ClaudiaJefferiesAndyDenis.PDF

Was the School of Salamanca proto-Austrian? Claudia Jefferies Andy Denis Department of Economics, City University London (claudia.jefferies.1@city.ac.uk; a.m.p.denis@city.ac.uk) 10 October 2015 Abstract In this paper we challenge Murray Rothbard’s interpretation of the School of Salamanca as proto- Austrian. We argue that Scholasticism is in goals and methods profoundly different from any modern school of economics, and that it is mistaken to use the Austrian school as a standard against which the Salamancans are to be appraised. Further, Rothbard’s interpretation is vitiated by a misconception of the specificity of the Austrian School: while the Salamancans bequeath a lasting heritage for 21st century economists, it is a broad contribution, one for many schools, and not at all one specific to the Austrian standpoint. Finally, the natural law tradition, which has been correctly identified as a continuity between early modern, classical and Austrian thought, far from an anticipation of scientific thinking in the Salamancans, constitutes a residue of religious thinking in the Austrians. Contents Abstract 1 1 Introduction 2 2 The School of Salamanca 3 3 Approaches to Scholastic economics in the history of economic thought 5 4 Rothbard’s method and sources: Kauder and de Roover 6 5 Salamanca, Azpilcueta, and the “vexed question of usury” 8 6 The Salamancans and the principle of diminishing margina l u