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Money for Nothing: The Sin of Usury

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  • Joseph Burke

    () (Department of Economics, Ave Maria University)

Abstract

I 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.

Suggested Citation

  • Joseph Burke, 2008. "Money for Nothing: The Sin of Usury," Working Papers 0801, Ave Maria University, Department of Economics.
  • Handle: RePEc:avm:wpaper:0801
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    File URL: http://mysite.avemaria.edu/jburke/working-papers/WP0801-Burke-Usury.pdf
    File Function: First version, 2008
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    Cited by:

    1. 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.

    More about this item

    Keywords

    usury; commutative justice; Catholicism;

    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

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