Cited by Hayek in his Nobel Prize Lecture

❧ Lugduni [Lyon]: Sumptib. Philippi Borde, Laurentii Arnaud, & Claudii Rigaud, MDCLII [1652]. In Latin. Folio. 366 × 245 mm (14.5 × 9.75 in.). 2 volumes in 1 (volume 1: [16], 606, [14] pp; volume 2: [16], 623, [33] pp., final leaf blank). With a half title. Title pages in red and black. Engraved vignette coats-of-arms on title pages. Woodcut head-pieces, tail-pieces, and initials. Inscribed on the half title of volume one: ​“Bibliotheca Fratrum Minorum de observantia ex liberali donatione devorendissimis ex Illustrissimi Principis Fuldensis Joachim de Grauenegg ascriptis fuit Anno 1658. Fratres [?] pro 20.” Inscribed on the title page of volume 1: ​“Bibliothecae Fratrum Minorum shid: obser. Fuldae An. 1658 incorporat[us].” Ink stamp on title page of volume 1: ​“Sig. Bibliothecæ Montis Mariani, Fuldæ.” A portion along the upper edge of page 339 in volume 2 has been carefully cut away, with no loss to the text. Very Good with a Good binding. Bound in alum-tawed pigskin over beveled wooden boards. Blind tooled decorative paneling with a central Jesuit Christogram on both covers. Pigskin heavily rubbed and softened; part of the skin on the lower right corner is lifting and curled, revealing the board beneath.

A complete set of the third edition of Juan de Lugo’s moral theological writings on justice, jurisprudence, and banking. Lugo entered the University of Salamanca to study law, but altered his plan of study when he joined the Jesuit order in 1603. He taught philosophy at universities in Spain before moving to Rome, where he was eventually made a cardinal by Pope Urban VIII.

It was in Rome that Lugo’s colleagues and superiors encouraged him to publish his writings, a project which he concluded in 1642 with the first edition of De iustitia et iure. It is said that the work so impressed Urban viii (to
whom it is dedicated) that Lugo was rewarded with a cardinalate.

Lugo’s work touches on many aspects of the world in which he lived, such as developments in medicine and the globalization of commerce that resulted from the conquest and colonization of the American continent. His contributions to economic thought were especially influential, and he is considered the last major figure of the School of Salamanca. Among the topics discussed in this treaty are the right to monopolies (which, for Lugo, were obstacles to competition and only just under circumstances where violence and fraud are avoidable), a subjective theory of value, and usury.

Economist Friedrich von Hayek (1899–1992) cited this book in his Nobel prize lecture. Hayek references Lugo to explain that mathematical formulas cannot accurately reflect the real world and that the price of equilibrium in economics, ​“the mathematical price, [is] depended on so many particular circumstances that it could never be known to man but was known only to God.”

Modern day Spanish economist Jesús Huerta de Soto in his treatise on money and banking, Money, Bank Credit and Economic Cycles, cites Lugo’s book extensively pertaining to the follies of inflationism and the dangers that bankers expose themselves to when they mismanage client funds.

Huerta de Soto offers an excellent overview of the extraordinary impact Spanish Jesuits had on the history of economic thought. Lugo ​“views the monetary bank deposits as ​‘precarious’ loan or mutuum which the banker may use in his private business dealings as long as the depositor does not claim it.” Lugo clearly understood the money-multiplier effect of fractional reserve banking: ​“Banks expand the means of payment through loans, trade-bill discounting and other economic activities they carry out with the money of third parties. The final result is that the purchasing power in the market is pushed far beyond that represented by the cash deposits at its origin.”

This copy from the shuttered abbey library at Fulda, a gift from the Prince-Abbot Joachim Graf von Gravenegg.

References:

Holcombe, Randall – editor. The Great Austrian
Economists.

Huerta de Soto, Jesús. Money, Bank Credit and Economic Cycles.

https://www.nobelprize.org/prizes/economic-sciences/1974/hayek/lecture/