Francisco de Vitoria

The Dominican Order

In addition to his university professors, Vitoria was also influenced by the developments in his Dominican Order. The government process of the Dominican Order has been credited with having helped develop the emergence of representative government in the secular world. Although during a considerable period of the twentieth century it seemed that liberal thinking was captured or dominated by economists, there is a consensus today that free-markets can’t work without a rule of law based on the respect of the dignity of the human person.

Domingo de Guzmán (1170-1221), St. Dominic, who after adopting the Augustinian rule founded his own order, left a legacy that influenced all other religious orders and the development of the free society.

His Order received the final authorization in early 1217. The "The Order of Preachers" ("Ordo Praedicatorum", or "O.P.”) had as its motto "to praise, to bless, to preach." It was this last goal, preaching, which required Dominicans to excel at knowledge. Each of their convents was an educational center, with well trained theologians in charge of the teaching. The Constitution of the Dominican Order, drafted to govern the Order and all their convents, was based in representative government, and influenced views about secular government in England, Europe, and from there to America. One of the great experts in this field puts it this way, “The Church of the thirteenth century shows a marked development, on its institutional side, of the principle and practice of representation. Three great Councils of the Church are held: representatives appear in them all. The provincial synods cease to be composed of bishops and abbots only; representatives, first of cathedral clergy, and then—in England but in England only—of the diocesan clergy, enter. The great Orders of the Friars are penetrated by representation. It appears first in the Dominicans: it is copied from them by the Franciscans. In the same century representation begins to appear in the State. In Spain, indeed, it has already appeared in the last half of the twelfth century: in France it does not properly appear, except in local assemblies, until the beginning of the fourteenth.” (Barker, p. 7)

The great theologians of the Dominican Order, with Aquinas as a prime example, were also making the most important contributions to the understanding of the human person and the role of reason.

Vitoria enters the academic world at a time when St Thomas Aquinas theological works, described as “realism” begin to take precedence over other schools, especially the “nominalists.” For our field of study, the main importance of this fact is not so much how nominalism or realism affect Vitoria’s thinking on economics and human rights, but rather the importance of the generalized used of Aquinas writings, not only in the Dominican Order, but in all other orders as well.

Murray Rothbard points out some of the dangers that can come up from “Ockhamite nominalism.” Named after the Franciscan William of Ockham (c. 1290-1350), the alleged views could lead to deny “the power of human reason to arrive at the essential truths about the man and the universe, and therefore negated the power of reason to arrive at a systematic ethic of man. Only God’s will, discernible by faith in revelation, could yield truths, laws, or ethics.” (Rothbard, p. 72) For Rothbard, nominalism paved the way for modern skepticism and positivism “for if faith in divine will is abandoned, reason no longer has the power to arrive at scientific or ethical truths.” (Rothbard, p. 72). In addition, in the world of politics, Rothbard argued that nominalism “failed to provide a natural law standard to set against the state, and it therefore fitted with the growing state absolutism of the Renaissanace.”

Perhaps I can agree with Rothbard that nominalist views become more dangerous in a world devoid of Faith or attached to a wrong faith. They might lead to relativism. In the readings of Ockham and his followers, “nominalist late-scholastics” I also see that they place limits on human reason, but I think that their views could be made compatible with natural law.

In his commentary on the Sentences of Peter Lombard (1509), another book widely studied at the time, John Major, a professor of Vitoria, drew the logical conclusion that not only man's right and dominion were natural but so too was private property. Jacques Almain, a student of John Major, expressed it in this manner: 'Natural dominion is thus the dispositional power or faculty of using things which people can employ in their use of external objects, following the precepts of the law of nature - by which everyone can look after their own bodies and preserve themselves.' (Rothbard, p. 94)

Economic Liberty

I define economic liberty as the rights of adults to try to use what they own as they please. Economists today seldom ask questions such as: What is a right? Who is the subject of rights? What is owning? Is use different than ownership? Who is allowed to enter into a contract? All these questions are essential to understand economic liberty. Francisco de Vitoria made important contributions to the understanding of these and many other concepts. He did not write books focusing solely on economic issues. There were very few books anywhere in the world with such focus: Copernicus book about money, written before Vitoria’s time, or Juan de Mariana, S.J. book on inflation (1609), Tomás de Mercado, O.P. book on contracts, are worthy to mention. Economic arguments tended to appear in manuals of moral theology, when analyzing theft and the seventh commandment; in treatise on justice, when dealing with commutative and distributive justice, and in manuals for confessors. Vitoria dealt with economics when studying and teaching philosophy and theology. There is also a manual of confessors under his name the Confesionario published in 1562 in Salamanca.

Vitoria’s vision of man is that of a rational Creature, free, able to talk and communicate, and with a need for social life. He stressed free will and the need for friendship. A correct view of the human person is essential for understanding economic liberty and this is where we find Vitoria’s most lasting contribution. Liberty was the most important temporal good (Vitoria, 1939, p. 59).

Private Property

Like so many other classical authors, Vitoria describes how the Creator is owner of everything, but that he called for humans to exercise dominion over all. He starts with Genesis 1:26-28.

“Let us make man in our image, after our likeness. Let them have dominion over the fish of the sea, the birds of the air, and the cattle,

and over all the wild animals and all the creatures that crawl on the ground. God created man in his image; in the image of God he created him; male and female he created them. God blessed them, saying:

“Be fertile and multiply; fill the earth and subdue it. Have dominion over the fish of the sea, the birds of the air, and all the living things that move on the earth.”

According to Vitoria, the human being becomes “owner of the sky, the moon, and the sun” from the moment that he can make use of them. Space exploration, occupation, and other human endeavors, are consistent with Vitoria’s views.[2]

The right of human beings for having dominium over created things derives from natural law, but the actual division is done through human positive law. Vitoria repeated the Aristotelic-Thomistic arguments in favor of private property and applied the reasoning to his time. In addition to the economic and political arguments that property should be private because it would be better used, better maintained, lead to less disputes, and a more orderly society, Vitoria also stressed the importance of private property to be able to practice Christian charitable acts such as clothing the naked, giving food to the hungry, and lodging to the homeless. Quoting Conradus Summenhart, Francisco de Vitoria defined domain (dominium) as the faculty to use a thing according to reasonably established laws. People can use things although they are not the owners. In this sense, domain and use are distinct. Whenever man has perfect domain over a good, he can use this good as he pleases, even to the extent of destroying it.

Vitoria, as all Late Medieval authors, recognized limits to the use of private property. In cases of extreme need people could take and use what belongs to others. He said that we should not define extreme need as the condition when one is about to die, but as when one is wounded, or almost lifeless for lack of food, and with death not far ahead. (Vitoria, 1939, p. 146)

He saw alms as a proof of the right to own property, “as one can’t give what one does not own.” (Vitoria, 1939, p. 138) In cases of extreme need, human beings have to give alms even to the point where their status might be affected, like switching to walking instead of riding a horse, or marrying less daughters (he actually uses this arguments and puts in Spanish rather than Latin, “dejar de casar también a sus hijas como las casara si no los socorriera.”) In extreme need, in order to escape death or great injury, people can use the property of another person, like a lady escaping would be rapists using the neighbor’s horse. Yet, if possible, one should return the property after the danger has passed. In cases of grave need, less serious than extreme need, the obligation is to give alms of superfluous goods.

Vitoria defended the rights of Indians to own property, both the one they had in private as the one they had in common. He concluded that the Indians had the right to trade with whomever they wanted. Vitoria must have been influenced by the first writings on economics coming from his fellow Dominicans in America. They complained in several writings against the mercantilist policies that restricted the right of free trade of the colonies, as in the Island of La Española, which had to send its product to Seville, rather than to the nearby islands and settlements.

Vitoria is better known for his contribution to the development of human rights than to the development of economics. Vitoria and his entire “school” stated very clearly that all rights were natural and the consequence of God’s law, not God’s grace. In predominant non-Roman traditions (including Wycliffe, Huss, and Luther), rights are seen as consequence of God’s grace. Vitoria proved that sinners, even those in mortal sin, had rights like any other person. On this topic Vitoria quotes Cajetan’s commentary of Aquinas’ Summa secundae, q. 66, a. 8. It was Vitoria’s views on the origin of rights that led to the conclusion that sin did not diminish one’s right to private property.

Vitoria developed even further some views hinted in the writings of St. Thomas Aquinas and stressed that the authority to exercise power comes from the community, usually through the operations of its legislative power.

Irrational beings, on the other hand, could not have dominium and true ownership: when someone “says that the lion is king, it is only a metaphor.” The natives, however, are not irrational. They are less educated, but they can still own property.

The Just Price

The topic of prices is essential for students of economic liberty: are we free to charge any price we want or is there a “just price.”?

Vitoria respected businessmen, but realized the dangers of commercial activities: “As justice deals in great part about human transactions, it is strange that we do not praise the merchants who exercise in buying and selling, and therefore practice more acts of virtue of justice. And so often quite the opposite, we decry them for their business . . . the truth is that they are worthy of praise, if they practice their craft well; but it is hard to keep the happy medium. Business is always dangerous, if we would not say better, that it is and obstruction of greater good.” (Vitoria, 1939, p. 74)

Vitoria was very well acquainted with the works of the great Dominicans who preceded him: Aquinas, St. Antonino of Florence, and Cardinal Tomás de Vío Cajetan. Antonino's Summa, exercised great influence on Vitoria and Late-Scholastic writings. All shared similar points of view concerning the theory of value and prices.[3] Cajetan's price theory is tainted with subjective elements. He defines the just price as that which is commonly paid "in a certain place and in a certain way of selling (on a public auction, through middlemen, etc.)".[4] This is why he concluded that if a house that is valued at 4,000 is sold for 1,000, "we say that the just price is one thousand as today no buyer was prepared to pay more".[5] Sylvestre de Priero, O.P. (or Silvester Prierias, d. 1523) analyzed estimation in detail,[6] and Conradus Summenhart, following the analysis of San Bernardino of Siena included virtuositas (objective value), raritas (scarcity) and complacibilitas (subjective value) in his writings.

Conrado Summenhart (1458-1502) was from the city of Calw in the Black Forest of Germany. The city was an important commercial and trade center for cloth and leather. He studied at the University of Heidelberg and at the University of Paris, later became a noted professor and dean at the University of Tübingen. He was a precursor in developing an analysis of economics from the starting point of the rights that human persons have to own property. His book on contracts was read by all serious scholars and Vitoria was no exception.

Vitoria’s analysis of price borrows much from Conradus Summenhart and he directs the reader to the question 56 of Summenhart’s Contractibus where the author list fifteen aspects to take into account when analyzing justice in prices. But Vitoria clarifies, that once there is a market and the price is established by common estimation, this market price supersedes any analysis, and has to be followed. If those who bring goods of similar quality to the market bought them at different prices, they have to be content with the market price, and have no right to charge more.

The manner in which one engaged in a sale also influenced prices. These variations were also consistent with justice. If a seller of a house goes around asking “please buy this house from me” the price will likely be lower than if a potential buyer knocks on the door asking “would you sell me this house?” In a public auction things are often sold for less than their cost or their “value” and this is also consistent with justice. It is also just that bulk sales will charge less per item.

Francisco de Vitoria wrote:

wherever there is a marketable good for which there are many buyers and sellers, neither the nature of the good nor the price for which it was bought, that is to say, how expensive it was, nor the toil and trouble it was to get it should be taken into account v.gr. When Peter sells wheat, the buyer need not consider the money Peter spent nor his work, but rather, the common estimation of how much wheat is worth. If according to common estimation, the bushel of wheat is worth four silver pieces and somebody buys it for three, this would constitute an injustice to the seller because the common estimation of a bushel of wheat is four silver pieces. In the same way, if that seller were to sell at a higher price, taking into account his expenses and his work, he would be selling unjustly, because he should sell it according to the common estimation of the market.[7]

After pointing out that the prices of goods that are different by nature (i.e., a table and a man, or a mouse and corn) are influenced not by their essence but by common estimation and agreement, Vitoria repeated St. Augustine's and St. Thomas Aquinas' arguments concerning the value of animate things (which are higher in nature and lower in price) and inanimate things (lower in nature and sometimes higher in price). Usefulness and need, as measured by the common estimation through markets, were more relevant than essence.

Vitoria reached different conclusions in cases where there few buyers and sellers, or when there was a famine. In those cases the just price had to be analyzed with the aid of principles such as those described by Summenhart. These included the costs, the opinion of “good men” (según el parecer de hombres buenos), scarcity, over abundance, the competence of producers, plagues, and the ease to transport the needed goods.[8] In most cases wheat, wine and cloth must be priced by common estimation, according to the price in the marketplace, a como vale en la plaza. Although some analysts conclude that Vitoria was saying that the just price is equal to the market price in conditions of perfect competition,[9] one must exercise great care in jumping to this conclusion. "Perfect competition" is a mental construction that nowadays has a very special meaning. It requires a number of unrealistic assumptions. The Scholastic idea of competition was nearer to the "free-entry" assumption than to perfect-competition suppositions. Some modern economists argue that monopolies hinder perfect competition. According to the Late Scholastics, the price charged by a monopolist could, in certain cases, be a just price. In the case of absence of competition, some Scholastics recommended the establishment of a legal price. Vitoria, like Domingo de Bañez, Juan de Medina and Francisco Garcia, and other Dominicans, prescribed cost-plus pricing as an alternative.[10]

In cases where there were many buyers, even if there was a single seller, the just price would tend to be the maximum price which a buyer would be willing to pay. Vitoria uses an example of a merchant who wants to sell expensive Syrian cloth (Suria, or paño de Siria). He wants to sell for 500 gold coins, but among the many merchants, none wants to pay more than 300. Vitoria states that 300 is then a just price. He provides a similar case of a town where only one house is for sale valued at 800 gold coins and there are many potential buyers, but none wants to pay more than 600, then that is the just price, even if the good was sold by less than its value (seemingly violating a principle set by Aquinas). The buyer of the good in question is not obliged to restitution unless he committed fraud.

Vitoria clarified that justice and legality in exchange: “are based on a universal and certain principle and this is that I am not obliged to benefit and please my neighbor gratis and without a profit, even when I could do so with no cost or work. (If he begs me to dance, I say I do not want to if you don't give me a ducat, and I can say the same thing in all other cases).”[11]

Trade

Vitoria argued that the division of lands and property did not invalidate the rights to trade and travel in other countries or in Indian territories. Indians need to respect the rights of Spaniards and vice-versa. Vitoria also used the example of France and Spain, unless one could clearly show damage or injury, the French should allow the Spaniards to travel and settle in their country, and vice-versa. Members of all nations should have the right to navigate the seas, and come to port. Vitoria’s contributions on this topic were later used by Grotius in his Freedom of the Seas.

Samuel von Puffendorf, who as Grotius was widely read and quoted by Adam Smith, criticized Vitoria Liberal views: “Franciscus a Victoria is certainly false when he maintains: “the law on nations allows every man to carry on trade in the provinces of others by importing merchandise which they lack and exporting gold and silver, as well as other merchandise, in which they abound.”

Vitoria and his followers dealt with international trade in a discussion similar to their remarks concerning domestic trade. One of the principal contributions of the Late Scholastics regarding commerce consists of the recognition of international free trade as a human rights issue, as Vitoria established in his De Indis et de lure Belli Relectiones.[12] Vitoria's point of view led Father Teófilo Urdanoz, O.P. to state "that no one has realized, at least up to now, that Vitoria's vision of the right to free communication and unrestricted foreign relations represents an explicit advance of the principles of economic neoliberalism and worldwide free market. "[13] Describing the advantages of commerce between the Indians and the Spaniards, Vitoria claimed that "the native princes cannot prevent their subjects from trading with the Spaniards". He said the same of the Spanish prince. Eternal, natural and positive human law (ius gentium) favors international trade. To abjure it would violate the Golden Rule. Vitoria denominated the laws restricting foreign trade, with the objective of excluding a foreign country from sharing in the benefit "iniquitous and against charity". Quoting Ovid, he added that "man is not a wolf for other men", and that "nature has established a certain bond between men".[14] International trade should respect the prices that prevail in each region according to common estimation. Wide differences in appreciation do not render the exchange unjust.

Mining, fishing, diving for pearls

The Spanish had the right to mine and export gold, which was abundant in the Americas, but had no right to exclude the Indians from trading and mining for themselves or with the Spaniards.

Vitoria also defended the equal rights to fish and hunt for pearls of all who were in a territory. It seems natural that in places of great scarcity, he would adjust his views, as the local population could rightly claim that allowing everyone to fish would cause damage or injury.

Interest rates

Vitoria, like most Late-Scholastics, condemned interest rates (usury) as being against natural law, but he justified accepting payments for forgone profits (lucrum cessans). Those are the profits that one has to give up in order to be able to lend. He provides the example of merchants who lend 100,000 gold coins to the King and tell him, “we would have earned ten ducats for each 100, so give us 8 aureos [ancient gold money] per 100.”

Vitoria conceded that if the lender receives compensation (without having signed a contract or making any implicit agreement), there is nothing wrong with the contract because it is legal to receive donations. Furthermore, no one can be required to worsen his own condition by granting a loan. Vitoria acknowledged, "have one" has more value than "I will give you two,"[15] which means that, as some other late-scholastics, he was aware of pure interest (the reflection of time-preference), yet he never acknowledged that time preference per-se was a legitimate title to interest payments.

Vitoria on other issues relevant to liberty and a free and just society

A more complete analysis of Vitoria should also analyze his general views on justice, very much aligned with Aquinas: "Justice is called commutative when it establishes an equality between two private men who buy and sell; but receives the name of distributive justice when it establishes an equality between the republic or the community and the private man." Profits, rents, wages, were not a topic of distributive justice.

As war has been always a menace to economic liberty, Vitoria’s writings on this topic are also relevant. He defined the conditions for just war. All other means to solve a conflict should be tried first. If they failed, Vitoria justified war not only to protect one’s country but also, out of solidarity, to protect the oppressed in other countries as well.

Free movement of peoples is also an aspect of economic liberty. On citizenship, he sides with those who argue that you could become a citizenship by being born in a city (citizenship comes from city.) If one comes to a city and becomes citizen by marriage, this is only just if the person in question pays taxes like any other. All immigrants need to contribute to the common sustenance of the civil society.

Conclusion

Although what I have shown in this lecture and everything I have read from Vitoria puts him squarely on the camp of a builder of economic liberty, he was not a “libertarian.” It is dangerous to try to make an author who wrote centuries ago fit neatly in modern labels.

He cautioned against war but was not against all wars, he regarded it a heresy to say that Christians are not allowed to wage war. He questioned many aspects of the conquest of America, but was not against the conquest. He favored the liberty of market participants to agree on a mutually beneficial price, but the price agreed not always was the just price.

Perhaps as much or even more than his intellectual and philosophical contributions, Francisco de Vitoria contributed to the world with the example of his dedicated life, the respect earned from masters, peers and students alike.

Selected Bibliography:

Barker, Ernest (1913), Dominican Order and Convocation: A Study of the Growth of Representation in the Church During the Thirteenth Century, Oxford University Press

Chafuen, Alejandro Antonio, 2003, Faith and Liberty: The Economic Thought of the Late Scholastics, Lanham: Lexington Books.

Jarret, Fr. Bede, [1926] 1942, The Social Theories of the Middle Ages, Westminster, MD: The Newman Bookshop.

Rothbard, Murray N., 1995, Economic Thought before Adam Smith, Edward Elgar

Villoslada, Ricardo G., S.J., La Universidad de Paris durante los Estudios de Francisco de Vitoria O.P. (1507-1522), Rome, Gregorian University, 1936.

Vitoria, Francisco de, The Indis et de Iure Belli Relectiones, edited by Ernest Nys, Carnegie Institution, Washington, 1917 [1557]

Vitoria, Francisco de, Sentencias Morales, Selección y prólogo del P. Luis Getino, O.P., 1939, Ediciones Fe.

[1] For a very complete listing of Vitoria’s work see http://www.unav.es/pensamientoclasico/Au%20Vitoria.html

[2] Hugo Grotius, who has received more recognition than Vitoria as founder of international law, borrows heavily on Vitoria’s views. In his book on the “The Free Sea,” Grotius quotes Vitoria approximately one dozen times (Grotius was the anonymous author).

[3] An English translation of Antonino's writings on value appears in Dempsey, "Just Price in a Functional Economy". pp. 484-485.

[4] Cajetan, Commentarium in Summam Theologicam S. Thomae (Lyon, 1568), qu.77, p. 264.

[5] Ibid., p. 265.

[6] Sylvestre, Summa Summarum quae Silvestrina dicitur, bk.1, s.v. Estimatio (Bolonia, 1514), p. 50.

[7] Francisco de Vitoria, De Justitia (Madrid: Publicaciones de la Asociacion Francisco de Vitoria, 1934-1936), bk. 2, qu. 77, art. 1, pp. 117-118.

[8] For a more complete analysis see, Chafuen, Faith and Liberty, p. 82

[9] For a modern analysis of this point see Luisa Zorraquin De Marcos, "An Inquiry into the Medieval Doctrine of the Just Price", master's thesis (Los Angeles: International College, 1984).

[10] Vitoria, De Justitia, p. 120; Juan de Medina, De Contractibus (Salamanca, 1550) qu. XXXI, fol. 92; Domingo de Bañez, De Iustitia et Iure Decisiones (Salamanca, 1594), p. 562; Francisco Garcia, Tratado Utilisimo de Todos los Contratos, Quantos en los Negocios Humanos se Pueden Obtener (Valencia, 1583), p. 252; Pedro de Aragón, De Iustitia et Iure (Lyon, 1596), p. 437.

[11] Francisco de Vitoria, Opera Omnia (Salamanca, 1952), vol. VI, p. 514.

[12] Francisco de Vitoria, De Indis et de Iure Belli Relectiones, Ed. Ernest Nys (New York: Oceana, 1964), p. 153.

[13] Father Teofilo Urdanoz, Sintesis teológico-jurídica de las Doctrinas de Vitoria, in Francisco de Vitoria, Relectio de Indis o Libertad de los Indios, Corpus Hispanorum de Pace, vol. V, critical edition by L. Perena and J. M. Perez Prendes, introductory studies by V. Beltran de Heredia, R. Agostino Iannarone, T. Urdanoz and A. Truyol y L. Perena (Madrid: Consejo Superior de Investigaciones Cientificas, 1967), p. CXL.

[14] Francisco de Vitoria, Relecciones sobre los Indios, in Restituto Sierra Bravo, El Pensamiento Social y Economico de la Escolástica (Madrid: Consejo Superior de Investigaciones Cientificas, 1975), vol. 2, p. 622, and in De Indis et de iure belli relectiones Ed. Ernest Nys, (New York: Oceana, 1964), p. 153.

[15] "Plus valet hoc tribuo; quam tribuenda duo; mas vale un toma, que dos te daré." Francisco de Vitoria, Opera Omnia (Salamanca, 1934), bk. IV, p. 170.