Usury and Church History

[SRoper]

How has the issue of usury played out in the history of the church? It seems that in a large span of church history--from Nicea to Thomas Aquinas at least--usury was defined as charging any interest and was condemned by the church. How then did we get to our present situation where usury is the charging of excessive interest? When did this happen, and what were the arguments?

 

[jogri17]

That is a very good question. Sounds like a good ThM project. Though actually I think The Catholic Church still teaches no interest charges except if because of a loan unexpected charges came about that were not foreseen. I am of the opinion that charging interest on a loan is not inherently sinful, but that there needs to be a regulator because it becomes very easy to prey on people then.

 

[Alan D. Strange]

The end of seignorialism and the rise of the merchant middle class in the High Middle Ages, developing into the mercantilism and capitalism of the Renaissance and Reformation, led to a rethinking of the absolute prohibition of charging interest. With capital investment and money as a factor not merely in consumption but also in production, European society looked to Roman law, allowing gain from a loan to compensate for the loss. Usury, as you indicated, was redefined to be a prohibition of excessive interest.

The ancient church (Chrysostom, Augustine, et al.) tended to forbid the charging of any interest, as did the medieval church (Synod of Paris, 829; Lateran II, 1139), with it passing into canon law. Aquinas forbade it too but allowed exceptions (ST II of II, q. 78). Though Luther favored the prohibition, Melanchthon, Bucer, Calvin, and others took a more moderate view, particularly in light of the changing economic conditions of the day.

In capitalism, it makes sense that you as the borrower give the lender some percentage to make it worth his while to lend you the money on which you will make money. In other words, you can't have capitalism without interest. One may wish to argue against capitalism and thus interest. But that's another matter.

Peace,
Alan

 

[py3ak]

James Durham defends moderate interest on the grounds that some people (e.g., ministers who are too occupied with other things) cannot devote time to the improvement of their estates: so they let someone else manage their resources, with an expectation of growth.

 

[Peairtach]

Our Lord spoke about making money from money in some of his parables. The ban on interest was was not necessarily on commercial loans but on brother exploiting, rather than assisting, poor brother.

Deacons' Courts - who have the resources - and wealthy individual brothers should show their charity by helping out brothers who they assess to be in genuine need, or who may need a helping hand to start a worthy project, with interest free loans.

This book on "Christian Economics" has a section on the subject of interest:
Amazon.com: The Political Economy of a Christian Society (9780952205838): Stephen C. Perks: Books

 

[Rich Koster]

A sidebar comment: In a society that uses fiat currency, you would have to apply interest equal to inflation, to effectively be paid back what you loaned. Just a thought.

 

[SRoper]

Thanks for the responses! Dr. Strange, your summary is very helpful. I'm a little disturbed by the appearance of a change in doctrine as a result of social upheaval. I would expect considerable resistance to revising the doctrine on usury, but maybe it happened at a time when so many doctrines were being challenged that it was never a focal point.

As an aside, it's not obvious to me that Aquinas allows exceptions to lending with interest. In ST II-II Q. 78 he does allow a lending fee for lending a coin collection because the collection is not something that is consumed in its use. He also allows the borrower to pay a gratuity, although it cannot be under obligation. Interestingly, he specifically allows capital investment with expectation of share in the profits, which seems to me to be more central to capitalism than lending with interest. I'm not sure these add up to exceptions.

Ruben, do you know where that can be found in James Durham's work?

Richard, I think you hit on an important point. It is one that came up in discussion with my wife this evening. We were thinking that the OT ban on usury is closely related to the judicially required generosity to the household of faith. That is, it would be in the same category as the Jubilee and leaving opportunity for gleaning. I'm still interested in the historical question, though.

 

[Alan D. Strange]

Scott:

I am glad that you recognize that I was giving a thumbnail sketch on the church's view on usury and not defending the shift.

Just as we've witnessed a plethora of changes in our world since the Second World War due to technological, medical, scientific and digital revolutions, much of which has considerably outpaced the church's ethical reasoning on such issues, so there have been economic revolutions, with wide social implications (like the shift to capitalism) that the church has, at least in part, failed adequately to address, though the Puritans, on the Protestant side, sought to do so with "fair price" laws, "sumptuary" laws and the like.

The greed that the church opposed in the charging of interest seems to have evaporated, at least for some of the church, in the rise of capitalism. I am not suggesting that there are easy answers to these things. I am suggesting that Christians have embraced a laissez-faire capitalism in the past and in vitro fertilization in the present without thinking through the ethical problems that may attend them.

I think that you are right to ask what happened to the church's doctrine of usury. There is doubtless some fine scholarship on this. I've seen a thing here or there: perhaps I'll look into it some more.

Peace,
Alan

 

[ChristianTrader]

I found this article, from a Roman Catholic Perspective, quite helpful: 'Is Usury Still a Sin?'

 

[py3ak]

Ruben, do you know where that can be found in James Durham's work?

Practical Exposition of the Ten Commandments, pp.381-386 (in the Naphtali Press reprint).

 

[SRoper]

I found this article, from a Roman Catholic Perspective, quite helpful: 'Is Usury Still a Sin?'

Fantastic. Thank you, Hermonta.

And thank you, Ruben, for the cite.

 

[Rufus]

Does anybody here have any criticisms or view usury as a sin?

 

[Peairtach]

I don't.

But the way it is used today may need to be looked at as part of a reform of the economic system.

 

[Alan D. Strange]

Of course I believe that usury is a sin. WLC 142 forbids usury, citing Psalm 15:5 as the proof text. I suppose this leaves us to debate what usury is, excessive interest on a loan or any interest on a loan, but certainly the former would be forbidden. As a confessional board, I would assume that we would agree that usury is a sin.

Peace,
Alan

 

[Peairtach]

Of course I believe that usury is a sin. WLC 142 forbids usury, citing Psalm 15:5 as the proof text. I suppose this leaves us to debate what usury is, excessive interest on a loan or any interest on a loan, but certainly the former would be forbidden. As a confessional board, I would assume that we would agree that usury is a sin.

Peace,
Alan

Thanks for pointing this out.

Presumably the divines weren't against all interest?