Abstract

Confession was made compulsory in 1215 at the Lateran Council. Confessors became a kind of regulators, providing advice and inflicting fines, called “restitutions”. Peter Olivi created price theory in 1295 to show that their concepts of ‘just price’ and ‘usury’ were misconceived and harmful for the ‘common good’. The paper uses Olivi’s own words, duly translated into English, to bring out his path-breaking contributions using the tools of elementary microeconomics to take stock of his achievements. His theoretical framework is presented step-by-step, culminating with capital-asset pricing and long-distance trade. The paper then briefly highlights the salient thinkers that kept his legacy alive across about three centuries.