The document provides information about an online course called "The School of Salamanca MOOC" offered by Universidad Francisco Marroquín. The course consists of 5 chapters that provide an overview of the School of Salamanca, an early modern intellectual movement in Spain that influenced modern Western civilization. It discusses topics like human rights, politics, economics, and influential thinkers. The document also provides context about the university and the course's structure, objectives, and activities to help students learn about the School of Salamanca and its impact on concepts in fields like economics and politics.

1. PART II

2. The School
of Salamanca
MOOC
The School of Salamanca is a
MOOC offered by Universidad
Francisco Marroquín that consists
of five chapters: an introduction, a
chapter each on the contributions
to thinking about human rights,
politics, and economics; and a
conclusion. It is an overview of
the School of Salamanca, the
main intellectual current of early
modern Spain. Learn about the
origins of the Hispanic liberal
tradition as well as the scope of its
fundamental influence on modern
Western Civilization. Win a badge
by successfully completing the
activities of the course.
In 2018 the course launches its
first edition: salamanca.ufm.edu

3. If you are interested in fields
like economics or politics, the
School of Salamanca is just
good homework. Studying
early modern thinking about
concepts like price inflation or
republicanism can help us to
understand and evaluate them.
Moreover, as an early modern
type of Hispanic liberalism, the
School of Salamanca can help
us to understand the ideas of
Enlightenment thinkers who
were influenced by them, such as
Locke, Montesquieu, or Jefferson.
Why should
we study
The School
of Salamanca?

4. The mission of Universidad
Francisco Marroquín (ufm.edu) is to
teach and disseminate the ethical,
legal, and economic principles of
a society of free and responsible
persons. In recent years the
university has expanded its use of
innovative technology in order to
encourage the learning experience
both on and off campus.
About Universidad
Francisco Marroquín

5. Eric Clifford Graf is a professor of literature at
Universidad Francisco Marroquín. He graduated
from the University of Virginia in 1997 with a PhD in
Spanish language and literature . He has worked at the
University of Virginia, The College of William & Mary,
the University of Chicago, the University of Illinois at
Urbana-Champaign, Smith College, Wesleyan University,
and Kershner Trading Group. He specializes in the
history of the novel, medieval and early modern Spain,
and literary, political, cultural, and economic theory.
He is author of the book Cervantes and Modernity
(Bucknell UP, 2007). In addition to numerous academic
essays on the poetry, theater, and narrative of Miguel de
Cervantes, he has also published on The Poem of the
Cid, Garcilaso de la Vega, Juan de Mariana, El Greco, San
Juan de la Cruz, Pedro de Calderón, José de Cadalso,
Vicente Aleixandre, Julio Cortázar, and Sigmund Freud.
Published academic essays
ufm.academia.edu/EricCliffordGraf
Other online courses
Discover Don Quijote de la Mancha
donquijote.ufm.edu/en
EricCliffordGraf
Professor

6. The course consists of five chapters
that students complete as they
use the e-learning resources in the
platform. This learning experience
is offered in English to disseminate
the ideas and cultural values around
the world.
Language
English
Effort
3 hours per week
Lenght
5 weeks
program
Academic

7. Course Syllabus
Chapter 1 Introduction
The School of Salamanca’s predecessors,
historical factors, and its founder, Francisco
de Vitoria
Chapter 2 Human Rights
Late-scholastic opinions on the rights of
indigenous peoples, women’s rights, religious
liberty, and slavery

8. Chapter 3 Politics
Late-scholastic thinking on regicide, popular sovereignty,
legal codes, parliamentary bodies, taxes, jurisdictional
conflicts, and constitutionalism
Chapter 4 Economics
Late-scholastic points of view on property rights,
monetary policy, free markets, theories of value, foreign
exchange, liquidity, etc.
Chapter 5 Conclusion
Juan de Mariana and the impact that the School
Salamanca has had on subsequent generations of
Europeans and Americans

9. Chapter 4economics
In this chapter Professor Graf will
explain late-scholastic points of
view on property rights, monetary
policies, free markets, theories of
value, and foreign exchange rates.
The online course includes a series
of resources to facilitate your
learning. Below is a list of activities
you will perform.
1. Watch the videos about the
economic topics that interested
the School of Salamanca.
2. Read the material provided in
PDF format in order to review the
chapter’s main ideas.
3. Share your impressions with
your colleagues by
participating in the discussion
forums.
4. Reinforce your knowledge
by taking the quizzes.
Part II
Professor Graf will explain
late-scholastic points of view
on another series of economic
topics: property rights, free
markets, theories of value,
oligopolies, just price theory,
and some of the era’s complex
financial instruments.

10. T
-10-
he School of Salamanca understood trade as a
source of wealth and social stability
Saravia, Mercado, Molina, and Mariana shared this view,
anticipating the ideas of Adam Smith and David Ricardo as well
as Madison’s Commerce Clause and Montesquieu’s notion of
doux commerce or “sweet commerce” (cf. Norbert Elias, Milton
Friedman, Steven Pinker, Matt Ridley, Niall Ferguson).
Adam
Smith
Madison
David
Ricardo
Montesquieu

11. Juan de
Mariana
-11-
To quote Mariana:
«Nada hay en la vida humana más
excelente que la buena fe, con la
cual se establecen las relaciones
comerciales y se constituye la sociedad
entre los hombres»
“There’s nothing more excellent
in human life than that good faith
by which commercial relations are
established and society among men is
constituted”
and «Si el comercio se suprimiera, ¿qué
habría más triste ni más infeliz que la
vida humana?»
“If commerce were to be suppressed,
what would be more sad or unhappy
than human life?”
(La dignidad real 216, 389).
Don Quijote is about this same lesson.
Juan de
Mariana

12. -12-
A few Salamancans, like
Villalón, clung to an antiquated
objective or labor theory of
value, whereby the price of
an item depends upon its
production costs, i.e., materials
and labor. That would later
be Karl Marx’s view. But most
Salamancans, such as Vitoria,
Juan de Medina (1490-1547),
De Soto, Saravia, Covarrubias,
Molina, Mariana, Suárez, and
Lugo, grasped that value is
subjective and based on the
relative utility that people
have for goods and services
(from St. Bernardino’s and St.
Antonino’s complacibilitas or
“capacity to satisfy”).
This would later be Böhm-
Bawerk’s view when he
refuted Karl Marx’s view.
Some may have had obscure
reasons for maintaining this
view, ranging from notions of
free will to Scripture (e.g., the
“Parable of the Talents” in Mt.
25.13-40).
Nevertheless, we should
not underestimate just how
modern this insight was: prices
depend not on objective costs
but, rather, on subjective
demand, both demand for
the items produced as well
as demand for the materials
and labor involved in their
production.

13. -13-
HuertadeSoto
After considering the alternatives,
some of the Salamancans
concluded that the morally just
prices of goods and services
are those determined by the
market. We should admit that
some, like De Soto, placed heavy
qualifications on this insight.
Others vaguely perceived that
somehow price controls could be
made to reflect the just price.

14. Juan
de Lugo
Juan de
Salas
Jerónimo
Castillo de Bobadilla
-14-
Nevertheless, still others, like Saravia
and Molina, were fairly unyielding
about scarcity and demand being
the sole determinants of prices.
Lugo and Juan de Salas (1553-1612)
even understood that the market is
always a dynamic process incapable
of obtaining any true equilibrium.
Many of the Salamancans were also
against monopolies, oligopolies, and
market interference by authorities.
Jerónimo Castillo de Bobadilla
(c.1547-c.1605), for example, insisted
that barring someone entry into a
market was immoral.

15. -15-
Frédéric
Bastiat
Sancho
Panza
All this thinking about labor,
value, and price allows readers to
appreciate the literary example
of the negotiation between Don
Quijote and Sancho regarding the
squire’s salary. Sancho wants money
to buy shoes for his children, but
Don Quijote has never read about
employment contracts in any novels
of chivalry. The School of Salamanca
also allows us to appreciate the
deep irony of Sancho’s last edicts
as Governor of the Isle of Barataria
by which he placed controls on the
prices of shoes and the salaries of
servants (see DQ 2.51). And when
we talk about the Isle of Barataria,
we must remember that the great
French classical liberal thinker
Frédéric Bastiat wrote a creative
sketch on the subject, a perfect
example of how the ideas of the
School of Salamanca made their way
north in all sorts of different formats.

16. -16-
The Salamancans also debated the difference between slavery
and compensated work, or to put it in the Aristotelian terms that
they used, they examined the difference between conventional
and natural slavery. On one hand, Vitoria’s contemporary and ally
Bartolomé de las Casas argued against slavery on natural, political,
and moral grounds.
Another interesting figure here is Francisco Marroquín Hurtado,
who tried to convince Charles V that the slaves working the lands
in the New World should be paid market wages. In Don Quijote,
Cervantes even criticized slavery in radically economic terms.
This anticipated the thinking of Thomas Hobbes (1588-1679), who
regarded labor as yet another commodity subject to the law of
supply and demand.
Bartolomé
de las Casas
Francisco
Marroquín

17. -17-
When Sancho threatens to go on strike, Sansón Carrasco, also
known as «perpetuo trastulo y regocijador de los patios de las
escuelas salmanticenses» “perpetual diversion and delight of
the courtyards of the schools of Salamanca,” offers his services
and suddenly Don Quijote sees a market:
«¿No te dijo yo,
Sancho, que me habían
de sobrar escuderos»
“Did I not tell you,
Sancho, that I would
have plenty of squires
from whom to choose?”
(2.7.683).
Cervantes recognized with Adam Smith and David Ricardo that
pay for work allows incentives, efficiencies, and competitive
advantages that coercion does not. The fact that labor was now a
commodity allowed Don Quijote and Sancho to overcome slavery
by negotiating a salary for the squire.

18. -18-
Is this early modern thinking about economics
in Spain an illusion? Might it be just a few
isolated sentences in obscure treatises that
focused mostly on theological matters? Perhaps
a vague response to so much gold and silver
arriving from the New World? The answer is no.
The Salamancans didn’t just think occasionally
and in the abstract about such matters; they
produced detailed treatises analyzing and
evaluating a range of complicated financial
instruments:
early modern variations on
what today we would
recognize as puts, calls,
collars, forwards, swaps,
credit guarantees, credit
sales, loans, and annuities.

19. -19-
There’s evidence that
mid-sixteenth century
Spaniards practiced double-
entry accounting and used
a discounted cash flow
analysis of investments. Their
derivatives, equity and debt
arrangements, accounting
practices, and financial
conventions anticipated
Wall Street. We should also
consider the ethical dilemmas
confronted by the Salamancans.
Saravia speculates that even
two highly unethical market
participants attempting to take
advantage of asymmetrical
information can transact in a
way that is mutually beneficial.
Wall Street

20. Nick
Szabo
-20-
Self-regulating!!! Did anyone
say “bitcoin” or “Nick Szabo”?
This is a vision of what
modern economists would
call a “lemon market.” The
Salamancans studied a world
of sophisticated merchants
and bankers, and they often
described the actions of
some well-intentioned
market regulators.
What is most interesting,
however, is that they also
described a self-regulating
marketplace in which
participants assumed
responsibility for obtaining
information and avoiding
unethical counterparties
who might damage their
reputations.

21. -21-
Why was the School of
Salamanca forgotten?
Writing mostly in Latin didn’t
help; the fact that they were
Catholics made Protestant
and post-Enlightenment
thinkers unwilling to cite them
as sources; and, similarly,
nationalistic allegiances made
Englishmen and Frenchmen
practically allergic to the idea
of crediting Spaniards with
anything. And as an academic,
I can tell you that there’s a
huge element of hubris here.
We always like to think we
are the first ones to think of
everything, which is almost
always false.
Thomas
Jefferson

22. -22-
What are the implications
of the economic activity
and theory of early modern
Spain?
It indicates a proto-liberal
Hispanic tradition that was
complex and influential.
Cervantes offers good
evidence of the scope of
this tradition. The first
modern novel turned out to
be an unexpected means
of transmitting the ideas
of the Salamancans to
classical liberals. Since
Montesquieu and
Jefferson read Don
Quijote, technically
speaking, they
didn’t have to read
Covarrubias or
If free markets are
a good thing, then
we might want to
understand what
went wrong.
Montesquieu
Saravia to be influenced by
the School of Salamanca.
They did, by the way, they
read texts by the School
of Salamanca as well as
Don Quijote. Finally, there
are implications here for
comparative history. Despite
a healthy merchant culture
around 1550, Spain went into
decline.

23. Analyze the content of the comic and participate in the
discussion forum.
What do “bear” and “bull” mean in the field of economics?
How do supply and demand determine market prices?
How can prices affect the quality of goods traded on the
market?
To enrich your learning experience it is important that you
ask interesting questions, formulate relevant comments,
and respond to the contributions of your classmates.
Chapter 4
Part II Activity

25. UFM New Media production
Universidad Francisco Marroquín
Executive Director
Script and Proffesor
E-learning Coordinator
Illustration
Editorial design
Comic Illustration
Stephanie Falla
Eric Clifford Graf
Lisa Quan
Sergio Miranda
Gabriella Noar
Sandy Rodríguez
Sandy Rodríguez
Carlos Rodríguez

26. Website salamanca.ufm.edu
Direction Calle Manuel F.Ayau (6ta Calle
final), zona 10 Guatemala, Guatemala 01010
Phone Number (+502) 2338-7849
Guatemala, October 2017
UFM thanks the following sponsors for their
generous support of this MOOC: Smith Family
Foundation, The Bottoms Family
Creative Commons Attribution-NonCommercial-ShareAlike 3.0.
(CC-BY-NCSA 3.0) Copying, distribution and public communication
is allowed, providing that the acknowledgement of the work is
maintained and it is not used for business. If it is transformed or
a secondary work is generated, it can only be distributed with an
identical license.