ABSTRACT
In the sixteenth century Spain was the world power. From that time there remain memories of great discoveries, of Spanish theatre and the art of the siglo d’oro, as well as of the language which is still spoken in former colonies. However, very few who are not specialists know of Spanish economics, although the modern era is thought to have begun with Columbus’ crossing of the Atlantic and the resulting shift in trade routes which led to the formation of a world economy. Economic thought and activity seems to have remained bound fast within the framework of a rigid Catholicism inherited from the medieval era: severe rejection of usury, loyalty to noble ideals, charity in dealing with poverty. But there was no unleashing of an independent economic rationality as a driving force, and no economic freedom facilitating economic development as known elsewhere since the eighteenth century. Nevertheless, the opposing impulses of spiritual self-assertion in Counter Reformation and the unheard-of territorial expansion due to trade, war and conquest led to quite remarkable economic reflections. At a time when globalization seems to be breaking down remaining local economic and cultural connections, consideration of an epoch characterized by a renewed and intense religious experience and attempts of strengthening the embedding of the economy deserves special attention. The Spanish Scholastics in Spain produced their most important work only
around 1550, connecting church and law in a manner elsewhere in Europe already in decline (Grice-Hutchinson 1952, p. 40). In the 1530s Vitoria was already attempting to adapt law to the needs of the Spanish empire. Soto wrote a famous treatise about aid to the poor while Spain starved in the 1540s, and also in 1553 his De iustitia et iure – a text that would be read for the next 200 years – on monetary questions. Diego de Covarrubias, a student of Azpilcueta, was known in Italy as a specialist in Roman law. GriceHutchinson has described the development of the purchasing power theory of exchange rates as the most original achievement of this group; it can be attributed primarily to Azpilcueta. Larraz Lopez (1943), who was the first to direct attention to the connections between the economists of the School of
Salamanca, describes their thinking roughly as follows (ibid., pp. 67ff.): Xenophon observed in the Poroi 1 that the value of goods ultimately decreased when more was produced, although this was not true of silver, which as money and also as jewellery always found buyers. Aristotle, by contrast, viewed money as a commodity and Thomas Aquinas, considering its value, already referred to the money supply. Antoninus of Florence recognized that hoarding diminished whenmore goods could be purchased for the same coin, and Copernicus’ quantity theory of money, dating from 1619, was even more precisely formulated. It is impossible to determine a clear beginning to the quantity theory of
money, and Azpilcueta does not lay claim to being the originator – in contrast to Jean Bodin, to whom the discovery of quantity theory is sometimes falsely ascribed. On the contrary, the phenomenon of the varying valuation of money in different countries and the resulting trade in currencies by means of letters of credit was for him so familiar that he was able to formulate an astute and illuminating representation of purchasing power parities: the amount of precious metal in circulation in a country determines its purchasing power, and precious metals gravitate to wherever their purchasing power is greatest. In the colonies price increases first became apparent with the exploitation
of the newly-discovered mines. For example, Popescu2 refers to a Juan de Matienzo, who was born in Valladolid in 1520, who had a law license and lived in America from 1561 onward. He stated: ‘Panis eiusdem naturae est in Hispania et apud Indios, sed maiori hic pretio venditur quam in Hispania, propter indigentiam et argenti aurique abundantiam, quae causae augendi pretium’ (Popescu 1986, p. 168).3 Azpilcueta had formulated his ideas before Matienzo left for America; and we cannot prove that his insights concerning quantity theory were based on news from overseas experiences abroad, but such a conclusion seems plausible. In Catholic Europe and in Latin America the economic thought of the
Spanish late-Scholastics and especially of the School of Salamanca was influential until well into the Mercantile period. In Latin America its influence was felt into the late eighteenth and early nineteenth centuries. Popescu (1986, p. 190) writes of Azpilcueta: ‘El ‘Manual de Confesores’ era uno de los libros predilectos de las bibliotecas públicas y particulares de todas las provincias de las Indias.’4
