Economics vs. Extorsionary Regulation: The Birth of Price Theory in Medieval Languedoc (1295)

Résumé

Peter Olivi discovered price theory in Narbonne in his 1295 Treatise on Contracts to counter the spurious arguments used by confessors to inflict massive fines on merchants. He analyzes demand and supply, equilibrium by "common estimation of the market price" i.e., rational expectations. He extends his analysis to capital asset pricing by introducing the concepts of capital and probability. He was then excomunicated and his book sentenced to be burnt. Courageous people managed to save copies that can be found nowadays in various places.