We find small beginnings only—little of sociology, still less of economics. In part this was doubtless due to lack of interest. St. Thomas, in particular, was indeed interested in political sociology but all the economic questions put together mattered less to him than did the smallest point of theological or philosophical doctrine, and it is only where economic phenomena raise questions of moral theology that he touches upon them at all. Even where he does we do not feel, as we do elsewhere, that his powerful intellect is all there, passionately resolved to penetrate into the core of things but rather that he is writing in obedience to the requirements of systematic completeness. More or less, this applies to all his contemporaries. In consequence, Aristotle’s teaching sufficed for them and they hardly ever went beyond it. There was indeed a difference in moral tone and cultural vision and also a shift of emphasis that is accounted for by the different social patterns they beheld. But neither is so important as we might have expected. Since these things are of no great moment in a history of economic analysis, it will suffice to note that the scholastic doctors looked upon physical labor as a discipline favorable to Christian virtue and as a means of keeping men from sinning, which implies an attitude entirely unlike that of Aristotle; that with them slavery was no longer a normal, let alone fundamental, institution; that they gave their blessings to charity and to voluntary poverty; that their ideal of a vita contemplativa carried, of course, a meaning that was quite foreign to Aristotle’s corresponding ideal of life, though there are important similarities between the two; that they repeated but qualified Aristotle’s views on commerce and commercial gain*. (Schumpeter 1954: 90-91)
St. Thomas’ sociology of institutions:
St. Thomas’ sociology of institutions, political and other, is not what readers will expect who are in the habit of tracing the political and social doctrines of the 19th century to Locke or to the writers of the French enlightenment or to the English utilitarians. Considering that, in this respect, the teaching of St. Thomas was not only representative of that of his contemporaries but also was accepted by all the scholastic doctors of later times, its main points should be briefly indicated. There was the sacred precinct of the Catholic Church. But for the rest, society was treated as a thoroughly human affair, and moreover, as a mere agglomeration of individuals brought together by their mundane needs. Government, too, was thought of as arising from and existing for nothing but those utilitarian purposes that the individuals cannot realize without such an organization. Its raison d’être was the Public Good. The ruler’s power was derived from the people, as we may say, by delegation. The people are the sovereign and an unworthy ruler may be deposed… This mixture of sociological analysis and normative argument is remarkably individualist, utilitarian, and (in a sense) rationalist, a fact that it is important to remember in view of the attempt we are going to make to link this body of ideas with the laical and anti-Catholic political philosophies of the eighteenth century. There is nothing metaphysical about this part of scholastic doctrine. Nor did the Catholic doctors countenance political authoritarianism. The divine right of monarchs, in particular, and the concept of the omnipotent state are creations of the Protestant sponsors of the absolutist tendencies that were to assert themselves in the national states. (Schumpeter 1954: 91-92)
St. Thomas’s theory of property:
Having disposed of the theological aspects of the matter, St. Thomas simply argues that property is not against natural law but an invention of the human reason, which is justifiable because people will take better care of what they possess for themselves than of what belongs to many or all; because they will exert themselves more strenuously on their own account than on account of others; because the social order will be better preserved if possessions are distinct, so that there is no occasion for quarreling about the use of things possessed in common—considerations that attempt to define the social ‘function’ of private property much as Aristotle had defined them before and much as the nineteenth-century textbook was to define them afterward. And since he found in Aristotle all he wished to say, he referred to him and accepted his formulations. (Schumpeter 1954: 92-93)
St. Thomas on Just Price:
The relevant part of the argument on just price—the price that assures the ‘equivalence’ of commutative justice—is strictly Aristotelian and should be interpreted exactly as we have interpreted Aristotle’s. St. Thomas was as far as was Aristotle from postulating the existence of a metaphysical or immutable ‘objective value.’ His quantitas valoris is not something different from price but is simply normal competitive price. The distinction he seems to make between price and value is not a distinction between price and some value that is not a price, but a distinction between the price paid in an individual transaction and the price that ‘consists’ in the public’s evaluation of the commodity (justum pretium…in quadam aestimatione consistit), which can only mean normal competitive price, or value in the sense of normal competitive price, where such a price exists. In cases where no such price exists, St. Thomas recognized, as coming within his concept of just price, the element of the subjective value of an object to the seller, though not the element of the subjective value of the object for the buyer—a point that is important for scholastic treatment of interest…Though he presumably thought of nothing beyond providing a more precise criterion of scholastic ‘commutative justice’—which was rightly rejected by the later scholastics—we must nevertheless credit him with having discovered the condition of competitive equilibrium which came to be known in the nineteenth century as the Law of Cost. This is not imputing too much: for if we identify the just price of a good with its competitive common value, as Duns Scotus certainly did, and if we further equate that just price to the cost of the good (taking account of risk, as he did not fail to observe), then we have ipso facto, at least by implication, stated the law of cost not only as a normative but also as an analytic proposition. (Schumpeter 1954: 93)
St. Thomas on Interest:
St. Thomas condemned interest as contrary to commutative justice on a ground that proved a conundrum for almost all his scholastic successors: interest is a price paid for the use of money; but, viewed from the standpoint of the individual holder, money is consumed in the act of being used; therefore, like wine, it has no use that could be separated from its substance as has, for example, a house; therefore charging for its use is charging for something that does not exist, which is illegitimate (usurious). Whatever may be thought of this argument, which among other things neglects the possibility that ‘pure’ interest might be an element of the price of money itself—instead of being a charge for a separable use—one thing is clear: exactly like the somewhat different Aristotelian argument, it does not bear at all upon the question why interest is actually paid. Since this question, the only one that is relevant to economic analysis, was actually raised by the later scholastics, we defer the consideration of the clues for an answer, which St. Thomas’ reasoning nevertheless suggests. (Schumpeter 1954: 93-94)
*It’s worth noting that, according to Schumpeter, scholastic thought on the physical and social sciences was heavily influenced by the writings of Aristotle, which were recently introduced to the West in the 13th century.
During the twelfth century more complete knowledge of Aristotle’s writings filtered slowly into the intellectual world of western Christianity, partly through Semite mediation, Arab and Jewish. To the scholastic doctors this meant two things. First, Arab mediation meant Arab interpretation, which was unacceptable to them in some matters of epistemology as well as of theology. Second, access to Aristotle’s thought immensely facilitated the gigantic task before them not only in metaphysics, where they had to break new paths, but also in the physical and social sciences, where they had to start from little or nothing…
…The Roman law came in usefully, not because it brought something that was foreign to the spirit and needs of the age—so far as it did this, its reception was in fact an unmitigated nuisance—but precisely because it presented, ready made, what without it would have had to be produced laboriously. Similarly, the ‘reception’ of Aristotle’s teaching was principally a most important timeand labor-saving device, particularly in those fields that were as yet waste lands. It is in this light—and not in the light of the theory that there was passive acceptance of a lucky discovery—that we must see the relation between Aristotelism and scholasticism.
But so soon as the scholastic doctors realized that in Aristotle’s writings they had all, or nearly all, they could hope for at the moment and that with the help of his doctrines they might accomplish what it would have cost them a century’s work to do by themselves, they naturally made the most of this opportunity. Aristotle became for them the philosopher, the universal teacher, and most of their work took the form of expounding him to students and to the public at large, and of commenting upon him. Moreover, his writings served admirably for didactic purposes since they were in fact summarizing and systematizing textbooks. In consequence, it was in the role of expounders of, and commentators on, Aristotelian doctrine that Grosseteste, Albertus Magnus, and the other leaders mentioned above appeared to the public of their own and of later times. St. Thomas himself became, for many people, simply the man who had succeeded in harnessing Aristotle for the service of the Church. This misconception of the revolution of the thirteenth century and, in particular, of St. Thomas’ performance was not corrected but, on the contrary, was fostered by the scientific practice of the next 300 years. For Aristotle’s work continued to provide the systematic frame for the growing scientific material and to supply the need for nicely pedestrian texts; everything, therefore, continued to be cast in the Aristotelian mold—nothing so completely as scholastic economics, which also illustrates the way in which, by this convenient practice, the scholastic doctors were likely to lose the credit for their original contributions…
…This explains not only the otherwise quite incomprehensible success of Aristotelian teaching through these 300 years but also the penalty the ancient sage was eventually to pay for this success. We may just as well complete the story which is so full of interest to the student of the tortuous ways of the human mind. We have seen that there was nothing in the scholastic system to bar new developments within it or even developments away
1. Schumpeter, Joseph A. History of Economic Analysis. New York: Oxford UP, 1954. Print. 87-94.