June 23, 2017 § 13 Comments
“But let your speech be yea, yea: no, no: and that which is over and above these, is of evil.” – Matthew 5:37
“Fungible” means interchangeable for use: one cup of sugar is fungible with another (assuming similar enough qualities) because when we put that sugar to use, we are indifferent as to which particular cup of similar-quality sugar we use.
“Recourse” (or “full recourse“) means that when some property is transferred into an individual’s (or group’s) possession, that individual (or group) personally guarantees to return, not the actual property, but some property with equivalent use. In short, recourse means that what secures contractual performance is a personal guarantee to restore the equivalent of what was borrowed.
Once one grasps that in a mutuum loan “fungible thing” means “treated as fungible by the contract”, fungible thing and recourse become convertible into each other. Fungible and recourse are fungible contract terms, if that isn’t too confusing a way to put it.
Now the security on a contract is whatever it is that secures the contractual performance of the contracting parties: whatever it is that ensures that the contracting parties each hold up their end of the bargain.
If a contract intended to produce profits is to be morally licit, the thing(s) which secure the contract cannot be treated as fungible (alienable) by the contract. The collateral which secures a bank loan may not (as per the contract) be sold until the loan is fully discharged, because once the collateral has been sold by the borrower it can no longer act as security on the loan.
If the agreement is that certain property bound to the contract may be consumed or alienated without discharging the borrower’s obligation to repay, that specific property cannot act as what ultimately secures contractual performance. A complex contract (a societas or census) may include other property which acts as security; but property which the contract treats as fungible cannot act as security.
A recourse contract – even if it also includes collateral as partial security – is ultimately secured by a mere personal guarantee or IOU. If the collateral is completely consumed or alienated the borrower remains personally obligated to repay the loan in full; so the collateral on any recourse loan is treated by the contract as fungible in the pertinent sense.
This is reflected in Pius V’s words in Cum Onus where he insists that any licit census contract must be secured by “a fixed immobile good”: by some property which the contract does not treat as fungible/alienable from the borrower or managing partner.
A non recourse contract is a contract which by definition does not involve making promises which the parties may not be able to keep. And a recourse contract by definition involves the parties making promises they most certainly might not be able to keep. This in my view is why St. Francis Xavier admonishes confessors to:
Ask [penitents] what profits they make, how, and whence? What is the system that they follow in barter, in loans, and in the whole matter of security for contracts?
You will generally find that everything is defiled with usurious contracts, …’
And this is yet another way, in addition to all the prior ways discussed, in which we might intuit the wickedness of usury: it involves profiting by deliberately insisting that borrowers make promises which they may not be able to keep.
June 20, 2017 § 25 Comments
A fungible thing is something which we habitually treat as interchangeable with different objects of the same kind and in the same amount. A cup of sugar is considered a fungible thing because we typically don’t care whether we are using this particular cup of sugar or that one: any cup of sugar with similar qualities will do.
Scholastics – academics who study the philosophy of St. Thomas Aquinas and other medieval Catholic scholars – tend, like philosophers of any school, to adopt certain habits of mind. One of the Scholastic habits of mind is to reflexively consider the nature of a thing as one argues or dialogs about that thing. This is of course perfectly natural and salutary, but I suspect that it underlies a common error when thinking about usury.
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. [Emphasis mine]
Scholastics – unlike Aquinas himself – tend to approach usury as having something to do with the nature of the property lent, qua fungible thing. But a mutuum loan is not, strictly speaking, a loan of a fungible thing: it is a loan of a thing which the contract treats as fungible. Aquinas explains this in his discussions of usury; here he is in de Malo:
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.
He goes on to explain that it is not the nature of the property itself, but the kind of use which is authorized by the contract, which is the essence of the mutuum loan and therefore the essence of usury. A contract which treats the lent property as fungible — as alienable from the borrower — is a mutuum loan; and it is on this kind of loan that making any profit whatsoever is morally illicit:
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 [usury], 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 [usury].
So Thomists and other thinkers who attempt to take the sinfulness of usury seriously would do well to follow the Doctor, and avoid the pitfall of confusing the fact that a usurious contract treats the property lent as fungible with something intrinsically the case about the property itself.
And Aquinas’s correctness on the doctrinal point – that usury consists in the nature of the contract, not the nature of the property lent/borrowed – can be easily confirmed by checking Magisterial sources, such as Vix Pervenit (cited above) and others (see here and here, for example).
June 19, 2017 § 14 Comments
Discussing usury in a previous post, Wood asks:
Why are we so susceptible to this particular sin, or at least why did the Enemy choose to attack here? Why do we “want” to be so blind here?
The idea that wealth can be conjured out of nothing, that we can create wealth ex nihilo, is very alluring. Look at the appeal of lotteries, “who wants to be a millionaire” game shows, and other kinds of gambling. Wealth is even more appealing than sex: in fact most people assume that wealth is fungible with sex, and other things besides. So wealth is better than sex. Wealth is a superset of sex: greed consumes lust.
Usury creates the illusion that wealth can be conjured ex nihilo by making an incantation, by speaking a magic spell: the personal IOU. Usury empowers us to speak into the void and say “let there be money!”; and there was money, and also sex, because those with money get sex as a concomitant.
June 15, 2017 § 37 Comments
Denzinger, for those who don’t know, is a compendium of Catholic doctrines which is used to teach seminarians. What is notable about it is that it isn’t a catechism or commentary: it is a collection of actual authoritative magisterial statements on a wide range of moral and theological subjects, originally commissioned by Pope Pius IX. The content of Denzinger is actual epistemically authoritative pronouncements of the teaching Magisterium collected over the millennia, as opposed to some person’s explanation of “what the Church teaches”.
One of the things that struck me when I bought my first copy of Denzinger was how small it is, as a collection of the explicit authoritative communal beliefs of a millennia old institution with a global footprint: as the collected actual resolutions drawn from two thousand years of disputation and controversy. No one can hold the dimunitive single volume in his hands, and then witness the glory of medieval cathedrals and universities, without concluding that the production of true propositions on paper is not the primary activity of the Church.
Another unmistakable impression was that when you read someone’s commentary represented as “what the Church teaches,” what is most remarkable is how much of that commentary represents the imported and unexamined metaphysical baggage of the author.
But you don’t have to trust my impressions. You can form your own by carrying a copy of Denzinger into St. Mary Major in Rome or one of a thousand other churches and cathedrals.
June 14, 2017 § 36 Comments
Doctrine is to pastoral practice as [fill in the blank] is to farming.
I’ll start: “mathematics”.
June 12, 2017 § 38 Comments
The distinction between recourse contracts and nonrecourse contracts as central to understanding usury – the conclusion that personal loans charging any profit whatsoever are usurious, whereas corporate bonds are not usurious – is obviously something I just pulled out of that wacky traditionalist tinfoil hat I was insanely doffing to the King.
Or maybe not.
We do in this our perpetual decree, reprobate and condemn all contracts, pacts, and conventions whatever, to be celebrated in the future, whereby it will be provided on the part of persons putting into company money, animals, or any other things whatever, that if, even by mere accidence, any injury, loss, or damage, follow, the very principal, or capital be always safe and restored [fully by] the managing partner … Fellowships of this nature … are to be entered into honestly, sincerely and with good faith, with fair and just conditions, … so that the managing partner be not [personally] obligated to pay as gain a certain sum, or quantity, free, as aforesaid, from all risk or danger; nor to restore the capital, if, by any casualty, it should perish. But if the capital, at the dissolution of the partnership, be extant, let it be restored to him, who had contributed it to the company, unless it is to be shared with the manager, or otherwise distributed, according to law, between the contractors. …
— Pope Sixtus V, Detestabilis avarita ingluvies, 1586, cited in Usury, Funds, and Banks by Rev. Jeremiah O’Callaghan, 1834
Emphasis and [annotation] mine.
And of course it is sheer coincidence that the medieval Popes who were clearest in their condemnation of abortion, contraception, and the like are the very same popes who were clear in their condemnation of usury.
June 9, 2017 § 60 Comments
The shield maiden is in fact an ancient archetype, notable precisely because she is an exception and very much not a feminine role model for women in general; just as for example the eunuch is an ancient archetype and very much not a masculine role model. Observe modernity’s expectation that the ideal man is basically a eunuch; the ideal woman a shield maiden.
The existence of these ancient archetypes combined with “choose whatever you want to be, except that only subhumans make the tyrannical traditional choice” modernity is toxic.