Salamanca school

They were Scholastic philosophers who were tied to the Catholic church.

They were especially influential in their writings on the theory of value. At the time the dominant theory of value was that of the just price, a variant of the cost-of-production theory of value, most recently manifested in the labor theory of value.

On this Luis Saravia de la Calle wrote in 1544 that

"Those who measure the just price by the labour, costs, and risk incurred by the person who deals in the merchandise or produces it, or by the cost of transport or the expense of traveling...or by what he has to pay the factors for their industry, risk, and labour, are greatly in error.... For the just price arises from the abundance or scarcity of goods, merchants, and money...and not from costs, labour, and risk.... Why should a bale of linen brought overland from Brittany at great expense be worth more than one which is transported cheaply by sea?... Why should a book written out by hand be worth more than one which is printed, when the latter is better though it costs less to produce?... The just price is found not by counting the cost but by the common estimation."

The school rarely followed this idea through systematically, and, as Friedrich Hayek has written, "never to the point of realizing that what was relevant was not merely man's relation to a particular thing or a class of things but the position of the thing in the whole...scheme by which men decide how to allocate the resources at their disposal among their different endeavors."

They have been compared to the Austrian School, although it is not thought that they had any direct effect upon them, and Murray Rothbard referred to them as "proto- Austrians."

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