Seminar: Just Price

Readings:

Raymond De Roover, “The Concept of the Just Price: Theory and Economic Policy,” Journal of Economic History 18, December 1958

David D. Friedman, “In Defense of Thomas Aquinas and the Just Price,” History of Political Economy 12, Summer 1980

The Seminar

Q What definitions of the just price did you find in your readings?

Q Who originated the concept of just price?

Q Through whose writings did Aristotle’s ideas come to influence medieval thought?

Q What is the essence of the Thomist system? [De Roover]

Q What principle governs the system?

Q The traditional view, held before de Roover wrote, was that the just price was tied to cost of production, thus supporting people in their respective stations in life. What was the supposed practical example of this?

Q We’ve already seen that de Roover rejects this in favor of the view that the competitive market price was, in most cases, taken as the just price. What led de Roover to this position?

Q So how did the idea spread that the just price was based on cost of production and social status?

Let’s turn to Friedman’s paper, which deals with a distinct but related issue. Neoclassical economists argue that forcing price to different from its competitively determined market level reduces economic efficiency, thereby reducing wealth and harming economic agents. Thus, the just price, if it differed from the competitive market price, presumably harmed the medieval economy.

Q On what basis does Friedman defend the efficiency of the just price?

Q Wouldn’t sellers have the upper hand in such a system? They can always say they value their goods more highly than they really do.