Thomas De Mercado

The School of Salamanca and the Quantity Theory of Money

The School of Salamanca and the Quantity Theory of Money
THOMAS DE MERCADO, Fray. Summa de Tratos y Contratos...anadidas ala primera addition, muchas nueuas resoluciones. Y dos libros enteros, como parace en la pagina siguente. Seville, Hernando Diaz 1571

Thick quarto, 20.0 x 14.0cm, quarter vellum and cloth boards, five raised bands, spine lettered gilt, leaf edges gilt, some wormholes neatly restored in the blank margins, two parts in one volume, [12] leaves + 154 leaves [misnumbered]; 220 leaves [misnumbered] + [14 ] leaves tablo, title with engraved woodcut of a friar holding a model of the church in his left hand and a quill in his right hand, printers ornamental woodcut initials, printed marginalia.
£3,500

Palau, IX p.91 165052. Colmeiro, 279. Smith, Rara Arithmetica p.335. Schumpeter, pp.95, 101. Kress 105. Goldsmith 155. Not in Einaudi or Sraffa.
See Marjorie Grice-Hutchinson, The School of Salamanca. Readings in Spanish Monetary Theory 1544-1605.Oxford 1952 pp.2-18; 40-51, 96-102.


Second edition, enlarged from the first edition of 1569, of the first description of the quantity theory of money. The concept was developed in the 16th century due to the flow of treasure into Spain from the Americas. By 1550 prices had more than doubled. At this time Spanish economists at the University of Salamanca began to attribute the fall in the purchasing power of money with the increase in the circulation of money brought about by the imports of gold and silver from America. Tomas de Mercado [1525-1585] was a Dominican friar from Mexico, who journeyed to Spain and lived for some years in Seville and Salamanca. Little is known of his early life, except that he wrote several learned commentaries on Aristotle. This handbook on commercial morality for merchants gives a vivid picture of the inflationary economy of the period and of business life in Seville. He died in 1585 on board ship taking him home to Mexico.
The work is an example of Spanish scholastic economics. Schumpeter defined the scholastics as coming “nearer than does any other group to having been ‘founders’ of scientific economics” and Mercado “adumbrated more or less clearly what came to be called the quantity theory of money”.
“From about 1540 onwards there appeared a whole crop of handbooks, written mostly by learned friars, which paint a vivid picture of the business life of the times...The shrewdest and at the same time the most entertaining of this group of writers is the Dominican friar Tomas de Mercado... His homilies are much enlivened by his pithy style, sardonic humour, and colourful way of describing the iniquities of merchants. Mercado distinguishes three main classes of business men: merchants, money-changers, and bankers...dedicates his book to the merchants of Seville and explains that his teaching is based on the doctrine of the theologians of Salamanca.” Grice-Hutchinson