29 Qualms

December 19, 2014 § 57 Comments

A condemned proposition:

Since ready cash is more valuable than that to be paid, and since there is no one who does not consider ready cash of greater worth than future cash, a creditor can demand something beyond the principal from the borrower, and for this reason be excused from usury. – Various Errors on Moral Subjects (II), Pope Innocent XI by decree of the Holy Office, March 4, 1679 (Denzinger)

I wasn’t going to put up any new posts until after the new year starts, but since Question 29 in my usury FAQ is basically an editorial rant I thought I would give it its own post.  So here you go:

29) I know that usury was traditionally considered an execrable mortal sin. But didn’t the Church change canon law and pastoral practice to remove the penalties and stigma associated with usury?  Haven’t most Catholic theologians accepted that the world has moved on from the time when the prohibition of usury made sense?

Well, you asked, so I’ll editorialize and give you my personal take.

The answer is yes. The progressive tactic of divorcing doctrine from pastoral and juridical practice is not a new Vatican II innovation targeted specifically at matters of sex and marriage. Earlier progressives were “successful” in leaving the doctrine on usury formally intact, as a kind of decoration that makes no important demands on anyone, despite their attendance of the traditional Latin Mass. Humanae Vitae could easily become the new Vix Pervenit. Contraception apologists have learned from earlier usury apologists and are using the same tactics. Progressives think that money is inherently fecund and that sex isn’t inherently fecund.

Acceptance of usury and contraception are both products of denying that things have an objective nature independent of human preferences. Centuries of ‘pastoral’ acceptance and indoctrination of economic relativism paved the way for other expressions of moral relativism.

You might think of this as the “hermeneutic of continuity of Hell”.

It should be said though that getting rid of the ecclesiastical penalties for usury was a pastoral judgement call, and I don’t necessarily disagree with it.  For example it was at times a requirement that a usurer had to make an accounting of all the money he had made through usury and make restitution before he was given sacramental absolution.  This is completely disanalogous to the situation of a divorced and ‘remarried’ person who is objectively committing adultery on an ongoing basis.  The former may be totally repentant and fully committed to sinning no more without having the practical means to do the accounting and make restitution.  The latter by definition is not committed to sinning no more.

It was also the case that usury was frequently misunderstood, and many contracts which were not usury were condemned as such by overzealous but financially ignorant people. An analogous case in the context of the sexual revolution would be the ‘rigorists’ who condemn NFP as a form of contraception, and their ‘laxist’ counterparts who make the same claim but conclude from it that therefore contraception is morally licit. The spectacle of a penitent, innocent of usury, hounded and denied absolution by an overzealous priest who doesn’t properly understand the subject, may be a risible fiction now; but that was not always the case.

An especially pernicious false-flag argumentative tactic of usury apologists is to take the ‘rigorist’ approach as a way of discrediting the doctrine. These will contend for example that the traditional understanding of usury would disallow all census-type contracts involving regular payments of principal and interest (e.g. corporate bonds), not just those census contracts with claims that terminate in persons as opposed to or in addition to actual property.  (See question 31). This ‘false flag’ approach is aided and abetted by useful idiots on the traditionalist or reactionary side who cheer on their ‘rigorist’ arguments.

None of that has any bearing on the objective status of usury as an execrable mortal sin.

Usury would of course be intrinsically immoral even if that did, counterfactually, make industry and commerce impossible or if it were unhealthy in some sense for industry and commerce — just as contraception would remain intrinsically immoral even if the lack of it led inexorably to overpopulation and misery. But the moral prohibition of charging usury does no such thing. Like moral doctrine on contraception it merely prohibits actions which are objectively harmful both to the parties involved and to the common good – even though they do involve a short term ‘payoff’ of sorts, which is why they are tempting. This is why the arguments in favor of laxity on contraception and usury tend to mirror and cross-reference each other (myriad examples can be found simply by Googling various combinations of the terms “usury”, “Catholic”, and “contraception”).

Apologists for contraception have learned the playbook from the apologists for usury: give lip service to the doctrine as an important decorative piece of theology up in the sky; “pastorally” defang it so that in practice it can be ignored on the ground; continue to “dialogue” until the right “pastoral” result is achieved; paint any opposition into a corner as unmerciful, impractical, and disconnected from reality; and assert that this “pastoral” result was a development of doctrine, ignoring the dog that doesn’t bark — the nonexistent teaching documents from the Magisterium representing an actual doctrinal “development”. Do the latter enough times over a long enough period so that everyone starts to accept it as a given, including much of the clergy. Continue to point out various “defects” in the “simplistic” understanding articulated in Magisterial documents, and be sure to reiterate regularly that they are not infallible. Oh, and point out the sexual peccadillos, I mean economic practices, in clergy and the Vatican: because if the Vatican does something in its secular operations or practices that constitutes an infallible proclamation that the practices cannot be immoral, as long as they are the things we want to not be immoral, and anyway it isn’t really immoral but if the Church actually means what it says doctrinally in those defective non-infallible documents then it is being hypocritical. Shout down any alternative description of the situation on that front as excuse-making. Once all that is achieved all remaining objections must be marginalized and ridiculed. Pat the old celibate economically illiterate men in the Holy See on the head for their prior silly immaturity, congratulate the laity for its wisdom about the “facts of life” and the sensus fidelium, and move on.

But it turns out that the prohibition of charging usury is and has ever been a perfectly reasonable limitation on morally licit commerce; a limitation which merely disallows trafficking in human beings as if they were property and thereby creating fake wealth, vested in nonexistent property, which pollutes the real economy.

§ 57 Responses to 29 Qualms

  • vetdoctor says:

    I know you eschew giving instructions and advice but my teenagers are already getting sucked into the morass of student loans. Even if they weren’t in debt they would later find that buying any expensive item pretty much requires the prior pinch of salt to the gods, a credit card history. I’d be interested in how you would attempt to guide a young adult coming into her own. Never get a credit card and live with the punishment? Get one but never pay interest (the companies hate that too)? Play the game and understand what you are doing? I’m afraid I am only the spirit looking for a drop of water, perhaps my children will listen to a prophet 😉

  • Alte says:

    *standing ovation*

    For once, I have nothing to add, Zippy. You are on an absolute roll on the usury issue and I’m so glad your ideas (well, God’s ideas) are getting wider play.

    Vetdoctor,

    You don’t need a credit history if you have actual wealth. Everyone, everywhere on the planet, accepts dollars (whether cash or debit) as payment for goods and services.

    You want to buy a house?
    Save up the money first.

    You want a college degree?
    Save up the money first.

    You want a car?
    Save up the money first.

    You want to travel?
    Save up the money first.

    You want to buy jewelry?
    Save up the money first.

    This is why I have no college degree, rent my home, drive an aging Hyundai, spend my vacations with family and friends, and own only a few valuable trinkets. We didn’t have the money for more yet.

    Most other people don’t have the money for that stuff, either, but I’ve decided against living in denial and becoming a financial slave to my desires. I’d rather just go without.

  • vetdoctor says:

    Alte: That’s one answer. Again, I’m so far down the credit path I don’t expect to see daylight this side of death. I’m willing to accept that a wise man would never take credit (usurous) but thought I would see if that’s what Zippy thinks.

    I did see the time in my life when it was credit cards or let the children starve. Tough choices abound.

  • Aethelfrith says:

    On a completely unrelated note, thank you for not going along with the tl;dr trap. I’ve seen people use tl;dr to summarize passages only about as long as vetdoctor’s above me.

    As for the entry itself, you make strong points. I notice the “rigorist” approach applies not only to usury but to any particular aspect of Christian life the enemies of the faith want to attack. I refer to it as the “abominable shrimp” approach. (Leviticus 11:912)

  • Interesting. I’m still absorbing a lot of what you say about usury, and I think I’m coming to understand it. I haven’t read a lot of stuff from pro-usurers who put it in pro-usury terms, though. I wonder why. 🙂

    But that’s not why I’m commenting. I hadn’t heard of Vix Pervenit. (Yeah, I know, it shows how little I’ve actually been reading you, I’m sure.) In fact, it’s not even on the vatican.va website: http://bit.ly/1wKSdrh

    That strikes me as a bad sign.

  • Zippy says:

    vetdoctor:
    Everyone’s situation is different, and taking money from professional usurers is a prudential judgment (see Question 23). Beyond that I don’t have advice to speak into the microphone of the Internet. I might have more to say to people I actually know in person, but in general I have no special charism when it comes to discerning personal questions of material cooperation with evil.

  • […] Source: Zippy Catholic […]

  • williamluse says:

    You’re right, Jake. I couldn’t find it there either.

    Vetdoc, My wife and I have a credit card, but we never buy more with it than can be paid off when the bill comes due. The card company never sees a penny of interest. Beyond that I don’t know what to tell you. (Not that I’m qualified to tell you anything.)

    Great post, Zippy.

  • Zippy says:

    Added the epigraph. In a different set of discussions various participants would not accept my arguments that opportunity costs are not tradable property and that “time value of money” theories do not justify charging interest on a mutuum, so I had to crack Denzinger for the reference. Enjoy.

  • Dystopia Max says:

    “Oh, and point out the sexual peccadillos, I mean economic practices, in clergy and the Vatican: because if the Vatican does something in its secular operations or practices that constitutes an infallible proclamation that the practices cannot be immoral”

    In my view the right tack for the Vatican to take in this instance is “you are not to demand that others serve you in the same unspecified and unlimited manner that monks and priests are to serve God, this type of dedication is properly limited to those who seek it as a lifetime commitment. To do so is to set yourself and your claims up as equal to those of God himself.” But this particular pope may be a little weak on that despite his perception as a friend to the poor.

    Also, it may not be a completely unfounded objection, as corporate bonds may even fall under this distinction if the asset in question is the talent or services provided by the corporate personnel themselves.

    However, as a Protestant and soft Sola Scriptorian, I would advise that perhaps the myriad diabolic corruptions and uncertainties in usurious practice could be more usefully contained by restoring and enforcing the Years of Jubilee instead. i.e., rather than trying to legally finesse a debt’s nature according to a hundred thousand million human natures and institutions, putting a hard cap on its duration, and thus, its power and tendency to corrupt.

    Whether these happen every 7, 50, or hundred years is, of course, dependent on how deeply the sickness of usury has infested every level of society.

  • Zippy says:

    Dystopia Max:
    Regular jubilees forgiving personal debt are a great practice, and would likely have very salutory effects inasmuch as new contracts would be bargained in their shadow.

    I’ve also suggested that units of fiat currency should come with an expiration date: perhaps they should be accepted as tax payment up to a given year, at which point the government will no longer accept that particular dollar. (The proposal is more of a thought experiment for further reflection than a concrete policy proposal; but something along those lines might bring a dose of sanity to our understanding of money).

  • Alte says:

    I did see the time in my life when it was credit cards or let the children starve.

    Yes, that isn’t surprising. I was once nearly drowning in debt myself, and it’s taken years to dig my way back out. Our entire financial system is designed to steer us toward debt accumulance, with a corresponding decline in our purchasing power. Although I live in relative poverty now, I sleep better.

    But you were asking about your children, who are still safely in the black, and still have the natural inhibition to indentured servitude. I can’t tell you what they should do, but I can say that it is possible to live completely debt-free and have a comfortable family life.

  • Alte says:

    Also note that we are now entering a period of worldwide deflation. This is significant for financial planning and your children’s decisions should take that into account.

    A lot of the old assumptions will no longer make any financial sense going forward because they are based on permanent inflation.

  • jf12 says:

    “But it turns out that the prohibition of charging usury is and has ever been a perfectly reasonable limitation on morally licit commerce; a limitation which merely disallows trafficking in human beings as if they were property and thereby creating fake wealth, vested in nonexistent property, which pollutes the real economy.”

    Great stuff.

  • […] The parallels of usury and birth control. […]

  • Mark Citadel says:

    A blessed Christmas to you, brother

  • Mike T says:

    Credit is considered the life blood of many businesses, but I think that’s true today only due to the options modern family structure places on entrepreneurs. If it were normal for unmarried kids to live with their parents, pay a nominal room and board and save while building a business or waiting to start a family, sweat equity could probably replace most credit. Obviously, for that to happen, most families would have to be stable, which is not a given, especially where it’s most needed in the working class and lower middle class.

  • Zippy says:

    Mike T:
    Non recourse business credit – which is the great majority of business credit – is not usury. ( As always Question 11 lurks in the background).

    See Kristor’s explanation here:
    http://orthosphere.org/2012/12/21/usury-versus-reality/

  • Ita Scripta Est says:

    Zippy,

    I am now reading the radical libertarian Murray Rothbard’s version of economic history. As you may know, libertarians have rather successfully been able to claim the origins of their school as supposedly arising in the thought of Reformation and Baroque era Thomists. In his commentary on Cardinal Cajetan, Rothbard claims:

    In the course of his defence of the exchange market in De Cambiis, Cajetan proceeded to advance the state of the art in monetary theory. He showed trenchantly that money is a commodity, particularly when moving from one city to another, and is therefore subject to the demand and supply laws governing the prices of commodities. At this point, Cajetan made a great advance in monetary theory, indeed in economic theory generally. He pointed out that the value of money depends not only on existing demand and supply conditions, but also on present expectations of the future state of the market. Expectations of wars and famines, and of future changes in the supply of money, will affect its current value. Thus, Cardinal Cajetan, a sixteenth century prince of the Church, can be considered the founder of expectations theory in economics.

    Furthermore, Cajetan distinguished between the two kinds of ‘value of money’: its purchasing power in terms of goods, so that gold or silver are ‘equated’ with goods being bought and sold; and the value of one coin or currency in terms of another on the foreign exchange market. Here, each kind of coin tends to move to that region where its value is highest, and away from wherever its value is lowest.

    On the vexed usury question, though Cajetan was not as radical as his German contemporary Summenhart in virtually eradicating the usury prohi­bition, he did join Summenhart on the doctrine of implicit intention, and was even more radical in the one area where Summenhart had hung back: lucrum cessans. Implicit intention meant that if someone really believed his contract not to be a loan, then it was not usurious, even though it might be a loan in practice. This of course paved the way for the practical elimination of the ban on usury. In addition, Cajetan also joined his fellow liberals in endorsing the guaranteed investment contract.

    But Cardinal Cajetan’s great breakthrough on the usury front was his vindication of lucrum cessans. Wielding the mighty authority of being the. greatest Thomist since Aquinas himself, Cajetan offered a point-by-point critique of his master’s rejection of this exception to the usury ban. He then vindicates, not indeed all of lucrum cessans, but any loan to businessmen. Thus a lender may charge interest on any loan as payment for profit foregone on other investments, provided that loan be to a businessman. This untenable split between loans to businessmen and to consumers was made for the first time – as a means of justifying all business loans. The rationale was that money retained its high profit-foregone value in the hands of business, but not of consumer borrowers. Thus for the very first time in the Christian era, Cardinal Cajetan justified the business of money lending, provided they were loans to business. Before him, all writers, even the most liberal, even Conrad Summenhart, had justified interest charges on lucrum cessans only for ad hoc charitable loans; now the great Cajetan was justifying the business of money-lending at interest.

    I haven’t studied enough about the so-called “Spanish Scholastics” but I was wondering if there is any truth to this? Did the Spanish Scholastics go wobbly on the question of usury? I also know too that Rothbard was an ideologue and was known for mangling other’s thought when it suited his goals, I mean Rothbard actually calls Cajetan a”liberal” I just find that hard to believe.

  • Marissa says:

    I’m not sure what Zippy knows about your question, Ita, but I am a recovering libertarian, and am familiar with much of Rothbard and some of the Austrians. As I was an atheist at the time, any mention of religious philosophers kind of slid off into the ether, but a good source of answers to your question might be at Mises.org where they’ve mentioned the Spanish Scholastics numerous times: http://mises.org/search/site/scholastic

    What do you think of some of the “unknown” history Rothbard unearthed? Is it worth much? I read and listened to quite a bit of it in my libertarian past life. It seems that libertarians, in a sense, are constantly amazed to discover man is sinful, and detailing those sinful actions within the political context is a consistent source of shock and outrage.

  • Zippy says:

    What I know is that in a debate which has gone on for literally thousands of years, you can find all sorts of folks taking all sorts of positions. What is notably present is Magisterial condemnation of the notion that opportunity costs, time value of money, productive use of proceeds, wealth of the borrower, etc. justify interest on a mutuum (usury). What is notably absent is any Magisterial proclamation in support of lucrum cessans at all, let alone under the sort of interpretation offered (that is, as a business transaction).

    Furthermore, it doesn’t actually matter what commodity or currency is specified in the mutuum contract, as I explained in Q35.

    The most common gap in understanding usury is the nature of a mutuum versus other contracts: the personal guarantee of the borrower to return what is lent in kind as opposed to in particular. It looks to me like folks who debate the subject have read all sorts of “scholarly” stuff, but haven’t bothered to read – and take seriously – the actual Magisterial stuff (Vix Pervenit, Cum Onus, Regimini Universalis, etc).

  • vishmehr24 says:

    Regarding #35, it does seem that fiat dollar is not a commodity. It is essentially unlike gold, wheat or cars that may be used as currency.
    If I borrow 200 sacks of wheat, then i should return 200 sacks of wheat.
    But the situation with fiat dollar–If i transfer electronically 5000 dollars, what commodity or tangible thing I have transferred that must be returned in kind?
    It would seem that the the notion of usury exists in un straightforward way only in a world without fiat money.

  • Zippy says:

    The idea that fiat currency as the medium of exchange changes anything about the nature of the contract itself is just flat wrong. Physicalism is a kind of selective anti-realism. Fiat dollars are real things with the real useful function of settling tax liabilities, among other things. Individuals who owe them under a loan contract cannot conjure them out of nothing, but must work or sell/encumber other assets to acquire them. They are no more “unreal” than shares of stock or other financial intangibles.

  • Mike T says:

    I didn’t say that it was a form usury, I was noting that a lot of credit to start businesses would be unnecessary under certain circumstances. Ideally, people wouldn’t go into debt to start a small business unless the business is, by its very nature, capital-intensive.

    On a totally different subject, I look forward to the Pope releasing his bull on Global Warming. It should be fascinating to read what the Pope has to say about the moral obligations that arise from a phenomenon that probably a) isn’t happen and b) we aren’t even sure what most of the data means or who is responsible.

  • Mike T says:

    If you electronically transfer $5,000 between accounts, you are just updating a contracted loan between one or more banks and between them and yourself. If you deposit $5k in bank A, you are contracting out a loan to them for $5k payable back to you under certain defined (contractually and legally) terms at a given interest. The bank also participates in the same electronic market as credit union B where you also have a contracted account with them. So when you transfer the $5k between them you are acting on your contract with bank A, their relationship with credit union B and then using your contracted rights with credit union B to extend them an additional loan of $5k sourced from bank A.

    The particular $5k may not exist as anything more than ledger entries, but it is part of a real contract where a contracting party can demand it be converted into $5k of physical currency. This is no different than lending a farmer $5k in investment capital under a term that says six months from now, he can be compelled to pay back the $5k in cash or provide $5k of product at the discretion of the lender.

    IANAL, but that’s how I understand the banking system to work based on Zippy and others, roughly speaking.

  • Zippy says:

    ISE cites Murray Rothbard:

    Implicit intention meant that if someone really believed his contract not to be a loan, then it was not usurious, even though it might be a loan in practice.

    If this doesn’t bring to mind the progressive “primacy of conscience” maneuver, it certainly should.

    Sexual revolutionaries have made no innovations in their theological approach: they are just following their groins along a path already well established by usurers. Present day progressives are carrying out the paint-by-numbers playbook established centuries earlier by usurers — the so-called ‘free market’ sort who insist that consensual contracts are presumptively licit.

    The sexual revolution is an inevitable, banal concomitant of the (so-called) ‘free market’.

  • Zippy says:

    Mike T:

    Ideally, people wouldn’t go into debt to start a small business unless the business is, by its very nature, capital-intensive.

    Without the presence of personal guarantees and deficiency judgments only the dumbest of lenders (or those coerced by influences external to the business itself, e.g. government policies) would lend under a condition where there was insufficient real capital in the business. Said differently, only foolish or externally coerced non recourse lenders will lend when the loan-to-value ratio is high.

  • vishmehr24 says:

    MikeT,
    “$5k of physical currency”
    There isn’t a physical currency. That is the point of fiat money. All one ever has are ledger entries. There is never and nowhere a commodity so analogies to gold coins, cars or cigarette do not exist.

  • Zippy says:

    Anyone who thinks that fiat currency doesn’t exist should feel free to wire all of their account balances to me.

  • vishmehr24 says:

    Also, there is the problem of currency debasement.
    Suppose I borrow 5000 dollar in gold coins and it is generally known that the Govt is debasing the coins.
    Then, should I not return more than 5000 nominal dollars in order to cover the debasement?

  • vishmehr24 says:

    The point, missed by Zippy, is fiat currency is dis analogous to cars, gold or cigarette.
    Fiat money is not a commodity.

  • Zippy says:

    Changes in the relative values of currency (inflation, debasement, etc) have no bearing on the nature of a mutuum, as explained in multiple different ways in the FAQ. A mutuum by its nature is not a purchase of an economic claim of any sort against assets which actually exist, so it is only ever licit at all as a charitable act. The mutuum lender has no legitimate property claims against the borrower whatsoever — because there is no actual property.

    Folks might consider actually reading the FAQ. Repeating questions which have already been answered doesn’t un-answer them.

  • Zippy says:

    The point missed by Vishmehr24 – which he might not miss if he read the FAQ – is that the differences between fiat currency and commodities (and between different kinds of commodities, for that matter) can be stipulated without changing a mutuum into some other kind of contract which is not a mutuum.

  • vishmehr24 says:

    So the mutuum lender has no claims on the principal even?
    For you state
    “. The mutuum lender has no legitimate property claims against the borrower whatsoever”
    and
    “it is only ever licit at all as a charitable act”

    But don’t you also maintain that in mutuum contacts (and why call them “contacts” when mutuum is just a charitable giving? ) the lender should be paid in kind what he lent (i.e. 5000 gold coins must be paid for 5000 gold coins)..

  • vishmehr24 says:

    “Changes in the relative values of currency (inflation, debasement, etc) ”

    Debasement is an Absolute change–the debased coin is not the thing a non-debased coin is.

  • Zippy says:

    vishmehr24:

    So the mutuum lender has no claims on the principal even?

    Once again your questions demonstrate that you haven’t read the FAQ.

    Debasement is an Absolute change–the debased coin is not the thing a non-debased coin is.

    Changes in the price of wheat are no more or less real than changes in the price of Euros or USD or shares of Exxon stock.

  • […] the discussion below, commenter Ita Scripta est cites libertarian Murray Rothbard on the subject of […]

  • vishmehr24 says:

    If one borrows 500 gold coins of 24 carat purity then shouldn’t one return the same amount of gold?
    Thus, if the
    govt has diluted the gold content to 22 carats, then isn’t one expected to return 500*24/22=545 gold coins?

  • Zippy says:

    We could tl;dr discuss the implications of the fact that gold is measured in carat-ounces and dollars are measured in cents, and that how many loaves of bread each can buy on a given day is not an objective property of the thing itself but a constantly varying relative guesstimate of an abstract economic relation.

    But that would be missing the point, since mutuum loans for interest are intrinsically immoral no matter what currency is used, for reasons explained repeatedly and from several different perspectives in the FAQ. Mutuum loans are only licit as acts of charity. The kind of ‘debt’ incurred by the mutuum borrower is not a property debt, because there is no property. To quote myself:

    If Bob was on Skid Row and the Franciscans helped him get back on his feet – he now has the means to repay what he borrowed – then the kind of debt he owes is different in kind from a commercial, property based debt. He owes a debt of gratitude and a debt of justice: the former to those who helped him, and the latter to the poor who are still on Skid Row and now need his help.

    If he is ungrateful and stingy and refuses to pay the loan back, even though he has the means to do so, he has committed an injustice. But it isn’t an injustice rooted in property: it is an injustice rooted in charity.

    Whether legal action is or is not warranted in such a case was controversial. The Dominicans thought not, and accused the Franciscans of usury. The Pope intervened on the side of the Franciscans.

    A personal commitment to return ‘in kind’ is a commitment to return something which doesn’t actually exist as an actual thing: it is just abstractly a ‘thing’ of such and such a kind. A commitment to return ‘in particular’ is a commitment to return something which does actually exist as an actual thing. Formally, then, the distinction between currency and property in the context of a rental contract is that currency is returned in kind, while property is returned in particular. The former is a mutuum; the latter is one kind of societas.

    When a mutuum lender attempts to sell his “opportunity cost” to a borrower in exchange for interest payments on the loan, the thing that he has attempted to sell does not actually exist. If it actually existed then when the borrower defaults the lender would be able to foreclose and retrieve his property, or the property in which he has purchased a claim. The fact that he cannot do so demonstrates St. Thomas Aquinas’ point that charging interest on a mutuum loan (usury) involves selling what does not exist.

    … the thing in which the contract asserts an ownership interest is no thing at all: nothing. The apples have been eaten, the wine has been drunk, and the borrower has to take action to acquire new, different apples or wine precisely because the thing to which the mutuum lender lays claim does not exist.

  • jf12 says:

    “Put your money to work” in usury means “whip the slaves harder”.

  • Zippy says:

    jf12:
    From the usurer’s point of view, usury is much better than slavery. Slaves have to be fed, sheltered, clothed, and given instructions. The usurer need bother with none of those hassles: they aren’t his problem.

  • jf12 says:

    re: “The usurer need bother with none of those hassles: they aren’t his problem.”

    True, especially of upper level usurers. Besides loan sharks, who in the usury business gets their hands dirty anymore?

  • vishmehr24 says:

    Zippy,
    It is the purity of gold that is measured in carats, not the quantity.
    I wonder if you regard currency debasement as a deliberate fraud or not.
    The quantity of gold in 500 24 carats coins exactly equals 545 22 carats coins.
    SO, I don’t think it is an example of profitable interest. The interest amount is precisely zero.

    [I changed my comment to make the measurement units ‘carat-ounces’, to clarify the pedantic but topically irrelevant point. –Z]

  • Zippy says:

    vishmehr24:
    That whooshing sound is the point going over your head.

  • William Luse says:

    You know, a man gets on his horse, starts riding, and can’t get off. He can’t see what’s up ahead or to left and right because he’s always looking down at his beloved horse, the only thing that can take him where he wants to go, and without which the world would not make sense.

  • Zippy says:

    I edited the following paragraphs in Q29 of the FAQ:

    It should be said though that getting rid of the ecclesiastical penalties for usury was a pastoral judgement call, and I don’t necessarily disagree with it. For example prior to a declaration by the Holy Office ending the practice on August 31, 1831, it was frequently imposed that a usurer had to make an accounting of all the money he had made through usury and make restitution before he was given sacramental absolution. This is completely disanalogous to the situation of a divorced and ‘remarried’ person who is objectively committing adultery on an ongoing basis. The former may be totally repentant and fully committed to sinning no more without having the practical means to do the accounting and make restitution. The latter by definition is not committed to sinning no more.

    It was also the case that usury was frequently misunderstood, and many contracts which were not usury were condemned as such by overzealous but financially ignorant people. An analogous case in the context of the sexual revolution would be the ‘rigorists’ who condemn NFP as a form of contraception, and their ‘laxist’ counterparts who make the same claim but conclude from it that therefore contraception is morally licit. Aquinas and the Popes who addressed the issue in bulls and encyclicals may have understood the difference between non recourse (societas) investment and full recourse (mutuum) loans, but many priests at the parish level did not. The spectacle of a penitent, innocent of usury, hounded and denied absolution by an overzealous confessor who doesn’t properly understand the subject, may be a risible fiction now; but that was not always the case.

    This was especially confounded by progressive scholastics’ use of a proposed distinction between putatively ‘productive’ interest bearing mutuum loans to businessmen (explicitly condemned in Vix Pervenit, see Question 25) and putatively ‘unproductive’ mutuaa. The argument over ‘productive’ vs ‘unproductive’ mutuum loans snookered the traditionalists by framing the debate in question begging terms, obscuring the essential distinction (the distinction, unlike ‘productive’/’non-productive’, actually found in Magisterial documents on usury such as Cum Onus and Regimini Universalis) between mutuum (full recourse) loans and legitimate non recourse (societas) business investment.

    (I also tweaked Q13, but this post is about Q29, which is in effect the question in which I indulge in editorial rant).

  • Zippy says:

    Here is part of the addition to Q13, which does further elaborate on the subject of Vishmehr24’s confusion. Relative price fluctuations of commodities and currencies are irrelevant in the context of mutuum loans, since mutuum loans for profit – including profit that attempts to hedge against abstract financial movements like inflation and currency debasement – are never morally licit. Mutuum loans are, again, only ever morally licit at all as gratuitous acts of charity or friendship, for reasons explained from several different perspectives in the FAQ:

    In practice a duly grateful borrower who has become prosperous through the help of charitable loans himself would become a patron of those same efforts which helped him out of poverty. But this “debt” of gratitude is not a property debt, and by its nature cannot be captured in a fixed rate of interest or other specific monetary amount. The very act of attempting to convert a debt of gratitude or friendship – above and beyond simply what was actually borrowed – into some definite charge of a specific amount of money, puts the lie to attempts to disclaim usury.

    Gratitude or friendship can be truly owed; but gratitude or friendship which can be bought and sold for a specific price is not true gratitude or friendship.

  • vishmehr24 says:

    “abstract financial movements like inflation and currency debasement ”
    Only debasement is deliberate fraud and not “abstract financial movement”
    and thus not analogous to inflation or currency or price fluctuation.

    Perhaps you regard debasement as a sovereign prerogative?

  • Zippy says:

    vishmehr24:

    Perhaps you regard debasement as a sovereign prerogative?

    I view it as – and have explained why it is – completely irrelevant to the subject of usury, notwithstanding the monomania some of my critics have expressed without actually addressing the issue of relevance.

  • vishmehr24 says:

    I dispute the claim of irrelevance.
    Usury prohibits profit-making from a mutuum loan. That is easy to get and even apply under condition of
    1) when currency is not debased
    2) when physical currency is debased, one can still evaluate the precious metal content of the coins.
    3) but under fiat currency that is being debased, it is hard or even impossible to figure out whether a particular mutuum loan is making a profit or not.
    4) it goes doubly so when all the global fiat currencies are being debased.
    5) Your putting debasement (which is a very concrete thing and a fraud) as a species of “abstract financial movement” just like inflation does not inspire confidence.You can claim usury is wrong but if it is impossible to know whether any particular loan is usurious or not, what good does it do?
    Perhaps that’s why the Church does not speak much on usury.

  • Zippy says:

    vishmehr24:

    I dispute the claim of irrelevance.

    You are giving yourself too much credit. If you disputed it, you would actually address the reasons why it is irrelevant. But you haven’t done that: you just keep riding the same horse, staring at the pommel.

    It is not morally licit to enslave your fellow man as a financial hedge against inflation, price fluctuation, currency debasement, or other literally abstract non-exchangable non-things. It is licit to purchase actually existing property or claims in actually existing property as such a hedge; it is not licit to enslave people as a hedge.

    Furthermore, any ‘losses’ to currency debasement or inflation are just a tax on stupidity, like a lottery ticket. Anyone who holds literal cash (ahem) for any significant length of time is financially incompetent; and it is doubly immoral to enslave your fellow man as a hedge against your own incompetence.

  • Zippy says:

    Those who believe that the government robs them by debasing the currency can have their revenge by paying their taxes in fiat dollars.

  • […] 34 of the Usury FAQ addresses the issue of personal bankruptcy.  Doubters of the contemporary relevance of the moral prohibition of usury frequently suggest that in the context of modern personal […]

  • […] I’d suggest that he who is complicit in obscuring moral doctrine with respect to property under a fog of ‘pastoral mercy’ and willful incomprehension has no standing to complain when doctrine with respect to sex and marriage is obscured under a fog of ‘pastoral mercy’ and willful incomprehension. […]

  • […] is entirely too optimistic. I often find that my comments in traditionalist forums, in which I explain the parallels between progressive ‘pastoral solutions’ with respect to usury and currently proposed […]

  • […] is giving Cardinal Kasper far too much credit.  If we want to give credit where credit is due, we’d be better off calling the position […]

  • […] Which is how Humanae Vitae becomes Vix Pervenit. […]

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