Money for Nothing: The Sin of Usury
AbstractI present an overview of the teachings of the Roman Catholic Church on usury. In 1515, the Fifth Lateran Council defined “the real meaning of usury: when, from its use, a thing which produces nothing is applied to the acquiring of gain and profit without any work, any expense or any risk.” I argue that the economic conditions of the Middle Ages could not have justified any interest, but structural changes to the economy, including the abolition of slavery, inflation, and the emergence of markets for investment, justify interest on the basis of default risk, the costs of inflation, and opportunity costs.
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Bibliographic InfoPaper provided by Ave Maria University, Department of Economics in its series Working Papers with number 0801.
Length: 16 pages
Date of creation: Nov 2008
Date of revision:
usury; commutative justice; Catholicism;
Find related papers by JEL classification:
- B11 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Preclassical (Ancient, Medieval, Mercantilist, Physiocratic)
- Z12 - Other Special Topics - - Cultural Economics - - - Religion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-14 (All new papers)
- NEP-CBA-2008-12-14 (Central Banking)
- NEP-MAC-2008-12-14 (Macroeconomics)
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- Joseph Burke, 2009. "Usury Redux: Notes on The Scholastic Analysis of Usury by John T. Noonan," Working Papers 0901, Ave Maria University, Department of Economics.
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