Renz's Thesis No. 8 - "Scholastic theologians developed the idea that usury is intrinsically wrong"

Several years ago I debated usury on an Internet Forum with a young Thomist. He challenged me to define why usury is wrong, and with his challenge he attached the condition that I was allowed no recourse to appealing to God’s Law. He spelled out in clear terms that “Because it is contrary to God’s Law” was not an acceptable answer. He wanted me to describe what was wrong with usury so that God did not approve of it and therefore would decree a law against it. As he expressed the question, “What according to usury’s nature causes it to be evil.” The Forum no longer exists on the Internet, otherwise I gladly would include here a link to the discussion. I quote from my reply to the question. “Goatskin” was the screen name of the young Thomist.

“Goatskin specifies that being contrary to God’s Law is not a sufficient explanation, but presses for an explanation of why it [usury] should be contrary to God’s Law. Here also we get directly into the Aristotelian speculation that characterizes Aquinas’ reasoning. In Pt. II-II, Q. 78, Art. 1 he brings his whole case to rest upon a principle of ‘justice.’ But the principle of ‘justice’ is derived through a process of analysis, i.e., it is not derived from the revelation of the Law. Aquinas states that usury is ‘unjust in itself.’ In the same way Goatskin wishes me to explain ‘what according to usury’s nature causes it to be evil,’ without recourse to the Law of God. This is the hallmark of Aristotelian thought, which seeks to ground everything of thought and life in ‘first principles’ that are above everything, including whatever ‘god’ we may posit. If at some subsequent time ‘god’ may speak and declare usury unlawful, he then would be affirming that which already was true by the nature of the case before he spoke.”

The ideas of “intrinsic” and “extrinsic” are useful in abstract discussions. Particularly in consideration of a philosophy of value it is useful to have these handy concepts, which provide a simplified means of expressing either that value is inherent or “intrinsic” in the thing, or else that it originates in the valuations of the valuer, and is “extrinsic” to the thing. However, in discussion of ultimate things and the Law of God, we are on quite shaky ground to insist that the distinction of “intrinsic” vs. “extrinsic” still provides any useful function. We cannot understand anything for what it truly is via contemplation of what it is “in itself,” for nothing of reality has any “intrinsic” being or attribute. This is the sine qua non of Christian metaphysics as opposed to non-Christian metaphysics: The Christian declares that nothing of “reality” exists “in itself,” or has any attributes “in itself.” All things first and finally are the creation of God. Nothing of reality can be known for what it truly is if knowledge is pursued independently of God; all things are what they are ultimately because of creation and the place they hold in God’s plan for creation. It is pure Aristotelianism to pursue the question of whether usury is “unjust in itself.” Contra Aristotle, Paul assured the Romans that, “…nothing is unclean in itself…” (Rom. 14:14).

If usury is thought to be unjust intrinsically rather than due to its being contrary to God’s Law, then immediately the mind focuses upon a quest to understand the injustice that is inherent in usury’s nature, rather than upon a quest to understand and to obey God’s Law. If the sin of usury is pegged soundly upon God’s Law, then issues of compliance are not so complex: if it is contrary to God’s Law, then it is sinful. However, if the matter is thought to rest upon a principle of “justice,” then compliance becomes exceedingly complex. Aquinas said that the main problem with usury was that it, “…evidently leads to inequality which is contrary to justice.” Such an emphasis shifts scrutiny from the nature of the contract to the nature of the results. In the Scholastic view of things, the question no longer is, “Does the contract stipulate that the borrower must repay the principal plus also some over and above?” but now has become, “Have the borrower and the lender achieved equality?” or “Is the purchasing power of what is repaid equal to the purchasing power of what was loaned?” or some such line. By this means contracts that are usurious on their face are justified. Scholastic opposition to usury was not really opposition to usury per se, but opposition to “injustice.” If the main problem with usury is said to be “injustice,” then main concern becomes, “Do the terms of the loan violate ‘justice’?” rather than, “Do the terms of the loan violate God’s Law?”

It was just this sort of approach to the matter that led to the Church’s liberalized position in the later Middle and early Modern Ages. In the Ancient and early Middle Ages, usury always manifestly aggravated the misery of debtors, and therefore it was quite easy to oppose it. The Church did not appear foolish to the world for opposing usury in that day, for the worldly leaders also opposed it. They opposed usury for different reasons: the world, because usury is socially destabilizing; the Church, because usury is contrary to God’s Law. But there was no pressure upon the Church to change her view. In the later Middle Ages, with the growth of industry and commerce, new occasions of lending and borrowing came into view and made usury seem reasonable and justified. There were many new business opportunities, and there arose great inducement to raise quick business capital by way of a loan. Now here was a challenge for the Church. What if a borrower arranged for a loan, not to meet some immediate need, but for the purpose of conducting some business? And what if the borrower earned a great profit in his use of the borrowed goods? Is not the lender justified in sharing in this profit by receiving back what was loaned plus a little more? The World answered with a resounding Yes! and the Church soon followed suit. The Scholastic idea of usury was primarily philosophical rather than biblical. They had based opposition to usury upon its being “intrinsically unjust” rather than upon its being contrary to God’s Law. When the World demonstrated to the Church that Modern contracts of usury satisfied the concerns of “justice,” the Church was in no position to maintain her opposition to usury. In his Thesis No. 8, Thomas demonstrates this quite clearly.

According to Thomas, “the encyclical Vix Pervenit (On Usury and Other Dishonest Profit) promulgated on 1 November 1745 by Pope Benedict XIV may be considered the apex of scholastic thinking on [usury].” He quotes from the encyclical, “The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one.” Of this statement Thomas declares, “This is about as full a condemnation of usury as one might get.” Actually, it is not. It is the Aristotelian concept of “commutative justice” that requires “equality.” The Law of God simply requires the borrower to repay to the lender what was loaned. If a man borrowed thirty pounds of seed corn, and a year later repaid thirty pounds of seed corn, then he has fulfilled the Law of God. If thirty pounds of seed corn in the year of repayment is not “worth” the same as thirty pounds of seed corn in the year it was borrowed, then the borrower may violate an Aristotelian concept of “justice,” but he has not violated God’s Law. In reality Pope Benedict XIV was waffling already in his supposed “full condemnation of usury.” It is no cause for surprise, then, that such waffling should be made crystal clear in subsequent passages of his encyclical. Thomas quotes the Pope as anticipating that, “entirely just and legitimate reasons arise to demand something over and above the amount due on the contract.” It is evident that Thomas wished to characterize the Pope’s earlier statement as “full condemnation of usury” in order to present a case that even those in the Church who fully condemned usury still allowed for the justice in some cases of demanding a greater amount repaid than was loaned. However, in reality we have no such case. In reality the liberal conclusion of the Church is built in to her Scholastic premises. Indeed, Thomas points out that some scholars argue that the liberal view of the Modern Roman Church does not really diverge in substance from its historic position. There is a good case to be made for a position that the Modern view does not diverge from what Aquinas taught, and that the Modern view really is the logical outworking of the foundation laid by Aquinas and the Scholastics.

But it was not only the Roman Church that turned to the liberal view. Via Calvin, a liberal view of usury also entered into the Protestant Church, which is a topic that we shall address more fully in discussion of Thomas’ next Thesis. In closing this article, it is worth relating more of my discussions with Goatskin on the Internet Forum. So pervasive was the influence of Aquinas and Aristotle upon him that he actually took the term “balance” in Proverbs 11:1 (“A false balance is an abomination to the Lord”) to mean the Aristotelian concept of “equality,” as though the text were saying that any transaction that does not “balance” in the sense of leaving all parties to it in a state of “equality” is an abomination to God. I actually had to explain to this fellow at great length that such a concept has nothing whatever to do with the text, and that the “balance” referred to was a physical device used for weighing out goods for trade, exactly as produce still is weighed for sale in grocery stores to this day. Such a gross misunderstanding of a simple text of Scripture by an ostensibly intelligent young man is eloquent testimony to the power of Scholasticism. It becomes a lens through which all of life and thought take on a distinctive hue. It colors even how seemingly plain and simple texts of Scripture are read. Scholasticism is what it is because of Aquinas, and Aquinas was who he was because of his devotion to Aristotle, and it was Greek Philosophy specifically that Paul meant when he warned the Colossians, “See to it that no one takes you captive through philosophy and empty deception, according to the traditions of men, according to the elementary principles of the world, rather than according to Christ.” (Col. 2:8)