Author Topic: Usury  (Read 894 times)

Offline Daniel

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Usury
« on: September 28, 2020, 12:47:58 PM »
I'm continuing the discussion on usury from the The Latin Text of the Oldest Surviving Papal Decree Rejects "Baptism of Desire" thread. (Didn't want to derail it)

So, I had not realized this before, but in the other thread it was brought up that the Church used to teach that all interest is usury. And I can only assume that this is still the teaching, since, as Greg pointed out, the alternative would entail that the Church was once mistaken.

Two questions, then.

1.) I take it that it's generally more "fair", if the borrower only borrows physical goods and services rather than money? (Physical goods and services have more or less constant value, whereas the value of money is always fluctuating and usually decreasing.)

2.) How does this affect restitution owed for theft of money? Do we only owe money equal to what we stole at the time we stole it, rather than money equal to the value of the money we stole? (Usually this would be to the thief's benefit, which seems kind of strange.) Or must the thief pay extra since it wasn't a fair transaction to begin with? (I do see in Exodus 22:1 that God commanded thieves who stole an ox to pay back five oxen, and thieves who stole a sheep to pay back four sheep... and in Luke 19:8 Zacheus says he'll pay back the money fourfold... but does the Church have an official teaching on this?)
« Last Edit: September 28, 2020, 01:04:30 PM by Daniel »
 

Offline Sempronius

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Re: Usury
« Reply #1 on: September 28, 2020, 01:44:10 PM »
If I understand correctly , Benedict XIV wrote that a small interest is allowed. I dont think anybody teaches that all interest is forbidden. The Church fathers did not have ”small interests” in mind when they wrote against usury.
 

Offline Maximilian

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Re: Usury
« Reply #2 on: September 28, 2020, 02:48:17 PM »
If I understand correctly , Benedict XIV wrote that a small interest is allowed. I dont think anybody teaches that all interest is forbidden. The Church fathers did not have ”small interests” in mind when they wrote against usury.

No, Benedict XIV wrote the opposite. He said that even a small amount of interest was still usury.
 
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Offline Sempronius

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Re: Usury
« Reply #3 on: September 28, 2020, 03:27:58 PM »
If I understand correctly , Benedict XIV wrote that a small interest is allowed. I dont think anybody teaches that all interest is forbidden. The Church fathers did not have ”small interests” in mind when they wrote against usury.

No, Benedict XIV wrote the opposite. He said that even a small amount of interest was still usury.

”III. By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract. Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made.”

Interests can be taken in order to cover for administrative expenses for example
 

Offline Vetus Ordo

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Re: Usury
« Reply #4 on: September 28, 2020, 04:20:36 PM »
In Aquinas, Summa Theologiæ, Secunda Secundæ Partis, Question 78: The Sin of Usury, we read:

Quote
...To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice. In order to make this evident, we must observe that there are certain things the use of which consists in their consumption: thus we consume wine when we use it for drink and we consume wheat when we use it for food. Wherefore in such like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing, is granted the thing itself and for this reason, to lend things of this kin is to transfer the ownership. Accordingly if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice. On like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz. one, the return of the thing in equal measure, the other, the price of the use, which is called usury.

On the other hand, there are things the use of which does not consist in their consumption: thus to use a house is to dwell in it, not to destroy it. Wherefore in such things both may be granted: for instance, one man may hand over to another the ownership of his house while reserving to himself the use of it for a time, or vice versa, he may grant the use of the house, while retaining the ownership. For this reason a man may lawfully make a charge for the use of his house, and, besides this, revendicate the house from the person to whom he has granted its use, as happens in renting and letting a house.

Now money, according to the Philosopher (Ethic. v, 5; Polit. i, 3) was invented chiefly for the purpose of exchange: and consequently the proper and principal use of money is its consumption or alienation whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury: and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury.

As to whether it is lawful to ask for any other kind of consideration for money lent, we read:

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According to the Philosopher (Ethic. iv, 1), a thing is reckoned as money "if its value can be measured by money." Consequently, just as it is a sin against justice, to take money, by tacit or express agreement, in return for lending money or anything else that is consumed by being used, so also is it a like sin, by tacit or express agreement to receive anything whose price can be measured by money. Yet there would be no sin in receiving something of the kind, not as exacting it, nor yet as though it were due on account of some agreement tacit or expressed, but as a gratuity: since, even before lending the money, one could accept a gratuity, nor is one in a worse condition through lending.

On the other hand it is lawful to exact compensation for a loan, in respect of such things as are not appreciated by a measure of money, for instance, benevolence, and love for the lender, and so forth.
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Offline Maximilian

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Re: Usury
« Reply #5 on: September 28, 2020, 08:01:32 PM »
https://www.papalencyclicals.net/ben14/b14vixpe.htm

Vix Pervenit
by Pope Benedict XIV

I. The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.

II. One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. 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. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.
 
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Offline Greg

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Re: Usury
« Reply #6 on: September 29, 2020, 02:10:21 AM »
Let the straw clutching commence.

A clear case of a teaching held and applied for 400 years being dropped when expedient.
 
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Offline The Theosist

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Re: Usury
« Reply #7 on: September 29, 2020, 03:47:05 AM »
How dare a lender make a return on his loan. He should bear financial risk with no monetary reward.
 

Offline queen.saints

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Re: Usury
« Reply #8 on: September 29, 2020, 03:55:03 AM »
On a happy note, Daniel, I know a young man who decided to live completely without usury and it worked out very well for him.

He wouldn’t even use a bank at all and kept all his money in cash in the back of his working van. He drove the van all over Europe doing landscaping and sleeping in the back, while saving his money and also putting his little sister through school. His whole extended traditional Catholic family got great enjoyment out of mocking him and calling him crazy. Then one day when he was back home an older man from Mass came to him and said, “I know you’re against usury and everything, so I thought I’d ask you first. I have a beautiful stone house I’m selling, but I want the money right away. You can have it for €30,000 if you can give me the cash today.”

And he did have the money.

So, now he owns a large gorgeous stone house in the countryside, but still within driving distance of a major world city.


“With usura hath no man a house of good stone”

 
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Offline Greg

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Re: Usury
« Reply #9 on: September 29, 2020, 04:43:25 AM »
He was lucky the van wasn't stolen.  Or caught on fire. I had a BMW 323i parked in Nice (close to the Russian Orthodox Church) which was burned out by Muslims.
 

Offline Graham

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Re: Usury
« Reply #10 on: September 29, 2020, 07:55:30 AM »
The workings of the western economy have changed immensely since the older teachings were laid down. For instance, we now have an annual measure of monetary inflation or deflation, while of course ought to be factored into a non-usurious lending contract, and yet older texts are not even cognizant of this. Similarly the financial instruments and legal fictions that have been developed allow for loan arrangements that are meaningfully different from what earlier centuries were acquainted with. See Zippy's faq:

https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#1

 

Offline Greg

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Re: Usury
« Reply #11 on: September 29, 2020, 08:30:43 AM »
That is nonsense Graham.

They have been debasing currencies and coin-clipping as long as there has been money.  Roman Emperors used to do it for goodness sake.

https://www.economics.utoronto.ca/munro5/timecht2.htm

Popes were well aware of this practice as were their advisors.  Anyone with an IQ of 110 could understand that these practices were inflationary.

https://en.wikipedia.org/wiki/Price_revolution#:~:text=In%20the%2016th%20century%2C%20prices,from%201%25%20to%201.5%25.
« Last Edit: September 29, 2020, 08:57:28 AM by Greg »
 

Offline Greg

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Re: Usury
« Reply #12 on: September 29, 2020, 09:04:44 AM »
And in the modern world no good Catholic would own a house.  In my town outside of London (one of the cheaper places to live) a small house sells for $500,000.  A home needed by a large family for $1m.

Nobody has that sort of money saved in cash by the age of 40.  All Catholics would be renters making the property owning class rich.

Many would not own cars, unless like me they bought old ones for cash because few people have $20,000 to $40,000 to spend on a car.

- - -

Whether usury is evil or legitimate is not the point.  The point is that the Church squarely condemned it and now allows it and does it through the Vatican Bank.  I won't accept the sophist's argument that the nature of money has changed.  That is a crock of shit.
 
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Offline Bl. Karl Hapsburg

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Re: Usury
« Reply #13 on: September 29, 2020, 10:55:28 AM »
From my experience working in banking the people who get trapped in debt usually have a major sin or vice that they are a slave too. Usury is a consequence and not the cause of their financial troubles. People with common sense and morals tend to pay off their debts and live within their means. There is of course exceptions to this but this is generally what I've observed.

I dont believe you can eliminate usury from society as things are today. As long as people live sinful lives they will make bad decisions with money and need to borrow more. Its like gambling, its best to try and regulate it or the criminals will be in charge of it on the black market.
« Last Edit: September 29, 2020, 11:08:19 AM by Bl. Karl Hapsburg »
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Offline The Theosist

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Re: Usury
« Reply #14 on: September 29, 2020, 11:42:55 AM »
In Aquinas, Summa Theologiæ, Secunda Secundæ Partis, Question 78: The Sin of Usury, we read:

Quote
...To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice.

Time has value and, moreover, since money can be invested to earn a return, lending money with no prospect of return deprives the lender of it. It is ludicrous to suggest that compensating the lender for this potential loss is an injustice. Never mind the risk of never being paid back the full sum. Would it be an injustice for him to refuse to lend? Also, the man who borrows money borrows it because its sum is of greater value to him now than he believes it will be in the future. The fact that time has value to him here is given by the fact that he is willing to pay such a premium  in the form of interest for whatever he is going to use the loan for. It is, again, ludicrous to suggest there is intrinsically an injustice here.

Quote
In order to make this evident, we must observe that there are certain things the use of which consists in their consumption: thus we consume wine when we use it for drink and we consume wheat when we use it for food. Wherefore in such like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing, is granted the thing itself and for this reason, to lend things of this kin is to transfer the ownership.

The lending of a thing is kin to whatever the lender and borrower agree under contract it is.

Quote
Accordingly if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice.

What? Lending wine isn't selling wine; without immediate monetary compensation it's a gifting of wine, with the expectation, but not the guarantee, of the like being returned in the future. And if he wants more wine in return, that's just a premium. If the total interest paid by expiration of the loan is, say, 20% of the price of the wine, would it be an injustice for him to jack up the price by 20%?

Come to think of it, under Aquinas's logic, why isn't earning a net profit an injustice?

Quote
On like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz. one, the return of the thing in equal measure, the other, the price of the use, which is called usury.

Why? He never really explains. Worse still, he reasons under the false presupposition that the value of a commodity is universal and fixed in time. It is not. The very condition of wanting to be given wine or wheat now in exchange for returning the same at some point in the future proves this.


Quote
Now money, according to the Philosopher (Ethic. v, 5; Polit. i, 3) was invented chiefly for the purpose of exchange: and consequently the proper and principal use of money is its consumption or alienation whereby it is sunk in exchange.

So what is investing?

Quote
Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury: and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury.

Money was invented chiefly of x, therefore it is by the nature of money unlawful to lend it at interest? Take a moment to reflect and it might dawn on you just how retarded this argument is. If "money" is a human invention, the purpose of "money" is given by convention; in our present time, that conventional purpose includes the concept of lending to earn a return. Is it also unlawful to use a coin as a guitar pick? Or the Summa as a door stop?


Quote
According to the Philosopher (Ethic. iv, 1), a thing is reckoned as money "if its value can be measured by money." Consequently, just as it is a sin against justice, to take money, by tacit or express agreement, in return for lending money or anything else that is consumed by being used, so also is it a like sin, by tacit or express agreement to receive anything whose price can be measured by money. Yet there would be no sin in receiving something of the kind, not as exacting it, nor yet as though it were due on account of some agreement tacit or expressed, but as a gratuity: since, even before lending the money, one could accept a gratuity, nor is one in a worse condition through lending.

According to Aristotle quod erat demonstrandum. All hail the divinely inspired and infallible pagan philosopher.
« Last Edit: September 29, 2020, 11:54:29 AM by The Theosist »
 
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