Since the publication of Murray Rothbard's economic thought before Adam Smith, the Austrian perspective on the history of economic thought 15 years ago,
a new awareness and appreciation of the importance and influence of many of the late scholastic writers as proto-Austrian has emerged in the academic literature.
Although it is undoubtedly true that many of these writers, which include De Vittoria,
De Soto, Navarres, De Molina, Cavarubias, Juan de Mariana, and Leonardo Celesius,
all blazed new paths of their own in their very theories of natural law and rights,
value, money, price, wages, profits, and so forth,
none of these advances would have been possible without the extraordinary
An extraordinary 13th century synthesis of faith and reason by St. Thomas Aquinas, born 1225, died 1274, and is unique and, at the time, controversial acceptance and integration of the works of Aristotle.
It is the purpose of this paper to therefore reflect on and revisit the enduring economic contributions of Aquinas, especially his scholastic theory of wealth.
of Wealth. Aquinas, I believe, is the keystone by which the later scholastic writers become
for us, all of us, more approachable and understandable. Additionally, there has been no attempt to
place before this conference something new or something I discovered in my attic that
was written by Aquinas, but rather to pay tribute to Aquinas in the words of Rothbard,
quote, the towering intellect of the high middle ages, the man who built on the philosophical
on the Concept of Natural Law and on Christian Theology to Forge Thomism, Mighty System of Philosophy, Theology and the Sciences of Man.
According to Rothbard, this young Italian was born an aristocrat, son of Landoff, Count of Aquino at Rocaseca in the Kingdom of Naples.
Thomas studied at an early age with the Benedictines and later at the University of Naples.
At the age of 15, he tried to enter the New Dominican Order, a place for church intellectuals and scholars, but he was physically prevented from doing so by his parents as well as his brothers, who kept him confined for two years.
Finally, he escaped, joined the Dominicans, he studied at Cologne and finally at Paris, the places to be, of course, in the 13th century, under his revered teacher, Albert the Great.
Aquinas took his doctorate at the University of Paris and taught there as well as at other
university centers in Europe. Aquinas wrote numerous works beginning with his commentary
on Peter Lombard's sentences, which almost any philosopher worth his salt would do a commentary
on Peter Lombard's sentences at the time in the 1250s, ending with his masterful and enormously
and the influential three-part Summa Theologica written between 1265 and 1273.
It was the Summa more than any other work, writes Rothbard, that was to establish Thomism as the mainstream of Catholic scholastic theology in centuries to come.
Since Aquinas wrote no specific treatise on economics or wealth, his ideas on this topic, that is his Economia Parenis,
are to be mostly found in his discussion of prudence in his Summa Theologica and in his commentary on Aristotle's politics.
When Aquinas uses the word economic, he uses it in the Aristotelian sense to distinguish between the management of the individual household and the activities of civil society.
According to Aquinas, quote, there is also a multitude that is united together for the whole of life,
Such is the multitude of a home or family, and this is ruled by domestic prudence.
Economics, then, is the prudence by which one rightly orders his household, according to Aquinas.
The end of economics, therefore, according to Aquinas, is that which is, quote,
directed to the common good of the home, end quote.
The difference between the common good of the family and the common good of civil society or the state
is found in the following expression.
The economic end is entitled by Aquinas odd vivendum and the civil society or political end is odd bene vivendum, not just to the existence of life but to the good society so to speak.
Thus the phrase odd vivendum is used by Aquinas in opposition to the phrase odd bene vivendum not to simply indicate the purely material estimations of civil society as opposed to the virtuous life of the individual
but rather to bring out in sharper detail the specific difference between the domestic good life and the civil political good life.
Economics or the art of wealth-getting, as understood by Aquinas, has a much different connotation than our modern usage as the following passage from his commentary on Aristotle's Politics Illustrates.
And he writes, for the household manager strives about human beings more than the acquisition of inanimate things, and he should strive for the future by the virtue by which human beings live well more than by the virtue by which one acquires and increases property well, which is the meaning of the word wealth, end quote.
Therefore, again, as Aquinas says, riches are compared to domestic prudence, not as its last end, but as its instrument.
Further, Aquinas agrees, of course, with the philosopher, as he does so many times, the philosopher, of course, meeting Aristotle,
in showing that the art of wealth-getting is certainly not the same as economics, since the former is concerned with acquiring wealth,
and the latter is limited and is more inclined to using it, to quote Aquinas.
For household management is the only skill to which using things useful for the household belongs.
And it is also clear in other things that the skill that uses something is different from the one that produces or acquires it.
For example, the skill of piloting is different from the art of shipbuilding,
therefore household management is different than money making, end quote.
Aquinas, then following Aristotle, describes the various ways by which man acquires material goods and the three distinguishable features of wealth-getting.
That is, again, the art of household management, again, quoting Aquinas.
For besides the way of those who produce food and those who live off commerce about which he, meaning, of course, Aristotle, will deal later,
So later, again we're taking this out of the commentary on Aristotle's Politics, there
are four simple ways of life, namely shepherding, raiding or piracy, fishing and hunting.
As what he said makes clear, but since a simple way of human life is most efficient because
it lacks many things, some human beings in order to be self-sufficient in all things
combine the aforementioned ways. And so they live pleasantly, supplying for themselves—again,
this is still Aquinas speaking—supplying for themselves from one way what they lack
from another. For example, some combine the life of shepherds and raiders. As we all know,
of course, piracy is still alive and well on the high seas. And we recently, of course,
Some of the life of farmers and hunters in some other ways of life, as it suits the advantage of each.
Then he shows the kind of thing, the aforementioned acquisition, that is of who is.
First, he shows that it is natural. Second, he shows that it is part of household management.
Third, he shows that it is limited.
The natural art of wealth getting, that is again household management, does not only provide the instruments for economics but also for the art of politics.
In addition to this natural acquisition of wealth, Aquinas identifies another kind which is the acquisition of money.
The second kind is unnatural because, quote, nature did not invent money but experience and skill introduced it, end quote.
The crucial character of this type of acquisition derives from the fact, according to Aquinas, that man does not acquire what nature has provided for his use, but rather he acquires what man has created merely for his convenience, that is money.
Commenting again on Aristotle's politics, Aquinas says that, quote, since money began to be exchanged for money for the sake of profit in a skillful way,
We call the skill regarding money, money-making, and its activity is to be able to weigh from what sources a person could make a great deal of money, for money-making is directed to making a great deal of money and wealth as its end.
Where money is the end of acquisition, for example, it is no longer desired for the pursuit of the good life, but is rather desired for itself.
Therefore, according to Aquinas and the scholastics, at least the early scholastics, this artificial
art of acquisition whose end is the ceaseless accumulation of money is infinite in character.
While one might be inclined to say that money making is not part of economics because it
is infinite, but Aquinas says that, quote, money is the end of commerce, since the aim
of commerce is to acquire money and only a means of household management to its end.
Therefore, money-making seeks unlimited money, but household management seeks a limited amount of money.
There is, however, another type of activity which is not entirely unnatural.
It is the kind in contradistinction to Aristotle, which does not seek money for its own sake, but which seeks it for the necessities of life.
This is identified by Aquinas as commerce.
It is, of course, and unfortunately, the perversity in human nature, says Aquinas, that causes men to pursue wealth for its own sake.
Again, Aquinas writes the following.
Therefore, he says that the reason for this disposition, namely that household managers seek to increase money without limit,
is because human beings are eager to live how so ever, not to live well, which is to live virtuously,
they would be content with things sufficient to sustain nature.
But since they omit this effort, and want to live according to their own will, each of them strives to acquire things with which to satisfy the individual's desire.
And because the desire of human beings has no limit, they desire without limit things whereby they can satisfy their desire.
Now a little bit of scholastic terminology.
When Linus first introduces wealth-getting as an activity, he uses the term ars cognitiva,
referring to natural acquisition. I think some of these, of course, are up there for you.
Later, in distinguishing the two kinds of acquisition, he uses the generic word postesiva,
includes both natural and artificial acquisition.
Still later, the natural art of wealth getting is called
by Aquinas, ours, acquisitiva, civiet, aliorum, necessariorum, vitae.
And finally, he distinguishes natural acquisition of money,
where the end is directed toward the necessities of life,
from the artificial acquisition of money,
where the end of the activity is simply
economic or monetary gain.
The former, he titles, precognitiva economica,
and the latter is called Cognitiva Numelaria, which I will put up here for you just to take a look.
So these are the relationships between economics and the acquisition of wealth.
Venice, economica, final end of economics, bona vita, vita domestica, the discipline of obviously employing the virtues.
Nasaria vitae, obviously the food and all the things of course that we have.
and then, of course, the natural art of acquisition being then dropped down to what later is, of course, our Pecunia Tiva Numeladia, which is the artificial act of acquiring goods and services.
According to Aquinas and early scholastic thought, the end of economics is the good life of the domestic society,
Just as the end of politics is the good life of the civil society. Wealth getting, that is again in the proper setting of the 13th century, is the proper management of the household, supplies the instruments of the economist and the statesman in order that their respective ends are attained.
The process of wealth-getting, however, is of two kinds, again, as we can see up here, natural and artificial.
Natural wealth-getting is as a means to an end and therefore subservient both to economics and politics,
while artificial wealth-getting has no proper connection with either economics or politics.
In addition, the natural art of wealth-getting has two aspects.
It may seek the necessities of life from what nature itself has provided,
or it may acquire the necessaries of life through the medium, again, of commerce.
And, of course, at the end here we see, of course, the final end of economics to the far left-hand side,
to the far right-hand side, of course, is that general term.
So we go from the general on the far right-hand side, ours, possessiva, to the far left-hand side, which is finis economiche.
For Aquinas and the early scholastics, therefore, the economic setting was placed in the context
of the proper duties in the management of the household. But management of the household
does not merely imply the managing of the material wants of the family. Instead, it
embraces all the needs, physical, mental, and moral, whose satisfaction is necessary
for the good and virtuous life of domestic society. In short, the economy for Aquinas
Aquinas is a prudence as well as a practical science and can be only understood within an ethical context like he describes.
In Aristotle's system as well as in Aquinas, the discussion of wealth is predominantly a moral discussion.
In other words, the quote-unquote problem of wealth is primarily viewed as a moral problem
whose implications involve the application of the ethical, the economic and political.
And Aquinas' notion of wealth is intrinsically modified by the conception of the supernatural character of man's final destiny.
The term divicia, which I don't have up here, but in Latin translated into English, divicia typically means divine good.
And Aquinas includes both external goods and temporal goods.
And according to Aquinas, external goods refer to something more than just material objects, and it includes goods of the body as well as goods of the mind.
In the early 20th century, Father Isaac Smith, in a hard to get book and certainly long forgotten, entitled Classification of Desires in St. Thomas, put forward his complete accounting of external goods, which I have here.
Here, in restricting the meaning of the term to external goods or wealth to those things
which pertain to the body, one is preserving, I think, to some extent, the essential elements
which are proper to the modern concept of economic wealth, meaning what? Its external
and material aspects. Again, there are two kinds of wealth according to Aquinas, which
he gets most of this, of course, from Aristotle, natural and artificial. Again, to quote from
Natural wealth is that which serves man as a remedy for his natural wants, such as food, drink, clothing, dwellings, and such like.
While artificial wealth is that which is not a direct help to nature as money, but is invented by the art of man for the convenience of exchange and as a means of things saleable.
Both are, from the scholastic point of view, distinguished on the basis of final causality.
Causality. Natural wealth is a means toward an end, while artificial wealth is viewed as a means to a means.
Whatever desirability natural wealth has, it receives it from the end which it serves.
That is the satisfaction of material needs.
Artificial wealth, on the other hand, is not directly related to nor measured by the end.
Whatever desirability it has, it comes from the means. That is, from natural wealth.
In book one of, again, Aristotle's politics, Aristotle references the famous fable of Midas to illustrate the two kinds of wealth.
Artificial wealth by itself is really without an end, says Aristotle, and it is put in relation to an end only through the existence of natural wealth,
and currency has the unfortunate distinction of being changed by those who use it and manipulate it.
Additionally, utility and value according to Aquinas function as determinants of wealth.
He says that, quote, each thing has two uses, which are the same in that each use is of the thing as such and not incidental to another use,
but differ in that one use is the proper use of the thing and the other is a common rather than a proper use.
Aquinas then quotes Aristotle's famous shoe example from a politics, for example, he quotes from Aristotle,
A shoe is used for wear, and is used for exchange. Both are uses of the shoe.
He who gives a shoe in exchange for money or food to him who wants one, does indeed use the shoe as a shoe.
But this is not its proper use, for the shoe is not made to be an object of barter.
Proper use is simply the scholastic term for utility.
Common use, on the other hand, is that use which all exchangeable goods enjoy by virtue of its exchangeability.
The common use of shoes and of food is the same.
Shoes can be used to get food or food can be used to acquire shoes.
Common use, therefore, is simply the scholastic term for value.
Although utility is easily seen to be inherent in each good, Aquinas foresaw that one might easily conclude that value is something extrinsic or accidental, as Aquinas quotes, in using shoes in exchange, although not a proper use of shoes, nonetheless uses them as such and not as incidental to another use, since the one who exchanges them uses them according to their worth, end quote.
By using the scholastic phrases proper use and common use, one, I think, can understand a little bit better the intrinsic character of each much more clearly than, obviously, the modern terms utility and value.
The proper and final cause of shoes, according to Aquinas, therefore, is a specific good.
That is, if it can be exchanged for some other article which satisfies a different one.
Thus, whether it be by its proper or common use, the final cause of the thing is some good, and for this reason both utility and value are intrinsic to the thing or material good.
And yet, although both uses are intrinsic, they do not enjoy an equal dignity in the scholastic sort of framework.
Utility is prior to value, and value without utility, of course, would be meaningless.
In other words, there would be no value to a shoe unless it had some kind of utility for someone.
Additionally, utility is based on a relationship between the thing needed and, of course, the person needing.
Consequently, between the thing and the person, there is a relationship of measure.
That is, the utility of the thing is measured by the need or desire of the person for a thing.
And the greater the need or desire, of course, the greater the utility.
Value, on the other hand, is based on the relation between one exchangeable thing and another, and cannot be determined by referencing utility alone.
According to Aquinas, the other determinants of value in the trading process include differences in time, place, risk, and a moderate profit motive, according to Aquinas.
Hence, training, considered in itself, has a certain debasement attaching thereto, insofar as, by its very nature, it does not imply a virtuous or necessary end. Nevertheless, gain, which is the end of trading, though not implying by its nature anything virtuous or necessary, does not, in itself, connote anything sinful or contrary to virtue.
Additionally, labor as well as an element used in computing value, merit and reward, says Aquinas, refer to the same, for a reward means something given to anyone in return for work or toil as a price for it.
Hence, as it is an act of justice to give a just price for anything received from another, so also is it an act of justice to make a return for work or toil, end quote.
Thus the value of a commodity, according to Aquinas and early scholastic thought, is determined not only by the cost of labor and other expenses incurred by the producer, but by the usefulness which it has for the consumer.
Aquinas recognized as well in the above passage that there is a definite relationship between wealth and ultimately scarcity.
Finally, when discussing the knowledge necessary for the successful application of the art of exchange, Aquinas makes the very astute observation that human beings should be knowledgeable about such things that they acquire, which of them are the most valuable, where they are sold at the highest price, and how they are sold, when and under what conditions.
In the thirteenth greatest of centuries, the advance of civilization, the increased organization of feudalism, the development of industry, the extension of commerce, largely under the influence of the crusades, all created a condition of affairs in which economic questions, of course, could no longer be overlooked or neglected.
There is no doubt that feudal concepts played a part in framing Aquinas' thought on economic matters, and yet it was largely his efforts within the context of an emerging scholastic moral philosophy that laid the groundwork for the late scholastic renaissance in economic thought.
And Aquinas' most enduring contribution to the history of economic thought, according to Murray Rothbard, was the scholastic superstructure that he built.
And this is what Murray says, sort of to end his section in the history on Aquinas.
For in reviving and building on Aristotle, St. Thomas introduced and established in the Christian world a philosophy of natural law,
A philosophy in which human reason is able to master the basic truths of the universe in the hands of Aquinas as in Aristotle.
Philosophy with reason as its instrument of knowledge became, once again, the queen of the sciences.