Information and Foresight: An Analysis of ‘Entrepreneurship’ in Late Scholastic Economic Thought

Abstract

Although historians of economic thought have paid some attention to late scholastic views on ‘entrepreneurship’ or, to put it less anachronistically, prudent commercial behavior, more often than not they have overlooked the importance of the closely related concepts of foresight and information in the works of early modern theologians. Focusing on the writings of the influential Jesuit authors Luis de Molina, Leonardus Lessius and Juan de Lugo, I will argue that their economic and ethical views on prudent commercial behavior was more in line with the self-perception and actual behavior of early modern businessmen than has been acknowledged thus far. Businessmen were acutely aware of the fact that their commercial success to a large extent depended on correct anticipation of future fluctuations in price. Apart from having recourse to astrology, they also learned to apply a rudimentary sort of ‘probability calculus’ in order to reduce the all-pervasive uncertainty of the future to a manageable set of specific risks and expectations. Late scholastic authors had a keen sense of this ‘probability calculus’ and fully integrated it into their discussion of the just pricing of insurances and money loans.