USURY AND INVESTMENT

Instrucion de mercaderes.

Medina del Campo, Pedro de Castro a costa de Antonio de Vrueña, 1547.

£7,500

4to. ff. lxv (i). Gothic letter. Woodcut arms within typographic frame to t-p, woodcut printer’s device to last, decorated initial. Outer and lower margin of t-p mostly cut away, slight spotting or browning, couple of ink spots touching text to 4 ll., light early marginalia. Handsome copy in slightly later vellum, ties, recased.

Handsome copy of the second edition of this important treatise in the history of economic theory. Luis Saravia de la Calle (fl. C16) was a doctor in theology and the author of several works on economics. His ‘Instrucion de mercaderes’ was first published in Medina del Campo in 1544. As with other Spanish economic manuals of the time, its composition was sparked by the recent market alterations brought about by the swift and unregulated arrival of great quantities of gold and silver from the New World, the formation of permanent international markets and the normalisation of bills of exchange as payment methods. Like those of other contemporary economists, Saravia’s arguments drew on market theories of the Late-Scholastic tradition concerning the value of money, kinds of investments, profit derived from money-lending (including usury) and their relationship to business ethics. The careful annotator of this copy—probably a merchant—was especially interested in the concept of just price, the quality of goods, usury and ‘damnum emergens’. Unlike Thomas Aquinas, for whom just price and the value of a commodity were based on its usefulness and ability to satisfy ‘human needs’, Saravia shared the theories of the contemporary economic School of Salamanca. According to these, the value of money was dependent on its purchasing power and just price was the result of market fluctuation—’particular circumstances of buying and selling, the abundance of goods and money, the monetary availability of buyers and sellers…the demand and supply of goods’, all linked to specific places and times. He also discussed variable pricing of identical goods of differing quality (e.g., selling two for one if the second is partially damaged). His analysis of usury, a key economic and ethical concern in late medieval and early modern Europe, involved the question of profit from loan: is it fair that financial loans should generate profit; is it ethical to charge interest on loans? The annotator was interested in ‘dannum emergens’, the loss derived from a loan, and ‘lucrum cessans’, the ceasing of gain through non-business loans as compared to loans to other merchants from which a profit could be made. Saravia defined usury in its many nuances as money-lending in expectation of profit, e.g., the borrower in return will make greater use of the lender’s business. The subtype in which the annotator was interested is money-lending for credit, i.e., when a buyer receives goods before having paid in full, and their price is increased to make up for the dilation of payment and the loss which may derive to the seller from interim market fluctuations during which his money is not generating profit. Like other such C16 treatises, ‘Instrucion’ required a complex adaptation of Latin economic terminology into the vernacular—a linguistic effort which led to disquisitions on the meaning of words like ‘cambium’ and theoretical debates with long-standing consequences in the history of economic thought.

Only St John and Princeton copies recorded in the US.

Goldsmiths, 40; Palau 301958; BL STC Sp., p. 178. Not in Kress. B. Gordon, Economic Analysis before Adam Smith: Hesiod to Lessius (London, 1975).

L2898

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