The Scholastic Legacy of Murray N. Rothbard in the History of Economic Thought

0:00My paper this afternoon is a is a preliminary attempt to trace Rothbard's legacy in economic thought Murray and Rothbard's contribution to the revival and newfound appreciation of the medieval and early modern scholastics I think is one of his greatest lasting achievements, and I know Murray has had a lot of lasting achievements No other book before or since has chronicled the importance and legacy of scholasticism as much as economic thought before Adam Smith Certainly, I think everyone should have a copy of this, both the Economic Thought Before Adam Smith, as well as the second volume, which is Classical Economics. They're both masterful works. And of course, Economic Thought Before Adam Smith is that first volume.

0:47His work not only sketched more than 50 minor, and again, in quotes, minor, these are minor scholastics, which I placed up here. And if you can notice, some of them of course are philosophers, all scholastics working within the tradition of scholasticism, taking us all the way to 1663, the latter part of the 17th century. The major writers, again in quotes major writers, from St. Albert the Great all the way to Juan de Lugo. So his work not only sketched more than 50 minor and major scholastic writers in their works, but also dismissed, and he says this in his introduction, the few great men approach as deficient and imprecise.

1:41As Rothbard says, quote, the cut and thrust of history itself, the context of the ideas and movements, how people influenced each other and how they reacted to and against one another is necessarily left out of the few great men approach, end quote. Not only was Rothbard strongly influenced by the revisionist contributions of Joseph A. Schumpeter, Raymond de Ruver, Marjorie Grace Hutchison, and John T. Noonan, as well as Emil Kauder. And just to throw in, obviously, the influence of Joseph Dorfman, his dissertation mentor at Columbia College at the time of Columbia University. But he also added his own unique Austrian perspective to the literature.

2:27Realizing that important knowledge and personalities had been lost by modern economic historians, Rothbard set out to recast the contributions of the scholastics in a decidedly positive light. He writes, it turns out that the scholastics were not simply, quote-unquote, medieval, but begun in the 13th century and expanded and flourished through the 16th and into the 17th century, end quote. Identifying the scholastics as proto-Austrian, Rothbard underscored the importance of studying their methods and appreciating their contributions in the following passage. Quote, Far from being cost of production more or less, the scholastics believed that the just price was whatever price was established on the common estimate of the free market. Furthermore, some of the scholastics were far superior to current formalist microeconomics in developing a proto-Austrian dynamic theory of entrepreneurship.

3:18Moreover, in macro, the scholastics beginning with Byrd and culminating in the 16th century Spanish scholastics worked out in Austrian rather than a monetarist supply and demand theory of money and prices and even a purchasing power parity theory of exchange rates, end quote. This rediscovery of the significance of scholasticism and scholastic thought emerged out of, as Rothbard again says, European-trained economists steeped in Latin, the language in which the scholastics wrote. He goes on, he says, it is no accident that the Austrian School, the major challenge to the Smith-Ricardo vision, arose in a country that was not only solidly Catholic, but whose values and attitudes were still heavily influenced by Aristotelian and Thomas' thought.

4:08Again, as he says, the studying of history and ideas should be an important part of every economist's toolbox. He writes, for if knowledge buried in paradigms lost can disappear and be forgotten over time, then studying older economists in schools of thought need not be done merely for antiquarian purposes or to examine how intellectual life proceeded in the past. Earlier economists can be studied for their important contributions to forgotten and therefore new knowledge today. Valuable truths can be learned about the content of economics not only from the journals but from from the Texts of Long, Deceased Thinkers. So I went down to my basement and went through a couple of boxes which were labeled histories of economic thought and began thumbing through the various texts, both the older texts and some of the newer texts.

5:01And not to my surprise, Rothbard's first volume, His Economic Thought Before Adam Smith, had a huge section, obviously, on the scholastics, and I think that's the major significance. So if we look and see, obviously, the amount of pages, and again, we can get into the fonts and the sizes and so on and so forth, but anything coming close to any kind of scholastic analysis is Joseph Schumpeter's History of Economic Analysis, which was published posthumously in 1954. I was ill-advised one semester in assigning Schumpeter's text as the primary text in a history of economic thought class, and I have never used it since, simply because, yes, he's very erudite, yes, he's very complete in some respects, and yet he is very difficult to read, whereas Rothbard's sort of Dorfman-like style really endears oneself to continuing to read this and get an appreciation, especially for the scholastics.

6:13Third on the list is Henry Spiegel's The Growth of Economic Thought out of Catholic University, 1971. 38 pages of scholastics, of which Murray Rothbard culled some of Spiegel's work as well. The Eklund and Eber text, which I think is in about the fifth edition now, which I use from time to time, again has thirteen pages, so I judiciously use that text as more related to modern economic thought as opposed to scholastic economic thought. Lewis H. Haney, in which Rothbard sort of rails at Haney for his very short shrifting of the scholastics as well, has with 11 pages, Charles Staley, a new text, 10 pages, Alessandro Rancaglia's The Wealth of Ideas, which was somewhat of a hit in 2005, has 10 pages, the old John Fred Bell text, which is much more interesting when you talk about classical economics, 8 pages, Edmund Whitaker's old 1960 text, 6 pages, 2002, History of Economic Thought, six pages, and Stanley Brew has none, and I could have listed a lot of others that had no pages at all.

7:42Again, I think the fact that Rothbard was able to use some of the great research that was available to him at the time and to add to it is really the legacy for us today. A little bit about scholasticism, and I think why Murray was certainly attracted to it. With newly translated texts of Aristotle as one of its dialectical focal points, along with the Old and New Testaments, various patristic writings on the Roman jurists, scholasticism was, quote, essentially a rational investigation of every relevant problem in liberal arts, philosophy, theology, medicine and law, and examined from opposing points of view in order to reach an intelligent, scientific solution that would be consistent with accepted authorities, known facts, human reason, and Christian faith.

8:35I think he was really attracted by that. There was a, there's substance to it. Beginning with St. Anselm, writes James Hitchcock in his recently published book entitled, Just Simply a History of the Catholic Church. Beginning with St. Anselm, who defined theology as faith seeking understanding, in that the The truths of faith can be neither proved nor disproved by human reason, but men are obliged to use reason to understand them as far as possible. Scholasticism spread as a system of logical investigation for studying various topics, including economics. It included, says John T. Noonan, the men who were the acknowledged intellectual and moral leaders of all of Europe for several hundred years, and the men who were the acknowledged leaders of part of Europe for later centuries.

9:25Deeply rooted in natural law theory, the medieval schoolmen turned their attention to numerous economic topics including the theory of money, value, and price, the defense of private property, public finance, entrepreneurship, distributive justice, not social justice, wages and profits, international trade and exchange, and interest. Although this system of thought would continue to be influential throughout Europe, scholasticism's greatest exponent was, as I had put on the first slide, the Jesuit Cardinal, Juan de Lugo. Although Lugo takes scholasticism well into the 17th century, his penetrating analysis of subjective utility was, according to Rothbard, quote, the culminating work of the Salamancon School, end quote.

10:13Unfortunately, scholasticism's demise is summed up by de Ruver in the following way, quote, the demise of scholasticism is not limited to economics, of course, but involves the entire scientific and philosophical system born in the medieval universities and still far from morbid on the eve of the 17th century. In the face of attack, the Aristotelians fail to realize that in order to survive, They had to renew their methods. Instead, they stubbornly refused to accept the new discoveries in experimental science, with the inevitable result that their philosophy shared the fate of their antiquated astronomy, physics and medicine, and along with them, fell into complete disrepute or discredit. Since the publication of Murray Rothbard's work nearly 20 years ago, numerous scholars have advanced a better and more complete understanding of scholasticism through monographs and journal articles, new translations of long forgotten Latin texts, The Mises Institute has been at the forefront with the republication of the two-volume work but especially, most especially for my purposes, economic thought before Adam Smith in 2006, other works of course in the bookstore of the Salomonkin School by Marjorie Grice-Hutcherson and others as well, and organizations such as

11:43such as the Juan de Mariana Institute, founded in 2005, named after the work and ideas of the 16th century Spanish scholastic. One such advancement has been the recent partial translation, and I say partial because, again, Lesius' work is over 800 pages of very tightly typed, dense Latin text. But the recent translation of Leonidas Lesius' De Justizia et Ure of Justice and Right, first published in 1605, was done by Wim Decock. His translation further enhances Rothbard's commentary on Lesius' most significant contributions, including the just price, loan contracts and markets, wages and the labor market, entrepreneurship, money and credit, usury and titles of interest.

12:39But again, his translation is snippets. It's a paragraph here, it's a paragraph there. Again, it's not the complete translation. That would literally be, I think, a lifetime of work. And there are, again, as I put up the two front slides of various scholastic writers So as one of the last great scholastics' interests in his work by Barry Gordon, Louis Beck, and others, including Murray Rothbard, has had its own specific impact on a growing body of work within the sub-discipline of economic thought. A few words about the work itself, and then some closing comments.

13:32Lesia's most important work was his De Justicia et Ore, On Justice and Right, published in 1605. This work circulated throughout the 17th century in Europe, with the cities of Antwerp, Louvain, Lyon, Paris and Venice publishing most of his editions. His work is divided into four books, which most of these on justice and right sort of compendiums were at the time, which incorporate the four cardinal virtues, de prudencia, of prudence, de justicia, of justice, de fortitudine, of fortitude, and de temporencia, of temperance. Not surprisingly, of the 808 pages of text in my Antwerp, Planton, Moretus, 7th edition of 1632, 683 pages of that text is dedicated to an examination of justice.

14:33And within the section of his treatise, Lesius devotes nine chapters to book two, to economics, to finance, banking and international trade. And again, these are the sections in which Wim D. Koch has recently done his translation. I believe the scholastic legacy of Murray and Rothbard in the history of economic thought is essentially threefold. First, his rejection of the few great men approach, and he didn't like the few great and the Great Men Approach, because again, if you take a look at the multi-volume history of American intellectual history by Joseph Dorfman, if you read Rothbard side-by-side and read Dorfman at the same time, you'll understand where he got his style.

15:35And again, Dorfman also rejected the few great men approach. includes all kinds of quote-unquote minor intellectuals and writers in shaping the direction of intellectual thought in early America as well. So we have the rejection of the few great men approach to the history of economic ideas. And this provided, I think, Rothbard the opportunity to expand the work of earlier historians. We felt a kinship to, as I said, some of these early writers like Grace Hutcherson and Noonan, and most especially Schumpeter, and dug around for information that wasn't in textbooks or available at the time. No longer would only a very few medieval philosophers like St. Thomas Aquinas appear in the early chapters of a standard textbook like Haney's textbook or John Fred Bell's textbook, book, but with the publication of Economic Thought before Adam Smith in 1995, readers have been treated with a comprehensive narrative in an engaging Dorfman style, so engaging and compelling, of more than 50 scholastics since the days of St. Anselm.

16:51Second, Rothbard's Economic Thought is a serious attempt to recapture the sense of historical continuity within the history of economic thought, most especially in portraying including the uniqueness and innovativeness of the scholastic writers. The history of the past, quote, adds depth to our understanding of the ideas that resulted from it all and which are still with us today. The history of economics can shed light on the history of ideas in general, and much that we can learn from that history about the dynamics of controversies and the emergence of paradigms applies to other fields and to our own times as well as to the past, end quote. a historical perspective in Rothbard's keen Austrian analysis of numerous scholastic writers that enriches our understanding of various policy questions today.

17:36For, quote, history necessarily means narrative, discussion of real persons as well as their abstract theories, says Rothbard, and includes triumphs, tragedies, and conflicts, conflicts which are often moral as well as purely theoretical, end quote. Finally, his work continues to inspire new attempts to explain and better understand the significance of the scholastic contributions to the overall development in the history of economic thought, ideas and concepts that are still with us today because they have enduring value. In the area of scholastic economic thought, Rothbard's work is the new gold standard, where alchemists are exposed and right reason is on full display. Thank you. Thank you very much.