One of the most eminent moral and dogmatic theologians of his time, Cardinal Juan de Lugo, S.J., was the last representative of the famous group of early-modern Catholic thinkers associated with Spain’s University of Salamanca. Sent by his father to study law at Salamanca, de Lugo entered the Jesuits in 1603 and turned his attention to theology. His theological reputation was such that he was eventually summoned to Rome by the Jesuit General Mutius Vitelleschi in 1621.
Despite his brilliance, de Lugo remained a humble man. He only allowed publication of his writings following a direct order from his Jesuit superiors. He also gave freely of his time and goods to Rome’s poor. De Lugo was made a cardinal by Pope Urban VIII in 1643, though only under obedience as he initially refused the honor. For the remainder of his life, de Lugo served the papacy in various official capacities. St. Alphonsus de Ligouri called him the greatest Catholic theologian since St. Thomas Aquinas.
De Lugo’s writings, such as De Incarnatione Domini (1633), De virtuto fidei divinæ (1646), and Responsorum morialum libri sex (1651), covered subjects ranging from physics to law. Perhaps his most famous work was De justitia et jure (1642), which was reprinted numerous times in following centuries. In the context of studying particular ethical problems, this work addresses important economic questions.
De Lugo wrote extensively on the nature of money and explored concepts of opportunity-cost to explain why merchants might stop supplying a particular good despite existing demand for that good.
De Lugo was, however, especially interested in price theory. One element of any rational valuation of a good, he suggested, was its utility. But, he noted, this was determined by collective subjective valuation of people, both the prudent and the unwise. A good’s subjective common estimation, De Lugo argued, thus differed from its objective use value. This was further complicated by matters such as the relative scarcity of the good in question and the volume of demand. These observations led de Lugo to conclude that the just price was the market price.
Though never viewing himself as an economist, Cardinal de Lugo’s work represented the culmination of the Salamanca’s school contributions to free-market theory. He exemplifies how serious theological inquiry into human choice and action can reveal economic truths.