I have found a review of it which offers a bit of a context of the article and some complementary Dutch sources whicht might be of help. (the article question can be disregarded) Section 2 is of interest:

http://www.springerlink.com.ezproxy.leidenuniv.nl:2048/content/t5527k5716472857/fulltext.pdf

Gary North wrote quite a bit about it a few years ago. I think he has some links to his material on his web site.Also, the Acton Institute has some good material at acton.org. The Church has always grounded the right to property and the sanctity of property in the Biblical attitude toward property. Much of the OT law was property law. It was summarized in the commandments to not steal and to not covet, or to put those commands positively, to respect the property of others.

Building on the principle of property, the primary goal of the Scholastics was to determine the market conditions that result in a just exchange of goods, or the just price. Eventually, they determined that the just price is the one set in a free market. They allowed for state intervention in extraordinary times, but required that the state try to determine what the free market price should be. Of course, free markets are just the implementation of property rights.

Raoul, Thanks for the info on Hayek’s “Law, Legislation and Liberty.” It looks like a good resource.

Haeyk: “…should have disposed once and for all of the Weberian myth of the Protestant source of capitalist ethics.”

The Dutch Protestants should get some credit for implementing Scholastic economics when Catholic countries refused, but it’s true the thinking came from Catholic scholars. Weber actually credited Calvinism, which is a subset of Protestantism. In the Dutch Republic and in Calvin’s Geneva, Calvinists opposed free markets and demand church control of the economy through the state. Fortunately for the Dutch the political leaders didn’t listen. They were what Israel calls Erasmian Protestants and were much to individualistic to submit to control by the church. It was the Erasmian Protestants who implemented capitalism and the Calvinists who opposed it. In addition, capitalism requires specific institutions for it to work, including the rule of law, honest police and courts, equality before the law, etc. The Dutch made radical changes in these institutions and without the reform of old institutions and creation of new ones free markets would not have worked and would have been taken over by the nobility and cartels.

MG, Thanks for the offer! Right now my plans are pretty vague because of family commitments. Years ago I ran across a work by Etienne Laspeyres in which he catalogued the pamphlets on business and economics written during the golden age of the Dutch Republic. I believe it was written in Dutch and I couldn’t find an English translation. Several people claim he knew more about the Dutch attitude toward economics than anyone. Do you know of any English translation?

Fascinating stuff! If you are going to write that book and you need a researcher ‘on the ground’ then I would be proud to help. This would fit in well with my study of Economic history.

kind regards,

MG

I guess it comes down to each his own. I love Hayek’s work but it doesn’t measure up to Mises.

Forgive my ignorance but I would think that “the dispersed nature of knowledge” can only be known by action. I fail to see how Mises and Hayek differ on this issue. In my opinion, they just seem to be looking down on the same valley from two different mountains.

I think you’re right about money. Mises and Hayek are closer than they thought themselves.

On other issues though Hayek is quite different. For example, to Hayek it is not the nature of action that makes socialism impossible, but the dispersed nature of knowledge. On this subject I agree with Hayek.

So money is an emergent phenomenon arising out of the actions over time of the actors in a society. Am I missing something? Where does Mises claim that the actors must understand the institution of money in order for it to evolve?

are you aware of any resources which either grounds capitalism on a biblical basis, or provides an economic analysis of the old testament ordinances?

I haven’t read any of the works you’ve cited, but that seems like a strong case for the Dutch being the first real capitalist country.

Don’t forget Jesus Huerta de Soto’s Money, Bank Credit, and Economic Cycles. He shows that the Bank of Amsterdam provided 100% gold backed deposits for about 200 years, and that it was a place of refuge for money across Europe as wars raged in the rest of the continent.

In Venice on the other hand, he shows some major early business cycles caused by the expansion of the money supply.

One of my first clues to capitalism’s origins was Smith’s “Wealth of Nations.” Check out how many times he cites the Dutch as his example. Then I ran across several economic historians who claimed that the Dutch created the first government that truely protected property rights for everyone. Sorry, I can’t remember who it was.

But first I had to cut through all of the Marxist crap about capitalism and come up with a sound definition. That’s where Austrian econ comes in very helpful. Also, North’s work on institutions and Geertz work on culture and economics. When I had a good definition of capitalism I went looking for the country that had the first set of institutions like those necessary for capitalism. I got Jonathan Israel’s “The Dutch Republic” and Jan de Vries’ “The First Modern Economy” which is about the Dutch Republic. Also important was Philip S. Gorski’s “The Disciplinary Revolution: Calvinism and the Rise of the State in Early Modern Europe” which has a chapter on the Dutch Republic.

Finally, I had to figure out where the Dutch got their ideas about free markets. That led to the study of the late Scholastics in “Faith and Liberty: The Economic Thought of the Late Scholastics”
by Alejandro A. Chafuen, “New Light on the Prehistory of the Austrian School” by Rothbard, and works by Raymond de Roover. I was convinced that the Dutch got their economic thought from the late Scholastics at the Spanish university at Salamanca, but I couldn’t prove it until the Acton Institute ran a series on the Dutch priest Leonard Lessius in the Fall 2007 issue of their journal “Markets and Morality.” Lessius brought Scholastic economic thought to the Dutch and he was possibly the most influential intellectual in the Republic until Grotius.

Someday I would like to turn the research into a book. Someday. When I get time.

A lot of people like to start capitalism with Venice, and they have very strong points. I wouldn’t argue too much about it; Venice had a lot of influence on the Dutch. But I didn’t choose Venice for several reasons. 1) Venice’s wealth depended upon a monopoly on trade between Northern Europe and the East, not free markets. 2) There was no mass manufacturing like the Dutch developed, or manufacturing for the masses. Manufacturing was still controlled by guilds, heavily regulated by the state, aimed at the wealthy and custom work for the most part. 3) Trade was heavily regulated by the state. Still, Venice comes in a very close second.

I was just reading the “indirect exchange” chapter in HA where Mises essentially confirms Menger’s spontaneous theory of money and rejects the rationalist constructivist theory. So in this sense he and Hayek certainly agree.

I think where they differ is that Mises says that money as an institution arose as individuals strove to to achieve ends in an indirect way and that further, in doing so, they individually comprehended the fact that in acquring a more marketable good they were nearer to their goal.

Hayek takes it even a step further and says even this is uneccesary. Individuals don’t even need to comprehend that this route is better. Money will still arise since those individuals who happened to do it in the past will tend be most the successful in the future (even if by chance). So you could even conceive of money arising if humans were like imitational automatons.

I agree with Hayek but I think you could say the process can be hastened if individuals comprehend better modes of action, so Mises is right in a sense too.

You seem to be quite knowlegdeable on the subject of capitalism in and the wealth of the Dutch Republic. Could you give me some good sources and books to read on that subject? Being Dutch it is something I am fascinated with as well.

I have to agree with Hayek on this one. My own study of the history of capitalism has led me to a similar conclusion. The great Scholastic writing on economics was about the morality of it, especially the just price, not the efficiency or wealth creating effect. When the Dutch Republic implemented scholastic writing, it did so for reasons of morality. It took a century before Adam Smith could identify the institutions, especially the free market, as the cause of the Republic’s wealth. Most Dutch writers attributed their wealth to the abundance of manufacturing or to God’s blessings. The Dutch had stumbled onto the greatest system of wealth creation the world has known.