Konzervatívny inštitút M. R. Štefánika s podporou Nadácie Tatra banky a v spolupráci s ďalšími partnermi organizovali dňa 18. septembra 2012 v Ivanke pri Dunaji špeciálnu prednášku v rámci cyklu prednášok CEQLS. Našim hosťom bol Alejandro A. Chafuen, prezident Atlas Economic Research Foundation (USA). Viac informácií nájdete na www.konzervativizmus.sk. Conservative Institute organized another of the CEQLS Lectures: Alejandro A. Chafuen, President of The Atlas Economic Research Foundation (USA), was our guest on September 18, 2012 in Ivanka pri Dunaji. More information is available at www.institute.sk.

1. Christian Roots of the Free
Economy
Dr. Alejandro Chafuen
Acton Institute, www.acton.org
www.chafuen.com
Kolegium Antona Neuwirtha
Slovakia
September 18, 2012

2. Saint Augustine (354-430)

3. Saint
Augustine
(354-430)
“The vices are of the
businessman himself,
not of business in
general”

4. Domingo de Guzmán, founder of the
Dominican Order
 Domingo de Guzmán (1170-1221)

5.  The Church of the thirteenth century shows a marked
development, on its institutional side, of the principle and
practice of representation.
 The great Orders of the Friars are penetrated by
representation. It appears first in the Dominicans: it is
copied from them by the Franciscans. In the same century
representation begins to appear in the State. In
Spain, indeed, it has already appeared in the last half of
the twelfth century: in France it does not properly
appear, except in local assemblies, until the beginning of
the fourteenth.” (Barker, p. 7)

6.  Benedictines, Franciscans, and other
religious orders adopted representative
government
 The Jesuits, the Ratio Studiorum (1581-
1599)

7. Saint Thomas Aquinas (1226-1274)

8. Commercial activities useful for
society:
•For the conservation and storing
of goods
•For the importation of useful
goods that are necessary for the
republic
•For the transportation of goods
from places where they are
abundant to places where they
are scarce

9. The importance of Private Property
 Consistent with Scripture
 Inspired by Aristotle
 Further developed by other authors became
the most essential institution of a free
society

10.  Aquinas in his Summa, II-II, Q. 66, art.
2, "Augustine says: The people styled apostolic
are those who arrogantly claimed this title for
themselves because they refused to admit married
folk or property owners to their fellowship, arguing
from the model of the many monks and clerics in
the Catholic Church ( De Haeresibus 40). But such
people are heretics because they cut themselves
off from the Church by alleging that those
who, unlike themselves, marry and own property
have no hope for salvation."

11. "First, because each person takes more
trouble to care for something that is his sole
responsibility than what is held in common or
by many for in such a case each individual
shirks the work and leaves the responsibility to
somebody else, which is what happens when
too many officials are involved.
Second, because human affairs are more
efficiently organized if each person has his
own responsibility to discharge; there would be
chaos if everybody cared for everything.
Third, because men live together in greater
peace where everyone is content with his
things. We do, in fact, notice that quarrels often
break out amongst men who hold things in
common without distinction."

16. Aquinas quoting Augustine on Value
 As Augustine says (De Civ. Dei xi, 16) the price of
things salable does not depend on their degree of
nature, since at times a horse fetches a higher
price than a slave; but it depends on their
usefulness to man. Hence it is not necessary for
the seller or buyer to be cognizant of the hidden
qualities of the thing sold, but only of such as
render the thing adapted to man's use, for
instance, that the horse be strong, run well and so
forth. Such qualities the seller and buyer can
easily discover.

17. Just Price
 Aquinas notion of just price was influenced
by a theory of value that states that the
value we place on goods depends on the
utility we derive from them. Since our needs
and desires are subjective, utility is
subjective as well. In their discourses on
value, St. Albert the Great, and later St.
Thomas, included the element of "common
estimation"

18. Just price not based on objective value
 “The relevant part of the argument on just price—
the price that assures the „equivalence‟ of
commutative justice—is strictly Aristotelian . . .St.
Thomas was a s far as was Aristotle from
postulating the existence of a metaphysical or
immutable „objective value.” (Schumpeter)
 St. Thomas Aquinas' words, "any exchange is for
the mutual benefit of both parties with the result
that they are better off than previously.“ [II-II, q. 77]

19.  “the just price of things is not fixed with
mathematical precision, but depends on a
kind of estimate, so that a slight addition or
subtraction would not seem to destroy the
equality of justice.” Qu. 77, art 2, resp. obj 2

20. Other economic questions
addressed by Aquinas
 Profits from trade
 Money as a medium of exchange
 Interest rates
 Distributive Justice

21. Aquinas on Distributive Justice
 St. Thomas noted that
 in distributive justice something is given to a private individual, in so far
as what belongs to the whole is due to the part, and in a quantity that is
proportionate to the importance of the position of that part in respect of
the whole. Consequently, in distributive justice a person receives all
the more of the common goods, according as he holds a more
prominent position in the community. This prominence in an
aristocratic community is gauged according to virtue, in an oligarchy
according to wealth, in a democracy according to liberty, and in various
ways according to various forms of government.
 The tradition of treating wages as a matter of commutative justice
similar to the exchange of other economic goods can be traced to St.
Thomas Aquinas, who stated that wages are the natural remuneration
for labor "almost as if it were the price of the same" (Quasi quoddam
pretium ipsius).

22. Aquinas justification of profits
 1. To provide for the businessman's household.
 2. To help the poor.
 3. To ensure that the country does not run short of
essential supplies.
 4. To compensate the businessman's work.
 5. To improve the merchandise.
 He also ascribed legitimacy to profits obtained
from price variations in response to local changes
as well as those earned through the lapse of time.
Furthermore, he allowed for profits that would
compensate the risks of transport and delivery.

23. Commercial Profits: Should a
merchant divulge that a shipment of
goods will be soon coming to port?

24. Saint Bernardino of Siena, (1380-1444)

25. Saint Francis and the Demon

33. Private Property:
•Better Care
•Less Fraud and confusion
•Better Order
•More Peaceful
•Makes the practice of charity possible

34. 1)Virtuositas (Objevtive Value
in Use)
2)Raritas (Scarcity)
3)Complacibilitas (Desirablity,
Subjective Value in Use)

35. Profits
Criticized Duns Scotus O.F.M.
(1265-1308) who argued that
businessmen were so useful that the
good prince should see that they earn a
just profit
Profits, if they result from market prices,
should not be limited.
Losses should be born by the
businessman

36. St Bernardine contribution to the virtues of
managers and entrepreneurs
•Industria (diligence, efficiency)
•Solicitudo (Responsibility)
•Labores (labor)
•Pericula (willingness to assume risks)
•“The rational and orderly conduct of business was
a virtue.”

37. Wages
•Wages should be determined as any other prices:
common estimation, supply and demand, with no fraud
or coercion
•Should be paid in cash unless stated otherwise by
contract
•Should not be paid in debased currency (usually
clipped or lower content silver coins)
•Not sympathetic of labor unions
•Strong condemnation of cabbaging/pilfering
•No consideration of family wage

38. Distributive Justice:
Maintenance and distribution of goods held in
common (taxes, government appointments,
provision of justice)
Did not deal with distribution of income (wages,
profits, rent), major mistake by Raymond De
Roover, author of the best analysis of these
authors San Bernardino of Siena and San‟t
Anotnino of Florence, Harvard, 1967

39. Paris

40. University of Salamanca

41. Salamanca
 The University of Salamanca had a strong influence in
most of Europe, including in the English speaking nations.
 The English hierarchy sponsored a college for the training
of priests, the Minor College of St. Thomas of
Canterbury, based at the University of Salamanca in 1510.
 The Irish, in 1592, established the Colegio de Nobles
Irlandeses or the “Royal College of Irish Nobles.” It
became the training ground of many notable Irish clergy
and hierarchy. Although administered by Spanish
Jesuits, it always had an Irish Jesuit as vice rector. By
1584, Salamanca had between 6 and 7 thousand
students. Its influence was immense.

42. Francisco de Vitoria, O.P. (c. 1495-1560)

45. University of Alcalá de Henares (Complutense)

46. College of Rome (Suárez, Mariana, Bellarmine)

47. The Roman College
 The Roman College, founded in 1551 was
especially influenced by Salamanca. It was
originally labeled “a free school of
grammar, humanities and Christian
doctrine,” “free” meant gratis, the original
Latin word used in its description. The
college had several Spanish born luminaries
among its greatest professors.

48. Salamanca influenced the teachings
at the first Jesuit Universities
 Messina, Palermo, Naples, Gandia, Salama
nca, Alcalà, Valladolid, Lisbon, Billom, Vienn
a;
Cologne, Munich, Prague, Innsbruck, Douai,
Bruges, Antwerp, Liège.
 By 1706 they had 750 colleges and
Universities
 96 in Latin America before their suppression

49. Increased recognition of the School
of Salamanca
 F. A. Hayek, the Nobel laureate, frequently
recognized their scholarly work.
 Lord Acton wrote that the greater part of the liberal
ideas of Milton, Locke, and Rousseau, may be
found in the works of the Salamanca Jesuits.
 Raymond De Roover, Marjorie Grice-
Hutchinson, Murray Rothbard, and Joseph
Schumpeter, recognized the major contributions of
the “School of Salamanca,” not only the Jesuits, to
economics.

50. Eternal or Divine Law
(God’s plan to lead all creation to its end)
Natural Law
(Intelligent creatures’ participation in eternal law or what reason tells
them about the nature of things)
Economics Ethics
Influence
Political Economy Economic Doctrine Economic Ethics

51. Relevant contributions to the free
economy
 their focus on the human person as an individual
being distinguished by its freedom, its social
inclination and spiritual component
 their emphasis on the importance of private
property for a more peaceful, productive and
ethical social order
 their conclusions about the importance of the right
to trade, both nationally and internationally

52. Relevant contributions to the free
economy
 the relevance of sound money, both for the need to
preserve the private property of cash holders as well as the
stability of its value so it would aid rather than hinder trade
 their analyses equating the just price with market prices
devoid of fraud, monopoly or coercion
 their treatment of wages, profits and rents as belonging to
commutative justice (contracts) rather than distributive
justice (which only dealt with justice in the provision and
distribution of goods held in common by a
family, organization or political body)
 and finally, their careful distinction between legal and moral
obligations and punishments.

53.  Rights: the consequence of God‟s law, not God‟s
grace
 Vitoria described four different aspects of law:
eternal, natural, positive, and “international” or Ius
Gentium. Vitoria developed even further some
views hinted in the writings of St. Thomas Aquinas
and stressed that the authority to exercise power
comes from the community, usually through the
operations of its legislative power. Vitoria‟s views
on the origin of rights led to the conclusion that sin
did not diminish one‟s right to private property.

54.  Father Teófilo Urdanoz “no one has
realized, at least up to now, that Vitoria‟s
vision of the right to free communication and
unrestricted foreign relations represent an
explicit advance of the principles of
economic neoliberalism and worldwide free
market.”

55. Christian contributions to
globalization
 Its stress on the universality of moral laws
 Its evangelizing spirit “Christ taught the
apostles and us to go out into the whole
world and preach the Gospel “
 The teaching and actions of
hierarchy, clergy and members

56. Vitoria‟s principles
 “Native princes cannot prevent their subjects from
trading with the Spaniards.”
 “Eternal, natural, and positive human law (ius
gentium) favors international trade. To abjure it
would violate the golden rule.”
 Barriers against trade can be “iniquitous and
against charity.” Quoted Ovid “Man is not a wolf
for other men.”
 “Nature has established a certain bond between
men.”

57. Seville

59. Hispaniola

60. Hispaniola

61.  Free Trade as a Human Right

62. Samuel Pufendorf
(1632-1694)
 Criticized Vitoria Liberal views:
“Franciscus a Victoria is certainly
false when he maintains: “the law
on nations allows every man to
carry on trade in the provinces of
others by importing merchandise
which they lack and exporting
gold and silver, as well as other
merchandise, in which they
abound.”

63. Other Hispanic Scholastics

64. Martin De
Azpilcueta

66. Tomás de Mercado (c. 1525-1575), Mastrers in México

67. Luis de Molina

68. Domingo de Bañez, O.P. (1528-1604)

69. Domingo de Soto, O.P. (1497- 1560 )

70. Domingo de Soto
 Repeats St. Augustine‟s point: trade “is like
eating, a morally indifferent act, which can be
good or bad depending the ends and the
circumstances”
 “Commerce is necessary for the republic. Not all
the provinces have the goods they need in
abundance. On the contrary, due to climates
some have in abundance the fruits and labors
which are scarce in others and vice versa.”

71. Juan de Mariana, S.J. (Money, Public Finance)

72. Francisco Suárez, SJ, Juridical Order, Rule of Law

73. Robert Bellarmine, S.J. Limits to Government Power

74.  Bellarmine wrote some of the most influential
works. Rev. John C. Rager addressed
Bellarmine‟s political philosophy on an essay
entitled “Catholic Sources and the Declaration of
Independence.” (Rager, 1930) His piece
compared essential sentences from the
Declaration of Independence with similar quotes
from St. Thomas Aquinas and then Blessed
Robert Bellarmine. The parallels are striking.

75. Q&A
 Thanks for your attention!

77. Saint Boniface cutting the “sacred” oak

78. Juan de Matienzo (1520-1579) Chuquisaca [today Sucre]