The history of economic thought did not develop in a straight line from superstition to enlightenment. Rather, it contains a lot of back and forth, zig and zag to come to its present state. For this reason I would like to talk about Juan de Mariana’s “On the Coinage,” an essay by a 16th century Spanish Scholastic, in which he explained some of the fundamentals of issuing money. Mariana’s opinions on monetary theory can also be found in “A treatise on the alteration of money,” which includes an overview of his political views. For someone who wants to get into Mariana I suggest the essay first. Many of the arguments expounded here have similarities with modern theory, and in a particular case he makes a statement very similar to Milton Friedman’s.

Mariana was born to a poor family in 1536 near Toledo, and in 1553 he was admitted to the prestigious University of Alcala. After completing his studies, he went on to teach theology and philosophy in Rome, Sicily, and Paris until the age of 37. He then retired due to problems with his health, but this did not stop him from becoming a prolific writer. Among many books, he wrote a famous history of Spain, Historiae de rebus Hispaniae, and De Rege et regis institutione (On the King and the royal institution); the latter will be of more interest to us since that text includes his political and economic theory.  

Juan de Mariana is considered a forerunner to marginalism and the Austrian school of economics. Murray Rothbard called him “The learned extremist” and rightfully so. Mariana believed that government was based on popular consent, and any actions that went against this, like imposition of new taxes and appropriation of private property, were justification for the assassination of a king. He called this tyrannicide. He supported free trade and argued against the debasement of currency, which he condemned as intervening with the efficient operation of the economy. He was often judged harshly by his fellow clerics, and his books were banned in France as undermining the foundations of absolutism. However, he lived a life of relative safety and died at the age of 88 in 1624. For more on his life you can read Jesus Huerta de Soto’s Biography of Juan de Mariana: The Influence of the Spanish Scholastics (1536-1624).

Mariana’s monetary theory has many interesting aspects. Regarding the debasement of currency by mixing gold and silver coins with copper, he says:

I have always typically thought of those men who promise to transform metals by some magical method – to make silver out of bronze and gold out of silver – as being the most untrustworthy sort, like itinerant snake oil salesmen.

Mariana uses harsh words against those who try to manipulate the value of the currency to solve economic problems. Yet today such policies have spread among the governments of the world. Some amount of currency devaluation is often used for a number of reasons, such as boosting exports or increasing short run employment. Mariana would be greatly disappointed.

Mariana makes another interesting observation based on his theory of natural rights. As the king has no justification to mess with his citizens’ property or establish taxes without their consent, the same applies to inflation: “It, too, is a kind of tax by which an amount is extracted from the possessions of subjects.” This is very similar to what Milton Friedman would later say: “Inflation is taxation without legislation”. 

Mariana explains that money has two values, intrinsic and extrinsic. The former is established by the quality and quantity of the metal and the latter is set by law. In plain language, intrinsic comes from the market, extrinsic comes from the state. Here again, Mariana has some harsh things to say about those who separate the two. 

He is a fool who separates these two values such that the subsequent legal value does not stick to its natural value. Unfair is he who commands that something that is commonly valued at five be generally sold for ten. No one should try to make this happen through effort or strictness.

The only reason for which debasement of currency is reasonable is as a last resort in the case of war, when all other means of paying the army have been exhausted and the independence of the state is uncertain. Even then, once the crisis has ended, the currency should be left to stabilize again at its former levels. 

There is one point in Juan de Mariana’s reasoning that I have to disagree with. He argued that if a fiat currency was used, then no one would be willing to exchange goods and services for the new currency since it is intrinsically worthless, a mere piece of paper. I can acknowledge all the problems created by incompetent monetary policy,  but I doubt that such chaos in commercial activity would happen from its adoption. After so many years of being off the gold standard it is reasonable to say that de Mariana has exaggerated its consequences. 

I will end with the same words de Mariana used to close his essay:

I would like to give princes one last piece of advice: if you want your state to be a healthy one, do not touch the primary foundations of commerce – units of weight, measurement, and the coinage. A many-layered swindle lies hidden behind the appearance of a quick fix.


[Editor’s note: See also this Essay by Maryann Keating at AdamSmithWorks, Adam Smith, Classical Liberalism, and the Legacy of Hispanic Scholasticism.]


Chris Loukas was born in Greece and is an economic journalist and recipient of a bronze medal in the 2022 International Economics Olympiad. His articles have been featured by the Foundation for Economic Education, the Mises Institute and Adam Smith Works.