Davanzati, Bernardo (1529-1606)

Encyclopaedia of the social sciences, editor in chief Edwin R.A. Seligman, New York, The Macmillan Company, vol. V, 1931, p. 7

DAVANZATI, BERNARDO (1529-1606), Italian merchant and economist. After living for a time in Lyons he established himself as a merchant in Florence. Davanzati had many literary interests: he wrote a history of the Reformation in England (Scismad’Inghilterra, Rome 1602) and his translation of Tacitus (Florence 1637) at once took its place as a masterpiece of Italian literature. He was a member of the Florentine and other academies.

Davanzati’s contributions to economics are contained in two short essays: Notiziadeicambi(1582), dealing with foreign exchanges, and Lezionedellemonete (1588), a lecture on money delivered before the academy in Florence; both of which are published in his Opere (ed. by E. Bindi, 2 vols., Florence 1852-53, vol. II, p. 425-57). Except for a few unimportant quotations he does not appear to have been influenced by the canonistic literature on the legitimacy of usury and of dealing with foreign exchange. His approach is that of a merchant who analyzes facts and attempts to explain them. He recognizes the economic function of the foreign exchange market and describes the variations of exchange rates around par and between gold points which are fixed by the amount of interest lost pending the transmission, the cost of carriage and risk. Between these points exchanges fluctuate according to the supply and demand of bills.

Davanzati was one of the first writers to point out the quantitative relationship between the volume of money and the level of prices and explained the great increase in prices in the sixteenth century by the influx of gold from America. He was in favor of free coinage and severely criticized princes who debased their currency for the sake of an immediate gain and to the detriment of public finance, creditors and society as a whole. He also noted the influence of scarcity and subjective utility as factors in price determination.

Consult: Noaro, G. C., La teoria dei cambi esteri di Bernardo Davanzati (Rome 1920); Arias, G., Davanzati et Montanari in «Revue d’economie Politique», vol. XXXVI (1922) 733-50; Sewall, H. R., The Theory of Value before Adam Smith in American Economic Association, Publications, 3rd ser., vol. II, no. 3 (1901) 52-55.