The just price is a theory of ethics in economics that attempts to set standards of fairness in transactions. With intellectual roots in ancient Greek philosophy, it was advanced by Thomas Aquinas based on an argument against usury, which in his time referred to the making of any rate of interest on loans. It gave rise to the contractual principle of laesio enormis .
Ethics or moral philosophy is a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong conduct. The field of ethics, along with aesthetics, concerns matters of value, and thus comprises the branch of philosophy called axiology.
Economics is the social science that studies the production, distribution, and consumption of goods and services.
Ancient Greece was a civilization belonging to a period of Greek history from the Greek Dark Ages of the 12th–9th centuries BC to the end of antiquity. Immediately following this period was the beginning of the Early Middle Ages and the Byzantine era. Roughly three centuries after the Late Bronze Age collapse of Mycenaean Greece, Greek urban poleis began to form in the 8th century BC, ushering in the Archaic period and colonization of the Mediterranean Basin. This was followed by the period of Classical Greece, an era that began with the Greco-Persian Wars, lasting from the 5th to 4th centuries BC. Due to the conquests by Alexander the Great of Macedon, Hellenistic civilization flourished from Central Asia to the western end of the Mediterranean Sea. The Hellenistic period came to an end with the conquests and annexations of the eastern Mediterranean world by the Roman Republic, which established the Roman province of Macedonia in Roman Greece, and later the province of Achaea during the Roman Empire.
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The argument against usury was that the lender was receiving income for nothing, since nothing was actually lent, rather the money was exchanged. And, a dollar can only be fairly exchanged for a dollar, so asking for more is unfair. Aquinas later expanded his argument to oppose any unfair earnings made in trade, basing the argument on the Golden Rule. The Christian should "do unto others as you would have them do unto you", meaning he should trade value for value. Aquinas believed that it was specifically immoral to raise prices because a particular buyer had an urgent need for what was being sold and could be persuaded to pay a higher price because of local conditions:
Aquinas would therefore condemn practices such as raising the price of building supplies in the wake of a natural disaster. Increased demand caused by the destruction of existing buildings does not add to a seller's costs, so to take advantage of buyers' increased willingness to pay constituted a species of fraud in Aquinas's view.
A natural disaster is a major adverse event resulting from natural processes of the Earth; examples are floods, hurricanes, tornadoes, volcanic eruptions, earthquakes, tsunamis, and other geologic processes. A natural disaster can cause loss of life or damage property, and typically leaves some economic damage in its wake, the severity of which depends on the affected population's resilience and also on the infrastructure available.
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law, a criminal law, or it may cause no loss of money, property or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements.
Aquinas believed all gains made in trade must relate to the labour exerted by the merchant, not to the need of the buyer. Hence, he condoned moderate gain as payment even for unnecessary trade, provided the price were regulated and kept within certain bounds:
In Aquinas' time, most products were sold by the immediate producers (i.e. farmers and craftspeople), and wage-labor and banking were still in their infancy. The role of merchants and money-lenders was limited. The later School of Salamanca argued that the just price is determined by common estimation which can be identical with the market price -depending on various circumstances such as relative bargaining power of sellers and buyers- or can be set by public authorities[ citation needed ]. With the rise of Capitalism, the use of just price theory faded, largely replaced by the microeconomic concept of supply and demand from Locke, Steuart, Ricardo, Ibn Taymiyyah, and especially Adam Smith. In modern economics regarding returns to the means of production, interest is seen as payment for a valuable service, which is the use of the money, though most banking systems still forbid excessive interest rates.
The School of Salamanca is the Renaissance of thought in diverse intellectual areas by Spanish and Portuguese theologians, rooted in the intellectual and pedagogical work of Francisco de Vitoria. From the beginning of the 16th century the traditional Catholic conception of man and of his relation to God and to the world had been assaulted by the rise of humanism, by the Protestant Reformation and by the new geographical discoveries and their consequences. These new problems were addressed by the School of Salamanca. The name refers to the University of Salamanca, where de Vitoria and other members of the school were based.
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system and competitive markets. In a capitalist market economy, decision-making and investments are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Likewise, during the rapid expansion of capitalism over the past several centuries the theory of the just price was used to justify popular action against merchants who raised their prices in years of dearth. The Marxist historian E. P. Thompson emphasized the continuing force of this tradition in his pioneering article on the "Moral Economy of the English Crowd in the Eighteenth Century."Other historians and sociologists have uncovered the same phenomenon in variety of other situations including peasants riots in continental Europe during the nineteenth century and in many developing countries in the twentieth. The political scientist James C. Scott, for example, showed how this ideology could be used as a method of resisting authority in The Moral Economy of the Peasant: Subsistence and Rebellion in Southeast Asia.
Edward Palmer Thompson was a British historian, writer, socialist and peace campaigner. He is probably best known today for his historical work on the British radical movements in the late 18th and early 19th centuries, in particular The Making of the English Working Class (1963).
A moral economy is an economy that is based on goodness, fairness, and justice, as opposed to one where the market is assumed to be independent of such concerns. The concept was an elaboration by English historian E.P. Thompson, from a term already used by various eighteenth century authors, who felt that economic and moral concerns increasingly seemed to drift apart.
James C. Scott is an American political scientist and anthropologist. He is a comparative scholar of agrarian and non-state societies, subaltern politics, and anarchism. His primary research has centered on peasants of Southeast Asia and their strategies of resistance to various forms of domination. The New York Times described his research as "highly influential and idiosyncratic".
Although the Imperial Roman Code, the Corpus Juris Civilis had stated that the parties to an exchange were entitled to try to outwit one another,the view developed that a contract could be unwound if it was significantly detrimental to one party: if there were abnormal harm (laesio enormis). This meant that if an agreement was significantly imbalanced to the detriment of one party, the courts would decline to enforce it, and have jurisdiction to reverse unjust enrichment. Through the 19th century, the codifications in France and Germany declined to adopt the principle while common law jurisdictions attempted to generalise the doctrine of freedom of contract. However, in practice, and increasingly over the 20th century and early 21st century, the law of consumer protection, tenancy contracts, and labour law was regulated by statute to require fairness in exchange. Certain terms would be compulsory, others would be regarded as unfair, and courts could substitute their judgment for what would be just in all the circumstances.
The Corpus JurisCivilis is the modern name for a collection of fundamental works in jurisprudence, issued from 529 to 534 by order of Justinian I, Eastern Roman Emperor. It is also sometimes referred to as the Code of Justinian, although this name belongs more properly to the part titled Codex Justinianus.
In contract law, unjust enrichment occurs when one person is enriched at the expense of another in circumstances that the law sees as unjust. Where an individual is unjustly enriched, the law imposes an obligation upon the recipient to make restitution, subject to defences such as change of position. Liability for an unjust enrichment arises irrespective of wrongdoing on the part of the recipient. The concept of unjust enrichment can be traced to Roman law and the maxim that "no one should be benefited at another's expense": nemo locupletari potest aliena iactura or nemo locupletari debet cum aliena iactura.
Freedom of contract is the freedom of private or public individuals and groups to form nonviolent contracts without government restrictions. This is opposed to government restrictions such as minimum- or maximum-wage laws, competition laws, economic sanctions, restrictions on price fixing, or restrictions on contracting with second-class citizens or undocumented workers. The freedom to contract is the underpinning of laissez-faire economics and is a cornerstone of free-market libertarianism. Through freedom of contract, individuals possess a general freedom to choose with whom to contract, whether to contract or not, and on which terms to contract.
In economics, a free market is a system in which the prices for goods and services are determined by the open market and by consumers. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority and from all forms of economic privilege, monopolies and artificial scarcities. Proponents of the concept of free market contrast it with a regulated market in which a government intervenes in supply and demand through various methods such as tariffs used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.
Interest, in finance and economics, is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. It is distinct from a fee which the borrower may pay the lender or some third party. It is also distinct from dividend which is paid by a company to its shareholders (owners) from its profit or reserve, but not at a particular rate decided beforehand, rather on a pro rata basis as a share in the reward gained by risk taking entrepreneurs when the revenue earned exceeds the total costs.
A price is the quantity of payment or compensation given by one party to another in return for one unit of goods or services. A price is influenced by both production costs and demand for the product. A price may be determined by a monopolist or may be imposed on the firm by market conditions.
Usury is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. The term may be used in a moral sense—condemning, taking advantage of others' misfortunes—or in a legal sense, where an interest rate is charged in excess of the maximum rate that is allowed by law. A loan may be considered usurious because of excessive or abusive interest rates or other factors defined by a nation's laws. Someone who practices usury can be called a usurer, but in contemporary English may be called a loan shark.
In finance, a futures contract is a standardized forward contract, a legal agreement to buy or sell something at a predetermined price at a specified time in the future, between parties not known to each other. The asset transacted is usually a commodity or financial instrument. The predetermined price the parties agree to buy and sell the asset for is known as the forward price. The specified time in the future—which is when delivery and payment occur—is known as the delivery date. Because it is a function of an underlying asset, a futures contract is a derivative product.
A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public company can be listed on a stock exchange, which facilitates the trade of shares, or not. In some jurisdictions, public companies over a certain size must be listed on an exchange.
In Karl Marx's critique of political economy, commodity fetishism is the perception of the social relationships involved in production not as relationships among people, but as economic relationships among the money and commodities exchanged in market trade. As such, commodity fetishism transforms the subjective, abstract aspects of economic value into objective, real things that people believe have intrinsic value.
A real estate broker, real estate agent or realtor is a person who represents sellers or buyers of real estate or real property. While a broker may work independently, an agent usually work under a licensed broker to represent clients. Brokers and agents are licensed by the state to negotiate sales agreements and manage the documentation required for closing real estate transactions. In North America, some brokers and agents are members of the National Association of Realtors (NAR), the largest trade association for the industry. NAR members are obligated by a code of ethics that go above and beyond state legal requirements to work in the best interest of the client. Buyers and sellers are generally advised to consult a licensed real estate professional for a written definition of an individual state's laws of agency, and many states require written disclosures to be signed by all parties outlining the duties and obligations.
Laesio enormis is a legal doctrine that gives a contracting party the ability to rescind an agreement if the price of exchange is less than a certain sum of its actual value. The principle was developed as a way to ensure that people received a just price in exchange, and in opposition to the Imperial Roman view, found in the Corpus Juris Civilis, that the parties to an exchange were entitled to try to outwit one another.
A requirements contract is a contract in which one party agrees to supply as much of a good or service as is required by the other party, and in exchange the other party expressly or implicitly promises that it will obtain its goods or services exclusively from the first party. For example, a grocery store might enter into a contract with the farmer who grows oranges under which the farmer would supply the grocery store with as many oranges as the store could sell. The farmer could sue for breach of contract if the store were thereafter to purchase oranges for this purpose from any other party. The converse of this situation is an output contract, in which one buyer agrees to purchase however much of a good or service the seller is able to produce.
The Summa Theologiae is the best-known work of Thomas Aquinas. Although unfinished, the Summa is "one of the classics of the history of philosophy and one of the most influential works of Western literature." It is intended as an instructional guide for theology students, including seminarians and the literate laity. It is a compendium of all of the main theological teachings of the Catholic Church. It presents the reasoning for almost all points of Christian theology in the West. The Summa's topics follow a cycle: God; Creation, Man; Man's purpose; Christ; the Sacraments; and back to God.
A market is one of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate trade and enable the distribution and resource allocation in a society. Markets allow any trade-able item to be evaluated and priced. A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights of services and goods. Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale.
Domingo de Soto was a Dominican priest and Scholastic theologian born in Segovia, Spain, and died in Salamanca at the age of 66. He is best known as one of the founders of international law and of the Spanish Thomistic philosophical and theological movement known as the School of Salamanca.
In economics, competition is a condition where different economic firms seek to obtain a share of a limited good by varying the elements of the marketing mix: price, product, promotion and place. In classical economic thought, competition causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).
Tomás de Mercado (1525–1575) was a Spanish Dominican friar and both an economist and a theologian, best known for his book Summa de Tratos y Contratos of 1571. Together with Martín de Azpilcueta he founded the economic tradition of "Iberian monetarism"; both form part of the general intellectual tradition often known as "Late Scholasticism", or the School of Salamanca.
This article contains a selection of thoughts of Thomas Aquinas on various topics. It is not intended as a complete account of Aquinas's thought. Within Aquinas' thought is included the philosophical school of Thomism.
Thomas Aquinas was an Italian Dominican friar, Philosopher, Catholic priest, and Doctor of the Church. He is an immensely influential philosopher, theologian, and jurist in the tradition of scholasticism, within which he is also known as the Doctor Angelicus and the Doctor Communis. The name Aquinas identifies his ancestral origins in the county of Aquino in present-day Lazio, Italy. He was the foremost classical proponent of natural theology and the father of Thomism; of which he argued that reason is found in God. His influence on Western thought is considerable, and much of modern philosophy developed or opposed his ideas, particularly in the areas of ethics, natural law, metaphysics, and political theory.
Chrematistics, or the study of wealth or a particular theory of wealth as measured in money, has historically had varying levels of acceptability in Western culture. This article will summarize historical trends.
The Latin Church, also known as the Western Church or the Roman Catholic Church, is the largest particular church sui iuris of the Catholic Church, employing the Latin liturgical rites. It is one of 24 such churches, the 23 others forming the Eastern Catholic Churches. It is headed by the bishop of Rome, the pope – traditionally also called the Patriarch of the West – with cathedra in this role at the Archbasilica of Saint John Lateran in Rome, Italy. The Latin Church traces its history to the earliest days of Christianity through its direct leadership under the Holy See, founded by Peter and Paul, according to Catholic tradition.
The philosophy, theology, and fundamental theory of canon law are the fields of philosophical, theological (ecclesiological), and legal scholarship which concern the place of canon law in the nature of the Catholic Church, both as a natural and as a supernatural entity. Philosophy and theology shape the concepts and self-understanding of canon law as the law of both a human organization and as a supernatural entity, since the Catholic Church believes that Jesus Christ instituted the church by direct divine command, while the fundamental theory of canon law is a meta-discipline of the "triple relationship between theology, philosophy, and canon law".