The economic landscape of the High Middle Ages, c. 1000-1300, was one of dramatic transformation.
The stagnation of the early medieval period gave way to a "commercial revolution" characterised by population growth, urbanisation, the rise of international trade fairs, and the increasing use of money.
This burgeoning commercial activity created a tension with the entrenched feudal, agrarian social order and, more importantly, with the dominant worldview of the Catholic Church.
The Church’s teachings, heavily influenced by the Church Fathers like St. Augustine (354 - 430 AD), were deeply ambivalent towards worldly wealth and economic endeavour.
The Bible, 1 Timothy 6:10 states, "For the love of money is a root of all kinds of evil," and is often misinterpreted as saying "money is the root of all evil".
The verse warns that the desire for wealth can lead people to stray from their faith, fall into temptation, and cause themselves "many sorrows".
The verse's main point is about the destructive power of greed, not about money itself.
The scriptural injunctions against the love of money and the ideal of apostolic poverty created a cultural milieu
that was inherently suspicious of profit-seeking and commerce, often associating it with avarice, one of the seven deadly sins.
Yet Thomas Aquinas had to find a way to justify that some charged a price for lending money. They demanded interest, which constitutes a violation of commutative justice because it creates inequality.
However, Aquinas had an ingenious explanation of demanding interest. He introduced the concepts "lucrum cessans" (ceasing gain) and "damnum emergens" (emerging loss).
If a lender could demonstrate that by lending his money, he incurred a verifiable loss ("damnum emergens"),
such as a missed business opportunity, or if he forfeited a profit he would otherwise have made ("lucrum cessans"), he could licitly charge compensation.
This was not payment for the use of the money *per se*, but restitution for a loss incurred. A borrower could say:
Ok, I'll lend you the money, but unfortunately, it means that I can not open my second store now, so I ask you to pay interest for this inconvenience.
This distinction, while intended to uphold the usury prohibition, in practice provided a significant loophole that allowed credit to flow in an expanding economy.
It shifted the focus from the inherent nature of money to the concrete circumstances of the lender and the economic consequences of the loan, paving the way for later justifications of interest.
Another step in the direction of capitalism and big banking.
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
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