ROMAN AND EARLY CHRISTIAN CONSTRIBUTIONS I. INTRODUCTION A. When the Roman Empire became BIGGER than Greece: 1.

commercial interests and issues spread that called for economists and advisers a. BUT STILL, not much progress in economic theory emerged B. Why is that so? 1. the social structure of ancient Rome was not congenial to intellectual pursuits a. Roman society comprised of slaves, peasants, traders and the military C. The greatest achievement of the Empire was Roman Law 1. Civil Law contained relations between citizens 2. Common Law contained relations between commercial groups, citizens and noncitizens 3. Roman Law contained the economic principles for the Middle Ages - Natural Law was utilized in developing this - the concept and process of incorporating a firm was contained here 4. Justinian Code contained the concept of the market price: price I based on the common estimate where time, place and scarcity were recognized variables D. From 476 to the 18th Century economic writers were either businessmen or clergymen E. The Rise of Christianity gave us a different perception from military Rome 1. emphasized non-material treasure BUT wealth was still a gift from God that is used to promote human welfare 2. St. Augustine presented a subjective theory of value: wants are individually determined 3. Christian like economic topics writers did not particularly

II.MEDIEVAL ECONOMIC THOUGHT A. Historical Background 1. Rise of the East a. Islam had the power in most aspects b. Moslem science developed on Grecian math and physics c. Moslem spread to parts of Europe and Asia 2. the Dark Ages sank in the West 3. the Arabs gave civilization Hindu Arabic numerals and the revival of Aristotelian thinking 4. Greek writings were translated to Latin and were held on to by the Scholastics B. What is Feudalism? 1. the King has all legal property rights and assigns these to his cohorts 2. OWNERSHIP = RIGHT TO USE (referred to then as USUFRUCT) and is passed on to generations 3. feudal property was the seat of political power there was no central authority 4. The Manor was the center of economic production social organization was based on status 5. factors different from Greece: a. feudalism had doctrinal unity under the Roman Catholic Church b. pervasiveness of the market mechanism C. The Scholastics wrote in a question and answer form - were more concerned with justice than the concept of exchange - took on the idea of value as cost-determined and also demand-determined

1. Albertus Magnus a Dominican bishop

a. was a teacher of Thomas Aquinas b. value in exchange complies with the cost of production: labor and expenses c. if price < cost, production of the good will cease: as cost is a regulator of value 2. Thomas Aquinas

a. stressed human wants (indigentia) as another regulator of value: price varies with need b. price varies with location, time and risk in transport c. the Just Price was NOT the market price market price looks into objective elements while Just Price is normative in nature 3. Henry Friemar an Augustinian Friar a. value is determined by the common need of something scarce if the good is abundant, indigentia will NOT raise price 4. Jean Buridan rector of the University of Paris a. further developed the concept of indigentia to effective demand a.1. indigentia desire with the ability to pay - its significance stems from the double rile in medieval price theory where high sacrifice of sellers justifies a higher price 5. Odonis looked into wage differentials: labor is scarce therefore it can command its price and can also regulate value 6. Crell synthesized and improved on Odonis

D. Conclusion and Contributions of Medieval Economic Theory 1. recognized demand and supply as cojoined in determining value 2. cost theory and demand theory were components of one principle with two distinct elements: a. labor is a regulator of value b. labor is always scarce