Value and Values in Economic Thought:
A Survey of Primary Sources from Aristotle to the Onset of Industrialization
David Weiland, Department of History
In the late medieval and early modern era, Europe experienced a series of profound changes in
economic life. Though long a function of commerce in the Mediterranean, the development of long
distance trade in the age of Marco Polo necessitated innovations in money-changing. Early letters of
exchange would, in the passage of time, become commodities in their own right – bought, sold, borrowed
against or used as outright money. Thus coin gave way to capital in stages, and many merchants became
merchant-bankers and then bankers outright, trading in currency and credit instruments as commodities,
as well as media of exchange.
Contemporaneous and parallel to this financial evolution (revolution?) came the rise of the socalled "new monarchies", such as France, Spain, and England, as well as lesser though still-influential
polities such as Portugal or the Netherlands. The development of empire was no less a function of banks
and borrowing than it was dependent on the success of armies or fleets. But while France and Spain
adhered to traditional values of pay-as-you-go, financing imperial adventures in coin, there was only a
modest commitment to the development of banks or banking. In contrast, the Dutch and English openly
embraced the new ways, actors, and institutions.
Economic value and moral views of markets, parallel conceptions in the Middle Ages, were
increasingly at odds from the sixteenth century onward. The Catholic monopoly on values, favoring
concepts of fair trade and just price, pursued various moral interdictions into markets and market practice,
including a proscription against usury. According to the prevailing secondary literature, this imposition of
morals on markets served as a factor limiting the development of value and surplus value, both real and
conceptual.
This proposal seeks support for an investigation into the development of the concepts of fair trade
and just price during the Fall 2012 semester. The overarching goal is to develop an understanding of the
evolving philosophical underpinnings of "market morality". Accordingly, this study will trace the
evolution of values in the most commonly referenced written works of the past three millennia. Why were
moral limitations on profit and commercial activity so important? Why did they fade over time? Were
there any new philosophical conceptions that replaced the religious, moral concerns that dominated the
centuries before 1500? Most important, however, is the question of influence of markets and market
forces on people. Accordingly, we must ask about the extent to which those who advanced the field of
Economics were concerned, if at all, about the moral or ethical implications of market forces on people.
Was there concern over exploitation? Fairness? Ethical conduct? Exploitation of the consumer? The
extent to which these concerns are voiced or played a role in the development of abstract concepts of
markets and commercial activity is the primary focus of this project. It is hoped that a greater
understanding may emerge framing the very contradictory nature separating what Europeans DID in their
economic lives and what they told themselves about their activities, and the activities of others from the
sixteenth century onward.
Would Jesus have been a socialist, as many Americans argued in the late nineteenth century? Is
capitalism a moral and ethical system, or simply the basest form of self-interested exploitation imposed
by those who "have" upon those who do not? Students are asking these questions, and it is important to be
able to guide them to find their own answers. In the case of the US survey, why was it that banks and
credit – though so necessary to early American economic growth – were deeply distrusted by an
overwhelming majority of the citizenry prior to the Civil War? This reading program will provide much
additional material to incorporate into weekly lectures and class discussion. Finally, it is hoped that a new
series of writing assignments making use of the original source materials under consideration can be
rendered accessible for the students of the World Civ. and Online US surveys. It is further expected that
the reading program itself, in combination with the presentation of findings that follows, will aid in the
creation of several new lectures for the World and US survey courses on the role of merchants and
markets, as well as how they were viewed over time.
The study will commence at the beginning, in the classical age, with the writings of Greece and
Rome. Aristotle's Politics, Book I, offers an early philosophical articulation of the nature of wealth,
money and trade. It is to Aristotle that the Catholic Church would apparently turn throughout the Middle
Ages in their attempts to ground their admonitions against usury. Next, Roman chronicler Cornelius
Tacitus' Annals, Book VI, describes the fiscal difficulties of the Roman state in the days of Julius Caesar
and his successors. Attempts to come to grips with the often-contradictory demands of war and prosperity
led the Roman state to embark upon a number of monetary policies that foreshadowed the "Age of
Capital" in the nineteenth century. This first "foundational" section of readings will conclude with an
examination of the Catholic biblical canon as codified in the fourth century CE. All across the internet,
there are references to the notion that there are but 500 references to faith or prayer, but some 2000
references to money and wealth, a claim that deserves further investigation as it relates to the larger
morality tale of market life. For purposes of expediency, the edition chosen for this investigation is the
King James translation (notwithstanding the questions of dubious translation or Protestant emphases that
may deviate from the Latin Vulgate of the Council of Carthage).
Next, we will turn to evolving notions surrounding European markets in the High Middle Ages,
long after the collapse of the Roman Empire but before the economic resurgence of the Renaissance. The
three works chosen to represent Medieval Europe are Thomas Aquinas' Summa Theologica (1274), John
Duns Scotus' Sententiae (1295), and Ibn Khaldun's Muqaddimah (1377). As one of the most important
works in western philosophy and literature, the Summa Theologica summarizes the state of Catholic
thought in the High Middle Ages and would continue to serve as a reference for Catholics on a host of
subjects – including markets and money - throughout the Early Modern era. It is in this work that the
secondary literature indicates the origins of the conception of "just price". According to economic
historians, John Duns Scotus, in turn, offers a response to Aquinas, arguing for a potential calculation of
just price – including cost of labor and other inputs. At the same time, Scotus was apparently one of the
first to articulate the idea of trade as "win-win", or that both buyer and seller should benefit from
exchange (a far cry from denunciations of capitalist exploitation five centuries later). Finally, Ibn Khaldun
represents an intersection of medieval thinking between Islam and Christianity, Europe and the
Mediterranean. Ibn Khaldun's family had left Andalucia in the thirteenth century for Tunis, where
Khaldun was born in 1337. Though principally a commentator on Islamic law and economic life, his
European ancestry and activity in the intellectual breeding ground of the Mediterranean offers unique
potential insights into medieval thinking about man and market.
Following the fragmentation of Catholic Europe in the Protestant Reformation, a new generation
of philosophers concerned with the market emerged in the seventeenth and eighteenth centuries. The
challenge (or at least one of the larger challenges) confronting this group of authors was the comparative
difference between Spain's Empire and its precious metal resources on the one hand and the paucity of
wealth at the disposal of Europeans in general and the English in particular. That England (and the
Netherlands) were growing in power and influence as rivals of Spain was as much a function of religion
and philosophy as it was national rivalries. The advent of Protestantism in general, and Calvinism in
particular, afforded the Dutch and English alike a spiritual rallying point for their defiance of Catholic
Spain. Articulating the differing views of markets and money that would come to separate Spain from its
new Protestant rivals was a letter by Jean Calvin to Claude de Sachin in 1545 on the question of usury. In
this correspondence, Calvin articulates something of a legitimization of what was previously seen as
exploitation, the loaning of money at interest. This letter thus opens the next phase of readings.
By the second quarter of the seventeenth century, the Netherlands had been at war with
Catholicism and Spain for nearly a century, while England was beginning to come into her own in
imperial pursuits and commercial prosperity. As a result, the so-called "Mercantilists" began to articulate
new ideas about money and commerce that would help England to become the world's pre-eminent
expositor of economic thought and understanding until the early twentieth century. In this tradition there
was first, Thomas Mun, an English merchant of the early to mid 1600s, who penned England's Treasure
By Foreign Trade (1630?, pub. 1664). This early treatise articulated the notion that, for a nation without
silver mines like England, the next best path to bullion was through commerce. When exports exceeded
imports by value, the net result would be an influx of the monetary metals to settle the resulting balance of
payments deficit. But what were the moral implications of profit to Mun?
Building on the ideas of Mun, a later generation of English observers added to the expanding
mercantilist tradition. William Petty, an English administrator in Ireland, drafted a series of tracts on the
intersection of markets, money and central government policy. A Treatise of Taxes and Contributions
(1662), followed by Political Arithmetic (approx. 1676, posthumously published in 1690) and Verbum
Sapienti (1664, also posthumously published, in 1691) articulate a new and emerging sensibility of the
necessary marriage between state policy and market functions. In this same tradition, Sir Josiah Child, a
contemporary of Petty, offered his own contribution to the body of emerging English mercantilist thought.
His works, Brief Observations concerning Trade and the Interest of Money (1668) and A New Discourse
of Trade (1668 and 1690) took up the balance of payments arguments of Mun, and combined them with
the call for state intervention and regulation advocated by Petty. Child thus more acutely articulated an
early call for a marriage between market function and national interest achieved via government
legislation. The earlier age of Catholic church regulation had seemingly given way in favor of a Protestant
yet secular arbiter, the English state. To what extent did this new actor take up the challenge of moral, or
even ethical, mediation remains to be seen. Finally, rounding out the age of the mercantilists was Scottish
author James Denham-Steuart. In his Inquiry into the Principles of Political Economy (1767), Steuart
summarizes the preceding century of mercantilist thought and doctrine. Though rendered largely obsolete
as economic theory by Adam Smith less than a decade later, it should provide excellent insight into the
English (and European?) mind as regards the functioning of the market and the role of regulators in the
pursuit of just price and fair trade.
The final chapter of this study is represented in the works of an emerging body of work
understood as the post-mercantilist age of "political economy", or physiocrats. For this group, the general
sensibility was that the origins of wealth were to be found first and foremost in land and agriculture. The
expanding role of industry, bringing markets and money in tow, was a secondary concern, but no less
important for our search for the moral or ethical organization of commercial activity. What we today refer
to, respectively, as political science and economics, was seen in the eighteenth century Age of
Enlightenment as a necessary melding of state and market in the pursuit of an environment more
conducive to the expansion of wealth and, thusly, national prosperity. The extent to which markets were,
or ought to be, free is the focus of questioning for these eighteenth century authors. First, Bernard
Mandeville penned The Fable of Bees (1714), with its focus on land and productivity. Where did wealth
come from? What segments of society were productive, or not? How and why? These issues underscored
the generally held notions of the physiocrats of greater Europe, and the English political economists
(sometimes referred to as "social statisticians") in particular.
The focus of thought then shifted away from England for a time, as France pursured philosophical
prescriptions to real and practical ailments which saw French power checked time and again by the
territorially smaller and less populous English nation. Accordingly, we will turn to François Quesnay and
his Tableau économique (1758) and Jacques Turgot's Réflexions sur la formation et la distribution des
richesses (1766) as the principle continental voices of Enlightenment economic theory. The functioning of
a national economy, the comparative advantages of agriculture and commerce/industry, and the broader
Enlightenment pursuit of improvement offer insight into the role and significance of markets and money
at the dawn of a new age of economic thought.
Finally, to conclude this investigation, we turn to Adam Smith. Oft quoted by modern politicians
and pundits but seldom read (or even understood) by any but academics, Smith offers a curious
dichotomy of treatises on the questions of market, money and morality. In his first treatise, and what
many consider to be his most important work, Smith's The Theory of Moral Sentiments (1759) developed
an epistemology of moral concerns, with particular interest in the various motivations for selfish and
rapacious man to divide his lot and share some part of his accumulation with the poor via the "invisible
hand." Seventeen years later, however, Smith released An Inquiry in the Nature and Causes of the Wealth
of Nations (1776). Where his earlier work articulated a propensity toward sharing driven by moral
consideration, Wealth of Nations was driven in large measure by the results of man's pursuit of selfinterest. Though unclear at the stage, it is expected that these "fraternal twins" of economic thought will
reveal an evolutionary fragmentation of western philosophy regarding considerations of markets and
morality.
In the end, it is hoped that this program will reveal an intellectual divorce between the secular and
the spiritual on questions of economic life. What began as abstract philosophical, and largely ethical,
concerns in the age of the Greeks and Romans took on a moral flavor with the advent of Christianity (and
Islam) in the Dark and Middle Ages. The fragmentation of Western religion in the sixteenth century,
especially as a byproduct of Calvinism, brought an evolutionary restoration of the ethical considerations
that framed the considerations of Aristotle and Tacitus. By the time the evolutionary cycle was complete –
as evidenced in the work of Adam Smith – Church had long since ceased to serve as arbiter and regulator
in the market arena. But was there still room – or even need – for such mediation and enforcement of
abstract principles? The hypothesis underscoring this program of reading is that there was not only a need,
but that three millennia of commentators accepted that the market could not be free, that social concerns
were paramount to profits, and that the changing terms of the debate over the truths of economics were
more a questioning of who should regulate and how that regulation should be executed rather than if there
should be regulation at all.
This program of study will thus be of importance both to illuminate the many issues addressed in
the World Civilizations survey, as well as in both halves of the United States survey. Today's students are
confronted with a choice in our national politics between a party of "self-reliance" and commercial
success and a party favoring limited state redistribution of national wealth. Each group references the
ideas articulated by the authors under consideration in this reading program, yet those same authors
cannot serve the interests of both factions simultaneously. Did Adam Smith really favor a market free of
regulation and government interference? Or did he, along with his philosopher predecessors, believe in
the need for the enforcement of moral and ethical codes on the functioning of the market? It is these
answers, once obtained, that I hope to bring to the students of Collin College.
BIBLIOGRAPHY
(Given in reading order)
Arisotle, Politics, Book I
Cornelius Tacitus, Annals, Book VI
Various, The Holy Bible (King James Translation)
Saint Thomas Aquinas, Summa Theologica (1274)
John Duns Scotus, Sententiae (1295)
Ibn Khaldun, Muqdimmah (1377)
Jean Calvin, Letter to Claude de Sachin (1545)
Thomas Mun, England's Treasure By Foreign Trade (1630?, 1664)
William Petty, A Treatise of Taxes and Contributions (1662),
Political Arithmetic (approx. 1676, posthum. pub. 1690)
Verbum Sapienti (1664, posthum. pub. 1691)
Sir Josiah Child, Brief Observations concerning Trade and the Interest of Money (1668)
A New Discourse of Trade (1668 and 1690)
James Denham-Steuart, Inquiry into the Principles of Political Economy (1767)
Bernard Mandeville, The Fable of the Bees (1714)
François Quesnay, Tableau économique (1758)
Jacques Turgot, Réflexions sur la formation et la distribution des richesses (1766)
Adam Smith, The Theory of Moral Sentiments (1759)
An Inquiry in the Nature and Causes of the Wealth of Nations (1776)
Calendar for Study Grant proposal:
Value and Values in Economic Thought:
A Survey of Primary Sources from Aristotle to the Onset of Industrialization
Fall 2012
Foundations of European & Catholic Moral Views of Markets and Exchange
Week 1
Aristotle, Politics, Book I
Week 2
Tacitus, Annals, Book IV
Weeks 3-4
Various(?), The Holy Bible (King James Translation)
Medieval Thought
Week 5
Aquinas, Summa Theologica
Week 6
Scotus, Sententiae
Week 7
Ibn Khaldun, Muqdimmah
Early Modern Thought - The Mercantilists
Week 8
Calvin, Letter to Claude de Sachin
Mun, England's Treasure By Foreign Trade
Week 9
Petty, The Collected Works of William Petty
Week 10
Child, Brief Observations Concerning Trade and the Interest of Money
A New Discourse of Trade
Week 11
Steuart, Inquiry in the Principles of Political Economy
Early Modern Thought - The Physiocrats
Week 12
Mandeville, The Fable of the Bees
Week 13
Quesnay, Tableau économique
Week 14
Turgot, Réflexions sur la formation et la distribution des richesses
Early-Modern Thought – Political Economy
Week 15
Smith, The Theory of Moral Sentiments ()
Week 16
Smith, An Inquiry in the Nature and Causes of the Wealth of Nations (1776)