4. The Late Spanish Scholastics (continued)

0:007. The Learned Extremist, Juan de Mariana One of the last Spanish scholastics was a Jesuit, but not a Salamancon. He was the extremist contemporary of Molina and Suarez, Juan de Mariana, 1536-1624. Mariana was born near Father Toledo of poor and humble parents. He entered the great University of Alcala in 1553, shown as a student, and a year later was received into the New Society of Jesus. After completing his studies at Alcala, Mariana went to the Jesuit College at Rome in 1561 to teach philosophy and theology, and after four years moved to Sicily to set up the theology program at the Jesuit College there.

0:58In 1569, Mariana moved to teach theology at the great University of Paris at the remarkably young age of 33. After four years, ill health forced him to retire to live in Toledo. Ill health, however, often does not necessarily mean a short life, and Mariana lived to the and then phenomenally ripe old age of 88. Fortunately Mariana's retirement was an active one and his great learning and erudition drew numerous persons from private citizens to state and ecclesiastical authorities to ask for his advice and guidance. He was able to publish two great and influential books.

1:45was a history of Spain written first in Latin and then in Spanish which went into many volumes and many editions in both languages. The Latin version was eventually published in 11 volumes and the Spanish in 30. The Spanish edition has long been considered one of the classics of Spanish style and it went into many editions until the mid-19th century. The other notable work of Mariana, De Rega, on kingship, was published in 1599, written at the suggestion of King Philip II of Spain and dedicated to his successor, Philip III. But monarchy did not fare well at the hands of the hard-hitting Mariana, a fervent opponent of the rising tide of absolutism in Europe and of the doctrine of such as King James The first of England that kings rule absolutely by divine right.

2:45Mariana converted the scholastic doctrine of tyranny from an abstract concept into a weapon with which to smite real monarchs of the past. He denounced such ancient rulers as Cyrus the Great, Alexander the Great and Julius Caesar as tyrants, who acquired their power by injustice and robbery. The scholastics, including Suarez, believed that the people could ratify such unjust usurpation by their consent after the fact, and thereby make their rule legitimate. But Mariana was not so quick to concede the consent of the people. In contrast to other scholastics who placed the ownership of power in the king, he stressed that the people have a right to reclaim their political power whenever the king should abuse it.

3:40Indeed, Mariana held that in transferring their original political power from a state of nature to the king, the people necessarily reserved important rights to themselves. In addition to the right to reclaim sovereignty, they retained such vital powers as taxation, The Right to Veto Laws and The Right to Determine Succession if the King Has No Heir It should already be clear that it was Mariana, rather than Suarez, who might be called the forebear of John Locke's theory of popular consent and the continuing superiority of the people to the government. Furthermore, Mariana also anticipated Locke in holding that men leave the state of nature The most fascinating feature of the extremism of Mariana's political theory was his creative innovation in the scholastic theory of tyrannicide.

4:57That a tyrant might be justly killed by the people had long been standard doctrine. But Mariana broadened it greatly in two significant ways. First, he expanded the definition of tyranny. A tyrant was any ruler who violated the laws of religion, who imposed taxes without the people's consent, or who prevented a meeting of a democratic parliament. All the other scholastics, in contrast, had located the sole power to tax in the ruler. Even more spectacularly, to Mariana, any individual citizen can justly assassinate a tyrant and may do so by any means necessary.

5:44Assassination did not require some sort of collective decision by the entire people. To be sure, Mariana did not think that an individual should engage in assassination lightly. First, he should try to assemble the people to make this crucial decision. But if that is impossible, he should at least consult some erudite and grave men, unless the cry of the people against the tyrant is so starkly manifest that consultation becomes unnecessary. Furthermore, Mariana added, in phrases anticipating Locke's and the Declaration of Independence's justification of the right of rebellion, that we need not worry about the public order being greatly disrupted by too many people taking up the practice of tyrannicide, for this is a dangerous enterprise, Mariana sensibly pointed out, and very few are ever ready to risk their and their lives in that way.

6:48On the contrary, most tyrants have not died a violent death, and tyrannicides have almost always been greeted by the populace as heroes. In contrast to the common objections to tyrannicide, he concluded, it would be salutary for rulers to fear the people, and to realize that a lapse into tyranny might cause the people Mariana has given us an eloquent description of the typical tyrant at his deadly work. He seizes the property of individuals and squanders it, impelled as he is by the unkingly vices of lust, avarice, cruelty and fraud.

7:35Tyrants indeed try to injure and ruin everybody, but they direct their attack especially against Most rich and upright men throughout the realm. They consider the good more suspect than the evil, and the virtue which they themselves lack is most formidable to them. They expel the better men from the commonwealth on the principle that whatever is exalted in the kingdom should be laid low. They exhaust all the rest so that they cannot unite by demanding new tributes from them by stirring up quarrels among the citizens and by joining war to war. They build huge works at the expense and by the suffering of the citizens.

8:21Whence the pyramids of Egypt were born? The tyrant necessarily fears that those whom he terrorizes and holds as slaves will attempt to overthrow him. Thus, he forbids the citizens to congregate together, to meet in assemblies, and to discuss the commonwealth altogether, taking from them, by secret police methods, the opportunity of free speaking and freely listening, so that they are not even allowed to complain freely. This erudite and grave man, Juan de Mariana, left no doubt what he thought of the most recent famous tyrannicide, that of the French King Henry III. In 1588, Henry III had been prepared to name as his successor Henry of Navarre, a Calvinist who would be ruling over a fiercely Catholic nation.

9:15Facing a rebellion by the Catholic nobles, headed by the Duc de Guise, and backed by the devoted Catholic citizens of Paris, Henry III called the Duke and his brother the Cardinal to a peace parley into his camp, and then had the two assassinated. The following year, on the point of conquering the city of Paris, Henry III was assassinated in turn by a young Dominican friar and member of the Catholic League, Jacques Clément. To Marianna, in this way, blood was expiated with blood, and the Duc de Guise was avenged with royal blood. Thus perished Clément, concluded Marianna, an eternal ornament of France.

10:04The assassination had similarly been hailed by Pope Sixtus V and by the fiery Catholic preachers of Paris. The French authorities were understandably edgy about Mariana's theories and, at his book, De Rega. Finally, in 1610, Henry IV, formerly Henry of Navarre, who had converted from Calvinism to the Catholic faith in order to become King of France, France, was assassinated by the Catholic resistor Ravillac, who despised the religious centrism and the state absolutism imposed by the king. At that point, France erupted in an orgy of indignation against Mariana, and the Parliament of Paris had de Rega burned publicly by the hangman.

10:56Before executing Ravillac, the assassin was questioned closely as to whether reading Mariana had driven him to murder, but he denied ever having heard of him. While the King of Spain refused to heed French pleas to suppress this subversive work, the General of the Jesuit Order issued a decree to his society forbidding them to teach that it is lawful to kill tyrants. This truckling, however, did not prevent a successful smear campaign in France against the Jesuit order, as well as its loss of political and theological influence. Juan de Mariana possessed one of the most fascinating personalities in the history of political and economic thought.

11:44Honest, gutsy and fearless, Mariana was in hot water almost all of his long life, even and for his economic writings. Turning his attention to monetary theory and practice, Mariana, in his brief treatise De Monetai Mutatione, on the Alteration of Money, 1609, denounced his sovereign, Philip III, for robbing the people and crippling commerce through the debasement of copper coinage. He pointed out that this debasement also added to Spain's chronic price inflation by increasing Mariana noted that debasement and government tampering with the market value of money could only cause grave economic problems.

12:44Only a fool would try to separate these values in such a way that the legal price should should differ from the natural. Foolish nay, wicked, the ruler who orders that a thing the common people value, let us say at five, should be sold for ten. Men are guided in this matter by common estimation founded on considerations of the quality of things and of their abundance or scarcity. It would be vain for a prince to seek to undermine these These Principles of Commerce, tis best to leave them intact instead of assailing them by force to the public detriment. Mariana begins de monetae with a charming and candid apologia for writing the book reminiscent of the great Swedish economist Nute Wicksell over two and a half centuries later.

13:40He knows that his criticism of the king courted great unpopularity, but everyone is now groaning are being under the hardships resulting from the debasement, and yet no one has had the courage to criticize the king's action publicly. Hence, justice requires that at least one man, Mariana, should move in to express the common grievance publicly. When a combination of fear and bribery conspire to silence critics, there should be at least one man in the country who knows the truth Mariana then proceeds to demonstrate that debasement is a very heavy hidden tax on the private property of his subjects, and that, pache, his political theory, no king has the right to impose taxes without the consent of the people.

14:38Since political power originated with the people, the king has no rights over the private property of his subjects, nor can he appropriate their wealth by his whim and will. Mariana notes the papal bull Coenadomini, which had decreed the excommunication of any ruler who imposes new taxes. Mariana reasons that any king who practices debasement should incur the same punishment, as should any legal monopoly imposed by the state without the consent of the people. Under such monopolies, the state itself, or its grantee, can sell a product to the public at a price higher than its market worth, and this is surely nothing but a tax.

15:28Mariana also set forth a history of debasement and its unfortunate effects, and he pointed out that governments are supposed to maintain all standards of weight and measure, not only of money, and that their record in adulterating those standards is most disgraceful. Castile, for example, had changed its measures of oil and wine in order to levy a hidden tax, and this led to great confusion and popular unrest. Mariana's book, Attacking the King's Debasement of the Currency, led the monarch to haul the aged 73-year-old scholar into prison, charging him with the high crime of Lee's Majesty.

16:13The judges convicted Mariana of this crime against the king, but the pope refused to punish him, and Mariana was finally released from prison after four months on the condition that he would cut out the offensive passages in his work, and that he would be more careful in the future. King Philip and his minions, however, did not leave the fate of the book to an eventual change of heart on the part of Mariana. Instead, the king ordered his officials to buy up every published copy of De Monetai Mutatione they could get their hands on, and to destroy them. Not only that, after Marianna's death, the Spanish Inquisition expurgated the remaining copies, deleted many sentences, and smeared entire pages with ink.

17:06All non-expurgated copies were put on the Spanish index and these in turn were expurgated during the 17th century. As a result of this savage campaign of censorship, the existence of the Latin text of this important booklet remained unknown for 250 years and was only rediscovered because the Spanish text was incorporated into a 19th century collection of classical Spanish essays. Hence, few complete copies of the booklet survive, of which the only one in the United States is in the Boston Public Library. The venerable Mariana was apparently not in enough trouble.

17:52After he was jailed by the king, the authorities seized his notes and papers and found there a manuscript attacking the existing governing powers in the society of Jesus. An individualist unafraid to think for himself, Mariana clearly took little stock in the Jesuit ideal of the society as a tightly disciplined military-like body. In this booklet, Discurso de las Enfermedades de la Compaña, Molina smote the Jesuit order for and aft, its administration and its training of novices, and he judged his superiors in the Jesuit order unfit to rule. Above all, Mariana criticized the military-like hierarchy.

18:41The general, he concluded, has too much power, and the provincials and other Jesuits too little. Jesuits, he asserted, should at least have a voice in the selection of their immediate superiors. When the Jesuit general, Claudius Aquaviva, found that copies of Mariana's work were circulating in a kind of underground zamisdat, both inside and outside the order, he ordered Mariana to apologize for the scandal. The feisty and principled Mariana, however, refused to do so, and Aquaviva did not press the issue. As soon as Mariana died, the legion of enemies of the Jesuit order published the discursos simultaneously in French, Latin and Italian.

19:30As in the case of all bureaucratic organizations, The Jesuits then and since were more concerned about the scandal and not washing dirty linen in public than in fostering freedom of inquiry, self-criticism, or correcting any evils that Mariana might have uncovered. The Jesuit Order never expelled their eminent member, nor did he ever leave. Still, he was all his life regarded as a feisty troublemaker and as unwilling to bow to orders or peer pressure. Father Antonio Astrain, in his History of the Jesuit Order, notes that, above all, we must bear in mind that his, Mariana's, character was very rough and un-mortified.

20:18Personally, in a manner similar to the Italian Franciscan saints San Bernardino and Sant'Antonino of the 15th century, Mariano was ascetic and austere. He never attended the theater, and he held that priests and monks should never degrade their sacred character by listening to actors. He also denounced the popular Spanish sport of bullfighting, which was also not calculated to increase his popularity. Gloomily, Mariana would often stress that life was short, precarious and full of vexation. Yet, despite his austerity, Father Juan de Mariana possessed a sparkling, almost mancanesque wit.

21:05Thus his one-liner on marriage. Someone cleverly said that the first and the last day of marriage are desirable, but that the rest are terrible. But probably his wittiest remark concerned bullfighting. His attack on that sport met with the objection that some theologians had defended the validity of bullfighting. Denouncing theologians who palliated crimes by inventing explanations to please the masses, Mariana delivered a line closely anticipating a favorite remark by Ludwig von Mises on economists over three and a half centuries later. There is nothing how-so-ever absurd which is not defended by some theologian.

21:538. The Last Salamancans, Lassius and De Lugo One of the last great Salamanquans was a Jesuit, but not a Spaniard. Leonard Lesius, 1554-1623, was a Fleming, born at Brecht, near the great city of Antwerp. During the 16th century, Antwerp had become the outstanding commercial and financial center of Northern Europe, a focus of trade from the Mediterranean. Lessius' parents had originally planned for him to become a merchant, but he entered the University of Louvain and was received into the Jesuit order in 1572. He taught philosophy for six years at the English College at Douai in France and then went to Rome for two years to study under Francisco Suarez.

22:49It was at Rome that Lesius became a Salamancon in spirit, and from then on struck up a friendship with Luis de Molina. Returning to Flanders, Lesius assumed a chair in philosophy and theology at the University of Louvain. In theology, Lesius took up the great Molinist cause of free will against a pro-determinist wing of theologians at Louvain. There he confronted the crypto-Calvinist Dr. Michael Debye, Chancellor of the University of Louvain, who had adopted the concept of predestination and salvation of the elect. Lessius also advanced the Suarezian view that original political power was conferred by God on the people, and hence he attacked the growing adherence to the divine right of kings, especially as put forth by King James I of England.

23:47Lessius' most important work was De Justicia et Jure, 1605, the same title as the works of Molina and de Báñez. The book was enormously influential, being published in nearly 40 separate editions in Antwerp, Louvain, Lyon, Paris and Venice. Not only was Lesius' knowledge of his predecessors encyclopedic, but he was renowned for his knowledge and analysis of contemporary commercial practices and contracts, and for his applications of moral principles to such practices. Lesius was consulted frequently on these matters by statesmen and church leaders.

24:32On the theory of price, Lesius, like his scholastic forebears, held the just price to be that determined by the common estimate of the market. A legally fixed price could also be the just price, but in contrast to many of his fellow scholastics, for whom the legal price took precedence, Lesius pointed out several cases in which the market price would have to be chosen over the legal price. Following Juan de Medina, these were, first, when the market price is lower, and, second, when in change of circumstances of increasing or diminishing supply and similar factors, the authorities were notably negligent in changing the legal price.

25:21Even more strongly, even a private individual may request a price above the legal ceiling when the authorities are ill-informed about the commercial circumstances, which is likely, of course, to happen a good deal of the time. Attacking the cost of production theory of price, laissez points to market demand as the determinant of price, regardless of a merchant's expenses. But if the merchant's expenses have been greater, that is his hard luck, and the common price may not be increased for that reason, just as it need not be decreased even if he had no expenses at all. This is the merchant's situation, just as he can make a profit if he has small expenses, so he can lose if his expenses are very large or extraordinary.

26:18Leonard Lessius had an insight into how all economic markets are interrelated, and he analyzed and defended in turn the workings of foreign exchange, speculation, and the value of money and prices. In particular, Lessius engaged in the most sophisticated analysis he had achieved of the workings of wages and the labor market. Like other scholastics, he saw that wages were governed by the same supply and demand principles, and therefore by the same canons of justice as any price. In asking what is the minimum justifiable wage for any given occupation, Lessius declared that the existence of other people willing to perform the work at any given wage shows that it is not too low.

27:11In short, if a supply exists for the labor at that wage, how can it be unjust? Lessius also discovered and set forth the concept of psychic income as part of a money wage. A worker can be paid in psychic benefit as well as money. If the work brings with it social status and emoluments, the pay can be low, because status and associated advantages are, so to say, a part of the salary. Lesius also advanced the view that workers are hired by the employer because of the benefits gained by the latter, and those benefits will be gauged by the workers' productivity.

27:59Here are certainly the rudiments of the marginal productivity theory of the demand for labor and hence of wages, which was set forth by Austrians and other neo-classical economists at the end of the 19th century. Indeed, Lassie's sophisticated analysis of wages and the labor market were lost to mainstream in Economics until they were independently rediscovered in the late 19th century. Lesius also stressed the importance of entrepreneurship in determining income. This quality of entrepreneurial industry, of efficiently combining jobs, is rare, and therefore the able entrepreneur can acquire a much higher income than his fellows.

28:48This also provides a sophisticated analysis of money, demonstrating that the value of money is dependent on its supply and demand. More abundant money will make it less valuable either for buying goods or for an exchange, and a greater demand for money will cause the value of the currency to rise. For example, if great princes are in urgent need of money for war or other public purposes, or if a large quantity of goods come on to the market. For whenever money is urgently needed for matters of great moment, so is it more highly esteemed in terms of goods. In his application of moral principle to trade practice, lesseus had a liberating effect on trade.

29:40This was particularly true of usury, where lesseus, while formally continuing the traditional Prohibition was actually a highly influential force in its ongoing destruction. Lesius provided the most sweeping defense so far of the guaranteed investment contract, and he treated benignly even high rates of return on capital. He also removed all the remaining restrictions on lucrum cessans. First he widened the doctrine to apply not only to specific loans that would otherwise have been invested, but to any funds, since they are liquid assets that always might have been invested.

30:25Thus the pool of funds can as a whole be considered opportunity cost, foregone of investment, and therefore interest may be charged on a loan to that extent. As Lesius puts it, although no particular loan separately considered be the cause, all, however, collectively considered are the cause of the whole lucrum cessens. For in order to lend indiscriminately to those coming by, you abstain from business, and you undergo the loss of the profit which would come from this. Therefore, since all collectively are the cause, the burden of compensation for this profit can be distributed to single loans, according to the proportion of each.

31:17But this meant that Leonard Lesius justified not only businessmen or investors planning to invest their money, but also any people with liquid funds, including professional moneylenders. For the first time among scholastics, all loans by money lenders were now justified. With Leonard Leseas, then, the last of the barriers to interest or usury were smashed, and only the hollow shell of the formal prohibition remained. Leseas adds that the lender may charge interest even though a reserve of money is kept out of fear, and even if that fear is irrational. Note that to Lesius the important point was the reality of the lenders' subjective fears, not whether the fears are objectively correct.

32:12Furthermore, Lesius takes the Medina Molina assumption of risk argument for interest, about which they had tended to hedge in practice, and widens it greatly. All loans, he points out, carry risks of non-payment. A personal right is almost always joined with some difficulties and dangers. In a careful analysis of lender's risk, Lesias pointed out that a greater risk and a greater charge would be incurred by lending to someone not known to the lender, or whose credit is doubtful. But that is not all. Sir Leonard Laissez contributed his own new and powerful weapon against the usury ban, a new title or justification for interest. The new justification, prefigured only by the neglected Zumenhardt, was carentia pecuniae, charging for lack of money. Laissez pointed out quite cogently that the lender suffers the lack of his money, the lack of his liquidity during the term of the loan, and therefore he is entitled to charge interest for this economic loss.

33:29In short, Lesius saw perceptively that everyone derives utility from liquidity from the possession of money, and that being deprived of this utility is a lack for which the lender may and will demand compensation. Pesius pointed out that unexpected situations can and do arise, which could be met far more effectively if one's money were in one's possession and not absent for a period of time. Time, in short, can and should be charged for for that reason, for it can never be obtained that the merchants do not value a long-term concession higher than a short-term one.

34:16And those who are deprived of their money value more the lack of their money for five months than the lack of it for four, and the lack of it for four more than three. And this is partly because they lack the opportunity of gaining with that money, partly because their principal is longer in danger. Furthermore, Lesius points out that bills of exchange or rights to future money are are always at a discount compared to cash. This discount is, of course, the rate of interest. Lesius explains, this is a matter of common experience in that money provides the means to a multitude of things which those rights do not provide. Therefore, they may be bought at a lower price.

35:08Lesius also notes that merchants and exchangers daily determine the price of the lack of money on the Antwerp bourse, averaging about 10 percent, and foreign exchanges of inestimable value to the economy would perish if such prices could not be charged. Thus, for Lesius, the price for a lack of money is established on organized loan markets. But to the extent that a loan market exists, there is no need to justify each merchant's loan on the basis of his particular opportunity cost or deprivation of funds. That price, which becomes the just price, is set on the loan market.

35:55As Lesius puts it, moreover, any merchant seems able to demand this price, even though So there is no gain of his that stops because of his loan. This is the just price for the privation of money among merchants, for the just price of an article or obligation in any community is that which is put upon it by that community in good faith for the sake of the common good in view of all the circumstances. Therefore, even if, through the privation of money for a year, there is no gain of mine that stops, and no risk of capital, because such a price for just causes has been put upon this privation, I may demand it, just as the rest do.

36:46With Carinthia Pecuni, I, therefore, Leonard Lesius delivered the final blow to smash the usury prohibition, while unfortunately still retaining the prohibition in a formal sense. It is no wonder that Professor Noonan, the great scholar of the scholastics on usury, holds Lesius to be the theologian whose views on usury most decidedly mark the arrival of a new era. More than any predecessor, he would probably have felt completely at ease in the modern financial world. The last Salamancan was the Jesuit cardinal Juan de Lugo, 1583 to 1660.

37:33De Lugo takes the Salamanquans into the 17th century, the century of the decline of Spanish power in Europe. After studying law and theology at Salamanca, De Lugo went to Rome to teach at the Great Jesuit College. After teaching theology in Rome for 22 years, De Lugo was made a cardinal and became a member of various influential church commissions in Rome. A learned and comprehensive theoretician, De Lugo has been called the greatest moral theologian since Aquinas. Author of a book on psychology and another on physics, De Lugo's masterwork in the area of law and economics was De Justicia et Jure published in 1642. This work went through numerous editions during the 17th and 18th centuries, its last edition having appeared as late as 1893. In his Theory of Value, this culminating work of the Salamancon in School displayed a subtle and advanced subjective utility explanation.

38:43The prices of goods, de Lugo pointed out, fluctuate on account of their utility in respect of human need, and then only on account of estimation, for jewels are much less useful than corn in the house, and yet their price is much higher. Here De Lugo once again comes very close to the late 19th century marginal utility explanation of value and to solving the value paradox. Corn is higher than jewelry in use value but is cheaper in price. The answer to this paradox is that subjective estimates or valuations differ from objective Subjectivity, de Lugo goes on, means that the estimation or valuation is going to be conducted by imprudent as well as prudent men.

39:51No rationality or economic man assumptions here. In short, the just price is the market price determined by demand and consumer valuations. And if the consumers are foolish or judge differently than we do, then so be it. The market price is a just price all the same. In his discussion of merchants' activities, De Lugo adds to the previous opportunity cost concept of mercantile expenses, for a merchant will only continue to supply a product if the price covers his expenses and the rate of profit he could earn in other activities. In his theory of money, Cardinal de Lugo follows his confrères.

40:39The value or purchasing power of money is determined by the quality of the metal content of Coins, the Supply of and the Demand for Money. De Lugo also set forth the idea that money moves from the area of its lower to that of its higher value. On usury De Lugo provided a mixed bag. On the one hand he draws back from the clear implications of laissez-faire and others that the usury ban should become a hollow shell. For that reason, he refuses to accept Laissez's willingness to have the lender charge for lack of money during the period of the loan. On the other hand, de Lugo widens still further the powerful pro-usery weapons of risk and lucrum cessans.

41:32He broadens the concept of risk to include explicitly every loan, for, as he puts it with remarkable bluntness, Where today is there to be found a debt so placed in safety that in security it equals ready cash? But that, of course, justifies the charging of interest on every loan. De Lugo also widens lucrum cessan still further, for he allows the lender to include not only probable profit foregone from a loan, but also the expectation of remote profit foregone. Also, the lender in charging interest may calculate the profit he would have made by re-investing the lost profit on a loan.

42:21In sum, De Lugo asserts sweepingly that Lucrum Cessans is the general title for purging usury. 9. The Decline of Scholasticism 16th century Spain has well been called the Indian summer of scholasticism. After that, its decline, not only in Spain but throughout Europe, was rapid. Part of the reason was a stubborn clinging to the form of the prohibition of usury. A ban which had made little sense, either by natural or divine law, and which entered Christian thought, quite late in the day, was clung to and strengthened in an almost perpetual irrational frenzy.

43:10The systematic weakening of the usury ban by some of the finest minds in Christendom had the beneficial effect of sanctioning the charging of interest, but at the long-run cost of discrediting the scholastic method itself. By clinging to the outer husk of banning usury as a mortal sin, while at the same time finding increasingly sophisticated ways of allowing merchants and finally professional money lenders to get around the ban, the scholastics opened themselves to unfair charges of evasion and hypocrisy. The deadly assault on scholasticism came from two contrasting but allied camps.

43:56One was the rising groups of Protestants without, and crypto-Calvinists within, the Church, who denounced it for its alleged decadence and moral laxity. Protestantism, after all, was in large part a drive to cast off the sophisticated trappings and refined doctrine of the Church, and to go back to the alleged simplicity and moral purity of early Christianity. Indeed the very emblem of this hostility was the Jesuit order, the devoted spearhead of the Counter-Reformation, that order which had taken up from the faltering Dominicans the torch of Thomism and scholasticism. The second camp of enemies of scholasticism was the rising group of secularists and rationalists, men who might be Catholics or Protestants in their private lives, but who mainly wanted to get rid of such alleged excresences on modern life as the political application of religious principles or the prohibition of usury.

45:04Consequently, the crypto-Calvinists attacked the Jesuits for weakening the prohibition of usury, while the secularists attacked them for keeping it. Neither wing of the opposition was impressed with the brilliance of the scholastic arguments to justify usury, nor with the entire scholastic and Jesuit enterprise of casuistry, that is, of applying moral principles, both natural and divine, to concrete problems of daily life. One might think that the task of casuistry should be deemed an important and even noble one. If general moral principles exist, why shouldn't they be applied to daily life?

45:49Both sets of opponents rapidly succeeded in making the very word casuistry a smear term, for the one a method of weaseling out of strict moral precepts, for the other a method of imposing outdated and reactionary dogmas upon the world. Why despite the great work of Zumenhardt and others did the Catholic Church persist in and keeping the formal ban on usury for two centuries thereafter, probably for the same reason that the Church has always tended to maintain stoutly that it never changes its doctrines while it keeps doing so. Changing content within an unchanging formal shell has long been characteristic not only of the Catholic Church but of any long-lived bureaucratic institution, whether it be the Church or the constitutional interpretations of the Supreme Court of the United States.

46:52The two-pronged alliance against scholasticism outside and within the Catholic Church cut far deeper than the quarrel over usury. At the root of Catholicism as a religion is that God can be approached or apprehended through all the faculties of man, not simply through faith but through reason and the senses. Protestantism and especially Calvinism sternly put God outside man's faculties, considering, for example, sensate embodiments of man's love for God in painting or sculpture as blasphemous idolatry to be destroyed in order to clear the path for the only proper communication with God, Pure Faith in Revelation.

47:43The Thomist stress on reason as a means of apprehending God's natural law and even aspects of divine law was reviled by a sole Protestant emphasis on faith in God's arbitrary will. While some Protestants adopted natural law theories, the basic Protestant thrust was opposition to any natural law attempts to derive ethics or political philosophy from the use of man's reason. For Protestants, man was too inherently sinful and corrupt for his reason or his senses to be anything but an embodiment of corruption. Only pure faith in God's arbitrary and revealed commands was permissible as a groundwork for human ethics.

48:34But this meant that for Protestants there was also very little natural law groundwork from which to criticize actions of the state. Calvinism and even Lutheranism provided little or no defenses against the absolutist state which burgeoned throughout Europe during the 16th century and triumphed in the 17th century. If Protestantism opened the way for the absolute state, the secularists of the 16th and 17th centuries embraced it. Shorn of natural law critiques of the state, new secularists such as the Frenchman Jean Baudin embraced the state's positive law as the only possible criterion for politics.

49:22Just as the anti-scholastic Protestants extolled God's arbitrary will as the foundation for for Ethics, so the new secularists raised the state's arbitrary will to the status of unchallengeable and absolute sovereign. On the deeper level of the question of how we know what we know, or epistemology, Thomism and scholasticism suffered from the contrasting but allied assaults by the champions of reason and empiricism. In Thomist thought, reason and empiricism are not separated but allied and interwoven. Truth is built up by reason on a solid groundwork in empirically known reality.

50:09The rational and empirical were integrated into one coherent whole. But in the first part of the seventeenth century, two contrasting philosophers managed between In them the fatal sundering of the rational and the empirical that continues to plague the scientific method until the present day. These were the Englishman Francis Bacon, 1561-1626, and the Frenchman René Descartes, 1596-1650. Descartes was the champion of a desiccated mathematical and absolutely certain reason divorced from empirical reality, while Bacon was the advocate of sifting endlessly and almost mindlessly through the empirical data.

51:00Both the distinguished English lawyer who rose to become Lord Chancellor, Lord Verilam, Viscount of the Realm, and corrupt judge, and the shy and wandering French aristocrat agreed on one crucial and destructive point, the severing of reason and thought from empirical data. Hence from Bacon there stemmed the English empiricist tradition steeped mindlessly in incoherent data, and from Descartes the purely deductive and sometimes mathematical tradition of Continental Rationalism. All this was, of course, an assault on natural law, which had long integrated the rational and the empirical. As a corollary to, and intermingled with, this basic and systematic change in European thought in the early modern period, the 16th and especially 17th centuries, was a radical shift in the locus of intellectual activity away from the universities.

52:08The theologians and philosophers who wrote and thought on economics, law, and other disciplines of human action during the medieval and renaissance periods were university professors. Paris, Bologna, Oxford, Salamanca, Rome, and many other universities were the milieu and arena for intellectual output and combat during these centuries. And even the Protestant universities in the early modern period continued to be centers of natural law teaching. But the major theorists and writers of the 17th and then the 18th centuries were almost none of them professors. They were pamphleteers, businessmen, wandering aristocrats such as Descartes, minor public officials such as John Locke, churchmen such as Bishop George Barclay.

53:02This shift of focus was greatly facilitated by the invention of printing, which made the publication of books and writings far less costly and created a much wider market for intellectual output. Printing was invented in the mid-15th century, and by the early 16th century it became possible for the first time to make a living as an independent writer, selling one's books to a commercial market. This shift from university professors to private lay citizens meant, at least for that era, a move away from traditional modes of learning and thought towards a more diverse spectrum of idiosyncratic individual views.

53:47In a sense, this acceleration of diversity went hand in hand with one of the most important impacts of the Protestant Reformation on social and religious thought. For in the long run, far more important than such theological disputes as over free will versus predestination, and over the significance of communion, was the shattering of the unity of Christendom. Luther and even Calvin had no intention of fragmenting Christendom. On the contrary, each set out to reform a unified Christian church. But the consequences of their revolution was to open Pandora's box. Whereas frictions and heresies had before been either stamped out or accommodated within the church, now Christianity split apart in literally hundreds of different sects, some quite bizarre, each propounding different theologies, ethics, and prescriptions for social life.

54:51While the variegated strains of social thought stemming from this break within Christianity included rationalists and individualist groups such as the Levellers as well as absolutists, the value of the resulting diversity must be offset by the unfortunate fading away of scholasticism and Thomism from Western thought. The severing of the unity of European thought was intensified by the shift during these in the Middle Ages, all intellectuals, jurists and theologians in Europe wrote in Latin, even though, of course, the spoken language in each country was the vernacular.

55:39This meant that for scholars and intellectuals there was only one language, and, in a sense, In the Middle Ages, only Italian authors wrote from time to time in Italian as well as Latin. But the Protestant Reformation gave tremendous impetus toward the abandonment of Latin, since Since Protestants felt it vital for the Christian masses to read and study the Bible in language they could understand. Martin Luther's famous translations of the Bible into German in the 16th century inspired a rapid change toward writing in the national language.

56:33As a result, since the 16th and 17th centuries, economic, social and religious thought began 10. Parting Shots, The Storm Over the Jesuits While the inspiration for creative and outstanding scholastics was played out, the 17th century We saw the influence of scholasticism continue in Spain and spread to other countries. The great champion and disseminator of the Salamanca School was, of course, the Jesuit Order.

57:21In Spain and elsewhere, the Jesuits produced a huge number of manuals on moral theology for the use of confessors, in which they discussed, among other matters, the application of theological and Moral Principles to the Ethics of Business. The most important instance was the pious father Antonio de Escobar e Mendoza's 1589-1669, Theologiae Morales 1652. This extremely popular work was reprinted in 37 editions in a brief period of time, was also translated and published in France, Belgium, Germany and Italy. Escobar's work was basically a restatement of two dozen previous books on moral theology, mainly by such Spanish writers as Molina, Suarez and De Lugo.

58:16He repeated the Salamanca emphasis on common estimation, scarcity and the supply of money as determinants of market price. The Salamanca School was particularly influential in Italy. There, the Genoese philosopher and jurist Ziggismundo Scaccia, circa 1568 to 1618, published a Tractatus de Comercius et Cambius in 1618, which was reprinted often in Italy, France and Germany down to the middle of the 18th century. Scotchia's Tractatus repeated the price and foreign exchange theories of the Salamanquans, including Covarrubias, Aspilqueta, and Lesius.

59:05Other prominent neo-Salamanquans in Italy were the Jesuit Cardinal Giambattista de Luca 1613-1683, who published his multi-volume Theatrum Veritatis et Justitiae in Rome in In France, however, the influential Escobar manual ran into a storm of abuse for its sophisticated permissive attitude toward usury. The abuse was led by an influential crypto-Calvinist group within the French Catholic Church that raised a furious row about the alleged moral laxity of the Jesuit order.

59:59The assault on the Jesuits and on their devotion to reason and the freedom of the will had begun in Belgium and was accelerated towards the end of the 16th century by Dr. Michael Charles de Bay, Chancellor of the Great University of Louvain. Bay and Bayanism launched a furious intramural warfare within Louvain against Leonard Lassius and the Jesuits on the faculty. Chancellor de Bay managed to convert most of the Louvain faculty to his creed, which adopted the Calvinist creed of predestination of an elect. In France, the absolutist pro-royalists The Jesuits began a bitter campaign against the Jesuit order, which they linked with the Catholic Leagueers and the assassination of the centrist and pro-Calvinist Henrys.

1:00:50In particular, the attorney Antoine Arnoule, defending royal absolutism to the hilt, petitioned for the expulsion of the Jesuits from France, angrily declaiming that they were the worst enemies of the sacred doctrine of the divine right of kings. Arnaud was originally employed to press the case against the Jesuits by the University of Paris and its theological faculty of the Sorbonne, which had also been swept by the Crypto-Calvinist tide. In the early 17th century, two disciples of Michael Debye, both former students of the Jesuits, took up the cudgels for his cause. Most important was Cornelius Janssen, founder of the neo-Calvinist Janssenist movement, which became extremely powerful in France.

1:01:43Janssen, like many openly Protestant theologians, demanded to go back to the moral purity of St. Augustine and of the Christian doctrines of the 4th and 5th centuries. If Jansen was the theoretician of the movement, his friend, the Abbé Saint-Séran, was the brilliant tactician and organizer. With the help of Mère Angelique, Superior of the Nuns of Port-Royal, Saint-Séran gained control of these influential nuns. Nones. Mère Angélique was the daughter of Antoine Arnault, and indeed a dozen of the Port-Royal nuns were members of the powerful Arnault family.

1:02:29One of the Port-Royal nuns was the sister of the brilliant young philosopher, mathematician and French stylist Blaise Pascal, and young Pascal took up the Jansenist cause with a The witty and blistering attack on the Jesuits, particularly Escobar, for his alleged moral failure in being soft on usury. Pascal even coined a popular new term, Escobarderie, with which he denounced the important discipline of casuistry as being evasive quibbling. Another victim of Pascal's poison pen was the austere French Jesuit Etienne Bonnet. In his Summe de Pêche, 1639, Bonnet extended the weakening of the usury ban by going so far as to justify interest charges higher than the maximum rate permitted by royal decree.

1:03:28For, after all, the debtors entered into them willingly. Moreover, Boni's trenchant voluntarism defended the usury contract on another incisive ground. Since it is licit for a lender to hope for a borrower to give him a free gift, it should also be licit for the lender and the borrower to make such a definite pact beforehand. How can making a contract for something be evil if hoping for the result is permissible? The Jesuits permit such justifications by voluntary choice, and then, of course, all assaults on usury and other free market activities must go by the board.

1:04:14Although the Jansenists were eventually condemned by the Pope, Pascal's scurrilous rampage against the Jesuits had considerable effect in helping to end the reign of scholastic thought, at least in France.