6. Aquinas and the Right of Fair Prices

While Thomas Aquinas provided the majority of his work in broad strokes, defining the relations of natural law to the daily and larger economic practices, he does some work in the Summa Theologica, his primary text, to better define particular aspects of economics in relation to the law. He defines these in two particularly relevant ways.

Property Rights: When asked “Whether it is natural for man to possess external things,” Aquinas states that:

External things can be considered in two ways. First, as regards their nature, and this is not subject to the power of man, but only to the power of God Whose mere will all things obey. Secondly, as regards their use, and in this way, man has a natural dominion over external things, because, by his reason and will, he is able to use them for his own profit, as they were made on his account: for the imperfect is always for the sake of the perfect, as stated above (II-II:64:1). It is by this argument that the Philosopher proves (Polit. i, 3) that the possession of external things is natural to man. Moreover, this natural dominion of man over other creatures, which is competent to man in respect of his reason wherein God’s image resides, is shown forth in man’s creation (Genesis 1:26) by the words: “Let us make man to our image and likeness: and let him have dominion over the fishes of the sea,” etc.

For Aquinas, this entails that the metaphysical nature of things allows for an object to belong to two different beings in two different ways. So, in the example of a piece of bread, the bread’s ‘nature’, or its base properties, belong to God since he made them and that aspect of anything cannot belong to any being but the creator. However, the use belongs to man, since he is able to reason and think in a similar manner to God, and as such, he can practice his right to dominion over the physical world and ‘use’ an object to benefit himself or others. The Institute for Faith, Work and Economics also notes that “Aquinas shows that we can and should own things, but that we should be holding these things as stewards. What we own is held in trust for God, so we can use our resources for his glory. Private property is necessary to provide us the opportunity to be generous, to better serve one another and to build up a community as well as develop limits for how and what is used by who over a long standing period of time.”

Fair Price theory. For Aquinas, there is such a thing as a morally justifiable price range for an object based on Greek tradition, the Bible and ‘Natural Law’. Aquinas originally defined this in order to combat usury in its day, as well as the other unfair price ranges, but the principles went on to combat general issues of unfair payment and employee treatment.

In the Summa Article 77, Aquinas poses a question offered by the Roman thinker Cicero, so eloquently described by Murray Rothbard of the Mises Institute as “A merchant is carrying grain to a famine-stricken area. He knows that soon other merchants are following him with many more supplies of grain. Is the merchant obliged to tell the starving citizenry of the supplies coming soon and thereby suffer a lower price, or is it all right for him to keep silent and reap the rewards of a high price?”

The two authors approach this differently. Rothbard elaborates on this in his piece:

“To Cicero, the merchant was duty-bound to disclose his information and sell at a lower price. But St. Thomas argued differently. Since the arrival of the later merchants was a future event and therefore uncertain, Aquinas declared justice did not require him to tell his customers about the impending arrival of his competitors. He could sell his own grain at the prevailing market price for that area, even though it was extremely high. Of course, Aquinas went on amiably, if the merchant wished to tell his customers anyway, that would be especially virtuous, but justice did not require him to do so. There is no starker example of Aquinas’s opting for the just price as the current price, determined by demand and supply, rather than the cost of production (which of course did not change much from the area of abundance to the famine area).”

Now, this contrast of ideals makes Aquinas seem like he is in the wrong since he is not acting in the best interests of those in need. But in all actuality, he is doing something that is in the interest of both parties. In the Summa, he states that

“If someone would be greatly helped by something belonging to someone else, and the seller not similarly harmed by losing it, the seller must not sell for a higher price: because the usefulness that goes to the buyer comes not from the seller, but from the buyers needy condition: no one ought to sell something that doesn’t belong to him.”

This is because Aquinas sees trade as a two-way affair, and not one that should be controlled or monopolized. So, if we look at the context of Cicero’s original problem, he would propose that telling the starving community about the other grain providers would be the best ethical condition possible, since it would not limit or harm his trade, and would only benefit those coming, thus enforcing the Golden Rule of “treat others the way you wish to be treated.”

While this text is referring to a rather specific series of conditions, the implications offers two rather significant observations; that we define an object’s value by our usage of said object, and that conditions of a sale’s context are what determine if you’ve been overcharged for a product.

Like what you read? Give Christopher Hutton a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.