EE312 │ History

Thought
of Economic

WEEK: _3_

2021-2022

STUDENT’S NAME: _________________________________________

YEAR AND SECTION: _________________________________________

DATE RECEIVED: _________________________________________

TEACHER’S NAME: __MARY GRACE D. VALENZUELA, LPT, M-AE_

 I. Title

ECONOMIC THOUGHT IN THE MIDDLE-AGES (500-1500 AD)

II. Overview

Our topic for today is about the Economic Thought in the Middle-Ages (500-1500 AD). In this
period Scholasticism (the schoolmen) which refers to the school of economic thought developed in Europe
during the medieval period of 500-1500. Scholastic thinkers are known for their moral and philosophical
approach to the study of exchange, value and ownership within period. There are Six Economic Thinkers in
the ages where it gives more focus on the medieval economic writing wherein the interest in how men
should behave and how that behavior can be related to a larger conception of society was keen than more
matter-of-fact question of how men actually behave in their day-to-day living. The economics of time is
dominated by religious and social issues that play an important role in this medieval life.

III. Learning Outcomes

At the end of this module, you will be able to:

1. Know the life of Aquinas, Scotus and Buridan as economic thinkers of the middle-ages?
2. Discuss the main economic issues of Aquinas, Duns Scotus and Jean Buridan.
3. Explain the relevance of St. Tomas Aquinas quotation:” It is by its very nature unlawful to take payment
for the use money lent”.

IX. Self-Assessment Question

In this module we are going to discuss the main economic issues in the middle-ages, the contribution
of some philosophers in this era.
To see if you have basic knowledge about it, here is a pre-assessment test which you will answer
before you proceed to the discussion.

Pre-Assessment #1 (Not graded)

Task #1: Identification.
Instruction: Choose from the choices below the term that is best described in every item. Write your answers on
a piece of paper and let’s see if you got the correct answer as you read this module.

a. Thomas Aquinas b. John Duns/Duns Scotus c. Jean Buridan

________1. He looked Money at two angels, it’s metal value and it’s purchasing power.
________2. His Treatise Summa Theologica.
________3. Virtual creation of the modern theory of money.
________ 4. His Magnum Opus was “Sententiae”.
________5. He recognized time and place utility or usefulness of the commodity.
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 V. Discussion

Happy and Blessed Ahead Class! In this module we will discuss the economic thinkers under
Middle-Ages.

❖ THOMAS AQUINAS- (1225–1274)

• He was an Italian and Medieval theologian, philosopher and economic writer. He taught in
both Cologne and Paris, and was part of a group of Catholic scholars known as the Schoolmen, who
moved their enquiries beyond theology to philosophical and scientific debates.
• Aquinas understand that economic ideas of economists today is rely on Law of supply and demand,
subjective value theory and the theory of time
preference.
• His ideas about private property, trade, wages, division
of labor, usury and etc. were greatly improved from
that of his predecessors and this theory of “JUST
PRICE” (JUSTUM PRETIUM) was a definite
contribution he made in economic thought.
• Just Price a doctrine about the concept of value. He
recognized time and place utility or usefulness of the
commodity.
• His notable economic thought was “Just Price and
usury”
-To sell a thing for more than its worth, or to buy it for
less than its worth, is in itself unjust and unlawful”
Aquinas dealt with the concept of a just price, which
he considered necessary for the reproduction of the social order. Similar in many ways to modern
concept of long-run equilibrium, a just price was sufficient to cover the costs of production, including
the maintenance of a worker and his family.
He argued that it was a moral obligation of businesses to sell goods at a just price, he argued it was
immoral for seller to raise their prices simply because buyers were in pressing need for product.

• His Treatise SUMMA THEOLOGICA

- “It is by its very nature unlawful to take payment for the use of money lent”., this was practiced
today thru “5/6 or 20%, percentage of money lent from lending institution, like Card Inc.,2Help, TSPI,
and etc. that every barangay had these by means of “tulong pangkabuhayan” to a family who wants to
engage in businesses to have extra income but a matter of fact the money they had borrowed from the
lending company is double or triple interest paying back to them.
• Aquinas formal contribution to Aristotelian value theory was a two-pronged one in which one element
conditioned the other.
✓ First, he reaffirmed the double measure of goods (value in use versus value in exchange)
that. Aristotle had established;
✓ Second, he introduced wants into the price formula.
✓ Third contribution is especially important because it marked the earliest root of an analytical
demand theory of value. Aquinas argued that price varies with wants. Thus, indigentia
became a regulator of value. This contribution, however, was strictly formal.
• Aquinas viewed market forces as antagonistic to justice. It is difficult to reconcile the medieval notion of
“just price” with the modern notion of “market price”, since the former is generally defended on
normative grounds whereas the latter is held to be an objective result of impersonal forces. Certainly,
Aquinas language was open-ended on many points, furthering the popular notion that his analysis was
wrongheaded.

❖ JOHN DUNS (1265-1308)- KNOWN AS DUNS SCOTUS

• A Scottish catholic priest and Franciscan friar, university professor.

• He was a Scottish theologian and philosophical, influences by St. Thomas Aquinas and Aristotle.
 • As a catholic and secular thought he is known to his Doctrine
“Univocity of being, that existence is the most abstract concept we
have, applicable to everything that exists; the formal distinction a
way of distinguishing between different aspects of the same thing;
and the idea of haecceity, the property supposed to be in each
individual thing that makes is an individual.
• His Magnum Opus was “Sententiae”
• In his work Sententiae (1295), he thought it possible to be more
precise than Aquinas in calculating a just price, emphasizing the
costs of labor and expenses, although he recognized that the latter
might be inflated by exaggeration because buyer and seller usually
have different ideas of what a just price comprises. If people did
not benefit from a transaction, in Scotus’ view, they would not
trade. Scotus defended merchants as performing a necessary and
useful social role, transporting goods and making them available to
the public.
• The Economic Philosophy of Duns Scotus was a “Justice in Exchange”, in which it shows the
understanding of exchange, the legitimization of trade and the development of the church’s traditional
teaching on usury.

❖ JEAN BURIDAN (1300-1358)

• In latin his name was Johannes Buridanus, and He is a French Priest.
• He rose to become rector of the University of Paris and the lover
of the French Queen.
• He was renowned critic of Aristotle’s “Just Exchange” and an
originator of the metallic theory of money.
• For Buridan, money originates as useful commodity on the
market, and that the market will pick the medium of exchange,
almost always a metal if available, possessing the best qualities to
serve as money, such as portability, high value per unit weight,
divisibility and durability-qualities possessed most strikingly by
the precious metals’ gold and silver.
“Money is a market commodity”, and the value of that
money, just as in the case of other market commodities, “must
be measured by human need.” Just as the values of
exchangeable goods” are proportionate to human need, so
they will be proportionate to money, itself proportionate to
human need.”
• He looked Money at two angels
a.) It’s metal value
b.) It’s purchasing power
• Where in this money can varies, he said that aggregated, not individual, demand and supply determine
market prices, for him a just price was the society collectively not just individual; is willing to pay.
• Since Money is a Market Commodity, according to Buridan and other scholastics, Buridan provide a
sophisticated analysis of how common human need and utility resulted in market prices. They said that
the greater the need the higher the demand, the greater the value is a reduction in the supply of product
will cause its price on the market to rise. He also emphasized that the goods is more expensive where it
is not produced than where it is, since there is greater demand for it in their former place; again the
marginal concept is all to complete the analysis of demand, supply and price. And there are also
intimations of different valuations by market participants resulting in a single price, with varying
consumer and producer psychic surpluses for each participant.
• The main great contribution of Jean Buridan to economics was his virtual creation of the modern theory
of money. He continued the analysis of Thomas and Aristotle about the exchange value goods being
determined by consumer need or utility. Buridan pointed out that a house would never exchange for one
garment, since the builder would have to forego a year’s worth of food as much fewer valuable goods.

Opportunity Cost concept of cost of production and influence on Supply.

 Notes: Opportunity Cost is a loss of potential gain from other alternatives when one alternative is
chosen.
• In Exchange concept, Buridan believed that both parties should be benefit, and the trade is not, as many
people believe, a type of warfare in which one party benefits at the expenses of another. He stressed that
the two parties to a two-good exchange can both benefit even if the exchange is itself immoral and is to
be condemned on ethical or theological grounds.

VI. Summary/Key Points

The topic discusses was about the contributions of three middle-ages namely; St. Thomas Aquinas,
John Duns (Duns Scotus) and Jean Buridan. The economic thought of Aquinas is about the “Just Price and
usury” he said that it was a moral obligation of businesses to sell goods at a just price; he argued it was
immoral for seller to raise their prices simply because buyers were in pressing need for product. In the
economic thought of Duns Scotus, he believed that if people did not benefit from a transaction, they would
not trade. And he also defended merchants as performing a necessary and useful social role, transporting
goods and making them available to the public. While the economic thought of Jean Buridan, found the
theory of money as a market phenomenon and took money out of the mystique of being solely a creation of
the state, and put it on a par with other goods as a product of the market place.

VII. End of Module Assessment (EMA)

Gentle Reminders: All answers should be written legibly on a short bond paper/yellow paper. Take a
clear picture and send it to me via messenger chat. Submit your answers on or before Saturday, September 4,
2021 at 11:59pm.

Task #2: Short Essay.

Instruction: Answer the question. 10 points.
1. Differentiate and explain the economic ideas/thought of Thomas Aquinas, Jean Buridan and Dun
Scotus.
2. Discuss the relevance of St. Thomas Aquinas’ quotation: “It is by its very nature unlawful to take
payment for the use of money lent.”

Rubrics for Essay:

Criteria Excellent (90-100) Very Satisfactory Satisfactory (60- Needs
(80-89) 79) Improvement
(0-59)
Content (80%) The content answers The content answers The content The content
the question directly. the question directly.answers the does not
Demonstrates Demonstrates question. answer the
comprehension and comprehension and Demonstrates little question.
explanation is very explanation is clear. comprehension and
clear. does not explain.
Organization The essay is logical The essay is logical The essay is logical The essay is
and Grammar and well-organized. and organized. It is and organized. difficult to
(20%) It is consistent and consistent and can be Does not show understand.
can be easily understood. consistency.
understood.

VIII. Looking Ahead

In preparation for the next module, read books/e-books about the life, works and contribution to
Economics of Ibn Khaldun, Nicol Oresme and Antonin of Florence.
 IX. Self-Learning Module Evaluation

Rate your learning experience in using this module according to the following scale.

Put a check mark on your response.

 4 – I learned a lot from this module.

 3 – I learned just right.
 2 – I still need guidance on certain topics.
 1 – I did not understand anything.

X. References

• De Leon E.B. (1990). The History of Economic Thought

• www.google.com
• https://www.investopedia.com
• https://www.economicsnetwork.ac.uk

XI. Answers on Module 2

Pre-Assessment #1 (Not graded)

Task #1: Identification.
Instruction: Choose from the choices below the term that is best described in every item. Write your answers on
a piece of paper and let’s see if you got the correct answer as you read this module.

b. Plato b. Aristotle c. Xenophon

b. Aristotle 1. He believes that the money should be used to commensurate goods and services and act as
the ultimate equalizer.

a. Plato 2. He said that the primary wants of Man was food, shelter and clothing.

c. Xenophon 3. In his writing after Hesiod, he took the concepts of efficient management in which he
applied at the level of household, the producer, the military and the public administrator.

c. Xenophon 4. He proposed a tendency toward equilibrium in the economy where supply and demand shift
and react accordingly.

b. Aristotle 5. He was the first economist and systematic philosopher, the first philosopher to tackle
economic issues, providing a human and social setting for economic reality. He also called "an
originator of economic analysis “.
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