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Source: (consider it)
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Thread: Titanic struggle for the soul of the Catholic church
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Dave W.
Shipmate
# 8765
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Posted
quote:
Originally posted by zippycatholic:
I've talked to certainly hundreds and possibly thousands of people on this subject in the years since I first took an interest in it -- folks from all sorts of different backgrounds, including clergy, professors of moral theology, and finance/business experts like myself.
Well, I'm sorry you didn't mention this before, since it is the very first thing I asked you about. I would have liked to know what their responses were (and I don't think that's unreasonable or insulting; after all, you presumably wanted to know that too.)
But as you've now gone, you will keep your experiences of hundreds/thousands of discussions and your sunshine, whereas I will get ... more snow.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by IngoB:
The problem is that what I'm putting up as a collateral there is really myself. The security you get for your loan is not some thing, it is me. If I default the loan, you get rights over me. You can take away my things, even though I never intended selling them to you. You can force me to labour for you (if in the polite form of taking part of the wages I earn, rather than outright slavery). You can perhaps have me thrown into prison, if I fail to provide you with satisfactory repayment. I'm on the line, as a person, not a thing.
I think you're right in what you say here - the moral issue in all this is how far creditors should be allowed to go in recovering unpaid debts. If justice is a fair balance of the interests of the two parties involved, then a legal system that gives the creditor too many rights is unjust. He should not be able to take away the shirt on your back. Or the tools of your trade. Or anything else that prevents you from being a functioning employed member of society.
But note that:
- this moral principle makes no distinction between the principal and the interest
- if the law rightly gives the debtor a limit on their liability, then this creates a greater risk of default on loans in general. Interest is compensation for such risk as well as compensation for not having the use of the money (or thing loaned) for the period of the loan
- if you live in a big house full of nice furniture, there may be in practice not all that much difference between a system that requires you to pledge your nice furniture as collateral in order to get a loan, and a system where a nominally-unsecured loan to you is underpinned by an unspoken threat to send the bailiffs round to confiscate your nice furniture...
quote:
the other moral problem is that money is a medium exchange. While money has physical realisations (the bank notes in my wallet), the point of money is that you can buy and sell stuff with it. It is intended to be used, and even if one saves it up, then the point of that is precisely to store it up for future usage. In that sense money is like food or drink. The point of food or drink is that it will be consumed eventually. Even if you store up food or drink, it is with the intention of future usage.
Now imagine you give a bagel to someone but you say "You are hungry... here, you can have my bagel, but I want to get a bagel back." That's fair enough. It may not be charitable or nice, but it is just. You give a bagel, you get a bagel back (eventually). OK. Now the person wolfs down the bagel. Then you say "Ah, but you ate my bagel. Now I want one and a half bagels back. One bagel because I gave you one, and half a bagel extra because you ate it." That's obviously nuts.
This argument doesn't make any sense to me at all. The point of a car is to be driven. Whether you drive a rented car or just park it in the driveway to impress the neighbours, whether you eat a borrowed bagel or exhibit it as modern art, whether you spend the loaned banknote or frame it on the wall, is entirely up to you. The interest or charge or rent you pay me for borrowing the thing from me is first and foremost compensation for the fact that I don't have those choices while the thing is on loan to you.
Of course, in the case of a financial institution like a credit union, the interest charged to borrowers may be considered as primarily being the interest paid to savers, with the institution paying its operating expenses (and covering the risk of default) out of a difference in the two interest rates.
Subject to the debt-collection procedures being just (as above), is there anything morally wrong with such an arrangement ?
Best wishes,
Russ
Posts: 3169 | From: rural Ireland | Registered: May 2001
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Enoch
Shipmate
# 14322
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Posted
quote:
Originally posted by zippycatholic:
Russ:
In order to understand usury you have to understand the difference between a mutuum loan and a contract for rent.
In a contract for rent, the borrower pays you for the use of the actual property (say a house), and returns that actual property at the end of the loan. If you stop making rent payments, he forecloses and claims his actual property -- but you, the borrower, are done at that point: he cannot continue to require payments from you after he has retrieved the actual property he loaned to you, or that was purchased (either from you as collateral or from a third party) with his money. Non recourse loans, licit census contracts, etc are variations on this kind of contract: there is always some actual property in which claims of the various parties terminate. As Vix Pervenit affirms, "from these types of contract honest gain may be made".
In a mutuum (the word "loan" in the English translation of Vix Pervenit is originally "mutuum"), the lender gives you something and you consume it - which is to say, once you are done using it, it is no longer in either your or his possession. Aquinas refers to this kind of situation as the loan of something 'consumed in its use'. This kind of loan is only morally licit as an act of charity or friendship, and cannot by its nature give rise to any titles to profit -- because any titles to profit would not be rooted in actual property, but rather in the person of the borrower, making this into a kind of partial enslavement of the borrower by the lender.
Of course this immediately gives rise to many other questions, which is why someone ought to post an FAQ covering all the different questions which tend to arise, citing Magisterial documents and Aquinas where appropriate, etc. ;-)
I can't follow this. Furthermore, what I can follow is both factually incorrect and over-precise logic-chopping. It reflects no credit on the moral theologians responsible, however celebrated.
If I let out my house to you, and you don't pay the rent, I can evict you. That does not discharge you from liability for the rent you owe. I can still sue you for it.
If I lend money to you secured on your house, and you don't pay, I have two options. I can foreclose. That means I keep your property but it replaces the debt + interest and you are discharged from it. The courts do not usually let creditors do this.
Or, I can sell the property. If I sell it for more than your debt + interest, I pay myself off and must give the surplus back to you. If I sell it for less than the debt, I can still sue you for the balance. This is called negative equity.
If I lend you money, you do not 'consume' it. Money is what is called a fungible i.e. if I put my money in the bank, my deposit isn't some specific notes with numbers on them. It's the amount, in whatever form it happens to be. The same could apply to a bag of sugar, but not really to an antique chair or a pork pie.
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Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
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IngoB
Sentire cum Ecclesia
# 8700
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Posted
quote:
Originally posted by Eliab:
I thought the RC position (or at least, the RC position if it's being accurately portrayed by ZC) was that your can lawfully make a full-recourse/mutuum loan, but not make a profit from it. Getting your money back is OK - getting money and interest is not. If that's right then Russ's qualifier "up to the value of the thing loaned" is important and prevents the arrangement from being usury - the lender is only claiming the right to get back what he lent, not a profit. Or have I missed something?
Good point, sorry, I didn't read that qualifier Russ added carefully. I think you are correct there, to simply ask one's money back without interest certainly should be OK. That this seems uncomfortable is because one would not expect somebody to provide an interest free loan other than motivated by charity, and it doesn't seem very charitable to recover outstanding debt from the presumably poor by confiscating their remaining property. But I guess we can construct cases where even a charitable lender would recover a debt "mercilessly". And anyhow, we did not make charity an explicit condition, so we cannot count on the lender being that.
quote:
Originally posted by Dave W.:
As for orthodoxy - when I ask about the teaching of the RCC, I'm not asking about an eternal metaphysical truth (not that there's anything wrong with that!), I'm asking about what the RCC, in the form of priests and theologians, actually teaches its believers. That's really not such a strange definition of "the teaching of the RCC".
In my experience as a convert with considerable interest in doctrinal matters, the RCC doesn't teach its believers anything about usury, other than in the sense that 1. there is a backlog of official documents on the subject, and 2. the word is occasionally used without further explanation in newer official documents. Nobody of the RCC has ever tried to teach me anything about usury as such. Without some apologetic interest in the topic, I would have simply looked up usury in the dictionary (e.g., "the action or practice of lending money at unreasonably high rates of interest" - OED), and would have thought that that is all this was about.
As zippy correctly points out, there is no official RC "Q&A service". In fact, one could argue that this apologetic role is actually proper to the laity. What of course does exist is somebody asking their priest about matters that concern them personally. And that sort of request can get kicked up from priest to bishop to CDF if it's a tough question. But I am not a money lender. So if I were to ask my priest about usury, then I would be doing it for the sake of apologetics or writing posts on SoF. It would not really be to save my own soul, or those of my loved ones. So in a sense I would be wasting his time, if I insist on getting a "philosophically precise" answer that I do not need myself. I would be quite reluctant to ask in depth about this, unless I'm friendly with the priest and think that he would enjoy looking at this for its own sake. A money lender however could more reasonably ask his priest about this...
However, I have in fact dug up two different (online) sources now, which seem to me to be reasonably well informed, and which contradict zippy concerning the extrinsic titles "loss occurring (damnum emergens) and profit ceasing (lucrum cessans)":
Fr G.L. Coulter (see in particular Chapter 3)
J. Burke (see in particular the revised version)
This is to be compared with Points 14-16 in Zippy's FAQ.
In summary, the story there goes like this: profit ceasing (lucrum cessans) was accepted as an extrinsic title that allowed charging of interest. The real change that happened in modern times is that the possibility of "profit elsewhere" became so ubiquitous, and the number of loans handed out so great (think of a banker), that the former practice of literally requiring a proof of "equal or greater lost opportunity" for every loan on which interest was charged was dropped. Basically, instead of assuming against the lender (in the confessional) unless the interest was proven justified, now it was assumed for the lender unless the interest was proven to be unjustified. And this de facto removed "normal lending" from the confessional altogether in short order.
quote:
Originally posted by Russ:
- this moral principle makes no distinction between the principal and the interest
It does. I answered your question improperly, see my response to Eliab above.
quote:
Originally posted by Russ:
- if the law rightly gives the debtor a limit on their liability, then this creates a greater risk of default on loans in general. Interest is compensation for such risk as well as compensation for not having the use of the money (or thing loaned) for the period of the loan
This seems to be the key question, really. To what extent is it justifiable to charge interest to compensate for the theoretical loss of gains elsewhere. Other Catholic commentators (see links above) disagree with zippy's conclusion that this is not justifiable (and consequently also interpret the actions of the Church differently).
quote:
Originally posted by Russ:
- if you live in a big house full of nice furniture, there may be in practice not all that much difference between a system that requires you to pledge your nice furniture as collateral in order to get a loan, and a system where a nominally-unsecured loan to you is underpinned by an unspoken threat to send the bailiffs round to confiscate your nice furniture...
That's true to a degree. However, in the former case I get to decide what furniture I'm willing to lose if I default. In the latter case, the bailiff gets to choose.
quote:
Originally posted by Russ:
This argument doesn't make any sense to me at all. The point of a car is to be driven. Whether you drive a rented car or just park it in the driveway to impress the neighbours, whether you eat a borrowed bagel or exhibit it as modern art, whether you spend the loaned banknote or frame it on the wall, is entirely up to you. The interest or charge or rent you pay me for borrowing the thing from me is first and foremost compensation for the fact that I don't have those choices while the thing is on loan to you.
People do not borrow money for fun or to have it on display. They borrow it so they can spend it, usually because they need it urgently, sometimes perhaps because they want to spend it frivolously. At any rate, it may be possible to charge interest as "extrinsic title", in particular because you forego a profit elsewhere by supplying this money as a credit. But the analogy I made concerns the justification (or rather the lack thereof) of an "intrinsic title". Imagine you have plenty of money (you don't need all of it for yourself) but currently have no particular other investment opportunity. Can you then charge interest on a loan just because you lend that money? Is that just? That's the question I was trying to talk about.
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They’ll have me whipp’d for speaking true; thou’lt have me whipp’d for lying; and sometimes I am whipp’d for holding my peace. - The Fool in King Lear
Posts: 12010 | From: Gone fishing | Registered: Oct 2004
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Dave W.
Shipmate
# 8765
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Posted
quote:
Originally posted by IngoB:
quote:
Originally posted by Dave W.:
As for orthodoxy - when I ask about the teaching of the RCC, I'm not asking about an eternal metaphysical truth (not that there's anything wrong with that!), I'm asking about what the RCC, in the form of priests and theologians, actually teaches its believers. That's really not such a strange definition of "the teaching of the RCC".
As zippy correctly points out, there is no official RC "Q&A service". In fact, one could argue that this apologetic role is actually proper to the laity. What of course does exist is somebody asking their priest about matters that concern them personally. And that sort of request can get kicked up from priest to bishop to CDF if it's a tough question. But I am not a money lender. So if I were to ask my priest about usury, then I would be doing it for the sake of apologetics or writing posts on SoF. It would not really be to save my own soul, or those of my loved ones. So in a sense I would be wasting his time, if I insist on getting a "philosophically precise" answer that I do not need myself. I would be quite reluctant to ask in depth about this, unless I'm friendly with the priest and think that he would enjoy looking at this for its own sake. A money lender however could more reasonably ask his priest about this...
Fair enough. I don't think I would have hesitated to ask such a question of the pastor of the church I grew up in, so it seemed to me a natural thing for a curious RC to do as well. (It seems zippy felt the same way; it would have been interesting to hear what kind of responses he got.) quote:
However, I have in fact dug up two different (online) sources now, which seem to me to be reasonably well informed, and which contradict zippy concerning the extrinsic titles "loss occurring (damnum emergens) and profit ceasing (lucrum cessans)":
Fr G.L. Coulter (see in particular Chapter 3)
J. Burke (see in particular the revised version)
This is to be compared with Points 14-16 in Zippy's FAQ.
In summary, the story there goes like this: profit ceasing (lucrum cessans) was accepted as an extrinsic title that allowed charging of interest. The real change that happened in modern times is that the possibility of "profit elsewhere" became so ubiquitous, and the number of loans handed out so great (think of a banker), that the former practice of literally requiring a proof of "equal or greater lost opportunity" for every loan on which interest was charged was dropped. Basically, instead of assuming against the lender (in the confessional) unless the interest was proven justified, now it was assumed for the lender unless the interest was proven to be unjustified. And this de facto removed "normal lending" from the confessional altogether in short order.
As it happens, a some-time SoF poster today directed me to a source (J. Noonan's "The Scholastic Analysis of Usury") which apparently says pretty much the same thing. The book itself seems a little hard to find, so I was going to post a link to a summary of the main points ... but it turns out it's the same as your 2nd link.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by IngoB:
In summary, the story there goes like this: profit ceasing (lucrum cessans) was accepted as an extrinsic title that allowed charging of interest. The real change that happened in modern times is that the possibility of "profit elsewhere" became so ubiquitous ...
Accepted by whom?
That's how the story goes as told by the modernists (e.g. Noonan, who not incidentally also agitated for change in doctrine on contraception and is cited frequently by those agitating for change of doctrine on contraception, e.g. Charles Curran). But the people telling it never produce an actual Magisterial proclamation permitting charging interest for lost opportunity (opportunity cost). At least they've never produced one that I have seen. That's the dog that doesn't bark.
However, there actually is explicit Magisterial condemnation of that story, as documented in my FAQ, e.g.
"[The following proposition is condemned as erroneous:] Since ready cash is more valuable than that to be paid, and since there is no one who does not consider ready cash of greater worth than future cash, a creditor can demand something beyond the principal from the borrower, and for this reason be excused from usury. – Various Errors on Moral Subjects (II), Pope Innocent XI by decree of the Holy Office, March 4, 1679 (Denzinger)"
and
"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. – Vix Pervenit, Pope Benedict XIV, November 1, 1745"
(Damnum emergens as a just title, understood as actual open your wallet and pay out of pocket expenses on the part of a charitable lender, was accepted even by Aquinas at least in cases of borrowers who are 'back on their feet' and able to restore what the lender actually paid out of pocket).
That different people (including clergy) have different opinions on the subject is neither here nor there. It is easy enough (and has always been easy enough) to find clergy who support all sorts of heresies. And I've gotten all manner of different opinions from all manner of different people, just as you would expect.
What matters though is what can be supported by authoritative magisterial proclamations of doctrine; and the modernist story on usury gains no more support there than the modernist story on (e.g.) contraception.
Posts: 27 | Registered: Dec 2014
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Dave W.:
Fair enough. I don't think I would have hesitated to ask such a question of the pastor of the church I grew up in, so it seemed to me a natural thing for a curious RC to do as well. (It seems zippy felt the same way; it would have been interesting to hear what kind of responses he got.)
I've gotten every kind of response you could imagine, typically based on the politics of the person asked. I've noticed no difference between clergy and laymen. Dorothy Day types want to condemn all profits of every kind as immoral. Republicans in cassocks take the opposite tack and view usury as something that just doesn't apply in modern economies with modern money, unless just in illegal loan sharking. The great majority of people haven't given the subject a second thought, know next to nothing about it, and would probably just defer to sources like the Catholic Encyclopedia, Noonan, and the few online commentaries which reference Noonan (this describes me circa 2007 or so).
That's why you have to actually check up on the claims people make by actually reading the authoritative Magisterial sources (if they even exist) which support or undermine the view expressed. You can find someone in a clerical collar to give you just about any view of the subject you like.
Posts: 27 | Registered: Dec 2014
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Enoch:
If I let out my house to you, and you don't pay the rent, I can evict you. That does not discharge you from liability for the rent you owe. I can still sue you for it.
If I lend money to you secured on your house, and you don't pay, I have two options. I can foreclose. That means I keep your property but it replaces the debt + interest and you are discharged from it. The courts do not usually let creditors do this.
Or, I can sell the property. If I sell it for more than your debt + interest, I pay myself off and must give the surplus back to you. If I sell it for less than the debt, I can still sue you for the balance. This is called negative equity.
If I lend you money, you do not 'consume' it. Money is what is called a fungible i.e. if I put my money in the bank, my deposit isn't some specific notes with numbers on them. It's the amount, in whatever form it happens to be. The same could apply to a bag of sugar, but not really to an antique chair or a pork pie.
These are all addressed in my FAQ. In general, unsecured contracts for profit are not licit. Secured contracts for profit are licit, and if the borrower defaults you recover what you are owed from the security. Notice how this makes lawsuits disappear unless there is actual negligence or fraud: lawsuits arising from misfortune are off the table.
"Consumed in its use" just means that whatever was loaned (it doesn't really matter what) is no longer in the possession of either the lender or the borrower, and it has not been exchanged for something else - something which actually exists - which explicitly secures the contract.
I cover this in the FAQ, and here is one of Aquinas' descriptions of "consumed in its use":
https://zippycatholic.wordpress.com/2015/02/02/more-numbskull-medieval-finance/
Posts: 27 | Registered: Dec 2014
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IngoB
Sentire cum Ecclesia
# 8700
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Posted
quote:
Originally posted by zippycatholic:
Accepted by whom?
By the Church, according to those who disagree with you.
quote:
Originally posted by zippycatholic:
But the people telling it never produce an actual Magisterial proclamation permitting charging interest for lost opportunity (opportunity cost). At least they've never produced one that I have seen. That's the dog that doesn't bark.
But aren't you arguing from silence here just as much as those opposed? They are saying: the magisterium has not spoken against it, therefore it is allowed. You are saying: the magisterium has not spoken for it, therefore it is forbidden. A law needs to be made public to be in effect. Thus the opposing side here has an advantage, all other things being equal. (You will say - I assume - that all other things are not equal. Fine. But I'm just saying that I find the line "but it has not been explicitly allowed" far from convincing as such.)
quote:
Originally posted by zippycatholic:
"[The following proposition is condemned as erroneous:] Since ready cash is more valuable than that to be paid, and since there is no one who does not consider ready cash of greater worth than future cash, a creditor can demand something beyond the principal from the borrower, and for this reason be excused from usury. – Various Errors on Moral Subjects (II), Pope Innocent XI by decree of the Holy Office, March 4, 1679 (Denzinger)"
That however is not a direct statement about opportunity cost. It is a statement about the value of liquid assets as such. The point here can simply be that it is not sufficient to say that money that I have is better than money owed to me. If I have a mountains of spare money lying around, but do not see how I can invest it other than by lending it to you, then where is my "lost opportunity"? Of course, we are used to a world now where those with lots of money find an endless array of possible investments. But apparently this was not the case in the middle ages (and perhaps still in early modernity), where some "players" were sitting on considerably more coin than they knew what to do with. The magisterial statement could then simply mean that you have to argue an actual alternative investment opportunity to motivate the taking of interest. It is not sufficient to merely value liquid assets higher, because if those liquid assets can flow nowhere but remain stagnant, then they do not represent an opportunity. If all this is true, then modernity would have changed the picture by making the proof of alternative investments too trivial to remain an issue.
quote:
Originally posted by zippycatholic:
"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. – Vix Pervenit, Pope Benedict XIV, November 1, 1745"
Once more, it is far from clear that this speaks to opportunity cost. First, one really needs to continue this paragraph in the encyclical to its conclusion:
quote:
By the same token, the things which result from these contracts will differ in accordance with the varying nature of the contracts. Truly an obvious difference exists between gain which arises from money legally, and therefore can be upheld in the courts of both civil and canon law, and gain which is illicitly obtained, and must therefore be returned according to the judgments of both courts. Thus, it is clearly invalid to suggest, on the grounds that some gain is usually received from money lent out, that the issue of usury is irrelevant in our times.
Thus what this paragraph is apparently about is the simple assertion "everybody is doing it (namely taking interest), therefore it is OK". And the answer of the pope is: 1. No, even if everybody is doing it, some of it is OK and some not. 2. This is obvious, since even secular courts condemn some interest taking. This paragraph simply does not state what is OK and what not. It merely points out that "all loans charge interest nowadays" is no moral guarantee that "all loans are decent nowadays".
quote:
Originally posted by zippycatholic:
What matters though is what can be supported by authoritative magisterial proclamations of doctrine; and the modernist story on usury gains no more support there than the modernist story on (e.g.) contraception.
Well, I don't think that you've really demonstrated your case so far. But here's the best counterargument from the opposing side, as far as I am concerned: as documented by Burke from Noonan here, see pages 8-10, the Holy See did not challenge practice in the confessional which according to your interpretation was letting usurers off the hook. Admittedly, there seems to be an "until further notice" attached here. Still, it's been almost 200 years with no further notice forthcoming. The first case is this:
quote:
In 1822, a woman of Lyons “gave her capital to certain persons with the agreement that they pay her the interest rate prescribed by civil law.” She appealed her confessor’s refusal of absolution and the sacraments.] The Holy Office, judging the appeal, declared that “a response will be given at a suitable time”; that meanwhile, however, restitution was not necessary; and that the woman might receive the sacraments.
Now, what is supposed to be different if a woman did so in 2012 in Lyons? Must we not conclude that her charging interest as prescribed by civil law is also currently not considered a matter for the confessional by the Holy See?
Of course, one can argue that if this is actually usury, then everybody here is inculpable except for the Holy See. Everybody would act in good faith, but for those who have been delaying a clarification - an easy clarification, you would say - for almost 200 years. It is not impossible that the Holy See is attempting to build up the biggest millstone ever, so that they can go to hell with the largest accumulated responsibility for human sin. But it just seems more likely that the Holy See simply never got around to making the positive statement that argues why the woman in fact does not sin there. And they can afford being ... a bit slow, if they think that the practice has already been adjusted to what is good and proper, even if they haven'y said exactly why it is good and proper.
Mind you, I'm playing the devil's advocate here a bit. I actually think that it is entirely possible that the Holy See gave up, dropped the ball and decided to look the other way, leaving themselves an "escape clause" as they did so (the pending decision that never ever comes). But I think there are weaknesses in your argument for that. And "lucrum cessans" seems to be the pivot point.
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They’ll have me whipp’d for speaking true; thou’lt have me whipp’d for lying; and sometimes I am whipp’d for holding my peace. - The Fool in King Lear
Posts: 12010 | From: Gone fishing | Registered: Oct 2004
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Erroneous Monk
Shipmate
# 10858
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Posted
We know from the Gospels that God expects interest on his (unsecured) loans, otherwise why would the servant entrusted with one talent have been castigated for putting it in the ground instead of in the bank?
What we *don't* know is how God values financial instruments, therefore we are unsure what the components of the interest are. I have always reasoned that the interest must be *at least* the time value of money (otherwise the lender still does not get his principal back - he gets back an amount that is nominally the same as his principal, but intrinsically less, since it will buy less (unless you are in a deflationary economy)).
But does God expect interest to cover credit risk? If you include credit risk in interest, you are effectively viewing the borrowers as a portfolio or system. You need to estimate the average propensity of them to "go bad" and spread that forecast loss across the portfolio as a whole.
What would God do? Does He actually "know" for sure our default rate? He is certainly capable of knowing it, but does he make that calculation? And does he expect us, as a portfolio, to systematically bear the cost of each other's default? Some would say that we *do* bear that cost, and that that must be part of His plan - in which case interest that covers credit risk gets the thumbs up.
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And I shot a man in Tesco, just to watch him die.
Posts: 2950 | From: I cannot tell you, for you are not a friar | Registered: Jan 2006
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by IngoB:
quote:
Originally posted by zippycatholic:
Accepted by whom?
By the Church, according to those who disagree with you.
... and who provide no doctrinal support for that position.
quote:
But aren't you arguing from silence here just as much as those opposed? They are saying: the magisterium has not spoken against it, therefore it is allowed. You are saying: the magisterium has not spoken for it, therefore it is forbidden.
I do cite where the Magisterium has spoken against it.
Furthermore Vix Pervenit explicitly states what kinds of contracts are licit for gain: non-mutuum contracts.
"Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from [mutuum] 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."
quote:
But here's the best counterargument from the opposing side, as far as I am concerned:
I agree that the pastoral changes to practice in the confessional are pretty much the best case that the progressives can make. I discuss that in Question 47 of my FAQ. But if we buy that pastoral instruction to confessors has doctrinal implications then Pope John Paul II reversed doctrine on contraception in 1997:
https://zippycatholic.wordpress.com/2015/01/22/did-the-church-reverse-course-on-contraception-in-1997/
Folks can and will argue (and have argued) the thing endlessly, and it is always possible that I am wrong (though I wouldn't argue the case if I thought that was likely). But the case for profitable interest in mutuum loans (especially loans like credit cards) is untenable to outright ludicrous given the Magisterial statements defining where profit is and is not morally licit; and is supported by tendentious appeal to changes in pastoral practice which - if the argument were valid - would just as effectively undermine doctrine on contraception and other matters of chastity. On that much I am in agreement with John Noonan and Charles Curran: that is, if the argument from pastoral practice and sensus fidelium is valid on the one hand it is just as valid on the other.
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zippycatholic
Apprentice
# 18312
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Posted
quote:
I wrote:
Furthermore Vix Pervenit explicitly states what kinds of contracts are licit for gain: non-mutuum contracts.
"Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from [mutuum] 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."
That is far from the only citation, by the way. I also cite Regimini Universalis and Cum Onus on what kinds of contracts are licit for gain, and support that with Aquinas' account in the Summa and in De Malo.
The notion that the opposing view from e.g. Noonan and later scholastics is on equal footing with Aquinas' view is simply false. I've read Noonan's book at least twice, and his spin on his own citations is tendentious and wrong. His best case is pastoral and juridical changes which do not pertain to doctrine, tendentious citation of all sorts of non-magisterial scholastic disputation from the progressive side, and confusion about the nature of a mutuum versus other kinds of contracts.
My case (which just is Aquinas' case, as far as I can tell and which certainly is my intention) is argued from numerous Magisterial citations defining both what kinds of contracts are licit and what kinds are not. It is also certainly colored by my own background in finance and entrepreneurship, which I touch on in the preface to the ebook version of the FAQ.
[ 09. February 2015, 17:18: Message edited by: zippycatholic ]
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Russ
Old salt
# 120
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Posted
Hi zippycatholic, and welcome aboard.
Finding myself in agreement with IngoB is a bit of a novel experience...
I'm wondering if what you're doing here amounts to extending Magisterial authority beyond faith and morals into matters of economics.
The Church hasn't always held to scholastic philosophy. If the Church has "always held" to anything in this area it would seem to be the proposition that there is sin in charging excessive interest. In deciding what is excessive, the benchmark is not "what is normal" in a particular culture but a consideration of what the lender can justly claim compensation for.
Inclusion of opportunity cost in that consideration is a development in economic understanding that does not change the moral principle.
You are as free to disagree with Benedict XV on economics as with Paul V on astronomy...
Best wishes,
Russ
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
Posts: 3169 | From: rural Ireland | Registered: May 2001
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zippycatholic
Apprentice
# 18312
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Posted
Hello Russ,
The prohibition of usury has no more dependence on specific economic theory than "thou shalt not steal". Mutuum loans as agreements between parties have been around for thousands of years, and usury was recognized as a form of slavery by pagans long before Christ let alone scholastic philosophy. I suppose certain economic theories might be incompatible with the immorality of theft, but, if so, that is so much the worse for those economic theories.
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leo
Shipmate
# 1458
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Posted
quote:
Originally posted by Erroneous Monk:
We know from the Gospels that God expects interest on his (unsecured) loans, otherwise why would the servant entrusted with one talent have been castigated for putting it in the ground instead of in the bank?
That is to make the dubious assumption that the parable of the talents is an allegory and that the man going away is God.
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My Jewish-positive lectionary blog is at http://recognisingjewishrootsinthelectionary.wordpress.com/
My reviews at http://layreadersbookreviews.wordpress.com
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Fr Weber
Shipmate
# 13472
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Posted
quote:
Originally posted by leo:
quote:
Originally posted by Erroneous Monk:
We know from the Gospels that God expects interest on his (unsecured) loans, otherwise why would the servant entrusted with one talent have been castigated for putting it in the ground instead of in the bank?
That is to make the dubious assumption that the parable of the talents is an allegory and that the man going away is God.
How is that dubious?
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"The Eucharist is not a play, and you're not Jesus."
--Sr Theresa Koernke, IHM
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Enoch
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# 14322
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Posted
Zippy I am sure you will condemn this as typical Proddy slackness. Alas, you would be quite wrong. They may apply the reasoning to different materials but this approach to Christian ethics is just as prevalent among some Prods.
If you find yourself applying the words or concepts, licit or illicit to ethical decisions, it's a warning sign.
Licit is all too often a sign we'd like to persuade ourselves something is OK but have a sneaking feeling God doesn't agree with us. Illicit all too often goes with something we think other people should not do, but God isn't really that bothered about it one way or the other.
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Brexit wrexit - Sir Graham Watson
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Fr Weber
Shipmate
# 13472
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Posted
"Licit" and "illicit" are canon law terms. Their definitions are pretty clear cut, and though it's understandable that connotations from their conversational use might be brought to mind, those connotations are ultimately irrelevant to their use in legal terminology.
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"The Eucharist is not a play, and you're not Jesus."
--Sr Theresa Koernke, IHM
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by zippycatholic:
The prohibition of usury has no more dependence on specific economic theory than "thou shalt not steal".
Exactly the point I was making.
But I was using "usury" to mean the moral principle of not charging excess interest.
You seem to mean something that involves categorising every loan into one of two forms of contract that were prevalent in a particular time and place. Which seems to contain an economic proposition.
Now it's possible that you mean something like "secured loans" and "unsecured loans" which could reasonably be taken to be mutually exclusive and exhaustive categories that could be applied irrespective of any economic understanding. In which case, my apologies - I'm getting the wrong idea from the way you express things.
What' I'm not seeing is how the valid reasons why I might charge you interest on a loan to buy an imperishable commodity, such as land - reasons such as opportunity cost, out-of-pocket expenses, risk of default - somehow cease to be valid reasons if instead you spend the money on a consumable commodity, such as a holiday. I appreciate that the land forms a security for the loan that the holiday, once taken, doesn't. But that doesn't seem to connect to the validity of the reasons for charging interest. Except that the risk of default becomes higher. Which is an argument for higher risk premium, not lower.
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
Posts: 3169 | From: rural Ireland | Registered: May 2001
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by zippycatholic:
usury was recognized as a form of slavery by pagans long before Christ let alone scholastic philosophy.
Paying off interest can become a form of slavery, yes. And the loan being unsecured may be a necessary condition for that to happen. But it is not, I think,a sufficient condition.
A: about the money you lent me. A hundred ducats, lent until harvest time.
B: at 10% interest. You've come to pay me back ?
A: I cannot. Locusts ate the whole crop. All I can pay you this year is 10 ducats.
B: that will cover the interest. But what about the principal ?
A: the best I can hope for now is to pay you 10 ducats every year for 10 years to clear the debt.
B: that will not clear the debt. By next harvest you will owe another 10 ducats interest...
A: No. The agreement was for one year only. I do not consent to those terms
B: then I will have you thrown in prison for non-payment
A: wait...
Slavery-in-all-but-name is all too possible, but arises ISTM from an unjust method of resolving the situation where someone defaults on a loan.
What prevents a good society from permitting interest on loans (secured & unsecured alike) at a level that compensates the lender for licit costs - opportunity costs, out-of-pocket costs, and insurance or cover against risk - whilst resolving defaults in a way that limits the debtor's liability ?
Best wishes,
Russ
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
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Eliab
Shipmate
# 9153
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Posted
quote:
Originally posted by Russ:
You seem to mean something that involves categorising every loan into one of two forms of contract that were prevalent in a particular time and place. Which seems to contain an economic proposition.
Now it's possible that you mean something like "secured loans" and "unsecured loans" which could reasonably be taken to be mutually exclusive and exhaustive categories that could be applied irrespective of any economic understanding. In which case, my apologies - I'm getting the wrong idea from the way you express things.
"Secured" and "unsecured" are somewhat misleading terms for the distinction being made. The important point is not what is being lent, or why, but the extent of the obligation on the borrower.
A "mutuum" loan or "full recourse" loan can be "secured" (like a mortgage) or "unsecured" (like a credit card debt) but it's still the sort of loan on which (according to the RCC according to ZC) you can't justly charge interest on, because the borrower's liability is unlimited. It isn't restricted to the subject matter of the loan, or ascribable to the use the borrower is making of some tangible property, but is pure profit on the advance of cash - usury.
You can (potentially) charge interest on loans where the borrower need not repay more than the security, or where the 'borrower' is a company, not an individual (because then the individuals behind the company have a liability limited to a fixed asset). That's not a mutuum loan, so not usury. It may be unfair or exploitative on ordinary ethical principles of fair dealing, but it isn't specifically usury.
The principle is that if you lend anything, and want to charge interest, you can't keep the borrower on the hook for the full debt with unlimited liability, regardless of what happens to the asset lent. You can have the right to collect interest*, OR you can have the right to unlimited enforcement of the debt* - you can't justly have both.
Whether or not you agree with ZC that usury is always unethical, the distinctions being made do seem to me to be genuine ones.
(*though either of these might be unfair for other reasons in any given case, of course)
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"Perhaps there is poetic beauty in the abstract ideas of justice or fairness, but I doubt if many lawyers are moved by it"
Richard Dawkins
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Enoch
Shipmate
# 14322
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Posted
quote:
Originally posted by Fr Weber:
"Licit" and "illicit" are canon law terms. Their definitions are pretty clear cut, and though it's understandable that connotations from their conversational use might be brought to mind, those connotations are ultimately irrelevant to their use in legal terminology.
Law, whether canon or civil, should try to express morality, to encourage good behaviour and discourage bad, but should never, however canon, be regarded as defining them.
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Brexit wrexit - Sir Graham Watson
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zippycatholic
Apprentice
# 18312
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Posted
When I use the term "morally licit", what I mean is "not prohibited under the Divine or natural law".
One can of course look at this from a virtue ethic point of view as well, and argue/conclude (just as an example) that usury is wrong because it involves contractually micro-enslaving your fellow man (as categorically distinct from contractually purchasing claims against actual property) as a hedge against risk and a guarantee of profit. Usury involves treating people as only things should be treated, which is inherently uncharitable (even when the counterparty agrees to be treated as only a thing should be treated). In either case (law or virtue), there is no dependence upon particular economic theories, theories of currency, etc. The principles involved in usury (as I understand it, which I believe to be as Aquinas understood it, which I believe to be as the RCC has _doctrinally_ defined it -- all of which should be verified by any reader to his own satisfaction before embracing my view) are as universal as the principles involved in theft.
Personally I find both the 'law' and 'virtue' perspectives helpful in moral theology generally. The former helps define lines which we just should not ever cross, but in its monomaniacal form turns moral good into something negative and encourages a 'minimum daily requirement' attitude. The latter is more holistic and is really ultimately the better perspective, but can tend toward 'pastoral' permissiveness as a false form of mercy.
Inferences from my choices of terminology to my personal psychology I leave as an exercise for people who care about that sort of thing. I do not claim (or believe myself) that my editorial choices are optimal.
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by Eliab:
The principle is that if you lend anything, and want to charge interest, you can't keep the borrower on the hook for the full debt with unlimited liability, regardless of what happens to the asset lent. You can have the right to collect interest*, OR you can have the right to unlimited enforcement of the debt* - you can't justly have both.
That would make sense if interest is seen purely as a risk premium.
Limited liability => risk of default => proportionate interest justified
Unlimited liability => no risk, as the lender can always recover the principal by going after the borrower's assets or future earnings => no justification for interest.
But I thought it was being argued earlier that in the happy case (where the indestructible non-consumable asset is always available to repay the lender and thus protect the borrower from the threat of unlimited liability), that interest is potentially justifiable...
Best wishes,
Russ
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
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Fr Weber
Shipmate
# 13472
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Posted
quote:
Originally posted by leo:
quote:
Originally posted by Fr Weber:
quote:
Originally posted by leo:
quote:
Originally posted by Erroneous Monk:
We know from the Gospels that God expects interest on his (unsecured) loans, otherwise why would the servant entrusted with one talent have been castigated for putting it in the ground instead of in the bank?
That is to make the dubious assumption that the parable of the talents is an allegory and that the man going away is God.
How is that dubious?
The landlord is the Roman Empire
That's an interesting interpretation, and one which works on the parable considered by itself. But in the context of Mt 25, it's sandwiched between the parable of the wise & foolish virgins (be ready for the bridegroom!) and a prophecy about the last judgment. I'm not sure how it makes sense to have an arc of discourse about being prepared for Christ's return and the Last Judgment and then interrupt it with an irrelevant jab at the Roman Empire.
I'll stick with the traditional exegesis, thanks.
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"The Eucharist is not a play, and you're not Jesus."
--Sr Theresa Koernke, IHM
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by zippycatholic:
In either case (law or virtue), there is no dependence upon particular economic theories, theories of currency, etc. The principles involved in usury... ...are as universal as the principles involved in theft.
If in thinking about this topic you don't recognise opportunity costs as being real, then that's not a moral failing, it's a deficiency in your economics.
If you think about all transactions in terms of trading goods (rather than trading goods and services), and therefore conceive of a contract as changing the ownership-property of Things rather than as creating obligations upon people (some of which involve Things and some of which don't) then you may end up with a model that doesn't fit reality, not through any failing in the logic of your thought but from building on a foundation of an inadequate grasp of economics.
Yes there are universal principles.
- there's the principle of keeping one's word.
- There's a principle around the idea of a fair price - that what you charge should bear some relationship to the cost of what you provide - the opposite of greed, of charging as much as you can get away with.
- There's a principle around not being able to own another human being - of accepting that the right to payment of a debt is not a moral absolute, that liability may run up against the limit of "cannot pay".
- And there's a principle that a person's consent means something and needs to be respected in one's dealings with them.
How you combine those principles into a clear, consistent and logical position regarding the payment of interest on loans is not yet clear to me.
Such a conclusion - a balance - once reached, is not itself a principle; it's something that needs to be argued for, showing how it does justice to each of the moral principles you hold (which may be more or less in number than the four which occur to me).
It may be that you have fully understood Aquinas' answer and that it's the right answer. But the explanation - the connections between the principles and the conclusion, in a way which doesn't rely on a distorted view of economics, hasn't yet been made satisfactorily.
I'm not aware that Aquinas was an economist. If he knew no more economics than a typical educated person of his time, that's not a fault. On that subject he may be found to be honestly and sincerely wrong without being thrown out of the ranks of the great moral philosophers.
Best wishes,
Russ
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
Posts: 3169 | From: rural Ireland | Registered: May 2001
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Russ:
If in thinking about this topic you don't recognise opportunity costs as being real, then that's not a moral failing, it's a deficiency in your economics.
And you are using the term 'real' equivocally, which is confounding your capacity to understand the point.
Opportunity costs are not ontologically real (actual) property - property which can be possessed, repossessed, owned, bought, and sold - and used to collateralize a non recourse loan. Whether opportunity cost is 'real' or not in some other abstract sense as a parameter in some economic theory is irrelevant to the doctrine prohibiting usury, which is not dependent upon any particular economic theory. Whatever opportunity cost is, it isn't actual property which actually exists.
Now whether someone agrees with the usury doctrine is another matter. But as long as you think that opportunity costs are the same kind of thing as actual property which can collateralize a non recourse loan, you have not correctly understood the doctrine which you reject. Lenders/investors clearly do understand the difference between posting actual property as collateral and not doing so, and between business loans with personal guarantees and those without; so even from the practical side the failure to understand the point is not on the side of the discussion which makes and understands the distinction between what constitutes actual property and what does not.
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Russ:
...and therefore conceive of a [morally licit investment of capital] contract [for profit] as [encumbering] the ownership-property of Things rather than as creating obligations upon [that is, enslaving] people ...
That is precisely what bounds morally licit investment of capital for profit under the usury doctrine.
That other kinds of obligations can arise in entirely different contexts which do not justify the pursuit of profit - say when you accidentally run over your neighbor's dog - is neither here nor there since it is outside of the scope of morally licit pursuit of profit.
Paying wages is addressed in my FAQ, as are most of the other usual questions which arise.
Whether one agrees with the doctrine or not is one thing. But if you think it depends on economic theory or can be refuted by economic conditions or practices, you don't yet understand it.
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by zippycatholic:
Whether one agrees with the doctrine or not is one thing. But if you think it depends on economic theory or can be refuted by economic conditions or practices, you don't yet understand it.
There may be aspects of this which I don't yet understand, which is a reason for continuing to discuss...
As you've presented it, it seems to me that you're saying that usury is not to do with the rate of interest being excessive, or how ruthlessly the lender pursues the borrower for the debt at the point of default - these might be moral issues, but they are issues additional to the question of whether the sin of usury has been committed. That sin is committed by the lender, at the point where the contract is signed, if that contract creates an obligation on the borrower personally, rather than limiting the lender's rights to title over some collateral Thing. And it's a sin because such an obligation is tantamount to slavery.
Is that the position you're putting forward ? Do I have that right ?
When I go to the barber, the implicit contract between us is that he will cut my hair and that I will pay him for this service a sum of money equal to the fee that he has displayed in his window. In the short period of time between getting up from the barber's chair and handing over a tenner on the way out, there is an obligation on me personally - no title to any Thing is involved.
When I go the library and pay a fine of 20c for returning a book late, in accordance with the agreement that I signed to become a member of the library, it was never in doubt that the book belonged to the library, but I am personally obliged to pay the 20c fine as well as returning their property.
If I held the view that you seem to be putting forward, then woe is me. Sinned against - practically enslaved - by barbers, librarians, and the whole service sector of the economy...
If I borrow money from the credit union over an agreed period of time, they do me a service for which I pay them some money. Trying to parse this as a purchase-of-goods transaction (where in case of dispute the vendor's remedy might plausibly be limited to getting their goods back)instead of a service transaction looks like an error in your appreciation of everyday economics.
Do you see where I'm coming from ?
Best wishes,
Russ
Posts: 3169 | From: rural Ireland | Registered: May 2001
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Russ:
... it seems to me that you're saying that usury is not to do with the rate of interest being excessive, or how ruthlessly the lender pursues the borrower for the debt at the point of default ...
The former is a matter of just pricing not specifically usury, and the latter does not arise in non-usurious investment of capital for profit because non-usurious investment of capital for profit does not encumber the borrower personally.
quote:
- these might be moral issues, but they are issues additional to the question of whether the sin of usury has been committed. That sin is committed by the lender, at the point where the contract [of investment of capital for profit] is signed, if that contract creates an obligation on the borrower personally, rather than limiting the lender's rights to title over some collateral Thing.
That is a correct statement of the doctrine.
quote:
And it's a sin because such an obligation is tantamount to slavery.
That is one explanation from one point of view of _why_ usury is morally wrong. But as with many moral precepts there may be all sorts of reasons, discussions, and controversy over the reasons why it is immoral.
quote:
When I go to the barber, the implicit contract between us is that he will cut my hair and that I will pay him for this service a sum of money equal to the fee that he has displayed in his window. In the short period of time between getting up from the barber's chair and handing over a tenner on the way out, there is an obligation on me personally - no title to any Thing is involved.
The obligation on you extends to the work the barber actually did: the haircut. If he charged you for two haircuts - interest on the time to walk from the chair to the cash register - that would be what the medievals called "hidden usury." If you actually damage him in some way (say by refusing to pay for a long time) you may be liable for damages in addition to the price of the haircut, as a fraud or thief is liable. So one of the other ways of 'seeing' why charging usury is immoral is that the lender in his pursuit of profit treats the borrower as if he were a thief or fraud, or at least negligent.
Again, though, understanding what usury _is_ and understanding _why it is morally wrong_ are distinct.
Also in general it should be noted that invoking edge cases or confusing cases in moral theology to invalidate paradigmatic cases is bad reasoning. I've referred to this as 'transitivity of bafflement' in the past: the fact that we may find some cases baffling does not invalidate different, clear, paradigmatic cases. Usury is charging interest on a mutuum loan, and while 'hidden usury' cases can be more subtle/confusing that is always the case. "Edge cases" can be invoked for any kind of moral case: murder, theft, contraception, adultery, etc. There is nothing 'special' about usury in this regard.
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zippycatholic
Apprentice
# 18312
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Posted
To be a bit more rigorous, the sin of usury occurs at the point where the agreement is made. By far the numerical majority of contracts are not signed, written agreements. The sin of usury is intrinsic to the kind of agreement made between the parties. Whether or not this is in writing is irrelevant.
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Eliab
Shipmate
# 9153
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Posted
quote:
Originally posted by zippycatholic:
Again, though, understanding what usury _is_ and understanding _why it is morally wrong_ are distinct.
Agreed. I think you've done a good job of explaining your view of what the definition usury is. I would also agree that the various features of that definition set out criteria that are morally relevant - they are things that ought to be considered in deciding on what is fair. What I think has yet to be established by argument is that the definition in itself determines some acts to be immoral. I don't think that you've shown that the set "technically usury, but nonetheless just" is an empty one.
quote:
Also in general it should be noted that invoking edge cases or confusing cases in moral theology to invalidate paradigmatic cases is bad reasoning.
Only if you accept the paradigm. If you don't accept that usury is immoral by definition (as opposed to accepting that usury tends to be unjust) then the edge cases help define what it is that is in principle objectionable. We are all agreed (I hope) that usury which is blatantly exploitative is immoral - to test what combinations of unlimited liability, loan security, and level of interest rate and purported justifications for charging that rate we are prepared to approve we need to consider edge cases.
Of course, I speak as a Protestant who does not accept that the RCC has authority simply to declare usury immoral by definition (while at the same time, suspecting that the RCC does have a genuinely moral insight on the point worth serious consideration). I don't think the past statements of the Magisterium establish a moral paradigm as such.
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"Perhaps there is poetic beauty in the abstract ideas of justice or fairness, but I doubt if many lawyers are moved by it"
Richard Dawkins
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Eliab:
What I think has yet to be established by argument is that the definition in itself determines some acts to be immoral. I don't think that you've shown that the set "technically usury, but nonetheless just" is an empty one.
That wasn't my objective. My objective was to show what the RC doctrine on usury is, to show that it has not changed, to show its independence of economic theories and conditions, to answer some frequently asked questions about the subject which naturally arise once someone actually understands the doctrine, and to provide a few different perspectives on why usury is immoral.
That seems quite ambitious enough, and the extent to which my writing succeeds is better for others to determine than for me to determine.
I suppose one other objective is to show that when it comes to casuistry about boundary or 'edge' cases, usury as a moral subject matter is not really any different from other subjects. "Technically murder, but nonetheless just; technically adulterous, but nonetheless just; technically blasphemy, but nonetheless just ..." are the sorts of things that people have always argued about and will continue to argue about no matter what I say, and I have no ambition to settle all moral questions - even just when it comes to the specific subject matter of usury - to the satisfaction of all people. This won't surprise folks who read my blog regularly, because I am not a positivist.
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Eliab
Shipmate
# 9153
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Posted
quote:
Originally posted by zippycatholic:
That wasn't my objective. My objective was to show what the RC doctrine on usury is, to show that it has not changed, to show its independence of economic theories and conditions, to answer some frequently asked questions about the subject which naturally arise once someone actually understands the doctrine, and to provide a few different perspectives on why usury is immoral.
Fair enough. You've done all that pretty well. Although "hasn't changed..." appears to mean "hasn't formally revised, but no longer enforces...". Also, what you've shown to be independent of econmic theory is the definition of usury only. I don't know whether or not you'd agree that differing economic conditions might reduce or eliminate moral culpability for usury.
quote:
I suppose one other objective is to show that when it comes to casuistry about boundary or 'edge' cases, usury as a moral subject matter is not really any different from other subjects. "Technically murder, but nonetheless just; technically adulterous, but nonetheless just; technically blasphemy, but nonetheless just ..." are the sorts of things that people have always argued about and will continue to argue about no matter what I say,
Yes, but the edge cases are the interesting ones for all those questions. Asking whether killing in self-defence, or in war, or to end the suffering of someone who longs to die, is morally acceptable tells us much more about what our ethical principles are than asking whether these things fall within a technical definition of murder. Asking whether sexually open marriages are ever moral is more interesting than pointing out that they are technically adulterous. Asking what may lawfully be said when angry and hurt with God says more about faith than condemning crass offensiveness.
It may be that some definition can be arrived at which does indeed set out where the real moral boundary lies (I'm not a positivist either), but it needs to be argued for. What exactly is wrong with adultery? Is in wrong because it abuses a divine ordinance? Or is a breach of trust? Or because it offends sexual purity? Or dissolves social bonds, risks public health, damages the line of inheritance of property, endangers the secure upbringing of children, or simply hurts innocent people? Asking about open marriages or other edge cases helps to sort out what it is about the paradigm case of adultery that I actually consider to be wrong.
I'm not disputing that in principle usury is similar - for me that's a reason to ask why exactly you say it's wrong, not to take the basic definition as settling the moral question.
[ 16. February 2015, 15:05: Message edited by: Eliab ]
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"Perhaps there is poetic beauty in the abstract ideas of justice or fairness, but I doubt if many lawyers are moved by it"
Richard Dawkins
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Enoch
Shipmate
# 14322
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Posted
quote:
Originally posted by Eliab:
... What exactly is wrong with adultery? Is in wrong because it abuses a divine ordinance? Or is a breach of trust? Or because it offends sexual purity? Or dissolves social bonds, risks public health, damages the line of inheritance of property, endangers the secure upbringing of children, or simply hurts innocent people? Asking about open marriages or other edge cases helps to sort out what it is about the paradigm case of adultery that I actually consider to be wrong. ...
Suppose it's wrong for all those reasons (which I do think). Demonstrating that there could be a convincing case why it was not wrong for one of those reasons, would not make it permissible, yet alone just.
What worries me about some of this stuff about which sorts of loans do and do not offend against usury being universally a sin, is that I lack the ability to believe that if usury is universally a sin (which I'm not convinced about), one can somehow make it all right by finagling pilpul about differences between sorts of security.
It seems to me that being paid a reasonable (usually too low) rate of interest on one's deposit by a bank or building society, or being charged a higher rate on one's mortgage is not a wickedness in the way that being a pay day lender, either as national business or your friendly neighbourhood one with big dogs, is.
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Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Eliab:
Although "hasn't changed..." appears to mean "hasn't formally revised, but no longer enforces...".
Agreed, and in fact I make the point myself. The tendency toward lax 'pastoral' enforcement isn't limited to the subject of usury -- consider (for example) the rate of annulment of marriages despite no formal changes in marriage doctrine.
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Also, what you've shown to be independent of economic theory is the definition of usury only. I don't know whether or not you'd agree that differing economic conditions might reduce or eliminate moral culpability for usury.
"Reduce", to be sure, and invincible ignorance can eliminate culpability for any objectively immoral act. The seriousness and culpability for sin always depends on circumstances, even when the objective action under consideration is intrinsically immoral qua action. Lying in response to "does this dress make me look fat?" involves a different degree of moral seriousness from lying in response to "is this the man who committed the murder?"
Once again though there is nothing 'special' about usury here.
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Yes, but the edge cases are the interesting ones for all those questions. Asking whether killing in self-defence, or in war, or to end the suffering of someone who longs to die, is morally acceptable tells us much more about what our ethical principles are than asking whether these things fall within a technical definition of murder. ...
I agree that edge cases and casuistry can be interesting and useful for discussion. I wasn't denigrating casuistry in general (I couldn't do so without irony, having engaged in plenty of it myself), but pointing out a common fallacious rhetorical move, which I for my own amusement call 'transitivity of bafflement' -- the importation confusion about edge cases into clear cases. In this I am also being rather unapologetically Roman Catholic, following the lead of St. John Paul II in _Veritatis Splendour_:
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"Such theories however are not faithful to the Church's teaching, when they believe they can justify, as morally good, deliberate choices of kinds of behaviour contrary to the commandments of the divine and natural law. These theories cannot claim to be grounded in the Catholic moral tradition. Although the latter did witness the development of a casuistry which tried to assess the best ways to achieve the good in certain concrete situations, it is nonetheless true that this casuistry concerned only cases in which the law was uncertain, and thus the absolute validity of negative moral precepts, which oblige without exception, was not called into question."
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Enoch:
... I lack the ability to believe that if usury is universally a sin (which I'm not convinced about), one can somehow make it all right by finagling pilpul about differences between sorts of security.
It is a question of whether claims for return of principal and profitable interest are asserted against persons or against property (subjects or objects). Treating people as only things should be treated (subjects as only objects should be treated) is fundamental to what makes many concrete kinds of actions immoral.
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It seems to me that being paid a reasonable (usually too low) rate of interest on one's deposit by a bank or building society, or being charged a higher rate on one's mortgage is not a wickedness in the way that being a pay day lender, either as national business or your friendly neighbourhood one with big dogs, is.
Stealing a dime from a rich man isn't a wickedness of the same degree as stealing all of the property of a poor man who depends upon that property for his livelihood. But they both fall under the moral species of theft.
Also, keep in mind that a deposit contract with a bank is not usurious at all, in itself: it is an investment of capital asserting claims against _property_ in pursuit of profit. In the contract between the bank and the depositor, the depositor asserts no claims against specific persons who are required to return the principal. There is no mutuum loan, therefore, and therefore there is no usury in the contract's claims to monetary gain. Those claims are against things, not people.
As always this does not mean that it is impossible to do moral wrong in such a case. It just means that whatever moral wrong may be done, it does not fall strictly speaking under the species of usury.
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by zippycatholic:
as with many moral precepts there may be all sorts of reasons, discussions, and controversy over the reasons why it is immoral.
Seems to me that there are three cases. The set of valid reasons why something is immoral may have many members, one member, or be empty.
Eliab makes a case, for example, that the sin of adultery is in the "multiple reasons" category.
I suggest that we can conceive of an act which is morally wrong for exactly one reason. Perhaps something that would be perfectly licit if one hadn't just promised not to do it ?
And there's the possibility that usury as you've defined it isn't morally wrong as such, that Aquinas got it wrong. That every valid moral objection to professional moneylending boils down to unjust pricing, pursuing defaulters too ruthlessly, or some other sin that is similarly distinct from usury (as you've defined it).
If you don't want to take a position on which of these three cases applies, that's fine. But if you choose to argue for usury as being wrong for multiple reasons - and that's what it sounds like - then it doesn't seem unreasonable to press you to give two valid reasons - sufficient to rule out the other two categories - although I'll understand that they are not in your view the only (or necessarily the most compelling) reasons.
You've suggested that for a lender to hold a borrower personally liable for paying for the service that the lender provides is to treat the borrower like an object. Whilst a barber can licitly hold his customer personally liable for paying for the service (and as you rightly suggest may be additionally entitled to compensation for unreasonable delay in payment). What's the difference ? Why do you think that a barber or librarian (or the owner of a threshing machine, or anyone else who provides a service to others for a living) is worthy to be paid his wages and his costs, and the moneylender is not ?
Best wishes,
Russ
[code]
[ 19. February 2015, 05:09: Message edited by: Eutychus ]
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
Posts: 3169 | From: rural Ireland | Registered: May 2001
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zippycatholic
Apprentice
# 18312
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Posted
quote:
Originally posted by Russ:
You've suggested that for a lender to hold a borrower personally liable for paying for the service that the lender provides is to treat the borrower like an object. Whilst a barber can licitly hold his customer personally liable for paying for the service (and as you rightly suggest may be additionally entitled to compensation for unreasonable delay in payment). What's the difference ?
Usury involves the intrinsic nature of the agreement between the parties. If you go to the barber (or hire any other worker to do a job) without having a means on hand to pay, you have committed a kind of fraud or theft against him. (Presumably he did not agree to cut your hair without being paid).
The prohibition of usury does not mean that it is impossible for unsecured personal obligations to arise when someone actually commits fraud, theft, or negligence. Fraud, theft, and negligence are by their nature extrinsic to the agreement between the parties. Just recompense for theft, fraud, etc does not produce a profit: it is an entirely distinct area of justice from capital investment or labor.
As I mentioned before, usury from one point of view involves the lender and borrower mutually (and perversely) agreeing to treat the borrower like a criminal in order that the lender may profit. There are all sorts of ways to view any sin -- usury can also be viewed as a kind of lie, in addition to enslavement, fraud, etc. But finding a comprehensive set of ways to appeal to the moral intuitions of all sorts of disparate people each with their own prejudices and intuitions is well beyond the scope of my own goals in publishing the FAQ.
Posts: 27 | Registered: Dec 2014
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by zippycatholic:
If you go to the barber (or hire any other worker to do a job) without having a means on hand to pay, you have committed a kind of fraud or theft against him...
...The prohibition of usury does not mean that it is impossible for unsecured personal obligations to arise when someone actually commits fraud, theft, or negligence. Fraud, theft, and negligence are by their nature extrinsic to the agreement
The barber expects to be paid as I leave the shop. The builder hands me as he leaves an invoice to be paid within 21 days. There is a period - however short - between the performance of the service and payment of the agreed price, when I as the customer have an unsecured personal obligation. And that's a normal part of a service economy, with no fraud involved. Unsecured personal obligation doesn't make a sin.
If my contract with the moneylender says that I will pay him the fee for his service at the point where his service to me is complete - ie at or shortly after the point in time where we've agreed that I will repay the sum borrowed - how is that different to paying the barber ? No fraud involved. And if the contract with the moneylender specifies payment in instalments up to the point where the debt is cleared, how is that different to paying the builder in instalments so that he can cover the cost of materials ? Paying a fee for a service received does not amount to being treated like a criminal.
But you also raise the issue of what happens if I don't pay the barber. if for example at the point where I reach the barber's till I find that my wallet has been stolen. I agree that he may be morally entitled to compensation for costs incurred and opportunities lost as a result of my late payment. But not punitive damages and not to make a profit at my expense.
So I agree with you this far - that the moneylender's contract may be unjust if it allows him to charge the agreed rate of interest - that includes an allowance for profit - on any shortfall in the borrower's payments.
In other words, if I borrow money until payday at an agreed rate of interest and make the payments as agreed, that's fine. If I take the same loan and fail to make the payment, the lender is entitled to some compensation for delay in getting back both principal and agreed interest. But the lender is not entitled to assume my consent to the same rate of interest being applied after payday. What's wrong with his contract is if it seeks to profit him by my failure to honour the agreement instead of merely compensate him for it.
Maybe that's what is meant by "usury" ?
Best wishes,
Russ
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
Posts: 3169 | From: rural Ireland | Registered: May 2001
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zippycatholic
Apprentice
# 18312
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Posted
Russ:
Setting aside whether or not you agree with the doctrine (or, if you prefer, with my understanding of the doctrine), you aren't expressing it accurately.
[ 22. February 2015, 14:00: Message edited by: zippycatholic ]
Posts: 27 | Registered: Dec 2014
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Russ
Old salt
# 120
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Posted
Hi zippycatholic.
The impression I'm getting is that you're not really all that interested in what natural moral law - accessible by reason - has to say about the morality of charging interest. That what's important to you is what Thomas Aquinas and Benedict XV say about the morality of charging interest. Is that impression mistaken ?
Best wishes,
Russ
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
Posts: 3169 | From: rural Ireland | Registered: May 2001
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PaulTH*
Shipmate
# 320
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Posted
I was about to start a thread on Pope Francis' Jubilee Year of Mercy, but I realised that my question forms part of this long running topic. The papal document Misericordiae Vultus has announced that on 8th December this year will begin the Year of Mercy. He wants to physically open a door at St Peter's and request every diocese to do the same in pursuit of the Church's welcome to all. Mercy has been at the heart of the many sermons and musings of Pope Francis, so this can come as no surprise.
Yet reaction to the announcement has been mixed. Michael Sean Winters of the National Catholic Reporter said, "This is the best papal bull ever...sadly, for too long the Church itself has failed to give mercy the centrality of focus it deserves and which Jesus Christ requires. This is the core of the Pope Francis revolution."
On the other hand, the traditionalist blog Rorate Caeli said, "We can only ask what depths of leniency (or laxity) he wants the Church to plumb in the name of mercy."
So is this papal bull, and the Year of Mercy it announces a genuine attempt to bring people in to the mercy of Christ, or is it an attempt to water down the harder teachings of the Church to accommodate the secular age? Or, in other words, is it part of the titanic struggle to which this thread refers.
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Yours in Christ
Paul
Posts: 6387 | From: White Cliffs Country | Registered: May 2001
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Arethosemyfeet
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# 17047
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Posted
I'm naturally predisposed to assume that anything opposed by Rorate Caeli is likely to be a good thing.
Posts: 2933 | From: Hebrides | Registered: Apr 2012
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Callan
Shipmate
# 525
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Posted
Originally posted by PaulTH:
quote:
So is this papal bull, and the Year of Mercy it announces a genuine attempt to bring people in to the mercy of Christ, or is it an attempt to water down the harder teachings of the Church to accommodate the secular age? Or, in other words, is it part of the titanic struggle to which this thread refers.
As Ambassador Kosh would say: <thunk, tinkle, whirr> Yes.
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How easy it would be to live in England, if only one did not love her. - G.K. Chesterton
Posts: 9757 | From: Citizen of the World | Registered: Jun 2001
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Fr Weber
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# 13472
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Posted
I think what both the NCR and Rorate Caeli are failing to see is that the mercy of amnesty is conditioned by the requirement of obedience. In other words, you're welcome to come back at any time, but you have to be repentant in the true sense--not just sorry for your sins, but committed to avoiding them in the future.
I think Pope Francis understands that perfectly well. He may be willing to suspend certain disciplinary requirements, but doctrinally he's just as Catholic as Benedict XVI was.
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"The Eucharist is not a play, and you're not Jesus."
--Sr Theresa Koernke, IHM
Posts: 2512 | From: Oakland, CA | Registered: Feb 2008
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Russ
Old salt
# 120
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Posted
quote:
Originally posted by PaulTH*:
is it part of the titanic struggle to which this thread refers.
I get the depressing sense that anything that any Pope or bishop does to try to improve things, to try to make the Catholic Church better or more successful or effective (by whatever standard) will be seen as part of the "titanic struggle" - that it becomes a lens for interpreting every conceivable action.
If there are two coherent views of what the Chirch should be, then any action can be parsed as either actively reinforcing that division, or passively reinforcing it by doing something within one paradigm instead of addressing the big issue, or as trying to bridge the divide.
But that may be unduly pessimistic....
Best wishes,
Russ
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
Posts: 3169 | From: rural Ireland | Registered: May 2001
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PaulTH*
Shipmate
# 320
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Posted
The Polish bishops have vowed to resist any changes at the family synod coming up in October. Mgr Jozef Kloch, spokesman for the Polish bishop's conference says, "There’s no support for change in Poland." In the same article, we read,
"In a survey published on March 10 by the government-owned Public Opinion Research Centre, up to three-quarters of the Poles surveyed said they disagreed with their Church’s stance on homosexuality, contraception and extramarital relationships, and favoured changes to Catholic teaching on issues such as divorce and clerical celibacy."
Poland is a country where it's nigh impossible to be anything but a Catholic, and the Church is still deeply rooted in the national psyche. Yet the country's faithful are saying something very different from what their leaders are saying. There may be no support for change among the bishops, but it doesn't extend to the man or woman in the pews.
But to get the measure of the Polish bishop's conference, one only has to listen to its president, Archbishop Stanislaw Gadecki, who urged “people with homosexual tendencies” to undergo therapy. I sincerely hope there's a struggle for the soul of the Church under way.
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Yours in Christ
Paul
Posts: 6387 | From: White Cliffs Country | Registered: May 2001
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