Some Reflexions on History and Economics


by Hugo Salinas Price, Plata:

Nicolas Oresme, a Catholic bishop (1320-1382), studied human behavior with regard to money, which in his time consisted of gold and silver coinage; he was perhaps the first to observe that humans attribute varying valuations to the money that comes into their hands. He stated that holders of gold and silver coins prefer to tender their most deteriorated coins in payments, and retain the most bright, shiny and perfect of their coins. Thus, he was the true originator of what has come to be known as “Gresham’s Law”, long before the Englishman Thomas Gresham made a similar observation during the reign of Queen Elizabeth I (1558-1603).

Juan de Mariana, a Catholic priest (1536-1624), denounced the Spanish king’s policy of reducing the gold and silver content of the prevailing Spanish coinage, arguing that the coinage of the realm belonged to the people and was not the property of the king, to do with it as he wished. For stating this, he was jailed by the Inquisition.

I have presented these two thinkers as illustrations of the first stirrings of the science of economics in The West.

From the year 313, when the Roman Emperor Constantine declared that Christianity was the official religion of the Empire, and up until about the year 1500, the intellectual life of Europe was in the hands of the Catholic Church. The period saw the marvellous flowering of the human spirit based on the belief that humans are endowed with souls which endure to Eternity after the death of the material body. This great hope was the consolation of millions who were thus sustained in the inevitable sorrows that must be endured in this life. We see the consequences of this great hope, in the magnificent Gothic cathedrals erected during this period.

In 1453, after many years of struggle, Christian Constantinople – now known as Istanbul – fell to the fierce Islamic Turks. In the preceding years, many of the city’s Greek-speaking people had fled to Italy and had taken with them a multitude of books in Greek, containing the philosophy and history of ancient Greece. One of the places where these fugitives sought refuge was Florence, and the refugees taught the local thinkers the Greek language, so that they became able to read the ancient authors, who had been unknown to them up to that time.

The effect upon those who read the ancient Greek authors was electrifying, as their books opened up new intellectual horizons. Thus was born “The Revival of Learning”, also called “The Renaissance”. The effect upon the Church was not entirely welcome, for reading the ancient writings promoted freedom of thought, outside the prescribed boundaries of Church teachings. The “Renaissance” spread throughout Europe amongst the learned, thanks to the invention of printing.

Another Revolution in thought, besides that wrought by the revival of the ancient Greek authors, struck the Church. It came from the realm of Astronomy, and weakened the position of the Church which held that Earth was the center of the Universe, around which circled the Sun, the Moon and the Stars. (Actually, from a practical point of view regarding human life, that position is quite acceptable; nevertheless, the findings of the astronomers did weaken the standing the of Church.)

Nicholas Copernicus (1473-1543), born in Poland, a Catholic lawyer, soldier, astronomer and thinker, very cautiously stated in his book On the Revolutions of the Celestial Spheres (of which he received the first printing upon his death bed) that perhaps the Sun did not rotate around the Earth, but rather that the Earth described an orbit as it circulated around the Sun.

After him, Galileo (1564-1642) took up the revolution in Astronomy, and was able to see the moons circulating around Jupiter through a telescope, recently invented in Holland. Thus he confirmed Copernicus and further reduced the religious importance of an immobile Earth as center of the whole Universe. This again, further weakened the position of authority of the Church; Galileo’s was a difficult character, swollen with an idea of self-importance. Though the community of Jesuits in Rome already quietly agreed with Galileo, Galileo imprudently ridiculed the Pope for not embracing his theories: a great mistake, for Galileo was punished with jail for life, in his own home.

Johannes Kepler (1571-1630); after a lifetime of meticulous astronomical work and calculations of the movement of the planets, he elaborated his three theories of the motion of the planets around the Sun.

To crown the work of astronomy, Isaac Newton (1642-1727) provided the mathematical calculus and the Laws of Gravitation.

With Newton we reach the 18th Century, when the Western world was boiling with scientific discoveries in all branches of learning. Benjamin Franklin invented the terms “Positive” and “Negative” for electricity, as well as the term “Battery” for the storage of electrical energy. Coal came into use to move machinery. The first flights in balloons took place.

By the 18th Century, Physical Science had displaced the Church as the principal fount of knowledge. Physical Science was what was New, the Church represented the worn-out Old. The amazing feats performed by scientists held the attention of a spell-bound humanity.

For 1500 years, the authority of the Church had maintained a standard of order over a humanity that suffered “the slings and arrows of outrageous fortune”. It had now been superseded by Science, that spoke with authority.

Over the course of thousands of years, there have been many successful revolutions, but they only involved the struggle for domination between centers of power. The first successful revolution that intended to improve the lot of humanity was the Puritan Revolution carried out by Oliver Cromwell, but it only prevailed briefly in England from 1648 to 1657.

The first enduring revolution in human history that proposed a New Order of Things – the famous motto on the Dollar Bills of the USA, “Novus Ordo Saeclorum” – was the French Revolution of 1789.

The French Revolutionaries -the brightest and best of French intelligentsia– were under the spell of Science as the road to the future happiness of mankind. The dazzling successes of Science in all fields had produced in their minds enormous confidence in their Revolution as the road which all mankind would have to follow, in order to achieve a better and just world, free of famine and political oppression. It was their intention to create “A New Order of the Centuries”. They had nothing but contempt for the Church, that taught that the condition of man within Creation is unalterable.

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