More numbskull medieval finance
February 2, 2015 § 16 Comments
Since everyone knows that St. Thomas Aquinas – while he was probably pretty wise as an expositor of important airy fairy theology up in the clouds that doesn’t actually affect everyday life in the Real World [tm] in any important way – was a medieval financial troglodyte who didn’t understand modern money and commerce and economies and entrepreneurship, whose ideas if implemented would make business and profit impossible (leading to mass global starvation and even dogs and cats living together), who just didn’t get it that money has a time value such that people as a matter of justice owe interest payments on emotional distress and regrets regarding roads not taken in mutually voluntary commercial contracts, and whose understanding of currency and economics is based on earth, air, fire, and water, it is important to expose his ridiculous naivete in black and white for the world to see.
Here he is discussing why the kind of currency used in a mutuum loan is irrelevant to the question of usury. He also affirms that making a profit by posting assets as security – selling insurance – is morally licit. (What a dumb ox!)
As the Philosopher says in the Politics, things can have two uses: one specific and primary; the other general and secondary. For example, the specific and primary use of shoes is to wear them, and their secondary use is to exchange them for something else. And conversely, the specific and primary use of money is as a means of exchange, since money was instituted for this purpose, and the secondary use of money can be for anything else, for example, as security or for display. And exchange is a use consuming, as it were, the substance of the thing exchanged insofar as the exchange alienates the thing from the one who exchanges it. And so if persons should lend their money to others for use as a means of exchange, which is the specific use of money, and seek a return for this use over and above the principal, this will be contrary to justice. But if persons lend their money to others for another use in which the money is not consumed, there will be the same consideration as regarding the things that are not consumed in their very use, things that are licitly rented and hired out. And so if one gives money sealed in a purse to post it as security and then receives recompense, this is not interest-taking, since it involves renting or hiring out, not a contract for a loan. And the reasoning is the same if a person gives money to another to use it for display, just as, conversely, if one gives shoes to another as a means of exchange and on that account were to seek a recompense over and above the value of the shoes, there would be interest-taking.
— St. Thomas Aquinas, De Malo, Oxford University Press, translated by Brian Davies and Richard Regan. (Emphasis mine)