"Saint Thomas Aquinas" (c. 1400)
Gentile da Fabriano (1370–1427)

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The concept of the just price is the basis of a great deal of erroneous economic thought that permeates our supposedly free market, capitalistic society. Laws regarding usury, loan sharking, price gouging, ticket scalping, dumping, profiteering, equal pay, price discrimination, predatory pricing and lending, product bundling, and antitrust — these are all prime examples of this fallacious way of thinking. Opinions expressed on these practices, and things like pay for supermodels, executives, actors, and athletes, as well as nebulous concepts of fairness, are likewise predicated on just price theory — regardless of whether the opinionist has any concept of basic economics or has ever even heard of just price theory. Regulations establishing price ceilings, price floors, a minimum wage, a living wage, a family wage, rent control, government subsidies, price supports, and in many cases tariffs, also result from the pursuit of the just price.

The term just price is customarily disguised with a euphemism. So, just like SCHIP, Medicare, and Medicaid are never called socialized medicine, and just like refundable tax credits are never referred to as income transfer programs, attempts to establish a just price are usually cloaked in terms of market failure remedies or consumer protection laws. The mention of just price theory either invokes a blank stare, or, in the case of those familiar with the term, the dismissal of the notion as a discredited medieval religious doctrine.

All myths, of course, are not created equal. For instance: The use of the term just price is very different from another widely held myth — that of the just war. The principle of the just war underlies our protracted war in Iraq, as well as our global crusade against terrorism. In its essence, the doctrine concerns the use of force: when force should be used and what kind of force is acceptable. Although many would now argue that the war in Iraq does not meet the criteria for a just war, they fully accept the concept as legitimate. In fact, it is the norm rather than the exception when discussions about the war turn to just war theory. Americans who don't view themselves as particularly religious, as well as those who have never studied the finer points of theology and don't generally participate in theological discussions, have suddenly taken to cloaking their positions with the rhetoric of just war theory.

But aside from the knowledge and usage of the terms, there are some important philosophical differences between the concepts of the just price and the just war. There are many individuals who recognize the myth of the just price, yet believe to the contrary about the just war. The former is viewed as detrimental to the operation of free market capitalism, while the latter is held up as a model for warfare. A more significant distinction is simply and bluntly this: Although full implementation in society of the concept of the just price might result in economic hardship, the loss of liberties, and a command economy, acquiescence in just one point of just war theory might result in the deaths of thousands of people.

I don't suppose there is anything I write and speak about with more fervor than the biblical, economic, and political fallacies of religious people. Whether it is Christian support for victimless crimes, educational vouchers, the military, preemptive war, or the pseudo-Christianity and faith-based socialism of President Bush, I have always tried to declare "the whole counsel of God" and destroy Christian reliance in and defense of the state. As anyone knows who is familiar with my rewrites from a warmonger perspective of Psalm Twenty-three, the Beatitudes, and the Lord's Prayer, I have always taken a radically biblical approach to debunking religious fallacies and dethroning the great god-State. And since there is no reason to stop now, I can therefore passionately say about my subject that, in the absence of fraud, not only is any price agreed upon between a willing buyer and a willing seller the just price, that alone is what makes it the just price.

It is my desire in this talk not only to break the myth of the just price, but to present the biblical case for laissez-faire. But why the biblical case? Truth is truth, is it not? "Two plus two equals four" is true whether written by an apostle on a parchment or a teacher on a chalkboard. Agreed. But because the concept of the just price has religious overtones, it is essential that the biblical case be made. And not only that, for the Christian the Scripture not only contains truth, it is truth. The Bible is our final authority in all matters — secular and sacred — not the natural law, not denominational creeds, not the decisions of church councils, not papal encyclicals, and not Human Action, however highly Christians regard — and rightly so — the economic thought of Ludwig von Mises. The clarion call for the Christian is "Thus saith the Lord," not theological treatises, not confessions of faith, not religious traditions, not a system of philosophy, and not "Thus saith Man, Economy, and State," however much Christians are indebted to Murray Rothbard for deepening our understanding of the potential of the free market and the perniciousness of state intervention into that market.

The Biblical Concept of Justness

The concept of justness is a biblical one: God sends rain "on the just and on the unjust"[1] ; Christ died for our sins, "the just for the unjust"[2] ; there will be "a resurrection of the dead, both of the just and unjust."[3] Now, the expression just price is nowhere to be found in the Scriptures. This ipso facto does not, of course, mean that the concept should be dismissed out of hand. After all, the word trinity is not in the Bible either. The Scripture does have some general principles as to when something is just and to what needs to be done justly. For instance: A just man does what is "lawful and right,"[4] judgment and rule are to be done justly,[5] servants are entitled to what is "just and equal,"[6] and we should follow that which is "altogether just."[7]

Although there are numerous references in the Bible to things being sold (houses, land, animals, people, food), there is generally no mention of what the items were sold for. Twice each we read of an item being sold for "full price,"[8] the price of an object being above rubies,[9] and something being "of great price."[10] There are only a few references to a specific price paid for something, the most well-known examples being Esau selling his birthright for "one morsel of meat"[11] and Judas betraying the Lord for thirty pieces of silver.[12]

Although the Scripture doesn't speak of a "just price," we do read of a "just weight" four times,[13] a "just measure" five times,[14] and a "just balance" two times.[15] In fact, it even says in the Book of Proverbs that "a false balance is abomination to the LORD: but a just weight is his delight."[16] Since following what is "altogether just" would apply to our commercial transactions, the absence of fraud would be essential for the price of any commodity to be said to be just. But one will search the Scriptures in vain for any other concept of what constitutes a just price.

The Just Price

Right or wrong, the concept of the just price will forever be associated with the medieval Roman Catholic philosopher and theologian Thomas Aquinas. Born about 1225, Aquinas is universally acknowledged as the greatest theologian of the Catholic Church. In his great summary of theology, the Summa Theologica, Aquinas discusses the concept of the just price in the section in his "Treatise on Prudence and Justice" called "Of Cheating, Which Is Committed in Buying and Selling."

As Rothbard and others before and after him have pointed out, Aquinas equated the just price, as did the Romanists, Canonists, and theologians that preceded him, with the common market price established by the "common estimation"[17] of buyers and sellers. However, as Rothbard explains: "Unfortunately, in discussing the just price, St Thomas stored up great trouble for the future by being vague about what precisely the just price is supposed to be."[18] The just price could not, in fact, be determined with precision. Indeed, it might even lie within a certain range and vary according to circumstances.

The idea that there is a just price in a monetary economic exchange is not just a medieval phenomenon. It is perhaps almost as old as commercial activity itself. The concept has been found recorded in ancient Babylonian inscriptions.[19] This should come as no surprise, for since the beginning of time there has been no shortage of people who thought it was their business to mind everyone else's business. This is especially true of government bureaucrats who, in the name of serving the public interest and protecting the economically disadvantaged, violently intervene in the free market. Aristotle's erroneous concept of equal value in a commercial exchange not only contributed to centuries of muddled economic thinking; it was revived and employed "as a philosophical justification for the medieval doctrine of the just price."[20]

One reason for the focus throughout history on the price paid by a buyer in an exchange was the unwarranted suspicion of merchants and mercantile activity. Aristotle, like his teacher Plato, disdained moneymaking, labor, commerce, and especially retail trade. Many of the early Church Fathers regarded greed to be the basis of commerce. Immoral means were considered the rule rather than the exception when it came to commercial activities. One party's gain in a transaction was thought to only be achieved by another party's loss. These ideas continued into the Middle Ages — the positive attitude toward the merchant of the great Church Father Augustine notwithstanding. Two ecclesiastical formulas overshadowed the profession of medieval merchants: "He who buys cheap in order to sell dear, seeks shameful profit," and "It is difficult among buyers and sellers not to fall into sin."[21]

Under Roman law, the price in a transaction was determined solely by the interaction of buyer and seller. Exception was only made for a minor who had been mistaken. Under the Justinian Code there were certain instances, such as the sale of land, where protection was accorded, not to the buyer, but to the seller, if the land was sold for less than half its value. Laissez-faire in transactions was the norm. Since all men wished to buy cheap and sell dear, it was expected that buyer and seller would each try to outwit the other. Fraud, of course, was not tolerated from either party.

Unfortunately, the Roman legacy of freedom of bargaining was sometimes augmented in the Middle Ages by some erroneous ideas. Frowned upon were buying and selling for gain, speculative transactions, buying goods and selling them for profit without improvements, selling goods at a price higher than their purchase without necessity, and price increases on credit sales because it was considered to be concealed usury, which was "universally prohibited and defined in the broadest terms."[22] Distinctions were made between what was allowed in the commercial transactions of the laity and clergy. In addition to the market price, the just price could also be the price "fixed by governments or government-privileged guilds."[23]

There were, however, two viewpoints that were decidedly in the minority. One, that the just price was only that beyond labor and expenses that enabled the seller to maintain his social status. And two, that the just price was the cost of production plus compensation for labor and risk incurred. The former has inaccurately been taken as typical of the scholastic doctrine of the just price;[24] the latter has given rise to the labor theory of value of Smith, Ricardo, and Marx. It should be pointed out that medieval discussions of labor, expenses, risk, and profit were generally for the purpose of justifying mercantile profits rather than determining just prices.

Like his predecessors, Aquinas maintained the necessity of a just price in every transaction. In examining his teaching as a whole, we see a number of principles:

• The merchant performs a valuable service
• The merchant can conduct business without sinning
• Buying and selling are to the advantage of both parties
• Misrepresenting the condition of goods in a sale is fraud
• Price is influenced by changes in supply and de