xi, 16, Healey’s translation.)

¹ Schreiber, op. cit., pp. 49–52.

²Com. Arist. Eth. v. 1, vii, e, quoted by Schreiber, op. cit., p. 35.

³ Ibid, 1, viii, h, quoted by Schreiber, op. cit., p. 39.

⁴ ‘The one thing which measures all else is in truth demand, which includes all commodities in so far as things are related to human wants. For they, are not priced according to the dignity of their nature (else would a mouse, which is a sensitive being, fetch more than a pearl, which is inanimate), but according to men’s need of them for their use.’ Com. Arist. Eth. 1, c, quoted by Schreiber, op. cit., p. 43.

¹ Schreiber, op. cit., pp. 57–58.

² Notably by Henry of Ghent (1217–93) and Richard of Mediavilla (1307), for a discussion of whose doctrines see Schreiber, op. cit., pp. 131–46, 227.

³ G. O’Brien, An Essay on Medieval Economic Teaching, London, 1920, pp. 109–10.

¹ Schreiber, op. cit., pp. 177–91.

² Ibid., pp. 196–202.

³ O’Brien, op. cit., p. 111.

¹ Miller, op. cit., p. 81.

² Ibid., pp. 85–87.

³ R. Gonnard, Histoire des doctrines monétaires, Paris, 1935, p. 117.

⁴ Miller, op. cit., p. 91; Schreiber, op. cit., p. 133.

¹ Monroe, op. cit., p. 25.

¹ A French translation of this treatise is included in J.-Y. Le Branchu, Écrits notables sur la monnaie, Paris, 1935, vol. i, pp. 30–46.

² Miller, op. cit., p. 113.

³ Gonnard, op. cit., pp. 11–12.

¹Discourse upon improving the Revenue of the State of Athens, tr. Cooper, London, 1832, p. 685.

²Expos, in viii lib. Polit. i, 7, quoted Monroe, op. cit., p. 26 (note).

¹Traictie de la première invention des monnoies, ed. Wołowski, Pt. I (Text), pp. xxx–xxxi.

² Schreiber, op. cit., pp. 133–4, 153–4.

³ French translation, ‘Discours sur la Frappe des Monnaies’, in Le Branchu, op. cit., vol. i, pp. 5–27. Quotation from p. 7.

⁴ Ibid., p. 13.

⁵ Jean Bodin, Réponse à M. de Malestroit, ed. Henri Hauser, Paris, 1932, pp. 9, 10. In his introduction to this edition (pp. xliii, lxxv, lxxvi) Hauser says: ‘Voilà le grand mot lâché. Bodin pose en principe qu’il y a un rapport nécessaire entre la quantité d’or et d’argent en circulation et le prix des choses.…C’est bien à lui, non à d’autres,(sauf à Copernic), que la pensée économique moderne est redevable de cet axiome, exact ou non, discutable peut-être; les prix, toutes choses égales d’ailleurs, varient en raison inverse de la quantité des moyens de paiement.’

J.-Y. Le Branchu, op. cit., p. li, says: ‘Le grand mérite de notre auteur [Bodin] est d’avoir, le premier, justement attribué le hausse des prix à I’afflux d’or et d’argent en provenance d’Amérique.’ Erich Roll, A History of Economic Thought, 1945, p. 61, agrees that ‘[Bodin’s] statement that “the principal reason which raises the price of everything, wherever one may be, is the abundance of that which governs the appraisal and price of things” is the first clear statement of a quantity theory of money’. And it would be easy to cite many similar utterances.

¹Summa Theol. Q. 77, Art. 4.

¹ Schreiber, op. cit., p. 134.

² Ibid., p. 164.

³ Ibid., pp. 171–2.

⁴ Ibid., p. 187.

¹ Ibid., pp. 211–13.

¹ G. Ilgner, Die volkswirtschaftlichen Anschauungen Antonins von Florenz, Paderborn, 1904, pp. 139–50.

² An extract from the Report and part of the Reply are reprinted in an Appendix to this study.