Ancient and Medieval Economic Thought

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Ancient and medieval economic thought is the body of ideas about wealth, money, prices, trade, and lending that Greek philosophers, Roman jurists, Church Fathers, and medieval theologians developed long before "economics" existed as a separate discipline — reasoning about the economy as a branch of ethics, law, and household management rather than as an autonomous science.

Before there was an economy

The word economics descends from the Greek oikonomia (οἰκονομία), literally the "law" or "management" of the oikos, the household. This etymology is not a trivial curiosity; it tells us how radically the ancient conception differed from ours. When Aristotle and his successors reasoned about production, exchange, and money, they did not imagine a self-regulating market system governed by impersonal laws of supply and demand. They imagined the estate, the polis, and the moral order that ought to bind them. For roughly two thousand years — from Hesiod in the eighth century BCE to the School of Salamanca in the sixteenth century CE — thinking about wealth was subordinate to two questions that we would now call ethical and political: What is the good life, and what forms of getting and spending are compatible with it?

The Hungarian-Austrian economic historian Karl Polanyi captured this in his influential thesis of embeddedness, developed in The Great Transformation (1944): in pre-modern societies, economic activity was "embedded" in social relations, kinship, religion, and law, rather than constituting a distinct "economy" that could be studied on its own. Whether Polanyi overstated the case remains one of the great debates in economic anthropology and history, but his framing is indispensable for understanding why ancient and medieval authors treated exchange as a subspecies of justice, and money-lending as a subspecies of sin.

The Greek beginnings: Hesiod, Xenophon, Plato

The earliest Greek reflections on wealth are moral and agrarian. Hesiod's Works and Days (c. 700 BCE) frames labor as the honest alternative to violence and idleness, and introduces the theme of scarcity — the gods have "hidden the means of life" so that men must toil. This is not analysis but exhortation, yet it establishes the moral valuation of productive work that runs through the whole tradition.

Xenophon (c. 430–354 BCE), a student of Socrates, wrote the Oikonomikos, a dialogue on estate management, and it is from him that our word derives. Xenophon treats oikonomia as an art of ordering resources and labor efficiently to increase the household's stock — a genuinely managerial concern. In the Poroi ("Ways and Means"), he even offers policy proposals for increasing Athenian public revenues, including exploiting the silver mines at Laurium and attracting resident foreigners (metics), and he notices that silver, unlike other goods, never seems to satiate demand — an early brush with the idea that money is peculiar among commodities.

Plato (c. 428–348 BCE) approached economic questions through the lens of the ideal city. In the Republic, the city arises precisely because no individual is self-sufficient; the division of labor emerges because each person is naturally suited to one task and does it best when specializing. This is one of the first statements of the productivity gains from the division of labor — a theme Adam Smith would make canonical over two millennia later. But Plato's interest is in justice, not output: the just city is one in which each class performs its proper function. In the Laws, his second-best city, he is deeply suspicious of commerce, private wealth, gold, and retail trade, which he associates with the corruption of civic virtue. Money-getting, for Plato, is the enemy of the philosophic and political life.

Aristotle: the founding analyst

Every serious history of economic thought begins in earnest with Aristotle (384–322 BCE), because he was the first to subject exchange and money to sustained conceptual analysis. His relevant texts are concentrated in two works: Book I of the Politics and Book V of the Nicomachean Ethics. Joseph Schumpeter, in his monumental posthumous History of Economic Analysis (1954), was famously grudging about Aristotle — he called his economics "decorous, pedestrian, slightly mediocre, and more than slightly pompous common sense" — yet even Schumpeter conceded that Aristotle set the terms of debate for the next two thousand years.

Oikonomia versus chrematistike

Aristotle's most consequential distinction is between oikonomia — the natural art of acquiring and using goods to sustain the household and the polis — and chrematistike (χρηματιστική), the art of money-making. He splits chrematistike further. There is a "natural" form, which provisions the household with genuinely useful things and has a natural limit (a household needs only so much food, clothing, shelter). And there is an "unnatural" form, aimed at the limitless accumulation of money for its own sake. This second form Aristotle condemns, because it treats wealth (ploutos) as an end rather than a means. As he writes in the Politics (I.9):

"Of the art of acquisition then there is one kind which by nature is a part of the management of a household... the other is a species of trade... and there is no bound to the riches which spring from this art of wealth-getting."

The distinction between wealth as means (subordinate to living well) and wealth as end (accumulation without limit) is the ethical hinge of the entire pre-modern tradition. It is why usury and pure commerce were regarded with such suspicion, and it explains the persistent moral anxiety about pleonexia — the vice of wanting more than one's due.

Use value and exchange value

In the same passage, Aristotle draws a distinction that would echo down to Karl Marx: every article of property has two uses. A shoe can be worn (its proper use) or exchanged for something else (a secondary, improper use). This is the germ of the later distinction between use value and exchange value, and Marx quotes Aristotle explicitly on this point in Capital. For Aristotle, exchange itself is natural and acceptable when it serves to redistribute goods according to need — barter arose to remedy the fact that some households have too much of one thing and too little of another. Trouble begins only when exchange is pursued for accumulation.

Reciprocity, need, and the analysis of exchange

The most analytically dense passage in all of ancient economics is Nicomachean Ethics Book V, chapter 5, where Aristotle discusses justice in exchange as a species of corrective or commutative justice. Exchange, he argues, requires that things be made "equal" in some sense, otherwise there could be no fair trade. His famous example runs:

"As a builder is to a shoemaker, so must such and such a number of shoes be to a house... There will be no exchange without equality, and no equality without commensurability."

Two hard questions have occupied commentators ever since. First, what is the common measure that makes a house commensurable with a number of shoes? Aristotle answers, tantalizingly, that it is chreia — need, or demand — that binds all things together, and that money is the conventional stand-in for need: "money has become by convention a sort of representative of need." This has led some interpreters (notably in the Austrian tradition) to see Aristotle as an early proponent of a demand/utility theory of value, and others to see him as gesturing toward a labor theory (the builder–shoemaker ratio). Aristotle does not resolve the tension, and the ambiguity became productive: medieval commentators mined this passage endlessly.

The second question is what Aristotle means by "proportionate reciprocity." He insists that just exchange is not simple equality (tit-for-tat) but proportion, adjusted to the relative worth of the parties and the goods. The Norwegian scholar Odd Langholm, whose meticulous studies (especially Economics in the Medieval Schools, 1992, and Price and Value in the Aristotelian Tradition, 1979) reconstructed how these texts were read across centuries, showed that the interpretation of Ethics V.5 was the central battleground of medieval price theory.

Money: origin, functions, and its "barrenness"

Aristotle offers the first functional theory of money. Money arose, he argues, by convention (nomisma, coin, is cognate with nomos, law or convention) to overcome the difficulties of barter, particularly the problem we now call the double coincidence of wants. Money serves as a medium of exchange, a measure of value, and a store of value for future need. This tripartite functional analysis is essentially the one still taught today.

But Aristotle then delivers the judgment that would haunt Europe for fifteen centuries. Of all forms of money-making, he says, usury is the most hated and with the greatest reason, because it makes money breed money:

"The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest... of all modes of getting wealth this is the most unnatural." (Politics I.10)

The Greek word for interest, tokos (τόκος), literally means "offspring" or "breed," and Aristotle exploits the metaphor: coins are sterile, so interest is a monstrous, unnatural birth. This single argument — the sterility of money — became the intellectual backbone of the medieval prohibition of usury.

Rome: law without theory

The Romans produced little theoretical economics but an immense apparatus of law that would shape medieval and modern economic institutions. Roman jurists did not philosophize about value; they built the categories of property (dominium), contract, sale (emptio-venditio), partnership (societas), and loan (mutuum for consumables, commodatum for use). Interest (fenus or usura) was legal in Rome, subject to statutory caps — the Twelve Tables (c. 450 BCE) limited it, and later law generally allowed rates around 12 percent (centesima usura, one percent per month).

Two Roman contributions proved especially durable. First, the doctrine of laesio enormis — "enormous injury" — codified in a rescript attributed to the emperors Diocletian and Maximian (c. 285 CE) and preserved in the Codex of Justinian's Corpus Juris Civilis (534 CE): a seller of land could rescind a sale if the price was less than half the "just price" (iustum pretium). This established in law the idea that a fair exchange has an objective benchmark and that gross deviation is legally actionable — a seed of the medieval just price. Second, Roman lawyers left the terminological toolkit that Scholastic theologians would deploy: the distinction between what is licit by natural law, civil law, and the law of nations (ius naturale, ius civile, ius gentium). Cicero, in De Officiis (44 BCE), also transmitted Stoic reflections on the ethics of commerce — including a famous discussion of whether a grain merchant sailing into a famished city must disclose that more ships are on the way — a case that Aquinas would revisit centuries later.

The Church Fathers: property, poverty, and the sin of usury

With the Christianization of the Roman world, economic ethics acquired a scriptural and pastoral urgency. The Church Fathers inherited both the Aristotelian suspicion of accumulation and a powerful body of biblical injunction. Two scriptural strands were decisive. The Hebrew Scriptures forbade lending at interest to fellow Israelites (Exodus 22:25; Leviticus 25:36–37; Deuteronomy 23:19–20, which permits lending at interest to "foreigners" but not to "brothers"). The Gospels raised the stakes: Luke 6:35 was read as commanding "lend, hoping for nothing again" (mutuum date, nihil inde sperantes), a text that became the single most cited proof against usury.

The Fathers were fierce. Basil of Caesarea (c. 330–379) and Gregory of Nyssa preached against the rapacity of lenders who preyed on the poor. Ambrose of Milan (c. 340–397) wrote De Tobia, an entire treatise attacking usury, and famously argued that one might take usury only from an enemy one was entitled to kill — the so-called Ambrosian exception, later invoked (and abused) in debates about lending to outsiders. John Chrysostom in the East denounced commerce and interest from the pulpit of Constantinople. Jerome argued that the Christian prohibition, unlike the Mosaic, admitted no distinction between brother and foreigner: all men are now brothers.

On private property, the Fathers were more nuanced than sometimes supposed. Many held that in the original state of innocence goods were common, and that private property was a consequence of the Fall — a remedy for human greed, permitted and regulated but not sacred. Augustine of Hippo (354–430) accepted private property as an institution of human and civil law while insisting that superfluous wealth belonged, in justice, to the poor. Ambrose put it starkly: "It is not from your own goods that you give to the poor; you are but restoring to him what is his." This doctrine — that surplus wealth is held in a kind of trust for the needy — would remain a live principle in medieval theology and canon law, and it forms the moral counterweight to any endorsement of commerce.

Canon law and the councils: usury becomes crime

The patristic condemnation of usury hardened, over the early Middle Ages, into ecclesiastical and then secular law. The Council of Nicaea (325) forbade the clergy to take interest. Charlemagne's legislation extended the prohibition to the laity within the Frankish realm around 800. The great systematizer was Gratian, whose Decretum (c. 1140), the foundational textbook of canon law, gathered the authorities and defined usury broadly: quidquid sorti accedit — "whatever is demanded beyond the principal is usury." The definition is crucial: usury was not excessive interest but any interest, any surplus over the sum lent, on a loan (mutuum).

The thirteenth century saw the most aggressive conciliar legislation. The Third Lateran Council (1179) declared manifest usurers excommunicate, denied them Christian burial, and forbade priests to accept their offerings. The Second Council of Lyon (1274) tightened the screws further, ordering the expulsion of foreign usurers and voiding their contracts. The Council of Vienne (1311–1312), under Pope Clement V, went to the doctrinal extreme: it declared that anyone who "pertinaciously" asserted that usury was not a sin should be punished as a heretic. Usury had become not merely a wrong but potentially a matter of heresy.

The economic consequences of this campaign are one of the enduring puzzles of medieval history. Because Christians were forbidden to lend at interest, and Jews (governed by Deuteronomy's permission to lend to "foreigners") were excluded from most other occupations, money-lending in much of Latin Christendom was pushed onto Jewish communities — a fact with catastrophic social consequences, feeding the anti-Jewish violence, expulsions (England 1290, France repeatedly, Spain 1492), and stereotypes that scar the period. Meanwhile Christian bankers — the great Florentine houses of the Bardi, Peruzzi, and later the Medici, and merchant-financiers across Italy — developed a battery of techniques to extend credit profitably while formally avoiding the sin of usura.

Thomas Aquinas and the high Scholastic synthesis

The recovery of Aristotle's complete works in Latin translation during the twelfth and thirteenth centuries — much of it via Arabic intermediaries and the translations of William of Moerbeke — transformed medieval economic thinking from scriptural exhortation into rigorous analysis. Albertus Magnus (c. 1200–1280) wrote the first serious Latin commentaries on the Ethics and Politics, and it was his pupil Thomas Aquinas (1225–1274) who produced the decisive synthesis.

Aquinas treats economic questions in the Summa Theologiae, above all in the Secunda Secundae (II-II), where questions 77 and 78 deal, respectively, with fraud in buying and selling (the just price) and with usury. His method is Aristotelian dialectic wedded to Christian doctrine: he asks, states objections, cites authorities, and resolves.

The just price

On the just price (iustum pretium), Aquinas asks in II-II q.77 "whether a man may lawfully sell a thing for more than it is worth." His answer is grounded in Aristotelian commutative justice: buying and selling were introduced for the mutual benefit of both parties, and justice requires equality, so "to sell a thing for more than its worth, or to buy it for less than its worth, is in itself unjust and unlawful." The just price is the price that preserves this equality.

But what fixes the just price? Here the historiography has fought a long war. An older interpretation, associated with the German historical school and with some Catholic writers, held that the medieval just price was a cost-of-production price, or a price set by authority to guarantee each craftsman a living appropriate to his station. Against this, the great Belgian-American historian Raymond de Roover, in a series of studies culminating in his influential 1958 article "The Concept of the Just Price: Theory and Economic Policy," argued forcefully that for Aquinas and most Scholastics the just price was simply the current market price — the communis aestimatio, the "common estimation" of the market — arrived at by the ordinary interplay of buyers and sellers in the absence of fraud and coercion. De Roover marshaled the texts to show that the Scholastics were far less hostile to the market, and far more analytically sophisticated, than the "medieval anti-capitalism" caricature allowed.

Aquinas's own text supports de Roover: he treats the market price as the benchmark and, following the Roman law of laesio enormis, holds that only substantial departures from it are unjust. Crucially, he embeds a subtle theory of value. He notes, quoting Augustine, the paradox that a mouse, a higher creature in the order of nature, sells for less than a pearl — because "things are priced not according to their rank in nature, but according as they are useful to man." Value in exchange tracks human need and usefulness (indigentia, following Aristotle's chreia), not intrinsic dignity. This is an early and clear statement that value is a matter of utility and scarcity relative to human wants, not an objective property of the good.

Aquinas also revisits Cicero's grain-merchant case. May the merchant who knows more grain is coming charge the current high price without disclosing this? Aquinas concludes that he is not bound in justice to reveal the future arrivals (the future is uncertain, and the current price reflects present conditions), though it would be more virtuous to do so. The reasoning shows a careful separation of the demands of strict justice from those of higher charity.

Usury

On usury (II-II q.78), Aquinas produces the argument that dominated late medieval thought. His central claim is that in the case of goods "consumed in their use" — like wine, or, crucially, money — the use of the thing cannot be separated from the thing itself. To lend such a thing and then charge separately for its "use" is to charge twice, or to sell what does not exist. As he puts it:

"To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice."

This is the doctrine of the consumptibility of money, reinforced by the Aristotelian claim that money is by nature sterile — a mere measure and medium, not a productive thing that can bear fruit. Aquinas also invokes the legal nature of the loan contract, the mutuum: in a mutuum, ownership of the money passes to the borrower, so the lender who charges for its use is charging for what is no longer his.

Yet Aquinas is not a simple prohibitionist, and the seeds of the doctrine's eventual dissolution are already present in his account of the licit titles to compensation. He accepts that a lender may lawfully take compensation for a loss he suffers by lending — damnum emergens ("emerging loss"). He is far more cautious about compensation for gain forgone — lucrum cessans ("ceasing gain," i.e., the profit the lender could have made by investing the money elsewhere) — regarding it as a doubtful title because such gain is merely potential. And he accepts that the risk of loss legitimizes a return: an investor in a genuine partnership (societas) who bears the risk of losing his capital may lawfully share in the profit, because he never fully alienates ownership — this is the title later called periculum sortis (risk to the principal).

The high Scholastic framework was elaborated, tested, and quietly loosened over the following two centuries by a remarkable succession of thinkers.

Peter John Olivi (c. 1248–1298), a Franciscan, offered a strikingly modern analysis. In his treatise on contracts he argued that money committed to trade takes on a "seminal quality" of profit — a kind of capital value — because in the hands of a merchant it is no longer sterile but productively invested, so the lucrum cessans is real. Olivi also developed a subjective analysis of value resting on utility (virtuositas), scarcity (raritas), and desirability (complacibilitas) — an anticipation of later value theory. His work was long neglected, partly because of his condemnation as a Spiritual Franciscan, but it was recovered and transmitted through preachers who did not always credit him.

John Duns Scotus (c. 1266–1308) analyzed the just price in terms of the labor, expenses, and risk (industria) borne by the merchant, arguing that the trader who transports goods and bears risk performs a genuine service to the community and deserves compensation — a partial cost-based reading that competed with de Roover's market reading.

Nicole Oresme (c. 1320–1382), bishop of Lisieux and one of the outstanding minds of the fourteenth century, wrote the De Moneta (A Treatise on the Origin, Nature, Law, and Alterations of Money, c. 1355), the first treatise devoted wholly to money. Oresme argued that money belongs to the community, not the prince, and condemned the debasement of coinage by rulers as a covert and unjust tax — indeed as worse than usury, because more secret and universal. His analysis of how debasement drives good coin out of circulation anticipates what would later, misleadingly, be called Gresham's Law ("bad money drives out good"). Oresme thus stands as a pioneer of monetary economics and of the idea that sound money is a public trust.

The fifteenth-century Franciscan and Dominican preachers turned this analysis to practical use. San Bernardino of Siena (1380–1444), drawing heavily (and often silently) on Olivi, developed the value analysis of virtuositas, raritas, and complacibilitas, and defended the merchant's legitimate profit as reward for labor, risk, and skill. His contemporary St. Antoninus of Florence (1389–1459), archbishop of a great commercial city, wrote a Summa Theologica Moralis that treated real business practices — bills of exchange, partnerships, banking — with a nuance born of pastoral experience in the world's leading financial center. Both men were instrumental in promoting the montes pietatis, municipal pawnshops founded by Franciscans from the 1460s to provide the poor with cheap credit, charging a modest fee to cover costs — a practice controversially defended as non-usurious and eventually approved by the Fifth Lateran Council in 1515.

Meanwhile merchant practice ran ahead of theory. The contractus trinus or "triple contract" — combining a partnership, an insurance contract guaranteeing the principal, and a further contract converting the uncertain profit into a fixed return — was engineered to produce something economically indistinguishable from a fixed-interest loan while remaining formally within the rules. Theologians debated its legitimacy fiercely; the German Dominican Johann Eck defended it (with backing from the Fugger banking house) in a celebrated disputation at Bologna in 1515.

The School of Salamanca: the bridge to modern economics

The tradition reached its analytical peak in sixteenth-century Spain, in the theologians of the School of Salamanca, whose recovery for the history of economics owes much to the British scholar Marjorie Grice-Hutchinson, whose The School of Salamanca: Readings in Spanish Monetary Theory, 1544–1605 (1952) and later work made their achievement widely known.

Confronted with the flood of silver and gold pouring into Spain from the New World after the conquests of Mexico (1519–21) and Peru (1532), and the resulting inflation, these thinkers produced strikingly modern analyses. Martín de Azpilcueta, known as Navarrus (1493–1586), in his Comentario resolutorio de cambios (1556), stated a clear quantity theory of money and a purchasing-power-parity insight:

"Money is worth more where it is scarce than where it is abundant."

He observed that prices in Spain had risen precisely because money had become abundant there, and that this explained why goods were dearer in money-rich Spain than in money-poor France. Tomás de Mercado (c. 1525–1575), a Dominican who had lived in Mexico, made similar observations in his Suma de tratos y contratos (1571). These insights paralleled and slightly preceded the more famous statement of the quantity theory by the French jurist Jean Bodin in his 1568 Response to the Paradoxes of Malestroit.

The Salamancans also pushed value theory decisively toward subjectivism. Luis de Molina (1535–1600), in his treatise De iustitia et iure (1593–1609), and Domingo de Soto (1494–1560) insisted that the just price is set by common estimation in the market, driven by utility and scarcity, and explicitly denied that it depends on the intrinsic nature or cost of the good or on the labor expended. Molina noted that prices rightly rise when goods are scarce and buyers numerous, and fall in the opposite case — and that this fluctuation is entirely just. On usury, the Salamancans, working in a world of sophisticated exchange banking, refined the licit titles (lucrum cessans, damnum emergens, risk) to the point where a great deal of commercial lending could be justified, even as they continued to condemn usury in principle.

It is this achievement that led Joseph Schumpeter to make his most provocative historiographical claim: that "it is they, not Adam Smith or the physiocrats, who come nearest to having been the 'founders' of scientific economics." Whether one accepts Schumpeter's genealogy or not, the Salamancans mark the point at which the ethical-theological tradition began to precipitate out a recognizably analytical, price-and-value-and-money economics.

The Islamic and Jewish traditions

The Latin story is not the whole story. The Islamic world, which transmitted Aristotle to the West, developed its own rich economic reflection. The Qur'an flatly prohibits riba (usurious increase), a prohibition at least as strict as the Christian one and still central to modern Islamic finance. Yet Muslim scholars and jurists developed extensive analyses of markets, hisba (market supervision), and money. The towering figure is Ibn Khaldun (1332–1406), the Tunisian-born statesman and historian whose Muqaddimah (1377) contains analyses of the division of labor, the value of goods as embodying labor, the effects of taxation on production (an anticipation of what would later be called the Laffer curve — that excessive taxes reduce the tax base and thus revenue), supply and demand, and the life-cycle of states and economies. Schumpeter's failure even to mention Ibn Khaldun is now regarded as one of the notable lacunae in his history, and recent scholarship treats Ibn Khaldun as a major independent economic thinker.

Jewish economic thought, meanwhile, wrestled continually with the Deuteronomic distinction between lending to a "brother" and to a "foreigner," and with the practical realities of the role forced upon Jewish communities in Christian Europe. Maimonides (1138–1204), in the Mishneh Torah, codified the biblical prohibitions on interest among Jews while permitting lending to Gentiles, and Jewish legal scholars later developed devices such as the heter iska — reconstruing a loan as a partnership — that parallel the Christian licit-title reasoning remarkably closely.

Historiography and the open questions

The modern study of ancient and medieval economic thought has been shaped by a handful of great debates. R. H. Tawney, in Religion and the Rise of Capitalism (1926), and Max Weber, in The Protestant Ethic and the Spirit of Capitalism (1904–05), framed the medieval economy as the ethically restrained "before" against which a disenchanted, profit-driven modern capitalism defined itself — a narrative of the "long divorce" of economic life from moral supervision. Raymond de Roover spent his career complicating this picture, showing the Scholastics as flexible, market-aware analysts rather than dogmatic anti-commercialists. Odd Langholm reconstructed, text by text, the transmission of Aristotelian price and value theory through the medieval schools, revealing a far more continuous and sophisticated tradition than either the Weberian or the Schumpeterian caricature allowed. Karl Polanyi and the substantivist school in economic anthropology challenged the very assumption that "the economy" existed as an analyzable object before the nineteenth century.

Several questions remain genuinely open at the research frontier. First, the value-theory debate: did Aristotle and the Scholastics hold a subjective/utility theory of value (as the Austrian-inflected reading of Emil Kauder and others maintains), a cost-and-labor theory (as some readings of Scotus and Aquinas suggest), or an unstable mixture that different successors resolved in different directions? Second, the just-price question: how far was the just price a market price and how far a normatively regulated one, and did this vary by author, place, and commodity? Third, the usury paradox: how did a society that formally criminalized interest for centuries nonetheless build the most sophisticated credit and banking institutions of the pre-modern world, and what exactly was the relationship between doctrine and practice — did theology constrain finance, rationalize it, or merely trail behind it? Fourth, the question of transmission and originality: how much did the Salamancans and the later mercantilists genuinely owe to the medieval Scholastics, and does Schumpeter's provocative genealogy — that scientific economics was born in the confessional and the theology faculty, not the Enlightenment — hold up? Finally, the comparative question: how should the Latin Christian tradition be situated alongside the Islamic and Jewish traditions with which it was in constant, if often hostile, contact and exchange?

What unites the whole tradition, and separates it decisively from the discipline that Adam Smith would inaugurate, is that these thinkers never asked "how does the economy work?" as a question independent of "how ought we to live?" For Aristotle, the merchant who accumulates without limit has misunderstood the purpose of wealth. For Aquinas, a price is a moral fact before it is a market fact. For Oresme, money is a public trust. The great achievement of the modern history of economic thought has been to show that, within this thoroughly ethical framework, these thinkers nonetheless worked out — with real rigor — most of the analytical building blocks that later economists would inherit: the functions of money, the quantity theory, the gains from the division of labor, the role of utility and scarcity in price, the legitimacy of risk-bearing returns. They did economics, in short, long before there was economics.

Further exploration

Aristotle, Nicomachean Ethics (Book V) and Politics (Book I) — the founding texts; read V.5 on exchange and I.8–10 on acquisition and usury directly, in a good annotated translation such as those of Terence Irwin or C. D. C. Reeve.
Thomas Aquinas, Summa Theologiae, II-II, qq. 77–78 — the classic Scholastic treatments of the just price and of usury; concise, dialectical, and endlessly cited.
Nicole Oresme, De Moneta (c. 1355) — the first treatise on money; the modern edition and translation by Charles Johnson (1956) makes its arguments about debasement and sound money accessible.
Ibn Khaldun, The Muqaddimah (1377) — Franz Rosenthal's translation (abridged by N. J. Dawood) opens a whole non-European tradition of economic and social analysis.
Joseph A. Schumpeter, History of Economic Analysis (1954) — Part II is the provocative source of the claim that the Scholastics and Salamancans founded scientific economics; opinionated and indispensable.
Raymond de Roover, Business, Banking, and Economic Thought in Late Medieval and Early Modern Europe (essays, ed. Julius Kirshner, 1974) — collects the studies, including "The Concept of the Just Price," that reshaped the field.
Odd Langholm, Economics in the Medieval Schools (1992) — the definitive scholarly reconstruction of Aristotelian economic thought from 1200 to 1350; demanding but authoritative.
Marjorie Grice-Hutchinson, The School of Salamanca (1952) — the book that recovered the Spanish scholastics for economics, with translated readings.
Diana Wood, Medieval Economic Thought (2002) — the best modern single-volume synthesis for the student; clear, thematic, and well-documented.
R. H. Tawney, Religion and the Rise of Capitalism (1926) — a beautifully written classic whose thesis about the moral supervision of medieval economic life is still worth arguing with.
Karl Polanyi, The Great Transformation (1944) — for the deep background claim that "the economy" is a modern invention, and that pre-modern economic life was embedded in society.