Fisk Pervenit

March 8, 2010 § 15 Comments

[Note: this blog post represents some of my earliest ruminations on the subject of usury.  For a more up to date understanding see my Usury FAQ, also available as an ebook.]

The papal encyclical Vix Pervenit promulgated by Pope Benedict XIV on November 1, 1745 is the Magisterium’s most recent and most authoritative official teaching on the subject of usury. While it is true that this encyclical was addressed initially to the Italian bishops, according to the Catholic Encyclopedia article on usury it was applied to the whole Church by the Holy Office on July 29, 1863. That same article points out that the Magisterium has made no doctrinal statements allowing lending at interest; but at the level of practice the Church does allow some lending at interest.

Some folks have made the assertion that Hilaire Belloc’s account of usury as charging interest on loans for the purpose of consumption is a fringe opinion with no connection to the Magisterium and the Tradition. That dismissal is easily dealt with by referring to the greatest Doctor of the Church, St. Thomas Aquinas, on the subject of usury. As we’ve seen, Aquinas’ understanding of usury is precisely that it is the injustice in charging an ongoing “rent” for something which is consumed rather than used without being consumed. So while Belloc’s understanding may well be wrong, the notion that his is a fringe opinion with no connection to the Tradition is risible.
Note that, given an understanding of money as a thing which can either be used productively or consumed, usury can take one or both of two forms. It can take the form of charging any interest at all on a loan for consumption (Aquinas viewed all uses of money to be inherently consumption). Alternatively, it can take the form of charging more interest than is warranted in justice even in the case of a productive loan, since the borrower isn’t receiving “that much use” of the money. In its essence, then, usury is like charging someone ongoing rent on a house which burned to the ground, or charging more rent than justice allows for the house in which one lives. (Restitution for the house itself – the principal of the loan, as it were – is a different subject).
Still, that leaves some work to be done in understanding Vix Pervenit. Since it is a short encyclical, I thought it might be useful to just publish the whole thing with my own very brief commentary and observations. My comments are not intended to settle the matter in some final and penultimate way: they are merely a proposal for one reasonable way to make sense rather than nonsense of the teaching. We moderns have a tendency to ignore prohibitions of usury as a strange artifact of those wacky medievals who didn’t understand economics. I’m not trying to convince you of my particular theory here: I’m just trying to provide an example of what it would look like to take the Church’s timeless wisdom on usury seriously, appealing specifically to the Magisterium and Doctors of the Church for that wisdom, rather rather than dismissing it without thought or at best by setting non-Magisterial sources against Aquinas and the Magisterium. My “I’m just some guy” qualifications for pontificating on the subject should remain in the forefront of your mind as you read this.
Here it is:

ON USURY AND OTHER DISHONEST PROFIT

Vix Pervenit

Encyclical of Pope Benedict XIV promulgated on November 1, 1745.

To the Venerable Brothers, Patriarchs, Archbishops, Bishops and Ordinary Clergy of Italy.

Venerable Brothers, Greetings and Apostolic Benediction.

Hardly had the new controversy (namely, whether certain contracts should be held valid) come to our attention, when several opinions began spreading in Italy that hardly seemed to agree with sound doctrine; We decided that We must remedy this. If We did not do so immediately, such an evil might acquire new force by delay and silence. If we neglected our duty, it might even spread further, shaking those cities of Italy so far not affected.

Therefore We decided to consult with a number of the Cardinals of the Holy Roman Church, who are renowned for their knowledge and competence in theology and canon law. We also called upon many from the regular clergy who were outstanding in both the faculty of theology and that of canon law. We chose some monks, some mendicants, and finally some from the regular clergy. As presiding officer, We appointed one with degrees in both canon and civil law, who had lengthy court experience. We chose the past July 4 for the meeting at which We explained the nature of the whole business. We learned that all had known and considered it already.

2. We then ordered them to consider carefully all aspects of the matter, meanwhile searching for a solution; after this consideration, they were to write out their conclusions. We did not ask them to pass judgment on the contract which gave rise to the controversy since the many documents they would need were not available. Rather We asked that they establish a fixed teaching on usury, since the opinions recently spread abroad seemed to contradict the Church’s doctrine. All complied with these orders. They gave their opinions publicly in two convocations, the first of which was held in our presence last July 18, the other last August 1; then they submitted their opinions in writing to the secretary of the convocation.

3. Indeed they proved to be of one mind in their opinions.

I. The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.

II. One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. [So the fact that the gain is small, the borrower is rich, or the loan is productive cannot in itself excuse from the charge of usury.] The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.

III. By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract. [So it isn’t interest per se that is a problem. The problem is in demanding interest for nothing but the lending of money. The liciety of receiving interest depends on the use to which the money is put.] Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made.

IV. There are many different contracts of this kind. In these contracts, if equality is not maintained, whatever is received over and above what is fair is a real injustice. Even though it may not fall under the precise rubric of usury (since all reciprocity, both open and hidden, is absent), restitution is obligated. [So this prohibition against demanding payment for what does not exist doesn’t apply only to loans. It also applies to things like, say derivatives or credit default swaps or insurance policies, even though the label “usury” might not technically apply in such cases]. Thus if everything is done correctly and weighed in the scales of justice, these same legitimate contracts suffice to provide a standard and a principle for engaging in commerce and fruitful business for the common good. Christian minds should not think that gainful commerce can flourish by usuries or other similar injustices. On the contrary We learn from divine Revelation that justice raises up nations; sin, however, makes nations miserable.

V. But you must diligently consider this, that some will falsely and rashly persuade themselves-and such people can be found anywhere-that together with loan contracts there are other legitimate titles or, excepting loan contracts, they might convince themselves that other just contracts exist, for which it is permissible to receive a moderate amount of interest. Should any one think like this, he will oppose not only the judgment of the Catholic Church on usury, but also common human sense and natural reason. Everyone knows that man is obliged in many instances to help his fellows with a simple, plain loan. Christ Himself teaches this: “Do not refuse to lend to him who asks you.” In many circumstances, no other true and just contract may be possible except for a loan. Whoever therefore wishes to follow his conscience must first diligently inquire if, along with the loan, another category exists by means of which the gain he seeks may be lawfully attained. [Note that the Pope here says that we must not dismiss this as a matter of small import: diligent inquiry is required into whether any title to interest is truly just in the particular case. Some real gain must be lawfully obtained.]

4. This is how the Cardinals and theologians and the men most conversant with the canons, whose advice We had asked for in this most serious business, explained their opinions. Also We devoted our private study to this matter before the congregations were convened, while they were in session, and again after they had been held; for We read the opinions of these outstanding men most diligently. Because of this, We approve and confirm whatever is contained in the opinions above, since the professors of Canon Law and Theology, scriptural evidence, the decrees of previous popes, and the authority of Church councils and the Fathers all seem to enjoin it. Besides, We certainly know the authors who hold the opposite opinions and also those who either support and defend those authors or at least who seem to give them consideration. We are also aware that the theologians of regions neighboring those in which the controversy had its origin undertook the defense of the truth with wisdom and seriousness.

5. Therefore We address these encyclical letters to all Italian Archbishops, Bishops, and priests to make all of you aware of these matters. Whenever Synods are held or sermons preached or instructions on sacred doctrine given, the above opinions must be adhered to strictly. Take great care that no one in your dioceses dares to write or preach the contrary; however if any one should refuse to obey, he should be subjected to the penalties imposed by the sacred canons on those who violate Apostolic mandates.

6. Concerning the specific contract which caused these new controversies, We decide nothing for the present; We also shall not decide now about the other contracts in which the theologians and canonists lack agreement. Rekindle your zeal for piety and your conscientiousness so that you may execute what We have given.

7. First of all, show your people with persuasive words that the sin and vice of usury is most emphatically condemned in the Sacred Scriptures; that it assumes various forms and appearances in order that the faithful, restored to liberty and grace by the blood of Christ, may again be driven headlong into ruin. Therefore, if they desire to invest their money, let them exercise diligent care lest they be snatched by cupidity, the source of all evil; to this end, let them be guided by those who excel in doctrine and the glory of virtue. [This is a serious matter, requiring serious diligence.]

8. In the second place, some trust in their own strength and knowledge to such an extent that they do not hesitate to give answers to those questions which demand considerable knowledge of sacred theology and of the canons. But it is essential for these people, also, to avoid extremes, which are always evil. For instance, there are some who judge these matters with such severity that they hold any profit derived from money to be illegal and usurious [investment for profit is not a moral wrong]; in contrast to them, there are some so indulgent and so remiss that they hold any gain whatsoever to be free of usury [it depends on the use to which the money is put]. Let them not adhere too much to their private opinions. Before they give their answer, let them consult a number of eminent writers; then let them accept those views which they understand to be confirmed by knowledge and authority. And if a dispute should arise, when some contract is discussed, let no insults be hurled at those who hold the contrary opinion; nor let it be asserted that it must be severely censured, particularly if it does not lack the support of reason and of men of reputation. Indeed clamorous outcries and accusations break the chain of Christian love and give offense and scandal to the people.

9. In the third place, those who desire to keep themselves free and untouched by the contamination of usury and to give their money to another in such a manner that they may receive only legitimate gain should be admonished to make a contract beforehand. [Great advice.] In the contract they should explain the conditions and what gain they expect from their money. This will not only greatly help to avoid concern and anxiety, but will also confirm the contract in the realm of public business. This approach also closes the door on controversies-which have arisen more than once-since it clarifies whether the money, which has been loaned without apparent interest, may actually contain concealed usury.

10. In the fourth place We exhort you not to listen to those who say that today the issue of usury is present in name only, since gain is almost always obtained from money given to another. How false is this opinion and how far removed from the truth! [The fact that the practice is ubiquitous doesn’t excuse us as Christians from doing diligence on our own acts.] We can easily understand this if we consider that the nature of one contract differs from the nature of another. By the same token, the things which result from these contracts will differ in accordance with the varying nature of the contracts. [So again, whether charging interest is just or not depends on the particulars, including the specific use of the money.] Truly an obvious difference exists between gain which arises from money legally, and therefore can be upheld in the courts of both civil and canon law, and gain which is illicitly obtained, and must therefore be returned according to the judgments of both courts. Thus, it is clearly invalid to suggest, on the grounds that some gain is usually received from money lent out, that the issue of usury is irrelevant in our times.

11. These are the chief things We wanted to say to you. We hope that you may command your faithful to observe what these letters prescribe; and that you may undertake effective remedies if disturbances should be stirred up among your people because of this new controversy over usury or if the simplicity and purity of doctrine should become corrupted in Italy. Finally, to you and to the flock committed to your care, We impart the Apostolic Benediction.

Given in Rome at St. Mary Major [a really beautiful church], November 1, 1745, the sixth year of Our Pontificate.

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§ 15 Responses to Fisk Pervenit

  • Anonymous says:

    The Blackadder Says:

    Vix Pervenit says:

    We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract.

    To which Zippy comments:

    So it isn't interest per se that is a problem. The problem is in demanding interest for nothing but the lending of money. The liciety of receiving interest depends on the use to which the money is put.

    The first two sentences of Zippy's comment are correct. The last is not. What matters is not the use to which the loaned funds are put, but the reason for which interest is charged. If the interest is based on a legitimate title (e.g. lucrum cessans) then it's not usury. If it is based on the loan itself, then it is.

    The fact that it is the reason for the interest and not the reason for the loan being spoken of here is clear not only from the reference to titles (which had a well developed meaning in scholastic theology at the time of Vix Pervenit) as well as the prior passage of the document which explicitly says the purpose of the loan doesn't matter.

  • zippy says:

    You appear to be ignoring this:

    By the same token, the things which result from these contracts will differ in accordance with the varying nature of the contracts.

  • zippy says:

    … the prior passage of the document which explicitly says the purpose of the loan doesn't matter.

    It doesn't say that though. It lists three kinds of appeals which cannot excuse the sin of usury.

    It is true that a loan isn't non-usurious by definition simply because it is for a productive purpose, as I discussed in the post.

  • Anonymous says:

    As far as medieval understanding of titles is concerned, this post at Siris may be useful.

  • Anonymous says:

    I am not an econimist at all. It seems that one point is that it is immoral to be making a profit at some one elses expense. So charging a poor man interest for money he needs to buy food or medicine.

    Faustina

  • Anonymous says:

    The Blackadder Says:

    Here is the passage in question:

    We exhort you not to listen to those who say that today the issue of usury is present in name only, since gain is almost always obtained from money given to another. How false is this opinion and how far removed from the truth! We can easily understand this if we consider that the nature of one contract differs from the nature of another. By the same token, the things which result from these contracts will differ in accordance with the varying nature of the contracts. Truly an obvious difference exists between gain which arises from money legally, and therefore can be upheld in the courts of both civil and canon law, and gain which is illicitly obtained, and must therefore be returned according to the judgments of both courts.

    What the Pope is saying here is that the fact both usury and legitimate interest charging can result in gain doesn't mean that the Church has abandoned its teaching on usury. The gain that results from a usurious loan contract is different than the gain resulting from a legitimate loan contract, because the nature of the loan contracts is different. A lawful contract produces lawful gain, whereas a usurious contract produces inequitable gain. That's all true, but none of it turns on the purpose for which a loan contract is made.

    Indeed, as the prior passage of Vix Pervenit indicates, charging interest based on the purpose of the loan *is* usurious, as the purpose of a loan is intrinsic to the loan. By contrast, charing interest based on lucrum cessans is not usurious, because it is based on extrinsic factors.

  • Zippy says:

    the prior passage of Vix Pervenit indicates, charging interest based on the purpose of the loan *is* usurious, as the purpose of a loan is intrinsic to the loan.

    You keep saying that it says that, but it doesn't say that. It says that the userer cannot plead not guilty on the basis that his interest rate is low, or that his debtors are all rich, or that his loans are all for productive use. All of which is perfectly true.

    A loan is usurious when the debtor gets nothing in return for (some or all of) his interest payments. That is true when the loan is for consumption, and it is true when the interest on a productive loan is greater than what the lender is due.

    … the purpose of a loan is intrinsic to the loan

    That seems implausible. For example, the purpose of a murder might be to gain an inheritance, or it might be to remove an enemy, or it might be to satisfy hatred. But those purposes are not intrinsic to the murder: it doesn't become not-murder when done for one of those purposes but not another.

    Princess Bride fallacy, I expect: that word, you keep using it, but it does not mean what you think it means.

  • Anonymous says:

    The Blackadder Says:

    For example, the purpose of a murder might be to gain an inheritance, or it might be to remove an enemy, or it might be to satisfy hatred. But those purposes are not intrinsic to the murder: it doesn't become not-murder when done for one of those purposes but not another.

    Okay, but your position is that a loan may become non-usury depending on its purpose. So your own position commits you to the view that the purpose of a loan is intrinsic to it.

  • zippy says:

    No, the purpose is extrinsic, which is why it can give rise to extrinsic titles.

  • Anonymous says:

    The Blackadder Says:

    No, the purpose is extrinsic, which is why it can give rise to extrinsic titles.

    Well, the purpose of a loan *doesn't* give rise to extrinsic titles. Damnum emergens, for example, arises from the fact that it costs the lender something to make the loan (e.g. operating expenses). Whether making a loan involves operating costs doesn't depend on the purpose for which the loaned funds are to be used. (Btw, is it really your view that it's usury to charge interest based on damnum emergens for nonproductive loans?) Likewise, lucrum cessans arises from the fact that the lender won't be able to invest the loaned funds during the period of the loan, a fact which will remain true even if the loan is made for a nonproductive purpose.

    In any event, if you think that the purpose of a loan is extrinsic to the loan, then I don't see how you think a loan can be usurious based on its purpose.

  • Zippy says:

    Well, the purpose of a loan *doesn't* give rise to extrinsic titles.

    Best of luck finding Magisterial support for that.

    In any event, part of the problem might be in that you keep thinking about the difference between use as consumption and use distinct from consumption as a “purpose”. There is some validity to that use of language, but it is also somewhat deceptive.

    Frankly, at this point you have yet to affirm that there is a difference between use as consumption and use which is not consumption. Do you, in fact, affirm that distinction?

    Damnum emergens, for example, arises from the fact that it costs the lender something to make the loan (e.g. operating expenses).

    This whole smoke screen you keep raising with respect to titles doesn't get you where you want to go. To wit:

    “I have seen arguments that in our current financial system loans almost always carry extrinsic title of damnum emergens and lucrum cessans. I think this is transparently false if you actually look at the circumstances surrounding most loans, and the arguments otherwise are equally transparent attempts to get answers that had already been predetermined. But even if it were true, it would not justify our current systems of interest. Damnum emergens only allows you to break even on the particular loan you are making; and lucrum cessans only allows you to keep your profits from other ventures relatively stable over the duration of the loan — one might think of it as a different sort of breaking even. They keep lending from being a bad situation for the lender, but that's it. You can't make a profit from lending itself if these are your only titles to interest. In fact, damnum emergens and lucrum cessans were very carefully and deliberately formulated to prevent them from being used as justifications for profits on mere lending.”

    Damnum emergens and lucrum cessans can only get you to the point of actual break even. If you have any profit motive to make the loan, as opposed to keeping your money elsewhere, that profit motive is itself a sign of usury.

    In any event, if you think that the purpose of a loan is extrinsic to the loan, then I don't see how you think a loan can be usurious based on its purpose.

    That any licit income above and beyond the payback of principal is extrinsic to the loan is right in the encyclical:

    By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract.

    At this point though I have a ground rule for further discussion, since I am too old to waste my time. If you are willing to say what kinds of mutually consensual transactions in our modern economy are usurious, I think productive discussion can proceed. If your purpose here is just to cast cold water on the notion that there is any such thing as usury — and that does appear to be your purpose, though whether it is in reality or not I cannot say — then I don't see how further discussion can be productive.

    (Captcha: wringle)

  • Anonymous says:

    The Blackadder Says:

    Best of luck finding Magisterial support for that.

    What support is there (Magisterial or not) for your claim that the purpose of a loan gives rise to extrinsic titles?

    The double standard here really is amazing. You won't accept the Catholic Encyclopedia as an authority because it's not Magisterial. Yet you're perfectly willing to cite random blog posts as authority if you think they support your position.

    Frankly, at this point you have yet to affirm that there is a difference between use as consumption and use which is not consumption. Do you, in fact, affirm that distinction?

    If you're talking about the distinction Aquinas makes, then sure, I recognize the distinction. If I use a hammer to pound some nails when I'm done I still have the hammer, whereas if I eat a hamburger when I'm done the hamburger is gone. The one is consumed in its use while the other is not. What of it?

    This whole smoke screen you keep raising with respect to titles doesn't get you where you want to go.

    First off, this isn't a smokescreen. It's the teaching of the Church. I didn't put the references to titles into Vix Pervenit. I didn't fill up volumes of scholastic theology talking about them.

    Second, whether any particular modern financial practice is consistent with the Church's teaching on usury is a secondary concern for me right now. What matters is that you are, out of ignorance and stubbornness, saying things about the Church's teaching that are simply not true. If the conclusion of this discussion is that you acknowledge the Catholic Encyclopedia is right and Belloc is wrong when it comes to Catholic doctrine on usury then I will consider that a great victory, regardless of what you think about credit default swaps or non-recourse mortgages.

    Damnum emergens and lucrum cessans can only get you to the point of actual break even. If you have any profit motive to make the loan, as opposed to keeping your money elsewhere, that profit motive is itself a sign of usury.

    Not quite. Lucrum cessans, after all, is compensation for foregone profits, so to reach the “break even” point the loan is going to have to be profitable.

    If you are willing to say what kinds of mutually consensual transactions in our modern economy are usurious, I think productive discussion can proceed.

    My view is that in a modern economy actual usury is going to be rare, because the overall profitability of lending is going to approximate the profitability of other investments. If the profitability of lending were to substantially exceed the profitability of other investments, then more money would flow in to lending, driving profitability back down to the level of other investments. Since it is legitimate to make a profit from lending equal to what you could have made through other investments, actual usury will be rare.

    This argument isn't unique to me, but neither is it necessary to accept this argument to accept the Church's teaching on the issue. The author of the blog post you cite, for example, seems to think that usury is rampant today, but at least he appears to have a more than passing familiarity with what the Church actually says on the matter, and doesn't go around making up claims about what the Church *really* teaches.

  • zippy says:

    You won't accept the Catholic Encyclopedia as an authority because it's not Magisterial.

    That overstates it. I don't consider the Catholic Encyclopedia to trump a Doctor of the Church or a papal encyclical.

    I've also carefully qualified my own statements, which you've obviously noticed since you keep citing my own disclaimers of my own qualifications on the subject as your way of saying “shut up”.

    Not quite. Lucrum cessans, after all, is compensation for foregone profits, so to reach the “break even” point the loan is going to have to be profitable.

    Yet it only applies when there is no financial incentive to make the loan. The loan itself must be gratuitous, and the compensation only for actual loss.

    Second, whether any particular modern financial practice is consistent with the Church's teaching on usury is a secondary concern for me right now. What matters is that you are, out of ignorance and stubbornness, saying things about the Church's teaching that are simply not true. If the conclusion of this discussion is that you acknowledge the Catholic Encyclopedia is right and Belloc is wrong when it comes to Catholic doctrine on usury then I will consider that a great victory, regardless of what you think about credit default swaps or non-recourse mortgages.

    Ah. So you aren't really interested in discussing the subject matter; you are interested in browbeating me. Thanks for the discussion then.

    Don't bother posting another comment.

  • Pope Benedict XIV promulgated on November 1, 1745:
    Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.
    Jct: That's why when my stiff-the-bank home foreclosure resisters filed their defence, they, like the “slothful servant in Matthew” accepted responsibility for the principal, the social credit portion of the debt, but repudiated the interest, the anti-social credit portion of the loan and subtracted its restitution from the final payment offered.

  • Tommy says:

    Yet it only applies when there is no financial incentive to make the loan. The loan itself must be gratuitous, and the compensation only for actual loss.

    I didn't see that as a necessary result of the Pope's teaching. If a person can make (on a loan) such profit as he would have been making on his money had he kept it in an investment, under the title lucrum sessans, then why would it be forbidden for him to make such ordinary operating expenses as he would need to continue lending as his manner of surviving, which he would have been able to earn had he been employed elsewhere? I know, this is incredibly simplistic, but I think there is a kernel of truth in there.

    If a person can lend out only as a gratuitous act, then he cannot afford to lend out anything that isn't for him a surplus simply speaking. And he can only afford to lend out to the extent that he can afford, separately from his gainful employment, such time it takes to oversee the loans and repayment. And if a person can only lend out of his ABSOLUTE surplus, only what loans he can oversee in his spare time, then there will be a lot less lending available. For example, I won't be able to lend out the money I am setting aside for retirement, since it is not really surplus simply, only for right now.

    And yet, I have invested most of my retirement money, and a friend comes along and says “let me borrow 10 grand, I will repay it and make your retirement fund whole, I will match the return the rest is earning.” This falls under lucrum cessans, yes? Yet this amount returned above the 10 grand is certainly a profit, in any ordinary terms – it merely replaces an otherwise expected profit. And the profit is part of what I intend to live off of when I eventually retire, meeting my living expenses. This profit is certainly intended in making the loan, so it is not a gratuitous loan. At least not unequivocally.

    Now, we switch over to Shylock, who spends a great deal of his time lending and collecting thereon. In fact, he spends so much of his time doing that, he has no time left for a gainful job. If he lends gratuitously, then, he will gradually eat up his money because he must live in the meantime, eventually leaving nothing to be lent for others. Are we saying that Shylock cannot lend at enough interest to replace his living expenses that enable him to do these loans, because there is no title separate from the loan itself, whereas I can indeed lend at enough interest to ensure my future living expenses because of a title of lucrum cessans?

    Seems to me either lucrum cessans is a fictitious title to begin with, or this is an overly narrow rendition of where it applies. It ought to apply equally to loans made when the lender invests his own time in the processing thereof to the exclusion of other gainful employment.

    And how you would separate that out from any common understanding of profit is beyond me. Certainly the IRS will call it just plain profit. Once lucrum cessans is understood as a title, extrinsic to the loan as such, which justifies making a profit, I don't think it is entirely beneficial to say that the loan itself must be gratuitous.

    Mind you, I am not trying to defend the current system. I don't have an iron in that fire, so I don't really have any emotional problem saying that 99.9% of the loans out there are usurious. It would be nice to be on solid ground about what is, and what is not, usury in practice, and that means getting the theory just right.

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