School of Salamanca_AustroThomism
Ask one hundred people on the street who was the father of economic thought, seventy five will tell you they don’t know or more likely don’t care, but the other twenty five will tell you it was the great Adam Smith with the “invisible hand of the market” in The Wealth of Nations. However the truth of the matter is that Adam Smith was certainly not the beginning of economics and in fact he wasn’t even one of the better of his contemporaries or predecessors. Murray Rothbard described him as “an inveterate plagiarist” who “plagiarized badly” with his economics being a grave deterioration of his predecessors.” He described Smith’s magnum opus - in which he only uses the phrase “invisible hand” in seven hundred some pages while the bulk of his work is unknown to the average person - as “a huge, sprawling, inchoate, confused tome rife with vagueness, ambiguity and deep inner contradictions.”
This leads to the question, if not Adam Smith, then who? A common answer by many Austrians is Richard Cantillon, a far superior contemporary of Smith, or Anne Robert Jacques Turgot. Both are excellent economists and far more worthy of respect than Smith, however, recently the answer has been diving back further to the late Spanish Scholastics, the School of Salamanca.
While Carl Menger does not seem to have drawn directly from these great thinkers two and a half centuries later when he founded the Austrian school of economics, these Catholics seemed to have discovered profound economic principles that would be vitally important to the Austrian school and as a result the late Spanish Scholastics have been deemed by many to be the proto-Austrians.
Among the many great thinkers of the School of Salamanca was Juan de Mariana who was so important to economic thought as we look back at it that he is highlighted as the very first economist listed in the Ludwig von Mises Institute’s 15 Great Austrian Economists. Writing on property rights, Mariana claims that a king cannot enforce a tax without the people’s consent and that a king may not enforce a monopoly and he claims that any king who does this may be reasonably assassinated.
Furthermore, Mariana’s most distinctly proto-Austrian point is on the debasement of currency:
Only a fool would try to separate these values in such a way that the price should differ from the natural. Foolish, nay, wicked the ruler who orders that a thing the common people value, let is say, at five should be sold from ten. Men are guided in this matter by common estimation founded on consideration of the quality of things, and of their abundance or scarcity. It would be vain for a Prince to seek to undermine these principles of commerce. ‘Tis best to leave them intact instead of assailing them by force to the public detriment
One may wonder why Catholic thinkers stumbled upon such profound realizations of sound money as they pondered the most pressing moral questions of the day. It is in the answer to this that we find why these Catholics were not just some of the earlier economic thinkers, but that such Catholics were specifically suited to be some of the best proto-Austrian thinkers. Austrian economics describes itself as causal-realist. Rather than trying to determine how the world should be through use of nonsensical charts and graphs that do not in any real way correspond to human action, Austrians study the cause and effect relationships that exist presently in an objective reality. On top of that, Austrians do not break their studies into microeconomics and macroeconomics and then break each of those into dozens of more divided topics. Rather, Austrians try to unearth the economic laws that naturally exist governing this objective reality. Such laws do not only apply in certain instances but rather apply to a grander universal theory of economics. As a result, brilliant Catholic thinkers who are also unearthing natural laws that govern our objective reality and who also are not looking for miniscule issues but rather are looking for grander universal truths were perfectly suited to stumble upon some of our earliest economic truths to become our first proto-Austrians.
Further research suggestions:
Readings:
Jesús Huerta de Soto’s Juan de Mariani and The Spanish Scholastics
Chapter four of Murray Rothbard’s An Austrian Perspective on The History of Economic Thought Volume I: Economic Thought Before Adam Smith
Lectures:
Joseph Salerno’s Birth of The Austrian School
Danielle Lacalle’s How The Salamanca School Influenced the Modern Austrian School
Connor Mortell