A fungible error
June 20, 2017 § 24 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).