Olivi: First Scholastic Economist
The possibility of earning and the “added value”
The novelty of the thought of the Franciscan theologian Pietro di Giovanni Olivi (1248-1298), called the Speculative Doctor, is important for the history of economic thought, because it constitutes one of the first and most significant sources for the delineation of the origins of economics as science. To understand the acumen of his thinking and the modernity of his vision, it is enough to remember two of his fundamental contributions: the theory of capital and interest and the theory of economic value and a just price.
Brother Giovanni Olivi recognized the existence of a private money, which he called capital, endowed with a special profit ‘seed’, making it capable of generating more. By virtue of the subjective will of ‘destination’, i.e. the intention on the part of the owner to use it, capital has in itself the virtual possibility for gain. With this concept-definition of 'capital', Giovanni Olivi overcomes, without incurring the ecclesiastical condemnation of interest, the practice of the 'sterility of money'. In the strength of propositum individuale (intention of the individual) a distinct value is recognized for capital, superior to that of simplex pecunia(money as a pure means of exchange): the value of superadiunctus, i.e. interest, for lucro cessante (loss of profit). Thus, there are two conditions for a sum of money or a saleable object to be described as 'capital': the owner's will and his investment.
The second major contribution of Olivi to economic science concerns the theme of economic value and a just price. This stems from the use that men make of goods and the usefulness they find in them: changing the utility also changes the value (subjective estimate of the usefulness of goods). The value of goods is determined by communal and not personal use. The economic value moves from a subjective plane to one of collective analysis, based on the common use of things. This allows for the introduction of the concept of market as a place (communitas), where the coming together of supply and demand occurs and where the price of goods is actually established. Determining factors here usually are: the scarcity of the product and thus the difficulty in finding same (raritas), the product’s intrinsic qualities (virtuositas), the subjective will and personal taste of the buyer (complacibilitas). Finally, Olivi, by overturning the scholastic principle that forbade the sale of ‘economic time’, shows that time spent ought to be seen in the same light (and have the same value) as the availability of money; furthermore, such time can be assessed economically when money is turned into capital. The prepayment of a debt justifies the request for a discount, because the debtor waives his right to dispose of the money usefully before the time originally agreed upon.