Abstract

Many years before Adam Smith, numerous theologians associated with the School of Salamanca, such as Domingo de Soto, Juan de Lugo, Juan de Mariana, Luís Saravia de la Calle, Martin de Azpilcueta, Luis de Molina, Leonard Lessius, Thomas Cajetan, and Francisco Garcia had made great strides in the development of economics. Specifically, these theologians, otherwise known as the “Scholastics,” analyzed and argued against price and wage controls by explaining that the only “just” prices and wages are those that are set by the market, examined and pushed back against prohibitions on usury, understood the concept of time preference, and helped develop monetary theory in multiple ways. They also demonstrated that all of this was consistent with the Catholic religion. This paper analyzes the ways in which these early theologians contributed to the development of economics and reconciled it with their Catholicism.