The rise of pure economics under a new form of scholasticism in view of the present socio-economic system

Abstract

The mainstream of economics still stands on the elements of pure economics. On the contrary, new analytical tools outside the field of economics are thriving by focusing on the socio-economics system. We need examinations of new analytical tools and the ideas of equilibria. In modern times, socio-economic factors changing the economic system should no longer be regarded as negligible. The idea of reciprocity will urge to reconsider the traditional rationalism. In the depth of these objections against the mainstream, however, the so-called theological rationalism will be revealed. The bounded rationality principle then is not deviating from the track set by the traditional rationalism, but is rather an extended form of it. In this article, we will identify the mainstream of economics with a new form of scholasticism originated from Neo-Thomism based on the School of Salamanca rising during 16–18th century. Realities in general are distorted from the ideal state. Given such a distortion, in the scholastic view, human free will can be exerted in conformity with God’s will. The bigger the distortion, the more human free will can be justified. However, it requires a lengthier sufficiency proof with additional assumptions and conditions. The proof of ideal states may then require a more complicated modeling. The resulting fact that the degree of complication may be much greater in modeling is very welcome in the sense that this kind of work, occasionally involving mathematical refinements, could a fortiori provide economics with the ideal goal grounded by divine inspiration. The distortion should thus be spiritually purified. Moreover, we also provide a historical note on the formation of the mental sources of capitalism. Prior to the Austrian theory, the Salamanca school definitely took into account the harmony between reality and scholasticus. Here, an interesting pragmatic compatibility between the purity of God and the chaos fabricated by secular human greed arises, but it is well known that Weber (The Protestant ethic and the “Spirit” of capitalism and other writings. Penguin, Westminster, 1905) found the source of capitalism in Protestantism. In this context, however, we learned that another moral source of capitalism was found in Catholicism in the form of scholasticism, although it must be strictly suppressed the idea to summarize scholastic arguments as the main principle of Catholicism. Readers in advance must carefully keep from identify the modern Catholic School’s Charter of bonus commune (the common good) and the personalism with capitalistic individualism. Finally, we notice that bounded rationality is regarded as a sophisticated demonstration to vindicate rationalism in conformity with a traditional scholastic manner.