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Special CEQLS Lecture: Alejandro A. Chafuen: Christian Roots of the Free Society



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Konzervatívny inštitút M. R. Štefánika s podporou Nadácie Tatra banky a v spolupráci s ďalšími partnermi organizovali dňa 18. septembra 2012 v Ivanke pri Dunaji špeciálnu prednášku v rámci cyklu prednášok CEQLS. Našim hosťom bol Alejandro A. Chafuen, prezident Atlas Economic Research Foundation (USA). Viac informácií nájdete na

Conservative Institute organized another of the CEQLS Lectures: Alejandro A. Chafuen, President of The Atlas Economic Research Foundation (USA), was our guest on September 18, 2012 in Ivanka pri Dunaji. More information is available at

Special CEQLS Lecture: Alejandro A. Chafuen: Christian Roots of the Free Society

  1. 1. Christian Roots of the Free Economy Dr. Alejandro Chafuen Acton Institute, Kolegium Antona Neuwirtha Slovakia September 18, 2012
  2. 2. Saint Augustine (354-430)
  3. 3. Saint Augustine (354-430) “The vices are of the businessman himself, not of business in general”
  4. 4. Domingo de Guzmán, founder of the Dominican Order  Domingo de Guzmán (1170-1221)
  5. 5.  The Church of the thirteenth century shows a marked development, on its institutional side, of the principle and practice of representation.  The great Orders of the Friars are penetrated by representation. It appears first in the Dominicans: it is copied from them by the Franciscans. In the same century representation begins to appear in the State. In Spain, indeed, it has already appeared in the last half of the twelfth century: in France it does not properly appear, except in local assemblies, until the beginning of the fourteenth.” (Barker, p. 7)
  6. 6.  Benedictines, Franciscans, and other religious orders adopted representative government  The Jesuits, the Ratio Studiorum (1581- 1599)
  7. 7. Saint Thomas Aquinas (1226-1274)
  8. 8. Commercial activities useful for society: •For the conservation and storing of goods •For the importation of useful goods that are necessary for the republic •For the transportation of goods from places where they are abundant to places where they are scarce
  9. 9. The importance of Private Property  Consistent with Scripture  Inspired by Aristotle  Further developed by other authors became the most essential institution of a free society
  10. 10.  Aquinas in his Summa, II-II, Q. 66, art. 2, "Augustine says: The people styled apostolic are those who arrogantly claimed this title for themselves because they refused to admit married folk or property owners to their fellowship, arguing from the model of the many monks and clerics in the Catholic Church ( De Haeresibus 40). But such people are heretics because they cut themselves off from the Church by alleging that those who, unlike themselves, marry and own property have no hope for salvation."
  11. 11. "First, because each person takes more trouble to care for something that is his sole responsibility than what is held in common or by many for in such a case each individual shirks the work and leaves the responsibility to somebody else, which is what happens when too many officials are involved. Second, because human affairs are more efficiently organized if each person has his own responsibility to discharge; there would be chaos if everybody cared for everything. Third, because men live together in greater peace where everyone is content with his things. We do, in fact, notice that quarrels often break out amongst men who hold things in common without distinction."
  12. 12. Aquinas quoting Augustine on Value  As Augustine says (De Civ. Dei xi, 16) the price of things salable does not depend on their degree of nature, since at times a horse fetches a higher price than a slave; but it depends on their usefulness to man. Hence it is not necessary for the seller or buyer to be cognizant of the hidden qualities of the thing sold, but only of such as render the thing adapted to man's use, for instance, that the horse be strong, run well and so forth. Such qualities the seller and buyer can easily discover.
  13. 13. Just Price  Aquinas notion of just price was influenced by a theory of value that states that the value we place on goods depends on the utility we derive from them. Since our needs and desires are subjective, utility is subjective as well. In their discourses on value, St. Albert the Great, and later St. Thomas, included the element of "common estimation"
  14. 14. Just price not based on objective value  “The relevant part of the argument on just price— the price that assures the „equivalence‟ of commutative justice—is strictly Aristotelian . . .St. Thomas was a s far as was Aristotle from postulating the existence of a metaphysical or immutable „objective value.” (Schumpeter)  St. Thomas Aquinas' words, "any exchange is for the mutual benefit of both parties with the result that they are better off than previously.“ [II-II, q. 77]
  15. 15.  “the just price of things is not fixed with mathematical precision, but depends on a kind of estimate, so that a slight addition or subtraction would not seem to destroy the equality of justice.” Qu. 77, art 2, resp. obj 2
  16. 16. Other economic questions addressed by Aquinas  Profits from trade  Money as a medium of exchange  Interest rates  Distributive Justice
  17. 17. Aquinas on Distributive Justice  St. Thomas noted that  in distributive justice something is given to a private individual, in so far as what belongs to the whole is due to the part, and in a quantity that is proportionate to the importance of the position of that part in respect of the whole. Consequently, in distributive justice a person receives all the more of the common goods, according as he holds a more prominent position in the community. This prominence in an aristocratic community is gauged according to virtue, in an oligarchy according to wealth, in a democracy according to liberty, and in various ways according to various forms of government.  The tradition of treating wages as a matter of commutative justice similar to the exchange of other economic goods can be traced to St. Thomas Aquinas, who stated that wages are the natural remuneration for labor "almost as if it were the price of the same" (Quasi quoddam pretium ipsius).
  18. 18. Aquinas justification of profits  1. To provide for the businessman's household.  2. To help the poor.  3. To ensure that the country does not run short of essential supplies.  4. To compensate the businessman's work.  5. To improve the merchandise.  He also ascribed legitimacy to profits obtained from price variations in response to local changes as well as those earned through the lapse of time. Furthermore, he allowed for profits that would compensate the risks of transport and delivery.
  19. 19. Commercial Profits: Should a merchant divulge that a shipment of goods will be soon coming to port?
  20. 20. Saint Bernardino of Siena, (1380-1444)
  21. 21. Saint Francis and the Demon
  22. 22. Private Property: •Better Care •Less Fraud and confusion •Better Order •More Peaceful •Makes the practice of charity possible
  23. 23. 1)Virtuositas (Objevtive Value in Use) 2)Raritas (Scarcity) 3)Complacibilitas (Desirablity, Subjective Value in Use)
  24. 24. Profits Criticized Duns Scotus O.F.M. (1265-1308) who argued that businessmen were so useful that the good prince should see that they earn a just profit Profits, if they result from market prices, should not be limited. Losses should be born by the businessman
  25. 25. St Bernardine contribution to the virtues of managers and entrepreneurs •Industria (diligence, efficiency) •Solicitudo (Responsibility) •Labores (labor) •Pericula (willingness to assume risks) •“The rational and orderly conduct of business was a virtue.”
  26. 26. Wages •Wages should be determined as any other prices: common estimation, supply and demand, with no fraud or coercion •Should be paid in cash unless stated otherwise by contract •Should not be paid in debased currency (usually clipped or lower content silver coins) •Not sympathetic of labor unions •Strong condemnation of cabbaging/pilfering •No consideration of family wage
  27. 27. Distributive Justice: Maintenance and distribution of goods held in common (taxes, government appointments, provision of justice) Did not deal with distribution of income (wages, profits, rent), major mistake by Raymond De Roover, author of the best analysis of these authors San Bernardino of Siena and San‟t Anotnino of Florence, Harvard, 1967
  28. 28. Paris
  29. 29. University of Salamanca
  30. 30. Salamanca  The University of Salamanca had a strong influence in most of Europe, including in the English speaking nations.  The English hierarchy sponsored a college for the training of priests, the Minor College of St. Thomas of Canterbury, based at the University of Salamanca in 1510.  The Irish, in 1592, established the Colegio de Nobles Irlandeses or the “Royal College of Irish Nobles.” It became the training ground of many notable Irish clergy and hierarchy. Although administered by Spanish Jesuits, it always had an Irish Jesuit as vice rector. By 1584, Salamanca had between 6 and 7 thousand students. Its influence was immense.
  31. 31. Francisco de Vitoria, O.P. (c. 1495-1560)
  32. 32. University of Alcalá de Henares (Complutense)
  33. 33. College of Rome (Suárez, Mariana, Bellarmine)
  34. 34. The Roman College  The Roman College, founded in 1551 was especially influenced by Salamanca. It was originally labeled “a free school of grammar, humanities and Christian doctrine,” “free” meant gratis, the original Latin word used in its description. The college had several Spanish born luminaries among its greatest professors.
  35. 35. Salamanca influenced the teachings at the first Jesuit Universities  Messina, Palermo, Naples, Gandia, Salama nca, Alcalà, Valladolid, Lisbon, Billom, Vienn a; Cologne, Munich, Prague, Innsbruck, Douai, Bruges, Antwerp, Liège.  By 1706 they had 750 colleges and Universities  96 in Latin America before their suppression
  36. 36. Increased recognition of the School of Salamanca  F. A. Hayek, the Nobel laureate, frequently recognized their scholarly work.  Lord Acton wrote that the greater part of the liberal ideas of Milton, Locke, and Rousseau, may be found in the works of the Salamanca Jesuits.  Raymond De Roover, Marjorie Grice- Hutchinson, Murray Rothbard, and Joseph Schumpeter, recognized the major contributions of the “School of Salamanca,” not only the Jesuits, to economics.
  37. 37. Eternal or Divine Law (God’s plan to lead all creation to its end) Natural Law (Intelligent creatures’ participation in eternal law or what reason tells them about the nature of things) Economics Ethics Influence Political Economy Economic Doctrine Economic Ethics
  38. 38. Relevant contributions to the free economy  their focus on the human person as an individual being distinguished by its freedom, its social inclination and spiritual component  their emphasis on the importance of private property for a more peaceful, productive and ethical social order  their conclusions about the importance of the right to trade, both nationally and internationally
  39. 39. Relevant contributions to the free economy  the relevance of sound money, both for the need to preserve the private property of cash holders as well as the stability of its value so it would aid rather than hinder trade  their analyses equating the just price with market prices devoid of fraud, monopoly or coercion  their treatment of wages, profits and rents as belonging to commutative justice (contracts) rather than distributive justice (which only dealt with justice in the provision and distribution of goods held in common by a family, organization or political body)  and finally, their careful distinction between legal and moral obligations and punishments.
  40. 40.  Rights: the consequence of God‟s law, not God‟s grace  Vitoria described four different aspects of law: eternal, natural, positive, and “international” or Ius Gentium. Vitoria developed even further some views hinted in the writings of St. Thomas Aquinas and stressed that the authority to exercise power comes from the community, usually through the operations of its legislative power. Vitoria‟s views on the origin of rights led to the conclusion that sin did not diminish one‟s right to private property.
  41. 41.  Father Teófilo Urdanoz “no one has realized, at least up to now, that Vitoria‟s vision of the right to free communication and unrestricted foreign relations represent an explicit advance of the principles of economic neoliberalism and worldwide free market.”
  42. 42. Christian contributions to globalization  Its stress on the universality of moral laws  Its evangelizing spirit “Christ taught the apostles and us to go out into the whole world and preach the Gospel “  The teaching and actions of hierarchy, clergy and members
  43. 43. Vitoria‟s principles  “Native princes cannot prevent their subjects from trading with the Spaniards.”  “Eternal, natural, and positive human law (ius gentium) favors international trade. To abjure it would violate the golden rule.”  Barriers against trade can be “iniquitous and against charity.” Quoted Ovid “Man is not a wolf for other men.”  “Nature has established a certain bond between men.”
  44. 44. Seville
  45. 45. Hispaniola
  46. 46. Hispaniola
  47. 47.  Free Trade as a Human Right
  48. 48. Samuel Pufendorf (1632-1694)  Criticized Vitoria Liberal views: “Franciscus a Victoria is certainly false when he maintains: “the law on nations allows every man to carry on trade in the provinces of others by importing merchandise which they lack and exporting gold and silver, as well as other merchandise, in which they abound.”
  49. 49. Other Hispanic Scholastics
  50. 50. Martin De Azpilcueta
  51. 51. Tomás de Mercado (c. 1525-1575), Mastrers in México
  52. 52. Luis de Molina
  53. 53. Domingo de Bañez, O.P. (1528-1604)
  54. 54. Domingo de Soto, O.P. (1497- 1560 )
  55. 55. Domingo de Soto  Repeats St. Augustine‟s point: trade “is like eating, a morally indifferent act, which can be good or bad depending the ends and the circumstances”  “Commerce is necessary for the republic. Not all the provinces have the goods they need in abundance. On the contrary, due to climates some have in abundance the fruits and labors which are scarce in others and vice versa.”
  56. 56. Juan de Mariana, S.J. (Money, Public Finance)
  57. 57. Francisco Suárez, SJ, Juridical Order, Rule of Law
  58. 58. Robert Bellarmine, S.J. Limits to Government Power
  59. 59.  Bellarmine wrote some of the most influential works. Rev. John C. Rager addressed Bellarmine‟s political philosophy on an essay entitled “Catholic Sources and the Declaration of Independence.” (Rager, 1930) His piece compared essential sentences from the Declaration of Independence with similar quotes from St. Thomas Aquinas and then Blessed Robert Bellarmine. The parallels are striking.
  60. 60. Q&A  Thanks for your attention!
  61. 61. Saint Boniface cutting the “sacred” oak
  62. 62. Juan de Matienzo (1520-1579) Chuquisaca [today Sucre]