---
title: "History of economic thought"
chunk: 3/18
source: "https://en.wikipedia.org/wiki/History_of_economic_thought"
category: "reference"
tags: "science, encyclopedia"
date_saved: "2026-05-05T03:59:30.681827+00:00"
instance: "kb-cron"
---

Mercantile theorists held that international trade could not benefit all countries at the same time. Money and precious metals were the only source of riches in their view, and limited resources must be allocated between countries, therefore tariffs should be used to encourage exports, which bring money into the country, and discourage imports which send it abroad.  In other words, a positive balance of trade ought to be maintained through a surplus of exports, often backed by military might. Despite the prevalence of the model, the term mercantilism was not coined until 1763, by Victor de Riqueti, marquis de Mirabeau (1715–1789), and popularized by Adam Smith in 1776, who vigorously opposed it.

=== School of Salamanca ===

In the 16th and 17th centuries the School of Salamanca in Spain developed economic theory, one of the earliest forms of a study in the economic tradition of the field of economics. Even if his doctrine was influenced by the philosophy of Thomas Aquinas, it sometimes renew the economic thought to such an extent that it was defined as "pro-market, pro-hard money, anti-state in many ways, pro-property, and pro-merchant to a surprising extent." There was also the development of an early form of monetarism in response to the introduction of New World gold into the Spanish economy.
With their reflexions on Contract law and fairness in exchange, the members of the School of Salamanca were often confronted with the concept of value. Thus observing the effect of American silver and gold arrivals in Spain, namely lessening of their values and augmentation of prices, Martín de Azpilcueta established the idea of a value-scarcity, first form of the quantity theory of money.
They also renewed the aquilian concept of just price, which respects the principle of commutative justice but depends on many factors. The just price have a certain latitude because it's not the result of God's will or of labor but of the common estimation of the people (communis aestimatio hominum). On this Luis Saravia de la Calle wrote in 1544:

Those who measure the just price by the labour, costs, and risk incurred by the person who deals in the merchandise or produces it, or by the cost of transport or the expense of traveling...or by what he has to pay the factors for their industry, risk, and labour, are greatly in error.... For the just price arises from the abundance or scarcity of goods, merchants, and money...and not from costs, labour, and risk.... Why should a bale of linen brought overland from Brittany at great expense be worth more than one which is transported cheaply by sea?... Why should a book written out by hand be worth more than one which is printed, when the latter is better though it costs less to produce?... The just price is found not by counting the cost but by the common estimation.
However, as Friedrich Hayek has written, the school rarely followed this idea through systematically. His members thought that authorities were sometimes required to intervene and to control prices, especially in monopoly cases or for staples. The opportunity of an economic interventionnism, called arbitrism, wasn't unanimously accepted: if some thought that the prince concerned with public interest is more trustable that greedy merchants, like Domingo de Soto and Tomás de Mercado, others like Luis de Molina, Leonardus Lessius or Juan de Lugo considered that any intervention of the authorities is inopportune owing to the corruption and the clientelism that will be created.

=== Notable contributors ===

==== Sir Thomas More ====
In 1516 English humanist Sir Thomas More (1478–1535) published Utopia, which describes an ideal society where land is owned in common and there is universal education and religious tolerance, inspiring the English Poor Laws (1587) and the communism-socialism movement.

==== Nicolaus Copernicus ====

In 1517 Polish astronomer Nicolaus Copernicus (1473–1543) published the first known argument for the quantity theory of money. In 1519 he also published the first known form of Gresham's law: "Bad money drives out good".

==== Jean Bodin ====
In 1568 Jean Bodin (1530–1596) of France published Reply to Malestroit, containing the first known analysis of inflation, which he claimed was caused by importation of gold and silver from South America, backing the quantity theory of money.

==== Barthélemy de Laffemas ====

In 1598 French mercantilist economist Barthélemy de Laffemas (1545–1612) published Les Trésors et richesses pour mettre l'Estat en splendeur, which blasted those who frowned on French silks because the industry created employment for the poor, the first known mention of underconsumption theory, which was later refined by John Maynard Keynes.

==== Leonardus Lessius ====
In 1605 Flemish Jesuit theologian Leonardus Lessius (1554–1623) published On Justice and Law, the deepest moral-theological study of economics since Aquinas, whose just price approach he claimed was no longer workable. After comparing money's growth via avarice to the propagation of hares, he made the first statement of the price of insurance as being based on risk.

==== Edward Misselden and Gerard Malynes ====

In 1622 English merchants Edward Misselden and Gerard Malynes began a dispute over free trade and the desirability of government regulation of companies, with Malynes arguing against foreign exchange as under the control of bankers, and Misselden arguing that international money exchange and fluctuations in the exchange rate depend upon international trade and not bankers, and that the state should regulate trade to insure export surpluses.

==== Thomas Mun ====
English economist Thomas Mun (1571–1641) describes early mercantilist policy in his book England's Treasure by Foreign Trade, which was not published until 1664, although it was widely circulated in manuscript form during his lifetime. A member of the East India Company, he wrote about his experiences in A Discourse of Trade from England unto the East Indies (1621).