There are so many important issues in Scholastic Thought related to our current capitalist situation. Let's focus on three issues:
making money with money, which means demanding interest on a loan, determining a just price, and private property. Today, we'll focus on making money with money.
The great Scholastic thinker Thomas Aquinas (1225-1274) addressed all these issues in his *Summa Theologica* and his commentary on Aristotle's *Ethics*.
He did not seek to create a separate discipline of economics. For him, economic acts were, as I said before, a subset of human acts and were therefore subject to the overarching framework of moral theology and natural law.
One of the most contentious and defining economic issues of the Middle Ages was usury, defined as the charging of interest on a loan.
The more you think about it, the weirder it gets. Suppose I lend you 100 euros and you say to me, I'll pay you back in four weeks.
Then I answer, that is OK, but after four weeks, you have to pay me back 140 euros. Why is that? You lent me 100 euros and I'll pay you back 100 euros. Thanks for the help.
I really try to understand what creates the obligation to repay more than you borrowed. The Church struggled with this question, too.
The Church’s prohibition was ancient and severe, based on several pillars: the Old Testament prohibitions, e.g., Exodus 22:25:
"If you lend money to one of my people among you who is poor, do not treat it like a business deal; charge no interest."
and the Aristotelian argument that money was sterile. It could not, by its nature, breed more money. To charge for the use of money was, therefore, to sell something that did not exist, an injustice.
Aquinas’s treatment of usury in the *Summa Theologica* is a masterclass in Scholastic reasoning, reinforcing the prohibition while simultaneously creating nuanced exceptions that acknowledged commercial reality.
He begins by reaffirming the traditional arguments. Following Aristotle, he classifies money as a consumable good whose use and substance are inseparable.
When one sells a loaf of bread, one transfers ownership. The buyer consumes it. Similarly, when one lends a sum of money, ownership is transferred to the borrower, who "consumes" it by spending it.
To charge a price (interest) for the *use* of the money, in addition to requiring the money's return, is therefore to charge twice for the same thing,
once for the substance and once for its use, which is non-existent once the substance is transferred. This constitutes a violation of commutative justice.
Commutative justice simply means fairness in exchange—what you give and what you get should be equal. A loan with interest, in Aquinas's view, automatically breaks that equality.
So, lending money and demanding interest creates an inequality between lender and borrower. It makes the lender richer and the borrower poorer, eventually.
Aquinas reinforced the prohibition with such powerful logic that it seemed unbreakable. So how did he, and the Scholastics who followed, find a way to accommodate the real economy? That's the puzzle we'll solve in our next lecture.
An interesting observation: homo sapiens has understood this consequence, the creation of inequality through interest, from the very beginning, and yet it is one of the pillars of our financial system today.
Thank you for your attention... the floor is yours....
Main Sources:
MacMillan The Encyclopedia of Philosophy, 2nd edition
of Economic Thought (2012)
TABLE OF CONTENT -----------------------------------------------------------------
1 - 100 Philosophers 9 May 2009 Start of
2 - 25+ Women Philosophers 10 May 2009 this blog
3 - 25 Adventures in Thinking 10 May 2009
4 - Modern Theories of Ethics 29 Oct 2009
5 - The Ideal State 24 Febr 2010 / 234
6 - The Mystery of the Brain 3 Sept 2010 / 266
7 - The Utopia of the Free Market 16 Febr 2012 / 383
8. - The Aftermath of Neo-liberalism 5 Sept 2012 / 413
9. - The Art Not to Be an Egoist 6 Nov 2012 / 426
10 - Non-Western Philosophy 29 May 2013 / 477
11 - Why Science is Right 2 Sept 2014 / 534
12 - A Philosopher looks at Atheism 1 Jan 2015 / 557
13 - EVIL, a philosophical investigation 17 Apr 2015 / 580
14 - Existentialism and Free Will 2 Sept 2015 / 586
15 - Spinoza 2 Sept 2016 / 615
16 - The Meaning of Life 13 Febr 2017 / 637
17 - In Search of my Self 6 Sept 2017 / 670
18 - The 20th Century Revisited 3 Apr 2018 / 706
19 - The Pessimist 11 Jan 2020 / 819
20 - The Optimist 9 Febr 2020 / 824
21 - Awakening from a Neoliberal Dream 8 Oct 2020 / 872
22 - A World Full of Patterns 1 Apr 2021 / 912
23 - The Concept of Freedom 8 Jan 2022 / 965
24 - Materialism 7 Sept 2022 / 1011
25 - Historical Materialism 5 Oct 2023 / 1088
26 - The Bonobo and the Atheist 9 Jan 2024 / 1102
27 - Artificial Intelligence 9 Feb 2024 / 1108
28 - Why Am I Here 6 Sept 2024 / 1139
The Discussion
[13:18] Particle Physicist Bejiita (bejiita.imako): And then came the banks and bank directors and it all went to hell with that because charging interests on loans are how they make their insane wealth
[13:19] Max Chatnoir: But if a stockholder gives you money, you have no obligation to pay it back.
[13:19] Max Chatnoir: You hope that your operation will be profitable for both of you, but it it is not, you own him nothing
[13:20] Stranger Nightfire: this is in fact the actual reason for the ; predominance of Jewish familiys in the banking industry, when banks were coming into being Christians were forbidden from participating
[13:20] herman Bergson: A stock is not a loan, it is a gamble
[13:20] Particle Physicist Bejiita (bejiita.imako): true
[13:21] Particle Physicist Bejiita (bejiita.imako): buy when cheap an sell when expensive and it is all set on randomize
[13:21] Particle Physicist Bejiita (bejiita.imako): like a slot machine
[13:21] Particle Physicist Bejiita (bejiita.imako): all based on speculation
[13:21] herman Bergson: Yes stranger and there is another biblical trick....
[13:21] Max Chatnoir: So how could you make lending more like a gamble, and just use it as a tax write-off?
[13:22] herman Bergson: that verse from Exodus refers to MY people.....so it is perfectly justified to loan money with interest to the OTHER people
[13:22] John Howard Cassio (sticaatsi): Jews were precious for that very reason. They were necessary as money lenders
[13:23] herman Bergson: I have no idea Max :-)
[13:23] herman Bergson: Ask your financial advisor :-))
[13:23] Max Chatnoir: If I donate money to some charity, they don't give me interest.
[13:24] John Howard Cassio (sticaatsi): same among Muslims. Same function, some prohibition
[13:24] herman Bergson: You never get interest on donations....
[13:24] John Howard Cassio (sticaatsi): so their banking tradition is centuries and centuries old
[13:24] herman Bergson: But we have to look at the basic issue here.....
[13:25] herman Bergson: When someone is in need he is willing to pay for solving his need....simple....
[13:25] John Howard Cassio (sticaatsi): the problem for us was solved by Calvin
[13:25] John Howard Cassio (sticaatsi): he reverted the idea that to be a Christian you have to be poor
[13:26] herman Bergson: SO, when he needs money he is willing to pay meback with interest
[13:26] John Howard Cassio (sticaatsi): he said that you are rich because god loves you more
[13:26] John Howard Cassio (sticaatsi): very convenient
[13:26] herman Bergson: indeed
[13:26] Max Chatnoir: But there should be some kind of ceiling on that.
[13:26] herman Bergson: Interest is in fact a matter of who is in power in a given situation
[13:27] Max Chatnoir: You shouldn't be able to collect 3x the principle or something like that.
[13:27] herman Bergson: There is no ceiling....
[13:27] herman Bergson: We call it freedom :-)
[13:27] herman Bergson: There is some ceiling...common sense....
[13:28] Max Chatnoir: If borrowing money from stockholders followed the same rules....
[13:28] herman Bergson: at a given moment the bank could conclude that asking higher interest would ruin their business eventually
[13:28] Stranger Nightfire: well it can become pay me back twice what I loaned you or we break your arms
[13:29] herman Bergson: Yeah..that is the Maffia system, Stranger :-)
[13:29] Particle Physicist Bejiita (bejiita.imako): hmm
[13:29] herman Bergson: But as you say....no ceiling there
[13:30] Particle Physicist Bejiita (bejiita.imako): indeed
[13:30] herman Bergson: It all boils down to who is in power in the situation
[13:30] Max Chatnoir: Yes.
[13:31] Stranger Nightfire: i can't recall the details off The top of my head but I there has recently been a return to something that could be called a sort of debtor's prison
[13:31] Max Chatnoir: So people with power can do what they like.
[13:31] herman Bergson: But the main point for me is that we have known this for centuries....that this is injustifiable....making money with money....
[13:32] herman Bergson: immoral actually and yet it is one of the main pillars of our economic system today
[13:32] Stranger Nightfire: Yes in fact the idea a certain point in time where deaths would be forgiven goes back to Babylonian times
[13:32] Max Chatnoir: Also, let's talk about taxes. I get no interest from that either.
[13:32] Stranger Nightfire: debts would be forgiv en
[13:33] herman Bergson: Taxes is a whole new chapter, Max
[13:33] Max Chatnoir: So there are lots of cases where you are effectively gambling.
[13:33] Stranger Nightfire: the ancients We're aware of the dangers of wealth inequality
[13:33] herman Bergson: It revolves around the question...how much are you willing to pay for a smoothly functioning society for everyone
[13:34] herman Bergson: With stocks you are gambling
[13:34] herman Bergson: With loans you aren't. They have to be paid back (unless the loaner dies or disappears...also a risk)
[13:34] Stranger Nightfire: I'm afraid that Mr Marx predicted pretty damned accurately the dystopian House of Cards we are living in today
[13:35] herman Bergson: Interesting observation, Stranger :-)
[13:36] herman Bergson: We'll get to Marx , so then we can discuss your observation more extensively
[13:36] Max Chatnoir: Yes, you have responsibilities to your stockholders, but not to the people who are helping to make their investment profitable?
[13:37] herman Bergson: What do you mean, Max.... it is the workers on the floor that make your stock profitable.
[13:38] herman Bergson: Who is the "you" in your remark?
[13:38] Particle Physicist Bejiita (bejiita.imako): But that fact seem to be ignored, the bosses and shareholders take 90% at least
[13:38] Max Chatnoir: workers
[13:38] Particle Physicist Bejiita (bejiita.imako): the ones doing the actual work gets little to nothing
[13:38] Particle Physicist Bejiita (bejiita.imako): if anything
[13:38] Max Chatnoir: in factories or on farms.
[13:39] herman Bergson: Yes Bejiita....
[13:39] Particle Physicist Bejiita (bejiita.imako): modern slavery
[13:39] Max Chatnoir: I don't object to owners making money. It's just that making 300x what the workers make seems a little excessive.
[13:39] herman Bergson: I agree Max
[13:40] Max Chatnoir: At some point the workers should get a share of the profit.
[13:40] Stranger Nightfire: I think unless people can come to realize the need for something like a worker coop based system our civilization is doomed
[13:40] Particle Physicist Bejiita (bejiita.imako): indeed, make money is one thing but EVERYONE should have the right to a good income then to make for a good life, not only the few filthy rich
[13:40] Particle Physicist Bejiita (bejiita.imako): while prices of everything hikes to more and more insane levels
[13:41] Particle Physicist Bejiita (bejiita.imako): fewer and fewer can afford
[13:41] Particle Physicist Bejiita (bejiita.imako): inequality
[13:41] herman Bergson: I only come to one conclusion.....:-)
[13:42] Stranger Nightfire: The problem with the bad authoritarian applications of Marxism was that in reality control of the means of production was taken from the capitalists but was not given to the workers but to government elites
[13:42] herman Bergson: We still have to discuss a lot more issues in the coming months
[13:42] Particle Physicist Bejiita (bejiita.imako): aaah
[13:42] herman Bergson: Yes Stranger
[13:42] herman Bergson: People did not feel responsible for the means of production
[13:42] John Howard Cassio (sticaatsi): Marx didn't foresee the faults and flaws of capitalism. He simply observed them as he was living at its very centre, London.
[13:43] herman Bergson: True...he was an observer and told us his conclusions
[13:44] John Howard Cassio (sticaatsi): he was a philosopher who observed society
[13:44] herman Bergson: For some read as solutions :-)
[13:44] John Howard Cassio (sticaatsi): he said it's useless to fight capitalism. It's going to self-destruct anyway
[13:44] Max Chatnoir: Somebody who invents and produces something deserves to profit from it, but there needs to be some fair sharing.
[13:44] herman Bergson: The essence of philosophy, John, questioning the obvious
[13:45] John Howard Cassio (sticaatsi): suspect it was kept in place by the competition with Socialist economies
[13:45] John Howard Cassio (sticaatsi): now that these economies have disappeared, it's getting off balance
[13:45] Particle Physicist Bejiita (bejiita.imako): true
[13:45] John Howard Cassio (sticaatsi): there was a balance, so to speak
[13:45] Particle Physicist Bejiita (bejiita.imako): agree, Profit is ok but indeed fair sharing
[13:46] Particle Physicist Bejiita (bejiita.imako): everyone shall benefit
[13:46] Particle Physicist Bejiita (bejiita.imako): ot just a few
[13:46] Particle Physicist Bejiita (bejiita.imako): not
[13:46] John Howard Cassio (sticaatsi): capitalism was forced to look a bit like socialism
[13:46] herman Bergson: yes...
[13:46] John Howard Cassio (sticaatsi): the masses became consumers and were given some buying powers
[13:46] John Howard Cassio (sticaatsi): they were powerful as they were consumers
[13:47] Max Chatnoir: You mean by some government subsidies?
[13:47] John Howard Cassio (sticaatsi): it was consumerism, as well as capitalism
[13:47] John Howard Cassio (sticaatsi): m
[13:47] John Howard Cassio (sticaatsi): now they have less and less money to be consumers
[13:47] John Howard Cassio (sticaatsi): this is depressing demand
[13:47] John Howard Cassio (sticaatsi): and with less demand you have less offer
[13:47] Particle Physicist Bejiita (bejiita.imako): :(
[13:47] Particle Physicist Bejiita (bejiita.imako): yes
[13:48] Stranger Nightfire: It always amazes me how the song Imagine Became such a widely popular standard
[13:48] Stranger Nightfire: considering it has probably the most radical lyrics of any song ever written
[13:48] John Howard Cassio (sticaatsi): this is making Marsx's prohecy come true
[13:48] herman Bergson: The prophecy that capitalism will destroy itself?
[13:48] John Howard Cassio (sticaatsi): look around you, where are pacifist movements today?
[13:49] John Howard Cassio (sticaatsi): I have a conspirational theory about them
[13:49] John Howard Cassio (sticaatsi): I suspect they were partially fueled by soviet propaganda
[13:49] John Howard Cassio (sticaatsi): in part, I mean
[13:49] John Howard Cassio (sticaatsi): as any big war, would have beeen a war against them
[13:50] John Howard Cassio (sticaatsi): no soviet union, no pacifists
[13:50] herman Bergson: yes pacifist groups....they are still there but in another form...Green Peace, Extinction Rebellion....groups like that
[13:50] John Howard Cassio (sticaatsi): yes, capitalist should destroy itself, or just make life unworthy to be lived for billions of individuals
[13:51] Max Chatnoir: So what is the alternative?
[13:51] John Howard Cassio (sticaatsi): herman they are there, but they are weak and sparse
[13:51] John Howard Cassio (sticaatsi): nothing like the ones during the Vietnam war
[13:51] John Howard Cassio (sticaatsi): the hope, Max, not the alternative
[13:51] Stranger Nightfire: Well I don't, Jesus of Nazareth, Francis of Assisi Mahatma Gandhi Leo Tolstoy, Albert Einstein et all were all agents of the Soviet government
[13:52] John Howard Cassio (sticaatsi): is that the market will selfregulate at some point
[13:52] John Howard Cassio (sticaatsi): just before collapsing on itself
[13:52] John Howard Cassio (sticaatsi): a big stress test was the covid crisis
[13:52] John Howard Cassio (sticaatsi): it was a big benchmark
[13:52] Stranger Nightfire: And if the Soviet government was promoting love and peace then more power to them
[13:52] herman Bergson: That is a bit anachronistic Stranger....
[13:52] John Howard Cassio (sticaatsi): never so many economies had been shut down all at the same time
[13:52] Stranger Nightfire: Deliberately so Herman
[13:53] John Howard Cassio (sticaatsi): I was honestly shitting my pants at the thought
[13:53] Stranger Nightfire: I mean that pacifism has a long important history
[13:53] Stranger Nightfire: I don't think the Quakers were Soviets either
[13:53] John Howard Cassio (sticaatsi): I said fueleed, I didn't say invented
[13:54] herman Bergson: true...like our theme of today....yes or no interest.....we KNOW the answer, but.....
[13:54] Max Chatnoir: What is the answer?
[13:54] herman Bergson: the driving forces seem to be power and greed
[13:55] Particle Physicist Bejiita (bejiita.imako): hm
[13:55] Max Chatnoir: and absolute power corrupts absolutely. How do we fix that?
[13:55] Particle Physicist Bejiita (bejiita.imako): EAT THE RICH!
[13:55] John Howard Cassio (sticaatsi): greed is the driving force of society
[13:55] herman Bergson: which has to do with our hormones like dopamine and oxytocin...
[13:55] John Howard Cassio (sticaatsi): power is a consequence of wealth
[13:55] Stranger Nightfire: Yes and as for war I fear a big part of the problem may be something inherent in the genes of the specific kind of monkeys that we are
[13:56] John Howard Cassio (sticaatsi): we are deranged apes..
[13:56] herman Bergson: we love andrenaline!
[13:56] Max Chatnoir: But we aren't stupid!!!
[13:56] Particle Physicist Bejiita (bejiita.imako): I guess so
[13:56] Particle Physicist Bejiita (bejiita.imako): Well if I want Oxy i hug someone
[13:56] John Howard Cassio (sticaatsi): we have reason and instinct that fight with one another all the time
[13:56] herman Bergson: THAT is what has kept us alive so far, Max, I agree
[13:56] John Howard Cassio (sticaatsi): we are bipolar apes
[13:56] Particle Physicist Bejiita (bejiita.imako): Hmm i guess so
[13:57] Particle Physicist Bejiita (bejiita.imako): i guess its quite complex but
[13:57] herman Bergson: lol..yes and this lecture hall is a zoo :-)
[13:57] Particle Physicist Bejiita (bejiita.imako): the main components we know
[13:57] Max Chatnoir: bipolar?
[13:57] herman Bergson: So, my dear monkeys...thank you all again for this exciting discussion....
[13:57] John Howard Cassio (sticaatsi): one pole is the instinct, the other i s the reason within us
[13:58] Max Chatnoir: Ah, gotcha
[13:58] herman Bergson: Got a point, John
[13:58] John Howard Cassio (sticaatsi): yw, our dear Alpha specimen and host
[13:58] Particle Physicist Bejiita (bejiita.imako): aaaa yes, they pull in opposite directions, wich one wins I guess depend on our personality a lot
[13:58] Particle Physicist Bejiita (bejiita.imako): are we loving or greedy
[13:58] Particle Physicist Bejiita (bejiita.imako): something like that
[13:58] Stranger Nightfire: One may fear that reason is in recession
[13:59] herman Bergson: Well is it the reptilian brain or the prefrontal lobe?
[13:59] Stranger Nightfire: Nobel Prize is once again are being given to war mongers
[13:59] Particle Physicist Bejiita (bejiita.imako): are we selfish or not
[13:59] Particle Physicist Bejiita (bejiita.imako): Trump?
[13:59] herman Bergson: No Trump here...:-)
[13:59] herman Bergson: Class dismissed.....
[14:00] Stranger Nightfire: They didn't give it to Trump I forget the lady's name but she is a traitor to her country and a supporter of Trump's war against Venezuela
[14:00] Particle Physicist Bejiita (bejiita.imako): ok,
[14:00] John Howard Cassio (sticaatsi): ty for the gift
[14:00] Max Chatnoir: Thanks, Herman.
