The University of Salamanca was organized in the 13th century in the city of Salamanca, Spain. Its academics—Roman Catholic friars, students, and others—provided initial writings and thoughts consonant with Austrian economics in the late 16th and early 17th century. This became known as the School of Salamanca.
An April 2025 family day trip to Salamanca was a reminder that freedom to think and write at University of Salamanca provided ideas for individual people around the world to prosper with the opportunity to be private property owners, own and operate a private business, and implement economic concepts never pursued in the past. According to one source,
The School of Salamanca, or “Hispanic School”. . .was not the result of a deliberate plan, or of a well-established project. It was a current of thought that was spontaneously created around a master. And this master-founder was Vitoria.
Francisco de Vitoria (1483-1546) was a Dominican priest who left Paris and came to Spain in 1513. He arrived in Salamanca in 1526 after being at another Spanish university. He remained in Salamanca until he died. Vitoria published nothing while alive. His thoughts were resurrected from his students’ notes.
He boldly asserted native peoples have rights to property even before Spanish conquistadors arrived. According to the same source as above,
Vitoria’s freedom of expression from his chair is astonishing. An example: the instrument that Spain brandished to exercise its dominion over the Indies was a bull of Pope Alexander VI, which gave the Crown of Castile a right over the lands and inhabitants of the Indies. However, in two of his famous re-readings (Relectiones) De Indis and De jure belli (1539) [Francisco de Vitoria, Leçons sur les Indiens et sur le droit de guerre. trans. Maurice Barbier, o.p., (Libraire Droz, 1966)], Vitoria simply asserts that the Emperor is not the master of the world and that the Pope is not the lord of the planet either. According to Vitoria, the papal bull does not legitimize either the conquest or the discovery. He asserts that the property of the Indians does not belong to the monarch, nor to the conquistadors, and that the Spaniards do not have the right to get their hands on the gold of America or to exploit the wealth of the continent against the will of the Indians. The emperor, he says, rules over a community of free peoples. Imperial laws are only just insofar as they serve to promote, conserve, and protect the indigenous people.
He asserted the Indians’ property belonged to them and not to the monarch and conquistadors. Spaniards had no right to take Indian gold or maneuver other wealth against the will of the Indians. Vitoria stated the Caribbean islands should be politically protected land for the native peoples’ welfare.
Many people followed Vitoria’s teachings. For example,
Domingo de Soto, known for his theory of money and his renovation of the law of nation /jus gentium; Tomas de Mercado, who studied the commercial exchanges between Spain and the Indies; Martin de Azpilcueta, former rector of the University of Coimbra, who was the first economist to correctly analyze the process of inflation caused by the influx of precious metal from the Indies.
. . .
Domingo de Soto maintained that the wealth of nations came from exchange and not from the accumulation of precious metals. He was thus clearly opposed to mercantilism.
A second generation of Jesuit students followed. One was Luis de Molina who taught in Madrid and Coimbra. Molina emphasized the “right price” and competition,
Luis de Molina explained that the right price is the price of competition, of the game of supply and demand; that the value attributed to things is subjective and not objective, as Marx, and Ricardo before him, would later say. For Molina, the right price is the market price; it is the abundance or scarcity of goods that determines their price and not the costs of production, work or risk, as was believed in the Middle Ages (via Duns Scott).
Additionally, their insights led them to argue for the limitation of the state and the upholding of property rights,
The masters of the Salamanca school criticized excessive taxation and price controls. Price controls can and should only be exceptional. They also clearly defended property, which is necessary for social peace; to deny it, to refuse it, according to them, is a heresy (Domingo de Soto), but it is not absolute; it can never be detached from its social function.
While Mises is credited as defining praxeology’s role in economics, the writings from the School of Salamanca provided groundwork for the Austrians almost three centuries later. Professor Jesús Huerta de Soto and Daniel Lacalle from Spain are contributors to Mises Wire. Each one has taught Spanish university courses centered on Austrian economics. The School of Salamanca should be remembered as a lasting legacy centuries later from a day trip worth savoring.
