The Austrian school of economic thought has made a prominent comeback and has risen to a newfound popularity in our political discourse today. However, but has one ever wondered where did this school come from? What are its origins? Who are the founders of this magnificent school of economic thought? This blog series “Meet the Austrians” will highlight those who contributed, and what their contributions to the Austrian School were.
Some argue that the Austrian school has its roots back to the thirteenth century, with the teachings of St. Thomas Aquinas (1225-1274). Thomas was born at Roccasecca, which is an area half way between Rome and Naples. He started receiving education at the age of five at the Benedictine abbey of Montecassino. Later Thomas transferred to the University of Naples in order to escape the battle that was to take place at the abbey. While at Naples, Thomas learned about the teachings of Aristotle and was introduced to the Order of Preachers, which at the time was a recently founded mendicant order. Later at the age of 17 Thomas joined the Dominican order, and studied in Cologne and at Paris under the tutelage of Albert the Great. After completing his studies he took his doctorate at the University of Paris, and later taught there and at a number of universities in Europe.
Throughout his life Thomas was a prolific writer; however, his most famous works was Summa Theologica. In which, Aquinas argues in favor of private property, and that the role of the state is to prevent theft, force and fraud in economic transactions. In this work, Aquinas also made the argument that prices should be set by the market, and brings up that prices will fluctuate due to the supply and demand of a particular product. Thomas was very much in favor of merchants, and as a result of his work in Summa Theologica he helped shift the negative view of mercantile trade.
How Thomas viewed economic thought is due largely to his perception of natural law. Aquinas believed that since God created everything, God had a plan for everything. Thus an unlawful act inhibits God’s plan from occurring. Economic transactions, he argues are to be placed in this framework, since capital is provided to them by nature and used to reach a certain end.
Saint Thomas Aquinas has earned the label of being a proto-Austrian due to the number of contributions he made to the later to come Austrian school of economics. Thomas supported the ownership of private property, argued that the price of goods are to be set by the laws of supply and demand, supported small businesses, and argued for a very limited role of the state. All of which are trademarks of the Austrian school.