Hugo Grotius on exchange and price

This paper explores the way Grotius's construction of a theory of acts which aimed at dealing with legal issues, in the chapter on contracts in a book from De Jure Belli ac Pacis (1625) where the causes of the birth of war are discussed (bk II), gave birth to an original understanding of exchange and price. The latter is part of a more extended economic analysis which, at the difference of economic policy aspects, has been paid till now little attention. Yet, Grotius' conception of exchange and price occupies an interesting position between the scholastic analysis where price was compared to a norm of just price and the later articulation, in classical economic thought, between typically natural prices and market prices. In a way, his conception of price might be viewed as a continuation of the Scholastic approach, illustrated two centuries and a half ago by Thomas Aquinas in the Summa Theologica, IIa-IIae, q. 77, where the issues debated aim to enlighten the priest about the morality of a transaction carried out by such of his parishioners. But here, with Grotius, the issue is no longer the morality or sinfulness of the transaction, but its lawfulness. This shift from a religious to a legal approach gives birth to an attempt to explain why individuals can deviate from a commonly accepted price in an exchange, and under what conditions, in the framework of either natural law or the law of nations, this effective price can be regarded as legal by a magistrate.