Gonna party like it’s 1312
October 25, 2017 § 71 Comments
Now and then you’ll encounter the claim that although usury (contractual profit from a mutuum loan) is morally wrong as an agreement between individuals, it becomes morally licit when it is authorized by the positive law, sometimes referred to as “the law of the Prince”. Various rationalizations were suggested for this proposed title to interest – German positive law at the time enforced contracts charging up to 5% interest on mutuum loans – as within the legitimate power of the Prince, starting with the theories of Adam Tanner (SJ) of Ingolstadt in 1620. Tanner and his pupil Christopher Haunold argued that:
This custom … was morally justified, even though the lender had no title to interest. The State validated the custom by its power of eminent domain, transferring the property of the borrower to the lender [in the form of interest]. The State, it was generally admitted, had the power of eminent domain to dispose of private property for the common good. — Noonan, The Scholastic Analysis of Usury, page 353.
According to Noonan this purely positive law argument gained no traction outside of Ingolstadt (a two and a half hour drive from Cardinal Kasper’s see today) until 1736, when Vitus Pichler (SJ) and Francis Barth worked it over into a theory. Noonan describes the theory:
The premium paid for a loan in such a situation was not usury in a strict sense, but a reward to a lender which the law allowed on the occasion of a loan. … As in the conferring of property rights by adverse possession, a private person was given the right, which he would otherwise not have, to take the property of someone else, in order that the general welfare be promoted.
No surprise that this is yet another case of selective, willful amnesia. Because centuries beforehand the constitutions of the Council of Vienne had ordered the excommunication of government officials who craft statutes asserting such a title:
Serious suggestions have been made to us that communities in certain places, to the divine displeasure and injury of the neighbour, in violation of both divine and human law, approve of usury. By their statutes, sometimes confirmed by oath, they not only grant that usury may be demanded and paid, but deliberately compel debtors to pay it. … We, therefore, wishing to get rid of these pernicious practices, decree with the approval of the sacred council that all the magistrates, captains, rulers, consuls, judges, counsellors or any other officials of these communities who presume in the future to make, write or dictate such statutes, or knowingly decide that usury be paid or, if paid, that it be not fully and freely restored when claimed, incur the sentence of excommunication.