E-text prepared by Brendan Lane, S. R. Ellison, and the Project Gutenberg
Online Distributed Proofreading Team



AN ESSAY ON MEDIÆVAL ECONOMIC TEACHING

by

GEORGE O'BRIEN, LITT.D., M.R.I.A.

Author of 'The Economic History of Ireland in the Seventeenth Century,'
and 'The Economic History of Ireland in the Eighteenth Century'

1920







TO THE REV. MICHAEL CRONIN, M.A., D.D.
UNIVERSITY COLLEGE, DUBLIN



AUTHOR'S NOTE

I wish to express my gratitude to the Rev. Dr. Cronin for his kindness
in reading the manuscript, and for many valuable suggestions which he
made; also to Father T.A. Finlay, S.J., and Mr. Arthur Cox for having
given me much assistance in the reading and revision of the proofs.



CONTENTS


  CHAPTER I
  INTRODUCTORY
    SECTION 1. AIM AND SCOPE OF THE ESSAY
    SECTION 2. EXPLANATION OF THE TITLE
      § 1. Mediæval
      § 2. Economic
      § 3. Teaching
    SECTION 3. VALUE OF THE STUDY OF THE SUBJECT
    SECTION 4. DIVISION OF THE SUBJECT


  CHAPTER II
  PROPERTY
    SECTION 1. THE RIGHT TO PRODUCE AND DISPENSE PROPERTY
    SECTION 2. DUTIES REGARDING THE ACQUISITION AND USE OF PROPERTY
    SECTION 3. PROPERTY IN HUMAN BEINGS


  CHAPTER III
  DUTIES REGARDING THE EXCHANGE OF PROPERTY
    SECTION 1. THE SALE OF GOODS
      § 1. The Just Price
      § 2. The Just Price when Price fixed by Law
      § 3. The Just Price when Price not fixed by Law
      § 4. The Just Price of Labour
      § 5. Value of the Conception of the Just Price
      § 6. Was the Just Price Subjective or Objective?
      § 7. The Mediæval Attitude towards Commerce
      § 8. _Cambium_
    SECTION 2. THE SALE OF THE USE OF MONEY
      § 1. Usury in Greece and Rome
      § 2. Usury in the Old Testament
      § 3. Usury in the First Twelve Centuries of Christianity
      § 4. The Mediæval Prohibition of Usury
      § 5. Extrinsic Titles
      § 6. Other Cases in which more than the Loan could be repaid
      § 7. The Justice of Unearned Income
      § 8. Rent Charges
      § 9. Partnership
      § 10. Concluding Remarks on Usury
    SECTION 3. THE MACHINERY OF EXCHANGE

  CHAPTER IV
  CONCLUSION

  INDEX




CHAPTER I

INTRODUCTORY



SECTION 1.--AIM AND SCOPE OF THE ESSAY


It is the aim of this essay to examine and present in as concise a
form as possible the principles and rules which guided and regulated
men in their economic and social relations during the period known as
the Middle Ages. The failure of the teaching of the so-called orthodox
or classical political economists to bring peace and security to
society has caused those interested in social and economic problems to
inquire with ever-increasing anxiety into the economic teaching which
the orthodox economy replaced; and this inquiry has revealed that each
system of economic thought that has from time to time been accepted
can be properly understood only by a knowledge of the earlier system
out of which it grew. A process of historical inquiry of this kind
leads one ultimately to the Middle Ages, and it is certainly not too
much to say that no study of modern European economic thought can be
complete or satisfactory unless it is based upon a knowledge of the
economic teaching which was accepted in mediæval Europe. Therefore,
while many will deny that the economic teaching of that period is
deserving of approval, or that it is capable of being applied to the
conditions of the present day, none will deny that it is worthy of
careful and impartial investigation.

There is thus a demand for information upon the subject dealt with in
this essay. On the other hand, the supply of such information in the
English language is extremely limited. The books, such as Ingram's
_History of Political Economy_ and Haney's _History of Economic
Thought_, which deal with the whole of economic history, necessarily
devote but a few pages to the Middle Ages. Ashley's _Economic History_
contains two excellent chapters dealing with the Canonist teaching;
but, while these chapters contain a mass of most valuable information
on particular branches of the mediæval doctrines, they do not perhaps
sufficiently indicate the relation between them, nor do they lay
sufficient emphasis upon the fundamental philosophical principles out
of which the whole system sprang. One cannot sufficiently acknowledge
the debt which English students are under to Sir William Ashley for
his examination of mediæval opinion on economic matters; his book
is frequently and gratefully cited as an authority in the following
pages; but it is undeniable that his treatment of the subject suffers
somewhat on account of its being introduced but incidentally into a
work dealing mainly with English economic practice. Dr. Cunningham
has also made many valuable contributions to particular aspects of the
subject; and there have also been published, principally in Catholic
periodicals, many important monographs on special points; but so
far there has not appeared in English any treatise, which is devoted
exclusively to mediæval economic opinion and attempts to treat the
whole subject completely. It is this want in our economic literature
that has tempted the author to publish the present essay, although he
is fully aware of its many defects.

It is necessary, in the first place, to indicate precisely the extent
of the subject with which we propose to deal; and with this end in
view to give a definition of the three words, '_mediæval, economic,
teaching_.'



SECTION 2.--EXPLANATION OF THE TITLE


§ 1. _Mediæval_.

Ingram, in his well-known book on economic history, following the
opinion of Comte, refuses to consider the fourteenth and fifteenth
centuries as part of the Middle Ages.[1] We intend, however, to treat
of economic teaching up to the end of the fifteenth century. The best
modern judges are agreed that the term Middle Ages must not be given
a hard-and-fast meaning, but that it is capable of bearing a very
elastic interpretation. The definition given in the _Catholic
Encyclopædia_ is: 'a term commonly used to designate that period of
European history between the Fall of the Roman Empire and about the
middle of the fifteenth century. The precise dates of the beginning,
culmination, and end of the Middle Ages are more or less arbitrarily
assumed according to the point of view adopted.' The eleventh edition
of the _Encyclopædia Britannica_ contains a similar opinion: 'This
name is commonly given to that period of European history which lies
between what are known as ancient and modern times, and which has
generally been considered as extending from about the middle of the
fifth to about the middle of the fifteenth centuries. The two dates
adopted in old text-books were 476 and 1453, from the setting aside
of the last emperor of the west until the fall of Constantinople. In
reality it is impossible to fix any exact dates for the opening and
close of such a period.'

[Footnote 1: _History of Political Economy_, p. 35.]

We are therefore justified in considering the fifteenth century as
comprised hi the Middle Ages. This is especially so in the domain
of economic theory. In actual practice the fourteenth and fifteenth
centuries may have presented the appearance rather of the first stage
of a new than of the last stage of an old era. This is Ingram's view.
However true this may be of practice, it is not at all true of theory,
which, as we shall see, continued to be entirely based on the
writings of an author of the thirteenth century. Ingram admits this
incidentally: 'During the fourteenth and fifteenth centuries the
Catholic-feudal system was breaking down by the mutual conflicts of
its own official members, while the constituent elements of a new
order were rising beneath it. The movements of this phase can scarcely
be said to find an echo in any contemporary economic literature.'[1]
We need not therefore apologise further for including a consideration
of the fourteenth and fifteenth centuries in our investigations as to
the economic teaching of the Middle Ages. We are supported in doing
so by such excellent authorities as Jourdain,[2] Roscher,[3] and
Cossa.[4] Haney, in his _History of Economic Thought_,[5] says: 'It
seems more nearly true to regard the years about 1500 as marking the
end of mediæval times.... On large lines, and from the viewpoint of
systems of thought rather than systems of industry, the Middle Ages
may with profit be divided into two periods. From 400 down to 1200,
or shortly thereafter, constitutes the first. During these years
Christian theology opposed Roman institutions, and Germanic customs
were superposed, until through action and reaction all were blended.
This was the reconstruction; it was the "stormy struggle" to found a
new ecclesiastical and civil system. From 1200 on to 1500 the world
of thought settled to its level. Feudalism and scholasticism, the
corner-stones of mediævalism, emerged and were dominant.'

[Footnote 1: _Op. cit._, p. 35.]

[Footnote 2: _Mémoires sur les commencements de l'économie politique
dans les écoles du moyen âge_, Académie des Inscriptions et
Belles-Lettres, vol. 28.]

[Footnote 3: _Geschichte zur National-Ökonomik in Deutschland_.]

[Footnote 4: _Introduction to the Study of Political Economy_.]

[Footnote 5: P. 70.]

We shall not continue the study further than the beginning of the
sixteenth century. It is true that, if we were to refer to several
sixteenth-century authors, we should be in possession of a very highly
developed and detailed mass of teaching on many points which
earlier authors left to some extent obscure. We deliberately
refrain nevertheless from doing so, because the whole nature of the
sixteenth-century literature was different from that of the fourteenth
and fifteenth; the early years of the sixteenth century witnessed the
abrogation of the central authority which was a basic condition of
the success of the mediæval system; and the same period also witnessed
'radical economic changes, reacting more and more on the scholastic
doctrines, which found fewer and fewer defenders in their original
form.'[1]

[Footnote 1: Cossa, _op. cit._, p. 151. Ashley warns us that 'we must
be careful not to interpret the writers of the fifteenth century by
the writers of the seventeenth' (_Economic History_, vol. i. pt. ii.
p. 387). These later writers sometimes contain historical accounts
of controversies in previous centuries, and are relevant on this
account.]


§ 2. _Economic_.

It must be clearly understood that the political economy of the
mediævals was not a science, like modern political economy, but an
art. 'It is a branch of the virtue of prudence; it is half-way between
morality, which regulates the conduct of the individual, and politics,
which regulates the conduct of the sovereign. It is the morality of
the family or of the head of the family, from the point of view of the
good administration of the patrimony, just as politics is the morality
of the sovereign, from the point of view of the good government of the
State. There is as yet no question of economic laws in the sense
of historical and descriptive laws; and political economy, not yet
existing in the form of a science, is not more than a branch of that
great tree which is called ethics, or the art of living well.'[1] 'The
doctrine of the canon law,' says Sir William Ashley, 'differed from
modern economics in being an art rather than a science. It was a body
of rules and prescriptions as to conduct, rather than of conclusions
as to fact. All art indeed in this sense rests on science; but the
science on which the canonist doctrine rested was theology. Theology,
or rather that branch of it which we may call Christian ethics, laid
down certain principles of right and wrong in the economic sphere;
and it was the work of the canonists to apply them to specific
transactions and to pronounce judgment as to their permissibility.'[2]
The conception of economic laws, in the modern sense, was quite
foreign to the mediæval treatment of the subject. It was only in
the middle of the fourteenth century that anything approaching a
scientific examination of the phenomena of economic life appeared,
and that was only in relation to a particular subject, namely, the
doctrine of money.[3]

[Footnote 1: Rambaud, _Histoire des Doctrines Économiques_, p. 39. 'It
is evident that a household is a mean between the individual and
the city or Kingdom, since just as the individual is part of the
household, so is the household part of the city or Kingdom, and
therefore, just as prudence commonly so called which governs the
individual is distinct from political prudence, so must domestic
prudence (oeconomica) be distinct from both. Riches are related to
domestic prudence, not as its last end, but as its instrument. On the
other hand, the end of political prudence is a good life in general as
regards the conduct of the household. In _Ethics_ i. the philosopher
speaks of riches as the end of political prudence, by way of example,
and in accordance with the opinion of many.' Aquinas, _Summa II_. ii.
50. 3, and see _Sent. III_. xxxiii. 3 and 4. 'Practica quidem scientia
est, quae recte vivendi modum ac disciplinae formam secundum virtutum
institutionem disponit. Et haec dividitur in tres, scilicet: primo
ethicam, id est moralem; et secundo oeconomicam, id est dispensativam;
et tertio politicam, id est civilem' (Vincent de Beauvais, _Speculum_,
VII. i. 2).]

[Footnote 2: _Op. cit._, vol. i. part. ii. p. 379.]

[Footnote 3: Rambaud, _op. cit._, p. 83; Ingram, _op. cit._, p. 36. So
marked was the contrast between the mediæval and modern conceptions
of economics that the appearance of this one treatise has been said
by one high authority to have been the signal of the dawn of the
Renaissance (Espinas, _Histoire des Doctrines Économiques_, p. 110).]

To say that the mediæval method of approaching economic problems was
fundamentally different from the modern, is not in any sense to be
taken as indicating disapproval of the former. On the contrary, it is
the general opinion to-day that the so-called classical treatment of
economics has proved disastrous in its application to real life,
and that future generations will witness a retreat to the earlier
position. The classical economists committed the cardinal error of
subordinating man to wealth, and consumption to production. In their
attempt to preserve symmetry and order in their generalisations they
constructed a weird creature, the economic man, who never existed, and
never could exist. The mediævals made no such mistake. They insisted
that all production and gain which did not lead to the good of man was
not alone wasteful, but positively evil; and that man was infinitely
more important than wealth. When he exclaims that 'Production is on
account of man, not man of production,' Antoninus of Florence sums
up in a few words the whole view-point of his age.[1] 'Consumption,'
according to Dr. Cunningham, 'was the aspect of human nature which
attracted most attention.... Regulating consumption wisely was the
chief practical problem in mediæval economics.'[2] The great
practical benefits of such a treatment of the problems relating to the
acquisition and enjoyment of material wealth must be obvious to every
one who is familiar with the condition of the world after a century of
classical political economy. 'To subordinate the economic order to
the social order, to submit the industrial activity of man to the
consideration of the final and general end of his whole being, is
a principle which must exert on every department of the science
of wealth, an influence easy to understand. Economic laws are the
codification of the material activity of a sort of _homo economicus_;
of a being, who, having no end in view but wealth, produces all he
can, distributes his produce in the way that suits him best,
and consumes as much as he can. Self interest alone dictates his
conduct.'[3] Economics, far from being a science whose highest aim
was to evolve a series of abstractions, was a practical guide to the
conduct of everyday affairs.[4] 'The pre-eminence of morality in
the domain of economics constitutes at the same time the distinctive
feature, the particular merit, and the great teaching of the economic
lessons of this period.'[5]

[Footnote 1: _Irish Theological Quarterly_, vol. vii. p. 151.]

[Footnote 2: _Christianity and Economic Science_, p. 10.]

[Footnote 3: Brants, _Les Théories économiques aux xiii^{e} et xii^{e}
siècles, p_. 34.]

[Footnote 4: Gide and Rist, _History of Economic Doctrines_, Eng.
trans., p. 110.]

[Footnote 5: Brants, _op. cit._, p. 9.]

Dr. Cunningham draws attention to the fact that the existence of such
a universally received code of economic morality was largely due to
the comparative simplicity of the mediæval social structure, where
the _relations of persons_ were all important, in comparison with the
modern order, where the _exchange of things_ is the dominant factor.
He further draws attention to the changes which affected the whole
constitution of society in the sixteenth and seventeenth centuries,
and proceeds: 'These changes had a very important bearing on all
questions of commercial morality; so long as economic dealings were
based on a system of personal relationships they all bore an implied
moral character. To supply a bad article was morally wrong, to demand
excessive payment for goods or for labour was extortion, and the
right or wrong of every transaction was easily understood.'[1] The
application of ethics to economic transactions was rendered possible
by the existence of one universally recognised code of morality,
and the presence of one universally accepted moral teacher. 'In the
thirteenth century, the ecclesiastical organisation gave a unity to
the social structure throughout the whole of Western Europe; over the
area in which the Pope was recognised as the spiritual and the Emperor
as the temporal vicar of God, political and racial differences were
relatively unimportant. For economic purposes it is scarcely necessary
to distinguish different countries from one another in the thirteenth
century, for there were fewer barriers to social intercourse
within the limits of Christendom than there are to-day.... Similar
ecclesiastical canons, and similar laws prevailed over large areas,
where very different admixtures of civil and barbaric laws were in
vogue. Christendom, though broken into so many fragments politically,
was one organised society for all the purposes of economic life,
because there was such free intercommunication between its parts.'[2]
'There were three great threads,' we read later in the same book,
'which ran through the whole social system of Christendom. First of
all there was a common religious life, with the powerful weapons of
spiritual censure and excommunication which it placed in the hands of
the clergy, so that they were able to enforce the line of policy which
Rome approved. Then there was the great judicial system of canon
law, a common code with similar tribunals for the whole of Western
Christendom, dealing not merely with strictly ecclesiastical affairs,
but with many matters that we should regard as economic, such as
questions of commercial morality, and also with social welfare as
affected by the law of marriage and the disposition of property by
will....'[3] 'To the influence of Christianity as a moral doctrine,'
says Dr. Ingram, 'was added that of the Church as an organisation,
charged with the application of the doctrine to men's daily
transactions. Besides the teaching of the sacred books there was a
mass of ecclesiastical legislation providing specific prescriptions
for the conduct of the faithful. And this legislation dealt with the
economic as well as with other provinces of social activity.'[4]

[Footnote 1: _Growth of English Industry and Commerce_, vol. i. p.
465.]

[Footnote 2: Cunningham, _Western Civilisation_, vol. ii. pp. 2-3.]

[Footnote 3: _Ibid._, p. 67.]

[Footnote 4: _Op. cit._, p. 27.]

The teaching of the mediæval Church, therefore, on economic affairs
was but the application to particular facts and cases of its general
moral teaching. The suggestion, so often put forward by so-called
Christian socialists, that Christianity was the exponent of a special
social theory of its own, is unfounded. The direct opposite would be
nearer the truth. Far from concerning itself with the outward forms
of the political or economic structure, Christianity concentrated its
attention on the conduct of the individual. If Christianity can be
said to have possessed any distinctive social theory, it was intense
individualism. 'Christianity brought, from the point of view of
morals, an altogether new force by the distinctly individual and
personal character of its precepts. Duty, vice or virtue, eternal
punishment--all are marked with the most individualist imprint that
can be imagined. No social or political theory appeared, because it
was through the individual that society was to be regenerated....
We can say with truth that there is not any Christian political
economy--in the sense in which there is a Christian morality or
a Christian dogma--any more than there is a Christian physic or a
Christian medicine.'[1] In seeking to learn Christian teaching of
the Middle Ages on economic matters, we must therefore not look
for special economic treatises in the modern sense, but seek our
principles in the works dealing with general morality, in the Canon
Law, and in the commentaries on the Civil Law. 'We find the first
worked out economic theory for the whole Catholic world in the _Corpus
Juris Canonici_, that product of mediæval science in which for so
many centuries theology, jurisprudence, philosophy, and politics were
treated....'[2]

[Footnote 1: Rambaud, _op. cit._, pp. 34-5; Cunningham, _Western
Civilisation_, vol. ii. p. 8.]

[Footnote 2: Roscher, _op. cit._, p. 5. It must not be concluded
that all the opinions expressed by the theologians and lawyers were
necessarily the official teaching of the Church. Brants says: 'It is
not our intention to attribute to the Church all the opinions of
this period; certainly the spirit of the Church dominated the great
majority of the writers, but one must not conclude from this that
all their writings are entitled to rank as doctrinal teaching' (_Op.
cit._, p. 6).]

There is not to be found in the writers of the early Middle Ages, that
is to say from the eighth to the thirteenth centuries, a trace of any
attention given to what we at the present day would designate economic
questions. Usury was condemned by the decrees of several councils, but
the reasons of this prohibition were not given, nor was the question
made the subject of any dialectical controversy; commerce was so
undeveloped as to escape the attention of those who sought to
guide the people in their daily life; and money was accepted as the
inevitable instrument of exchange, without any discussion of its
origin or the laws which regulated it.

The writings of this period therefore betray no sign of any interest
in economic affairs. Jourdain says that he carefully examined the
works of Alcuin, Rabanas Mauras, Scotus Erigenus, Hincmar, Gerbert,
St. Anselm, and Abelard--the greatest lights of theology and
philosophy in the early Middle Ages--without finding a single passage
to suggest that any of these authors suspected that the pursuit of
riches, which they despised, occupied a sufficiently large place in
national as well as in individual life, to offer to the philosopher a
subject fruitful in reflections and results. The only work which might
be adduced as a partial exception to this rule is the _Polycraticus_
of John of Salisbury; but even this treatise contained only some
scattered moral reflections on luxury and on zeal for the interest of
the public treasury.[1]

[Footnote 1: Jourdain, _op. cit._, p. 4.]

Two causes contributed to produce this almost total lack of interest
in economic subjects. One was the miserable condition of society,
still only partially rescued from the ravages of the barbarians, and
half organised, almost without industry and commerce; the other
was the absence of all economic tradition. The existence of the
_Categories_ and _Hermenia_ of Aristotle ensured that the chain
of logical study was not broken; the works of Donatus and Priscian
sustained some glimmer of interest in grammatical theory; certain rude
notions of physics and astronomy were kept alive by the preservation
of such ancient elementary treatises as those of Marcian Capella; but
economics had no share in the heritage of the past. Not only had the
writings of the ancients, who dealt to some extent with the theory of
wealth, been destroyed, but the very traces of their teaching had been
long forgotten. A good example of the state of thought in economic
matters is furnished by the treatment which money receives in the
_Etymologies_ of Isidore of Seville, which was regarded in the early
Middle Ages as a reliable encyclopædia. 'Money,' according to Isidore,
'is so called because it warns, _monet_, lest any fraud should enter
into its composition or its weight. The piece of money is the coin of
gold, silver, or bronze, which is called _nomisma_, because it bears
the imprint of the name and likeness of the prince.... The pieces of
money _nummi_ have been so called from the King of Rome, Numa, who was
the first among the Latins to mark them with the imprint of his image
and name.'[1] Is it any wonder that the early Middle Ages were barren
of economic doctrines, when this was the best instruction to which
they had access?

[Footnote 1: _Etymol_. xvi. 17.]

In the course of the thirteenth century a great change occurred. The
advance of civilisation, the increased organisation of feudalism, the
development of industry, and the extension of commerce, largely under
the influence of the Crusades, all created a condition of affairs in
which economic questions could no longer be overlooked or neglected.
At the same time the renewed study of the writings of Aristotle served
to throw a flood of new light on the nature of wealth.

The _Ethics_ and _Politics_ of Aristotle, although they are not
principally devoted to a treatment of the theory of wealth, do in
fact deal with that subject incidentally. Two points in particular
are touched on, the utility of money and the injustice of usury.
The passages of the philosopher dealing with these subjects are of
particular interest, as they may be said, with a good deal of truth,
to be the true starting point of mediæval economics.[1] The writings
of Aristotle arrested the attention, and aroused the admiration of
the theologians of the thirteenth century; and it would be quite
impossible to exaggerate the influence which they exercised on the
later development of mediæval thought. Albertus Magnus digested,
interpreted, and systematised the whole of the works of the Stagyrite;
and was so steeped in the lessons of his philosophic master as to be
dubbed by some 'the ape of Aristotle.' Aquinas, who was a pupil of
Albertus, also studied and commented on Aristotle, whose aid he was
always ready to invoke in the solution of all his difficulties. With
the single and strange exception of Vincent de Beauvais, Aristotle's
teaching on money was accepted by all the writers of the thirteenth
century, and was followed by later generations.[2] The influence
of Aristotle is apparent in every article of the _Summa_, which was
itself the starting point from which all discussion sprang for the
following two centuries; and it is not too much to say that the
Stagyrite had a decisive influence on the introduction of economic
notions into the controversies of the Schools. 'We find in the
writings of St. Thomas Aquinas,' says Ingram, 'the economic doctrines
of Aristotle reproduced with a partial infusion of Christian
elements.'[3]

[Footnote 1: Jourdain, _op. cit._, p. 7.]

[Footnote 2: _Ibid._, p. 12.]

[Footnote 3: _Op. cit._, p. 27. Espinas thinks that the influence
of Aristotle in this respect has been exaggerated. (_Histoire des
Doctrines Économiques_, p. 80.)]

In support of the account we have given of the development of economic
thought in the thirteenth century, we may quote Cossa: 'The revival
of economic studies in the Middle Ages only dates from the thirteenth
century. It was due in a great measure to a study of the _Ethics_ and
_Politics_ of Aristotle, whose theories on wealth were paraphrased by
a considerable number of commentators. Before that period we can only
find moral and religious dissertations on such topics as the proper
use of material goods, the dangers of luxury, and undue desire for
wealth. This is easily explained when we take into consideration (1)
the prevalent influence of religious ideas at the time, (2) the
strong reaction against the materialism of pagan antiquity, (3)
the predominance of natural economy, (4) the small importance of
international trade, and (5) the decay of the profane sciences, and
the metaphysical tendencies of the more solid thinkers of the Middle
Ages.'[1]

[Footnote 1: _Op. cit._, p. 14; Espinas, _op. cit._, p. 80.]

The teaching of Aquinas upon economic affairs remained the groundwork
of all the later writers until the end of the fifteenth century.
His opinions on various points were amplified and explained by
later authors in more detail than he himself employed; monographs of
considerable length were devoted to the treatment of questions which
he dismissed in a single article; but the development which took
place was essentially one of amplification rather than opposition. The
monographists of the later fifteenth century treat usury and sale in
considerable detail; many refinements are indicated which are not
to be found in the _Summa_; but it is quite safe to say that none
of these later writers ever pretended to supersede the teaching of
Aquinas, who was always admitted to be the ultimate authority. 'During
the fourteenth and fifteenth centuries, the general political doctrine
of Aquinas was maintained with merely subordinate modifications.'[1]
'The canonist doctrine of the fifteenth century,' according to Sir
William Ashley, 'was but a development of the principles to which the
Church had already given its sanction in earlier centuries. It was the
outcome of these same principles working in a modified environment.
But it may more fairly be said to present a _system_ of economic
thought, because it was no longer a collection of unrelated opinions,
but a connected whole. The tendency towards a separate department of
study is shown by the ever-increasing space devoted to the discussion
of general economic topics in general theological treatises, and
more notably still in the manuals of casuistry for the use of the
confessional, and handbooks of canon law for the use of ecclesiastical
lawyers. It was shown even more distinctly by the appearance of a
shoal of special treatises on such subjects as contracts, exchange,
and money, not to mention those on usury.'[2] In all this development,
however, the principles enunciated by Aquinas, and through him, by
Aristotle, though they may have been illustrated and applied to new
instances, were never rejected. The study of the writers of this
period is therefore the study of an organic whole, the germ of which
is to be found in the writings of Aquinas.[3]

[Footnote 1: Ingram, _op. cit._, p. 35.]

[Footnote 2: _Op. cit._, vol. i. pt. ii. p. 382.]

[Footnote 3: The volume of literature which bears more or less on
economic matters dating from the fourteenth and fifteenth centuries is
colossal. By far the best account of it is to be found in Endemann's
_Studien in der Romanisch-canonistischen Wirthschafts- und
Rechtslehre_, vol. i. pp. 25 _et seq_. Many of the more important
works written during the period are reprinted in the _Tractatus
Universi Juris_, vols. vi. and vii. The appendix to the first chapter
of Reseller's _Geschichte_ also contains a valuable account of certain
typical writers, especially of Langenstein and Henricus de Hoyta.
Brants gives a useful bibliographical list of both mediæval and modern
authorities in the second chapter of his _Théories économiques aux
xiii^{e} et xiv^{e} siècles_. Those who desire further information
about any particular writer of the period will find it in Stintzing,
_Literaturgeschichte des röm. Rechts_, or in Chevallier's _Répertoire
historique des Sources du moyen âge; Bio-bibliographie_. The
authorship of the treatise _De Regimine Principum_, from which we
shall frequently quote, often attributed to Aquinas, is very doubtful.
The most probable opinion is that the first book and the first three
chapters of the second are by Aquinas, and the remainder by another
writer. (See Franck, _Réformateurs et Publicistes_, vol. i. p. 83.)]


§ 3. _Teaching_.

We shall confine our attention in this essay to the economic teaching
of the Middle Ages, and shall not deal with the actual practice of the
period. It may be objected that a study of the former without a study
of the latter is futile and useless; that the economic teaching of a
period can only be satisfactorily learnt from a study of its actual
economic institutions and customs; and that the scholastic teaching
was nothing but a casuistical attempt to reconcile the early Christian
dogmas with the ever-widening exigencies of real life. Endemann, for
instance, devotes a great part of his invaluable books on the subject
to demonstrating how impracticable the canonist teaching was when it
was applied to real life, and recounting the casuistical devices that
were resorted to in order to reconcile the teaching of the Church with
the accepted mercantile customs of the time. Endemann, however,
in spite of his colossal research and unrivalled acquaintance with
original authorities, was essentially hostile to the system which he
undertook to explain, and thus lacked the most essential quality of a
satisfactory expositor, namely, sympathy with his subject. He does
not appear to have realised that development and adaptability to new
situations, far from being marks of impracticability, are rather the
signs of vitality and of elasticity. This is not the place to discuss
how far the doctrine of the late fifteenth differed from that of the
early thirteenth century; that is a matter which will appear below
when each of the leading principles of scholastic economic teaching
is separately considered; it is sufficient to say here that we agree
entirely with Brants, in opposition to Endemann, that the change
which took place in the interval was one of development, and not of
opposition. 'The law,' says Brants, 'remained identical and unchanged;
justice and charity--nobody can justly enrich himself at the expense
of his neighbour or of the State, but the reasons justifying gain
are multiplied according as riches are developed.'[1] 'The canonist
doctrine of the fifteenth century was but a development of the
principles to which the Church had already given its sanction in
earlier centuries. It was the outcome of these same principles working
in a modified environment.'[2] With these conclusions of Brants and
Ashley we are in entire agreement.

[Footnote 1: Brants, _op. cit._, p. 9.]

[Footnote 2: Ashley, _op. cit._, p. 381.]

Let us say in passing that the assumption that the mediæval teaching
grew out of contemporary practice, rather than that the latter grew
out of the former, is one which does not find acceptance among the
majority of the students of the subject. The problem whether a correct
understanding of mediæval economic life can be best attained by first
studying the teaching or the practice is possibly no more soluble than
the old riddle of the hen and the egg; but it may at least be argued
that there is a good deal to be said on both sides. The supporters of
the view that practice moulded theory are by no means unopposed.
There is no doubt that in many respects the exigencies of everyday
commercial concerns came into conflict with the tenets of canon law
and scholastic opinion; but the admission of this fact does not at
all prove that the former was the element which modified the latter,
rather than the latter the former. In so far as the expansion of
commerce and the increasing complexity of intercourse raised questions
which seemed to indicate that mercantile convenience conflicted with
received teaching, it is probable that the difficulty was not so much
caused by a contradiction between the former and the latter, as by the
fact that an interpretation of the doctrine as applied to the facts
of the new situation was not available before the new situation had
actually arisen. This is a phenomenon frequently met with at the
present day in legal practice; but no lawyer would dream of asserting
that, because there had arisen an unprecedented state of facts, to
which the application of the law was a matter of doubt or difficulty,
therefore the law itself was obsolete or incomplete. Examples of such
a conflict are familiar to any one who has ever studied the case law
on any particular subject, either in a country such as England, where
the law is unwritten, or in continental countries, where the most
exhaustive and complete codes have been framed. Nevertheless, in spite
of the occurrence of such difficulties, it would be foolish to contend
that the laws in force for the time being have not a greater influence
on the practice of mercantile transactions than the convenience of
merchants has upon the law. How much more potent must this influence
have been when the law did not apply simply to outward observances,
but to the inmost recesses of the consciences of believing Christians!

The opinion that mediæval teaching exercised a profound effect on
mediæval practice is supported by authorities of the weight of Ashley,
Ingram, and Cunningham,[1] the last of whom was in some respects
unsympathetic to the teaching the influence of which he rates so
highly. 'It has indeed,' writes Sir William Ashley, 'not infrequently
been hinted that all the elaborate argumentation of canonists and
theologians was "a cobweb of the brain," with no vital relation to
real life. Certain German writers have, for instance, maintained that,
alongside of the canonist doctrine with regard to trade, there existed
in mediæval Europe a commercial law, recognised in the secular courts,
and altogether opposed to the peculiar doctrines of the canonists.
It is true that parts of mercantile jurisprudence, such as the law of
partnership, had to a large extent originated in the social conditions
of the time, and would have probably made their appearance even
if there had been no canon law or theology. But though there were
branches of commercial law which were, in the main, independent of
the canonist doctrine, there were none that were opposed to it. On
the fundamental points of usury and just price, commercial law in the
later Middle Ages adopted completely the principles of the canonists.
How entirely these principles were recognised in the practice of the
courts which had most to do with commercial suits, viz. those of the
towns, is sufficiently shown by the frequent enactments as to usury
and as to reasonable price which are found in the town ordinances
of the Middle Ages; in England as well as in the rest of Western
Europe.... Whatever may have been the effect, direct or indirect, of
the canonist doctrine on legislation, it is certain that on its other
side, as entering into the moral teaching of the Church through the
pulpit and the confessional, its influence was general and persistent,
even if it were not always completely successful.'[2] 'Every great
change of opinion on the destinies of man,' says Ingram, 'and the
guiding principles of conduct must react in the sphere of material
interests; and the Catholic religion had a profound influence on the
economic life of the Middle Ages.... The constant presentations to the
general mind and conscience of Christian ideas, the dogmatic bases
of which were as yet scarcely assailed by scepticism, must have had a
powerful effect in moralising life.'[3] According to Dr. Cunningham:
'The mediæval doctrine of price was not a theory intended to explain
the phenomena of society, but it was laid down as the basis of rules
which should control the conduct of society and of individuals. At
the same time current opinion seems to have been so fully formed in
accordance with it that a brief enumeration of the doctrine of a just
price will serve to set the practice of the day in clearer light. In
regard to other matters, it is difficult to determine how far public
opinion was swayed by practical experience, and how far it was really
moulded by Christian teaching--this is the case in regard to usury.
But there can be little doubt about the doctrine of price--which
really underlies a great deal of commercial and gild regulations,
and is constantly implied in the early legislation on mercantile
affairs.'[4] The same author expresses the same opinion in another
work: 'The Christian doctrine of price, and Christian condemnation
of gain at the expense of another man, affected all the mediæval
organisation of municipal life and regulation of inter-municipal
commerce, and introduced marked contrasts to the conditions of
business in ancient cities. The Christian appreciation of the duty of
work rendered the lot of the mediæval villain a very different thing
from that of the slave of the ancient empire. The responsibility of
proprietors, like the responsibility of prices, was so far insisted
on as to place substantial checks on tyranny of every kind. For these
principles were not mere pious opinions, but effective maxims in
practical life. Owing to the circumstances in which the vestiges of
Roman civilisation were locally maintained, and the foundations of
the new society were laid, there was ample opportunity for
Christian teaching and example to have a marked influence on its
development.'[5] In Dr. Cunningham's book entitled _Politics and
Economics_ the same opinion is expressed:[6] 'Religious and industrial
life were closely interconnected, and there were countless points at
which the principles of divine law must have been brought to bear
on the transaction of business, altogether apart from any formal
tribunal. Nor must we forget the opportunities which directors had for
influencing the conduct of penitents.... Partly through the operation
of the royal power, partly through the decisions of ecclesiastical
authorities, but more generally through the influence of a Christian
public opinion which had been gradually created, the whole industrial
organism took its shape, and the acknowledged economic principles were
framed.' We have quoted these passages from Dr. Cunningham's works at
length because they are of great value in helping us to estimate
the rival parts played by theory and practice in mediæval economic
teaching; in the first place, because the author was by no means
prepossessed in favour of the teaching of the canonists, but rather
unsympathetic to it; in the second place, because, although his work
was concerned primarily with practice, he found himself obliged
to make a study of theory before he could properly understand the
practice; and lastly, because they point particularly to the effect of
the teaching on just price. When we come to speak of this part of the
subject we shall find that Dr. Cunningham failed to appreciate the
true significance of the canonist doctrine. If an eminent author, who
does not quite appreciate the full import of this doctrine, and who
is to some extent contemptuous of its practical value, nevertheless
asserts that it exercised an all-powerful influence on the practice of
the age in which it was preached, we are surely justified in
asserting that the study of theory may be profitably pursued without a
preliminary history of the contemporary practice.

[Footnote 1: Even Endemann warns his readers against assuming that the
canonist teaching had no influence on everyday life. (_Studien_, vol.
ii. p. 404.)]

[Footnote 2: Ashley, _op. cit._, vol. i. pt. ii. pp. 383-85. Again:
'The later canonist dialectic was the midwife of modern economics'
(_ibid._, p. 397).]

[Footnote 3: _History of Political Economy_, p. 26.]

[Footnote 4: Cunningham, _Growth of English Industry and Commerce_,
vol. i. p. 252.]

[Footnote 5: Cunningham, _Western Civilisation_, vol. ii. pp. 9-10.]

[Footnote 6: P. 25.]

But we must not be taken to suggest that there were no conflicts
between the teaching and the practice of the Middle Ages. As we have
seen, the economic teaching of that period was ethical, and it would
be absurd to assert that every man who lived in the Middle Ages lived
up to the high standard of ethical conduct which was proposed by the
Church.[1] One might as well say that stealing was an unknown crime
in England since the passing of the Larceny Act. All we do suggest is
that the theory had such an important and incalculable influence
upon practice that the study of it is not rendered futile or useless
because of occasional or even frequent departures from it in real
life. Even Endemann says: 'The teaching of the canon law presents a
noble edifice not less splendid in its methods than in its results.
It embraces the whole material and spiritual natures of human society
with such power and completeness that verily no room is left for
any other life than that decreed by its dogmas.'[2] 'The aim of the
Church,' says Janssen, 'in view of the tremendous agencies through
which it worked, in view of the dominion which it really exercised,
cannot have the impression of its greatness effaced by the unfortunate
fact that all was not accomplished that had been planned.'[3] The fact
that tyranny may have been exercised by some provincial governor in
an outlying island of the Roman Empire cannot close our eyes to the
benefits to be derived from a study of the code of Justinian; nor can
a remembrance of the manner in which English law is administered in
Ireland in times of excitement, blind us to the political lessons to
be learned from an examination of the British constitution.

[Footnote 1: The many devices which were resorted to in order to evade
the prohibition of usury are explained in Dr. Cunningham's _Growth
of English Industry and Commerce_, vol. i. p. 255. See also Delisle,
_L'Administration financière des Templiers_, Académie des Inscriptions
et Belles-Lettres, 1889, vol. xxxiii. pt. ii., and Ashley, _Economic
History_, vol. i. pt. ii. p. 426. The _Summa Pastoralis_ of Raymond de
Pennafort analyses and demolishes many of the commoner devices which
were employed to evade the usury laws. On the part played by the Jews,
see Brants, _op. cit._, Appendix I.]

[Footnote 2: _Die Nationalökonomischen Grundsätze der canonistischen
Lehre_, p. 192.]

[Footnote 3: _History of the German People_ (Eng. trans.), vol. ii. p.
99.]



SECTION 3.--VALUE OF THE STUDY OF THE SUBJECT


The question may be asked whether the study of a system of economic
teaching, which, even if it ever did receive anything approaching
universal assent, has long since ceased to do so, is not a waste of
labour. We can answer that question in the negative, for two reasons.
In the first place, as we said above, a proper understanding of
the earlier periods of the development of a body of knowledge is
indispensable for a full appreciation of the later. Even if the
canonist system were not worth studying for its own sake, it would
be deserving of attention on account of the light it throws on the
development of later economic doctrine. 'However the canonist theory
may contrast with or resemble modern economics, it is too important
a part of the history of human thought to be disregarded,' says Sir
William Ashley. 'As we cannot fully understand the work of Adam Smith
without giving some attention to the physiocrats, nor the physiocrats
without looking at the mercantilists: so the beginnings of mercantile
theory are hardly intelligible without a knowledge of the canonist
doctrine towards which that theory stands in the relation partly of a
continuation, partly of a protest.'[1]

[Footnote 1: _Op. cit._, vol. i. pt. ii. p. 381.]

But we venture to assert that the study of canonist economics, far
from being useful simply as an introduction to later theories, is of
great value in furnishing us with assistance in the solution of the
economic and social problems of the present day. The last fifty years
have witnessed a reaction against the scientific abstractions of the
classical economists, and modern thinkers are growing more and more
dissatisfied with an economic science which leaves ethics out of
account.[1] Professor Sidgwick, in his _Principles_ _of Political
Economy_, published in 1883, devotes a separate section to 'The Art
of Political Economy,' in which he remarks that 'The principles of
Political Economy are still most commonly understood even in England,
and in spite of many protests to the contrary, to be practical
principles--rules of conduct, public or private.'[2] The many
indications in recent literature and practice that the regulation of
prices should be controlled by principles of 'fairness' would take too
long to recite. It is sufficient to refer to the conclusion of Devas
on this point: 'The notion of just price, worked out in detail by the
theologians, and in later days rejected as absurd by the classical
economists, has been rightly revived by modern economists.'[3] Not
alone in the sphere of price, but in that of every other department
of economics, the impossibility of treating the subject as an abstract
science without regard to ethics is being rapidly abandoned. 'The best
usage of the present time,' according to the _Catholic Encyclopædia_,
'is to make political economy an ethical science--that is, to make it
include a discussion of what ought to be in the economic world as well
as what is.'[4] We read in the 1917 edition of Palgrave's _Dictionary
of Political Economy_, that 'The growing importance of distribution as
a practical problem has led to an increasing mutual interpenetration
of economic and ethical ideas, which in the development of economic
doctrine during the last century and a half has taken various forms.'
[5] The need for some principle by which just distribution can be
attained has been rendered pressing by the terrible effects of a
period of unrestricted competition. 'It has been widely maintained
that a strictly competitive exchange does not tend to be really
fair--some say cannot be really fair--when one of the parties is
under pressure of urgent need; and further, that the inequality of
opportunity which private property involves cannot be fully justified
on the principle of maintaining equal freedom, and leads, in fact, to
grave social injustice.'[5] In other words, the present condition of
affairs is admitted to be intolerable, and the task before the
world is to discover some alternative. The day when economics can be
divorced from ethics has passed away; there is a world-wide endeavour
to establish in the place of the old, a new society founded on an
ethical basis.[7] There are two, and only two, possible ways to
the attainment of this ideal--the way of socialism and the way of
Christianity. There can be no doubt the socialist movement derives a
great part of its popularity from its promise of a new order, based,
not on the unregulated pursuit of selfish desires, but on justice. 'To
this view of justice or equity,' writes Dr. Sidgwick, 'the socialistic
contention that labour can only receive its due reward if land and
other instruments of production are taken into public ownership,
and education of all kinds gratuitously provided by Government--has
powerfully appealed; and many who are not socialists, nor ignorant of
economic science, have been led by it to give welcome to the notion
that the ideally "fair" price of a productive service is a price at
least rendering possible the maintenance of the producers and their
families in a condition of health and industrial efficiency.' This
is not the place to enter into a discussion as to the merits
or practicability of any of the numerous schemes put forward by
socialists; it is sufficient to say that socialism is essentially
unhistorical, and that in our opinion any practical benefits which
it might bestow on society would be more than counterbalanced by the
innumerable evils which would be certain to emerge in a system based
on unsatisfactory foundations.

[Footnote 1: We must guard against the error, which is frequently
made, that, because the classical economists assumed self-interest
as the sole motive of economic action, they therefore approved of and
inculcated it.]

[Footnote 2: P. 401, and see Marshall's Preface to Price's _Industrial
Peace_, and Ashley, _op. cit._, vol. i. pt. i. p. 137.]

[Footnote 3: _Political Economy_, p. 268.]

[Footnote 4: Tit., 'Political Economy.']

[Footnote 5: Vol. iii. p. 138.]

[Footnote 6: _Ibid._]

[Footnote 7: See Laveleye, _Elements of Political Economy_ (Eng.
trans.), pp. 7-8. On the general conflict between the ethical and the
non-ethical schools of economists see Keynes, _Scope and Method_, pp.
20 _et seq_.]

The other road to the establishment of a society based on justice
is the way of Christianity, and, if we wish to attempt this path, it
becomes vitally important to understand what was the economic teaching
of the Church in the period when the Christian ethic was universally
recognised. During the whole Middle Ages, as we have said above, the
Canon Law was the test of right and wrong in the domain of economic
activity; production, consumption, distribution, and exchange were all
regulated by the universal system of law; once before economic life
was considered within the scope of moral regulation. It cannot be
denied that a study of the principles which were accepted during that
period may be of great value to a generation which is striving to
place its economic life once more upon an ethical foundation.

One error in particular we must be on our guard to avoid. We said
above that both the socialists and the Christian economists are agreed
in their desire to reintroduce justice into economic life. We must not
conclude, however, that the aims of these two schools are identical.
One very frequently meets with the statement that the teachings of
socialism are nothing more or less than the teachings of Christianity.
This contention is discussed in the following pages, where the
conclusion will be reached that, far from being in agreement,
socialism and Christian economics contradict each other on many
fundamental points. It is, however, not the aim of the discussion to
appraise the relative merits of either system, or to applaud one and
disparage the other. All that it is sought to do is to distinguish
between them; and to demonstrate that, whatever be the merits or
demerits of the two philosophies, they are two, and not one.



SECTION 4.--DIVISION OF THE SUBJECT


The opinion is general that the distinctive doctrine of the mediæval
Church which permeated the whole of its economic thought was the
doctrine of usury. The holders of this view may lay claim to very
influential supporters among the students of the subject. Ashley says
that 'the prohibition of usury was clearly the centre of the canonist
doctrine.'[1] Roscher expresses the same opinion in practically the
same words;[2] and Endemann sees the whole economic development of the
Middle Ages and the Renaissance as the victorious destruction of the
usury law by the exigencies of real life.[3] However impressed we
may be by the opinions of such eminent authorities, we, nevertheless,
cannot help feeling that on this point they are under a misconception.
There is no doubt that the doctrine of the canonists which impresses
the modern mind most deeply is the usury prohibition, partly because
it is not generally realised that the usury doctrine would not have
forbidden the receipt of any of the commonest kinds of unearned
revenue of the present day, and partly because the discussion of usury
occupies such a very large part of the writings of the canonists. It
may be quite true to say that the doctrine of usury was that which
gave the greatest trouble to the mediæval writers, on account of the
nicety of the distinctions with which it abounded, and on account of
the ingenuity of avaricious merchants, who continually sought to
evade the usury laws by disguising illegal under the guise of
legal transactions. In practice, therefore, the usury doctrine was
undoubtedly the most prominent part of the canonist teaching, because
it was the part which most tempted evasion; but to admit that is not
to agree with the proposition that it was the centre of the canonist
doctrine.

[Footnote: 1 _Op. cit._, vol. i. pt. ii. p. 399.]

[Footnote: 2 'Bekanntlich war das Wucherverbot der praktische
Mittelpunkt der ganzen kanonischen Wirthschaftspolitik,' _Op. cit._,
p. 8.]

[Footnote: 3 _Studien_, vol. i. p. 2 and _passim_. At vol. ii. p. 31
it is stated that the teaching on just price is a corollary of the
usury teaching. But Aquinas treats of usury in the article _following_
his treatment of just price.]

Our view is that the teaching on usury was simply one of the
applications of the doctrine that all voluntary exchanges of property
must be regulated by the precepts of commutative justice. In one sense
it might be said to be a corollary of the doctrine of just price. This
is apparently the suggestion of Dr. Cleary in his excellent book on
usury: 'It seems to me that the so-called loan of money is really
a sale, and that a loan of meal, wine, oil, gunpowder, and similar
commodities--that is to say, commodities which are consumed in use--is
also a sale. If this is so, as I believe it is, then loans of all
these consumptible goods should be regulated by the principles which
regulate sale contracts. A just price only may be taken, and the
return must be truly equivalent.'[1] This statement of Dr. Cleary's
seems well warranted, and finds support in the analogy which was drawn
between the legitimacy of interest--in the technical sense--and the
legitimacy of a vendor's increasing the price of an article by reason
of some special inconvenience which he would suffer by parting with
it. Both these titles were justified on the same ground, namely, that
they were in the nature of compensations, and arose independently of
the main contract of loan or sale as the case might be. 'Le vendeur
est en présence de l'acheteur. L'objet a pour lui une valeur
particulière: c'est un souvenir, par exemple. A-t-il le droit de
majorer le prix de vente? de dépasser le juste prix convenu? ... Avec
l'unanimité des docteurs on peut trouver légitime la majoration du
prix. L'évaluation commune distingue un double élément dans l'objet:
sa valeur ordinaire à laquelle répond le juste prix, et cette valeur
extraordinaire qui appartient au vendeur, dont il se prive et qui
mérite une compensation: il le fait pour ainsi dire l'objet d'un
second contrat qui se superpose au premier. Cela est si vrai que le
supplément de prix n'est pas dû au même titre que le juste prix.'[2]
The importance of this analogy will appear when we come to treat just
price and usury in detail; it is simply referred to here in support of
the proposition that, far from being a special doctrine _sui generis_,
the usury doctrine of the Church was simply an application to the sale
of consumptible things of the universal rules which applied to all
sales. In other words, the doctrines of the just price and of usury
were founded on the same fundamental precept of justice in exchange.
If we indicate what this precept was, we can claim to have indicated
what was the true centre of the canonist doctrine.

[Footnote 1: _The Church and Usury_, p. 186.]

[Footnote 1: Desbuquois, 'La Justice dans l'Echange,' _Semaine Sociale
de France_, 1911, p. 174.]

The scholastic teaching on the subject of the rules of justice in
exchange was founded on the famous fifth book of Aristotle's _Ethics_,
and is very clearly set forth by Aquinas. In the article of the
_Summa_, where the question is discussed, 'Whether the mean is to be
observed in the same way in distributive as in commutative justice?'
we find a clear exposition: 'In commutations something is delivered to
an individual on account of something of his that has been received,
as may be seen chiefly in selling and buying, where the notion of
commutation is found primarily. Hence it is necessary to equalise
thing with thing, so that the one person should pay back to the other
just so much as he has become richer out of that which belonged to
the other. The result of this will be equality according to the
_arithmetical_ mean, which is gauged according to equal excess in
quantity. Thus 5 is the mean between 6 and 4, since it exceeds the
latter, and is exceeded by the former by 1. Accordingly, if at the
start both persons have 5, and one of them receives 1 out of the
other's belongings, the one that is the receiver will have 6, and the
other will be left with 4: and so there will be justice if both are
brought back to the mean, I being taken from him that has 6 and given
to him that has 4, for then both will have 5, which is the mean.'[1]
In the following article the matter of each kind of justice is
discussed. We are told that: 'Justice is about certain external
operations, namely, distribution and commutation. These consist in the
use of certain externals, whether things, persons, or even works: of
things as when one man takes from or restores to another that which
is his: of persons as when a man does an injury to the very person of
another...: and of works as when a man justly enacts a work of another
or does a work for him.... Commutative justice directs commutations
that can take place between two persons. Of these some are
involuntary, some voluntary.... Voluntary commutations are when a
man voluntarily transfers his chattel to another person. And if he
transfer it simply so that the recipient incurs no debt, as in the
case of gifts, it is an act not of justice, but of liberality. A
voluntary transfer belongs to justice in so far as it includes the
notion of debt.' Aquinas then goes on to distinguish between the
different kinds of contract, sale, usufruct, loan, letting and hiring,
and deposit, and concludes, 'In all these actions the mean is taken in
the same way according to the equality of repayment. Hence all these
actions belong to the one species of justice, namely, commutative
justice.'[2]

[Footnote 1: ii. ii. 61, 2.]

[Footnote 2: ii. ii. 61, 3. The reasoning of Aristotle is
characteristically reinforced by the quotation of Matt. vii. 12; ii.
ii. 77,1.]

This is not the place to discuss the precise meaning of the equality
upon which Aquinas insists, which will be more properly considered
when we come to deal with the just price. What is to be noticed at
present is that all the transactions which are properly comprised in
a discussion of economic theory--sales, loans, etc.--are grouped
together as being subject to the same regulative principle. It
therefore appears more correct to approach the subject which we are
attempting to treat by following that principle into its various
applications, than by making one particular application of the
principle the starting-point of the discussion.

It will be noticed, however, that the principles of commutative
justice all treat of the commutations of external goods--in other
words, they assume the existence of property of external goods in
individuals. Commutations are but a result of private property; in a
state of communism there could be no commutation. This is well pointed
out by Gerson[1] and by Nider.[2] It consequently is important,
before discussing exchange of ownership, to discuss the principle of
ownership itself; or, in other words, to study the static before the
dynamic state.[3]

[Footnote 1: _De Contractibus_, i. 4 'Inventa est autem commutatio
civilis post peccatum quoniam status innocentias habuit omnia
communia.']

[Footnote 2: _De Contractibus_, v. 1: 'Nunc videndum est breviter unde
originaliter proveniat quod rerum dominia sunt distincta, sic quod
hoc dicatur meum et illud tuum; quia illud est fundamentum omnis
injustitiae in contractando rem alienam, et post omnis injustitia
reddendo eam.']

[Footnote 3: See l'Abbé Desbuquois, _op. cit._, p. 168.]

We shall therefore deal in the first place with the right of private
property, which we shall show to have been fully recognised by the
mediæval writers. We shall then point out the duties which this
right entailed, and shall establish the position that the scholastic
teaching was directed equally against modern socialistic principles
and modern unregulated individualism. The next point with which we
shall deal is the exchange of property between individuals, which is a
necessary corollary of the right of property. We shall show that such
exchanges were regulated by well-defined principles of commutative
justice, which applied equally in the case of the sale of goods and in
the case of the sale of the use of money. The last matter with which
we shall deal is the machinery by which exchanges are conducted,
namely, money. Many other subjects, such as slavery and the legitimacy
of commerce, will be treated as they arise in the course of our
treatment of these principal divisions.

In its ultimate analysis, the whole subject may be reduced to a
classification of the various duties which attached to the right of
private property. The owner of property, as we shall see, was bound
to observe certain duties in respect of its acquisition and its
consumption, and certain other duties in respect of its exchange,
whether it consisted of goods or of money. The whole fabric of
mediæval economics was based on the foundation of private property;
and the elaborate and logical system of regulations to ensure justice
in economic life would have had no purpose or no use if the subject
matter of that justice were abolished.

It must not be understood that the mediæval writers treated economic
subjects in this order, or in any order at all. As we have already
said, economic matters are simply referred to in connection with
ethics, and were not detached and treated as making up a distinct
body of teaching. Ashley says: 'The reader will guard himself against
supposing that any mediæval writer ever detached these ideas from
the body of his teaching, and put them together as a modern text-book
writer might do; or that they were ever presented in this particular
order, and with the connecting argument definitely stated.'[1]

[Footnote 1: _Op. cit._, vol. i. pt. ii. p. 387.]




CHAPTER II

PROPERTY



SECTION 1.--THE RIGHT TO PROCURE AND DISPENSE PROPERTY


The teaching of the mediæval Church on the subject of property was
perfectly simple and clear. Aquinas devoted a section of the _Summa_
to it, and his opinion was accepted as final by all the later writers
of the period, who usually repeat his very words. However, before
coming to quote and explain Aquinas, it is necessary to deal with
a difficulty that has occurred to several students of Christian
economics, namely, that the teaching of the scholastics on the subject
of property was in some way opposed to the teaching of the early
Church and of Christ Himself. Thus Haney says: 'It is necessary to
keep the ideas of Christianity and the Church separate, for few
will deny that Christianity as a religion is quite distinct from the
various institutions or Churches which profess it....' And he goes
on to point out that, whereas Christianity recommended community of
property, the Church permitted private property and inequality.[1]
Strictly speaking, the reconciliation of the mediæval teaching with
that of the primitive Church might be said to be outside the scope of
the present essay. In our opinion, however, it is important to insist
upon the fundamental harmony of the teaching of the Church in the two
periods, in the first place, because it is impossible to understand
the later without an understanding of the earlier doctrine from which
it developed, and secondly, because of the widespread prevalence, even
among Catholics, of the erroneous idea that the scholastic teaching
was opposed to the ethical principle laid down by the Founder of
Christianity.

[Footnote 1: _Op. cit._, p. 73.]

Amongst the arguments which are advanced by socialists none is more
often met than the alleged socialist teaching and practice of the
early Christians. For instance, Cabet's _Voyage en Icarie_ contains
the following passage: 'Mais quand on s'enfonce sérieusement et
ardemment dans la question de savoir comment la société pourrait être
organisée en Démocratie, c'est-à-dire sur les bases de l'Égalité et de
la Fraternité, on arrive à reconnaître que cette organisation exige
et entraîne nécessairement la communauté de biens. Et nous hâtons
d'ajouter que cette communauté était également proclamée par
Jésus-Christ, par tous ses apôtres et ses disciples, par tous les
pères de l'Église et tous les Chrétiens des premiers siècles.' The
fact that St. Thomas Aquinas, the great exponent of Catholic teaching
in the Middle Ages, defends in unambiguous language the institution of
private property offers no difficulties to the socialist historian of
Christianity. He replies simply that St. Thomas wrote in an age when
the Church was the Church of the rich as well as of the poor; that
it had to modify its doctrines to ease the consciences of its rich
members; and that, ever since the conversion of Constantine, the
primitive Christian teaching on property had been progressively
corrupted by motives of expediency, until the time of the _Summa_,
when it had ceased to resemble in any way the teaching of the
Apostles.[1] We must therefore first of all demonstrate that there is
no such contradiction between the teaching of the Apostles and that of
the mediæval Church on the subject of private property, but that,
on the contrary, the necessity of private property was at all times
recognised and insisted on by the Catholic Church. As it is put in an
anonymous article in the _Dublin Review_: 'Among Christian nations we
discover at a very early period a strong tendency towards a general
and equitable distribution of wealth and property among the whole body
politic. Grounded on an ever-increasing historical evidence, we might
possibly affirm that the mediæval Church brought her whole weight to
bear incessantly upon this one singular and single point.'[2]

[Footnote 1: See, _e.g._, Nitti, _Catholic Socialism_, p. 71. 'Thus,
then, according to Nitti, the Christian Church has been guilty of the
meanest, most selfish, and most corrupt utilitarianism in her attitude
towards the question of wealth and property. She was communistic when
she had nothing. She blessed poverty in order to fill her own coffers.
And when the coffers were full she took rank among the owners of
land and houses, she became zealous in the interests of property, and
proclaimed that its origin was divine' ('The Fathers of the Church and
Socialism,' by Dr. Hogan, _Irish Ecclesiastical Record_, vol. xxv. p.
226).]

[Footnote 2: 'Christian Political Economy,' _Dublin Review_, N.S.,
vol. vi. p. 356]

The alleged communism of the first Christians is based on a few verses
of the Acts of the Apostles describing the condition of the Church of
Jerusalem. 'And they that believed were together and had all things
common; And sold their possessions and goods, and parted them to
all men, as every man had need.'[1] 'And the multitude of them that
believed were of one heart and of one soul: neither said any of them
that aught of the things which he possessed was his own; but they had
all things common. Neither was there any amongst them that lacked: for
as many as were possessors of land or houses sold them, and brought
the price of the things that were sold, And laid them down at the
apostles' feet: and distribution was made unto every man according as
he had need.'[2]

[Footnote 1: ii. 44-45.]

[Footnote 2: iv. 32, 34, 35.]

It is by no means clear whether the state of things here depicted
really amounted to communism in the strict sense. Several of the most
enlightened students of the Bible have come to the conclusion that the
verses quoted simply express in a striking way the great liberality
and benevolence which prevailed among the Christian fraternity at
Jerusalem. This view was strongly asserted by Mosheim,[1] and is held
by Dr. Carlyle. 'A more careful examination of the passages in the
Acts,' says the latter,[2] 'show clearly enough that this was no
systematic division of property, but that the charitable instinct
of the infant Church was so great that those who were in want were
completely supported by those who were more prosperous.... Still there
was no systematic communism, no theory of the necessity of it.' Colour
is lent to this interpretation by the fact that similar words
and phrases were used to emphasise the prevalence of charity and
benevolence in later communities of Christians, amongst whom, as
we know from other sources, the right of private property was fully
admitted. Thus Tertullian wrote:[3] 'One in mind and soul, we do not
hesitate to share our earthly goods with one another. All things are
common among us but our wives.' This passage, if it were taken alone,
would be quite as strong and unambiguous as those from the Acts; but
fortunately, a few lines higher up, Tertullian had described how the
Church was supported, wherein he showed most clearly that private
property was still recognised and practised: 'Though we have our
treasure-chest, it is not made up of purchase-money, as of a religion
that has its price. On the monthly collection day, if he likes, each
puts in a small donation; but only if he has pleasure, and only if
he be able; all is voluntary.' This point is well put by Bergier:[4]
'Towards the end of the first century St. Barnabas; in the second,
St. Justin and St. Lucian; in the third, St. Clement of Alexandria,
Tertullian, Origen, St. Cyprian; in the fourth, Arnobius and
Lactantius, say that among the Christians all goods are common; there
was then certainly no question of a communism of goods taken in the
strict sense.'

[Footnote 1: _Dissert. ad Hist. Eccles._, vol. ii. p. 1.]

[Footnote 2: 'The Political Theory of the Ante-Nicene Fathers,'
_Economic Review_, vol. ix.]

[Footnote 3: _Apol._ 39.]

[Footnote 4: _Dictionnaire de Théologie_, Paris, 1829, tit.
'Communauté.']

It is therefore doubtful if the Church at Jerusalem, as described in
the Acts, practised communism at all, as apart from great liberality
and benevolence. Assuming, however, that the Acts should be
interpreted in their strict literal sense, let us see to what the
so-called communism amounted.

In the first place, it is plain from Acts iv. 32 that the communism
was one of use, not of ownership. It was not until the individual
owner had sold his goods and placed the proceeds in the common fund
that any question of communism arose. 'Whiles it remained was it not
thine own,' said St. Peter, rebuking Ananias, 'and after it was sold
was it not in thine own power?'[1] This distinction is particularly
important in view of the fact that it is precisely that insisted on by
St. Thomas Aquinas. There is no reason to suppose that the community
of use practised at Jerusalem was in any way different from that
advocated by Aquinas--namely, 'the possession by a man of external
things, not as his own, but in common, so that, to wit, he is ready to
communicate them to others in their need.'

[Footnote 1: Roscher, _Political Economy_ (Eng. trans.), vol. i. p.
246; _Catholic Encyclopædia_, tit. 'Communism.']

In the next place, we must observe that the communism described in the
Acts was purely voluntary. This is quite obvious from the relation in
the fifth chapter of the incident of Ananias and Sapphira. There is
no indication that the abandonment of one's possessory rights was
preached by the Apostles. Indeed, it would be difficult to understand
why they should have done so, when Christ Himself had remained
silent on the subject. Far from advocating communism, the Founder
of Christianity had urged the practice of many virtues for which
the possession of private property was essential. 'What Christ
recommended,' says Sudre,[1] 'was voluntary abnegation or almsgiving.
But the giving of goods without any hope of compensation, the
spontaneous deprivation of oneself, could not exist except under a
system of private property ... they were one of the ways of exercising
such rights.' Moreover, as the same author points out, private
property was fully recognised under the Jewish dispensation, and
Christ would therefore have made use of explicit language if he had
intended to alter the old law in this fundamental respect. 'Think not
that I am come to destroy the law or the prophets: I am not come
to destroy, but to fulfil.'[2] At the time of Christ's preaching, a
Jewish sect, the Essenes, were endeavouring to put into practice the
ideals of communism, but there is not a word in the Gospels to suggest
that He ever held them up as an example to His followers. 'Communism
was never preached by Christ, although it was practised under His
very eyes by the Essenes. This absolute silence is equivalent to an
implicit condemnation.'[3]

[Footnote 1: _Histoire du Communisme_, p. 39.]

[Footnote 2: Matt. v. 17.]

[Footnote 3: Sudre, _op. cit._, p. 44. On the Essenes see 'Historic
Phases of Socialism,' by Dr. Hogan, _Irish Ecclesiastical Record_,
vol. xxv. p. 334. Even Huet discounts the importance of this instance
of communism, _Le Règne social du Christianisme_, p. 38.]

Nor was communism preached as part of Christ's doctrine as taught
by the Apostles. In Paul's epistles there is no direction to the
congregations addressed that they should abandon their private
property; on the contrary, the continued existence of such rights is
expressly recognised and approved in his appeals for funds for the
Church at Jerusalem.[1] Can it be that, as Roscher says,[2] the
experiment in communism had produced a chronic state of poverty in the
Church at Jerusalem? Certain it is the experiment was never repeated
in any of the other apostolic congregations. The communism at
Jerusalem, if it ever existed at all, not only failed to spread to
other Churches, but failed to continue at Jerusalem itself. It is
universally admitted by competent students of the question that the
phenomenon was but temporary and transitory.[3]

[Footnote 1: _e.g._ Rom. xv. 26, 1 Cor. xvi. 1.]

[Footnote 2: _Political Economy_, vol. i. p. 246.]

[Footnote 3: Sudre, _op. cit._; Salvador, _Jésus-Christ et sa
Doctrine_, vol. ii. p. 221. See More's _Utopia_.]

The utterances of the Fathers of the Church on property are scattered
and disconnected. Nevertheless, there is sufficient cohesion in them
to enable us to form an opinion of their teaching on the subject. It
has, as we have said, frequently been asserted that they favoured
a system of communism, and disapproved of private ownership. The
supporters of this view base their arguments on a number of isolated
texts, taken out of their context, and not interpreted with any regard
to the circumstances in which they were written. 'The mistake,' as
Devas says,[1] 'of representing the early Christian Fathers of the
Church as rank socialists is frequently made by those who are friendly
to modern socialism; the reason for it is that either they have taken
passages of orthodox writers apart from their context, and without
due regard to the circumstances in which they were written, and the
meaning they would have conveyed to their hearers; or else, by a
grosser blunder, the perversions of heretics are set forth as the
doctrine of the Church, and a sad case arises of mistaken identity.' A
careful study of the patristic texts bearing on the subject leads one
to the conclusion that Mr. Devas's view is without doubt the correct
one.[2]

[Footnote 1: _Dublin Review_, Jan. 1898.]

[Footnote 2: Dr. Hogan, in an article entitled 'The Fathers of the
Church and Socialism,' in the _Irish Ecclesiastical Record_, vol.
xxv. p. 226, has examined all the texts relative to property in the
writings of Tertullian, St. Justin Martyn, St. Clement of Rome, St.
Clement of Alexandria, St. Basil, St. Ambrose, St. John Chrysostom,
St. Augustine, and St. Gregory the Great; and the utterances of St.
Basil, St. Ambrose, and St. Jerome are similarly examined in 'The
Alleged Socialism of the Church Fathers,' by Dr. John A. Ryan.
The patristic texts are also fully examined by Abbé Calippe in 'Le
Caractère sociale de la Propriété' in _La Semaine Sociale de France_,
1909, p. 111. The conclusion come to after thorough examinations such
as these is always the same. For a good analysis of the patristic
texts from the communistic standpoint, see Conrad Noel, _Socialism in
Church History_.]

The passages from the writings of the Fathers which are cited by
socialists who are anxious to support the proposition that socialism
formed part of the early Christian teaching may be roughly divided
into four groups: first, passages where the abandonment of earthly
possessions is held up as a work of more than ordinary devotion--in
other words, a counsel of perfection; second, those where the practice
of almsgiving is recommended in the rhetorical and persuasive language
of the missioner--where the faithful are exhorted to exercise their
charity to such a degree that it may be said that the rich and the
poor have all things in common; third, passages directed against
avarice and the wrongful acquisition or abuse of riches; and fourth,
passages where the distinction between the natural and positive law on
the matter is explained.

The following passage from Cyprian is a good example of an utterance
which was clearly meant as a counsel of perfection. Isolated sentences
from this passage have frequently been quoted to prove that Cyprian
was an advocate of communism; but there can be no doubt from the
passage as a whole, that all that he was aiming at was to cultivate in
his followers a high detachment from earthly wealth, and that, in so
far as complete abandonment of one's property is recommended, it is
simply indicated as a work of quite unusual devotion. It is noteworthy
that this passage occurs in a treatise on almsgiving, a practice which
presupposes a system of individual ownership:[1] 'Let us consider what
the congregation of believers did in the time of the Apostles, when
at the first beginnings the mind flourished with greater virtues, when
the faith of believers burned with a warmth of faith yet new. Thus
they sold houses and farms, and gladly and liberally presented to
the Apostles the proceeds to be dispersed to the poor; selling and
alienating their earthly estate, they transferred their lands thither
where they might receive the fruits of an eternal possession, and
there prepared houses where they might begin an eternal habitation.
Such, then, was the abundance in labours as was the agreement in love,
as we read in the Acts--"Neither said any of them that aught of
the things which he possessed was his own; but they had all things
common." This is truly to become son of God by spiritual birth; this
is to imitate by the heavenly law the equity of God the Father. For
whatever is of God is common in our use; nor is any one excluded from
His benefits and His gifts so as to prevent the whole human race from
enjoying equally the divine goodness and liberality. Thus the day
equally enlightens, the sun gives radiance, the rain moistens, the
wind blows, and the sleep is one to those who sleep, and the splendour
of Stars and of the Moon is common. In which examples of equality he
who as a possessor in the earth shares his returns and his fruits
with the fraternity, while he is common and just in his gratuitous
bounties, is an imitator of God the Father.'

[Footnote 1: _De Opere et Eleemosynis_, 25.]

There is a much-quoted passage of St. John Chrysostom which is
capable of the same interpretation. In his commentary on the
alleged communistic existence of the Apostles at Jerusalem the Saint
emphasises the fact that their communism was voluntary: 'That this was
in consequence not merely of the miraculous signs, but of their
own purpose, is manifest from the case of Ananias and Sapphira.' He
further insists on the fact that the members of this community were
animated by unusual fervour: 'From the exceeding ardour of the
givers none was in want.' Further down, in the same homily, St. John
Chrysostom urges the adoption of a communistic system of housekeeping,
but purely on the grounds of domestic economy and saving of labour.
There is not a word to suggest that a communistic system was morally
preferable to a proprietary one.[1]

[Footnote 1: _Hom, on Acts xi_. That voluntary poverty was regarded
as a counsel of perfection by Aquinas is abundantly clear from many
passages in his works, _e.g. Summa_, I. ii. 108, 4; II. ii. 185, 6;
II. ii. 186, 3; _Summa cont. Gent_., iii. 133. On this, as on every
other point, the teaching of Aquinas is in line with that of the
Fathers.]

The second class of patristic texts which are relied on by socialists
are, as we have said, those 'where the practice of almsgiving
is recommended in the rhetorical and persuasive language of the
missioner--where the faithful are exhorted to exercise their charity
to such a degree that it may be said that the rich and poor have all
things in common.' Such passages are very frequent throughout the
writings of the Fathers, but we may give as examples two, which are
most frequently relied on by socialists. One of these is from St.
Ambrose:[1] 'Mercy is a part of justice; and if you wish to give to
the poor, this mercy is justice. "He hath dispersed, he hath given
to the poor; his righteousness endureth for ever."[2] It is therefore
unjust that one should not be helped by his neighbour; when God hath
wished the possession of the earth to be common to all men, and its
fruits to minister to all; but avarice established possessory rights.
It is therefore just that if you lay claim to anything as your private
property, which is really conferred in common to the whole human race,
that you should dispense something to the poor, so that you may not
deny nourishment to those who have the right to share with you.' The
following passage from Gregory the Great[3] is another example of
this kind of passage: 'Those who rather desire what is another's, nor
bestow that is their own, are to be admonished to consider carefully
that the earth out of which they are taken is common to all men, and
therefore brings forth nourishment for all in common. Vainly, then,
do they suppose themselves innocent who claim to their own private
use the common gift of God; those who in not imparting what they have
received walk in the midst of the slaughter of their neighbours; since
they almost daily slay so many persons as there are dying poor whose
subsidies they keep close in their own possession.'

[Footnote 1: _Comm. on Ps. cxviii._, viii. 22.]

[Footnote 2: Ps. cxii. 9.]

[Footnote 3: _Lib. Reg. Past._, iii. 21.]

The third class of passages to which reference must be made is
composed of the numerous attacks which the Fathers levelled against
the abuse or wrongful acquisition of riches. These passages do not
indicate that the Fathers favoured a system of communism, but point
in precisely the contrary direction. If property were an evil thing
in itself, they would not have wasted so much time in emphasising the
evil uses to which it was sometimes put. The insistence on the abuses
of an institution is an implicit admission that it has its uses.
Thus Clement of Alexandria devotes a whole treatise to answering the
question 'Who is the rich man who can be saved?' in which it appears
quite plainly that it is the possible abuse of wealth, and the
possible too great attachment to worldly goods, that are the principal
dangers in the way of a rich man's salvation. The suggestion that
in order to be saved a man must abandon all his property is strongly
controverted. The following passage from St. Gregory Nazianzen[1]
breathes the same spirit: 'One of us has oppressed the poor, and
wrested from him his portion of land, and wrongly encroached upon his
landmarks by fraud or violence, and joined house to house, and field
to field, to rob his neighbour of something, and has been eager to
have no neighbour, so as to dwell alone on the earth. Another has
defiled the land with usury and interest, both gathering where he has
not sowed and reaping where he has not strewn, farming not the land
but the necessity of the needy.... Another has had no pity on the
widow and orphans, and not imparted his bread and meagre nourishment
to the needy; ... a man perhaps of much property unexpectedly gained,
for this is the most unjust of all, who finds his very barns too
narrow for him, fining some and emptying others to build greater ones
for future crops.' Similarly Clement of Rome advocates _frugality_
in the enjoyment of wealth;[2] and Salvian has a long passage on the
dangers of the abuse of riches.[3]

[Footnote 1: _Orat_., xvi. 18.]

[Footnote 2: _The Instructor_, iii. 7.]

[Footnote 3: _Ad Eccles._, i. 7.]

The fourth group of passages is that in which the distinction between
the natural and positive law on the matter is explained. It is here
that the greatest confusion has been created by socialist writers, who
conclude, because they read in the works of some of the Fathers that
private property did not exist by natural law, that it was therefore
condemned by them as an illegitimate institution. Nothing could be
more erroneous. All that the Fathers meant in these passages was that
in the state of nature--the idealised Golden Age of the pagans, or the
Garden of Eden of the Christians--there was no individual ownership of
goods. The very moment, however, that man fell from that ideal state,
communism became impossible, simply on account of the change that had
taken place in man's own nature. To this extent it is true to say
that the Fathers regarded property with disapproval; it was one of the
institutions rendered necessary by the fall of man. Of course it would
have been preferable that man should not have fallen from his natural
innocence, in which case he could have lived a life of communism;
but, as he had fallen, and communism had from that moment become
impossible, property must be respected as the one institution which
could put a curb on his avarice, and preserve a society of fallen men
from chaos and general rapine.

That this is the correct interpretation of the patristic utterances
regarding property and natural law appears from the following
passage of _The Divine Institution_ of Lactantius--'the most explicit
statement bearing on the Christian idea of property in the first four
centuries':[1] '"They preferred to live content with a simple mode
of life," as Cicero relates in his poems; and this is peculiar to our
religion. "It was not even allowed to mark out or to divide the plain
with a boundary: men sought all things in common,"[2] since God had
given the earth in common to all, that they might pass their life in
common, not that mad and raging avarice might claim all things for
itself, and that riches produced for all might not be wanting to any.
And this saying of the poet ought so to be taken, not as suggesting
the idea that individuals at that time had no private property, but it
must be regarded as a poetical figure, that we may understand that
men were so liberal, that they did not shut up the fruits of the earth
produced for them, nor did they in solitude brood over the things
stored up, but admitted the poor to share the fruits of their labour:

  "Now streams of milk, now streams of nectar flowed."[3]

And no wonder, since the storehouses of the good literally lay open
to all. Nor did avarice intercept the divine bounty, and thus cause
hunger and thirst in common; but all alike had abundance, since they
who had possessions gave liberally and bountifully to those who had
not. But after Saturnus had been banished from heaven, and had arrived
in Latium ... not only did the people who had a superfluity fail
to bestow a share upon others, but they even seized the property of
others, drawing everything to their private gain; and the things which
formerly even individuals laboured to obtain for the common use of all
were now conveyed to the powers of a few. For that they might subdue
others by slavery, they began to withdraw and collect together the
necessaries of life, and to keep them firmly shut up, that they might
make the bounties of heaven their own; not on account of kindness
(_humanitas_), a feeling which had no existence for them, but that
they might sweep together all the instruments of lust and avarice.'[4]

[Footnote 1: 'The Biblical and Early Christian Idea of Property,' by
Dr. V. Bartlett, in _Property, its Duties and Rights_ (London, 1913).]

[Footnote 2: _Georg._, i. 126.]

[Footnote 3: Ovid, _Met._, I. iii.]

[Footnote 4: Lactantius, _Div. Inst._, v. 5-6.]

It appears from the above passage that Lactantius regarded the era in
which a system of communism existed as long since vanished, if indeed
it ever had existed. The same idea emerges from the writings of St.
Augustine, who drew a distinction between divine and human right. 'By
what right does every man possess what he possesses?' he asks.[1] 'Is
it not by human right? For by divine right "the earth is the Lord's,
and the fullness thereof." The poor and the rich God made of one clay;
the same earth supports alike the poor and the rich. By human right,
however, one says, This estate is mine, this servant is mine, this
house is mine. By human right, therefore, is by right of the Emperor.
Why so? Because God has distributed to mankind these very human rights
through the emperors and kings of the world.'

[Footnote 1: _Tract in Joh. Ev._, vi. 25.]

The socialist commentators of St. Augustine have strained this, and
similar passages, to mean that because property rests on human, and
not on divine, right, therefore it should not exist at all. It is, of
course true that what human right has created human right can repeal;
and it is therefore quite fair to argue that all the citizens of a
community might agree to live a life of communism. That is simply an
argument to prove that there is nothing immoral in communism, and does
not prove in the very slightest degree that there is anything immoral
in property. On the contrary, so long as 'the emperors and kings of
the world' ordain that private property shall continue, it would be,
according to St. Augustine, immoral for any individual to maintain
that such ordinances were wrongful.

The correct meaning of the patristic distinction between natural and
positive law with regard to property is excellently summarised in Dr.
Carlyle's essay on _Property in Mediæval Theology_:[1] 'What do the
expressions of the Fathers mean? At first sight they might seem to be
an assertion of communism, or denunciation of private property as a
thing which is sinful or unlawful. But this is not what the Fathers
mean. There can be little doubt that we find the sources of these
words in such a phrase as that of Cicero--"Sunt autem privata nulla
natura"[2]--and in the Stoic tradition which is represented in one of
Seneca's letters, when he describes the primitive life in which men
lived together in peace and happiness, when there was no system of
coercive government and no private property, and says that man passed
out of this primitive condition as their first innocence disappeared,
as they became avaricious and dissatisfied with the common enjoyment
of the good things of the world, and desired to hold them as their
private possession.[3] Here we have the quasi-philosophical theory,
from which the patristic conception is derived. When men were
innocent there was no need for private property, or the other great
conventional institutions of society, but as this innocence passed
away, they found themselves compelled to organise society and to
devise institutions which should regulate the ownership and use of
the good things which men had once held in common. The institution of
property thus represents the fall of man from his primitive innocence,
through greed and avarice, which refused to recognise the common
ownership of things, and also the method by which the blind greed of
human nature might be controlled and regulated. It is this ambiguous
origin of the institution which explains how the Fathers could hold
that private property was not natural, that it grew out of men's
vicious and sinful desires, and at the same time that it was a
legitimate institution.'

Janet takes the same view of the patristic utterances on this
subject:[4] 'What do the Fathers say? It is that in Jesus Christ there
is no mine and thine. Nothing is more true, without doubt; in the
divine order, in the order of absolute charity, where men are
wholly wrapt up in God, distinction and inequality of goods would be
impossible. But the Fathers saw clearly that such a state of things
was not realisable here below. What did they do? They established
property on human law, positive law, imperial law. Communism is
either a Utopia or a barbarism; a Utopia if one imagine it founded on
universal devotion; a barbarism if one imposes it by force.'[5]

[Footnote 1: _Property, Its Duties and Rights_ (London, 1913).]

[Footnote 2: _De Off._, i. 7.]

[Footnote 3: Seneca, _Ep._, xiv. 2.]

[Footnote 4: _Histoire de la Science politique_, vol. i. p. 330.]

[Footnote 5: See also Jarrett, _Mediæval Socialism_.]

It must not be concluded that the evidence of the approbation by the
Fathers of private property is purely negative or solely derived from
the interpretation of possibly ambiguous texts. On the contrary,
the lawfulness of property is emphatically asserted on more than one
occasion. 'To possess riches,' says Hilary of Poictiers,[1] 'is not
wrongful, but rather the manner in which possession is used.... It
is a crime to possess wrongfully rather than simply to possess.' 'Who
does not understand,' asks St. Augustine,[2] 'that it is not sinful to
possess riches, but to love and place hope in them, and to prefer them
to truth or justice?' Again, 'Why do you reproach us by saying that
men renewed in baptism ought no longer to beget children or to
possess fields and houses and money? Paul allows it.'[3] According to
Ambrose,[4] 'Riches themselves are not wrongful. Indeed, "redemptio
animae* viri divitiae* ejus," because he who gives to the poor saves
his soul. There is therefore a place for goodness in these material
riches. You are as steersmen in a great sea. He who steers his ship
well, quickly crosses the waves, and comes to port; but he who does
not know how to control his ship is sunk by his own weight. Wherefore
it is written, "Possessio divitum civitas firmissima."' A Council in
A.D. 415 condemned the proposition held by Pelagius that 'the rich
cannot be saved unless they renounced their goods.'[5]

[Footnote 1: _Comm. on Matt. xix._ 9.]

[Footnote 2: _Contra Ad._, xx. 2.]

[Footnote 3: _De Mor. Eccl. Cath._, i. 35.]

[Footnote 4: _Epist._, lxiii. 92.]

[Footnote 5: _Revue Archéologique_, 1880, p. 321.]

The more one studies the Fathers the more one becomes convinced that
property was regarded by them as one of the normal and legitimate
institutions of human society. Benigni's conclusion, as the result of
his exceptionally thorough researches, is that according to the early
Fathers, 'property is lawful and ought scrupulously to be respected.
But property is subject to the high duties of human fellowship which
sprang from the equality and brotherhood of man. Collectivism is
absurd and immoral.'[1] Janet arrived at the same conclusion: 'In
spite of the words of the Fathers, in spite of the advice given by
Christ to the rich man to sell all his goods and give to the poor, in
spite of the communism of the Apostles, can one say that Christianity
condemned property? Certainly not. Christianity considered it a
counsel of perfection for a man to deprive himself of his goods; it
did not abrogate the right of anybody.'[2] The same conclusion is
reached by the Abbé Calippe in an excellent article published in _La
Semaine Sociale de France_, 1909. 'The right of property and of the
property owner are assumed.'[3] 'It is only prejudiced or superficial
minds which could make the writers of the fourth century the
precursors of modern communists or collectivists.'[4]

[Footnote 1: _L'Economia Sociale Christiana avanti Costantino_ (Genoa,
1897).]

[Footnote 2: _Histoire de la Science politique_, vol. i. p. 319.]

[Footnote 3: P. 114.]

[Footnote 4: P. 121.]

When we turn to St. Thomas Aquinas, we find that his teaching on the
subject of property is not at all out of harmony with that of the
earlier Fathers of the Church, but, on the contrary, summarises and
consolidates it. 'It remained to elaborate, to constitute a definite
theory of the right of property. It sufficed to harmonise, to
collaborate, and to relate one to the other these elements furnished
by the Christian doctors of the first four or five centuries; and this
was precisely the work of the great theologians of the Middle Ages,
especially of St. Thomas Aquinas.... In establishing his thesis St.
Thomas did not borrow from the Roman jurisconsults through the medium
of St. Isidore more than their vocabulary, their formulas, their
juridical distinctions; he also borrowed from Aristotle the arguments
upon which the philosopher based his right of property. But the ground
of his doctrine is undoubtedly of Christian origin. There is, between
the Fathers and him, a perfect continuity.'[1] 'Community of goods,'
he writes, 'is ascribed to the natural law, not that the natural
law dictates that all things should be possessed in common, and that
nothing should be possessed as one's own; but because the division of
possession is not according to the natural law, but rather arose from
human agreement, which belongs to positive law. Hence the ownership
of possessions is not contrary to the natural law, but an addition
thereto devised by human reason.' This is simply another way of
stating St. Augustine's distinction between natural and positive law.
If it speaks with more respect of positive law than St. Augustine
had done, it is because Aquinas was influenced by the Aristotelian
conception of the State being itself a natural institution, owing to
man being a social animal.[2]

[Footnote 1: Abbé Calippe, _op. cit._, 1909, p. 124.]

[Footnote 2: See Carlyle, _Property in Mediæval Theology_. Community
of goods is said to be according to natural law in the canon law,
but certain titles of acquiring private property are also said to be
natural, so that the passage does not help the discussion very much
(_Corp, Jur. Can._, Dec. 1. Dist. i. c. 7.)]

The explanation which St. Thomas gives of the necessity for property
also shows how clearly he agreed with the Fathers' teaching on natural
communism: 'Two things are competent to man in respect of external
things. One is the power to procure and dispense them, and in this
regard it is lawful for a man to possess property. Moreover, this is
necessary to human life for three reasons. First, because every man is
more careful to procure what is for himself alone than that which is
common to many or to all: since each one would shirk the labour, and
would leave to another that which concerns the community, as happens
when there is a great number of servants. Secondly, because human
affairs are conducted in more orderly fashion if each man is charged
with taking care of some particular thing himself, whereas there
would be confusion if everybody had to look after any one thing
indeterminately. Thirdly, because a more peaceful state is ensured to
man if each one is contented with his own. Hence it is to be observed
that quarrels more frequently occur when there is no division of the
things possessed.[1] It is quite clear from this passage that Aquinas
regarded property as something essential to the existence of society
in the natural condition of human nature--that is to say, the
condition that it had acquired at the fall. It is precisely the greed
and avarice of fallen man that renders property an indispensable
institution.

[Footnote 1: II. ii. 66, 2.]

There was another sense in which property was said to be according
to human law, in distinction to the natural law, namely, in the sense
that, whereas the general principle that men should own things might
be said to be natural, the particular proprietary rights of each
individual were determined by positive law. In other words, the
_fundamentum_ of property rights was natural, whereas the _titulus_
of particular property rights was according to positive law. This
distinction is stated clearly by Aquinas:[1] 'The natural right or
just is that which by its very nature is adjusted to or commensurate
with another person. Now this may happen in two ways; first, according
as it is considered absolutely; thus the male by its very nature is
commensurate with the female to beget offspring by her, and a parent
is commensurate with the offspring to nourish it. Secondly, a thing
is naturally commensurate with another person, not according as it
is considered absolutely, but according to something resultant from
it--for instance, the possession of property. For if a particular
piece of land be considered absolutely, it contains no reason why it
should belong to one man more than to another, but if it be considered
in respect of its adaptability to cultivation, and the unmolested use
of the land, it has a certain commensuration to be the property of
one and not of another man, as the Philosopher shows.' Cajetan's
commentary on this article clearly emphasises the distinction between
_fundamentum_ and _titulus_: 'In the ownership of goods two things are
to be discussed. The first is why one thing should belong to one man
and another thing to another. The second is why this particular field
should belong to this man, that field to that man. With regard to
the former inquiry, it may be said that the ownership of things is
according to the law of nations, but with regard to the second, it may
be said to result from the positive law, because in former times one
thing was appropriated by one man and another thing by another.' It
must not be supposed, however, from what we have just said, that there
are no natural titles to property. Labour, for instance, is a title
flowing from the natural law, as also is occupancy, and in certain
circumstances, prescription. All that is meant by the distinction
between _fundamentum_ and _titulus_ is that, whereas it can be clearly
demonstrated by natural law that the goods of the earth, which are
given by God for the benefit of the whole of mankind, cannot be made
use of to their full advantage unless they are made the subject of
private ownership, particular goods cannot be demonstrated to be
the lawful property of this or that person unless some human act
has intervened. This human act need not necessarily be an act of
agreement; it may equally be an act of some other kind--for instance,
a decree of the law-giver, or the exercise of labour upon one's own
goods. In the latter case, the additional value of the goods becomes
the lawful property of the person who has exerted the labour. Aquinas
therefore pronounced unmistakably in favour of the legitimacy of
private property, and in doing so was in full agreement with the
Fathers of the Church. He was followed without hesitation by all the
later theologians, and it is abundantly evident from their writings
that the right of private property was the keystone of their whole
economic system.[2]

[Footnote 1: II. ii. 57, 3.]

[Footnote 2: A community of goods, more or less complete, and a denial
of the rights of private property was part of the teaching of many
sects which were condemned as heretical--for instance, the Albigenses,
the Vaudois, the Bégards, the Apostoli, and the Fratricelli. (See
Brants, _Op. cit._, Appendix II.)]

Communism therefore was no part of the scholastic teaching, but it
must not be concluded from this that the mediævals approved of the
unregulated individualism which modern opinion allows to the owners of
property. The very strength of the right to own property entailed as a
consequence the duty of making good use of it; and a clear distinction
was drawn between the power 'of procuring and dispensing' property
and the power of using it. We have dealt with the former power in the
present section, and we shall pass to the consideration of the latter
in the next. In a later chapter we shall proceed to discuss the duties
which attached to the owners of property in regard to its exchange.



SECTION 2.--DUTIES REGARDING THE ACQUISITION AND USE OF PROPERTY


We referred at the end of the last section to the very important
distinction which Aquinas draws between the power of procuring and
dispensing[1] exterior things and the power of using them. 'The second
thing that is competent to man with regard to external things is their
use. In this respect man ought to possess external things, not as his
own, but as common, so that, to wit, he is ready to communicate them
to others in their need.'[2] These words wherein St. Thomas lays
down the doctrine of community of user of property were considered
as authoritative by all later writers on the subject, and were
universally quoted with approval by them,[3] and may therefore be
taken as expressing the generally held view of the Middle Ages. They
require careful explanation in order that their meaning be accurately
understood.[4] Cajetan's gloss on this section of the _Summa_ enables
us to understand its significance in a broad sense, but fuller
information must be derived from a study of other parts of the _Summa_
itself. 'Note,' says Cajetan, 'that the words that community of goods
in respect of use arises from the law of nature may be understood
in two ways, one positively, the other negatively. And if they are
understood in their positive sense they mean that the law of nature
dictates that all things are common to all men; if in their negative
sense, that the law of nature did not establish private ownership of
possessions. And in either sense the proposition is true if correctly
understood. In the first place, if they are taken in their positive
sense, a man who is in a position of extreme necessity may take
whatever he can find to succour himself or another in the same
condition, nor is he bound in such a case to restitution, because by
natural law he has but made use of his own. And in the negative sense
they are equally true, because the law of nature did not institute
one thing the property of one person, and another thing of another
person.' The principle of community of user flows logically from the
very nature of property itself as defined by Aquinas, who taught that
the supreme justification of private property was that it was the
most advantageous method of securing for the community the benefits of
material riches. While the owner of property has therefore an absolute
right to the goods he possesses, he must at the same time remember
that this right is established primarily on his power to benefit
his neighbour by his proper use of it. The best evidence of the
correctness of this statement is the fact that the scholastics
admitted that, if the owner of property was withholding it from the
community, or from any member of the community who had a real need of
it, he could be forced to apply it to its proper end. If the community
could pay for it, it was bound to do so; but if the necessitous person
could not pay for it, he was none the less entitled to take it.
The former of these cases was illustrated by the principle of the
_dominium eminens_ of the State; and the latter by the principle that
the giving of alms to a person in real need was a duty not of charity,
but of justice.[5] We shall see in a moment that the most usual
application of the principle enunciated by Aquinas was in the case
of one person's extreme necessity which required almsgiving from
another's superfluity, but, even short of such cases, there were rules
of conduct in respect of the user of property on all occasions which
were of extreme importance in the economic life of the time.

[Footnote 1: Goyau insists on the importance of the words 'procure'
and 'dispense.' 'Dont le premier éveille l'idée d'une constante
sollicitude, et dont le second évoque l'image d'une générosité
sympathetique' (_Autaur du Catholicisme Sociale_, vol. ii. p. 93).]

[Footnote 2: II. ii. 66, 2. In another part of the _Summa_ the same
distinction is clearly laid down. 'Bona temporalia quae* homini
divinitus conferuntur, ejus quidem sunt quantum ad proprietatem; sed
quantum ad usum non solum desent esse ejus, sed aliorum qui en eis
sustentari possunt en eo quod ei superfluit,' II. ii. 32, 6, ad 2.]

[Footnote 3: Janssen, _op. cit._, vol. ii. p. 91.]

[Footnote 4: The Abbé Calippe summarises St. Thomas's doctrine as
follows: 'Le droit de propriété est un droit réel; mais ce n'est pas
un droit illimité, les propriétaires ont des devoirs; ils ont des
devoirs parce que Dieu qui a créé la terre ne l'a pas créée pour eux
seuls, mais pour tous' (_Semaine Sociale de France_, 1909, p. 123).
According to Antoninus of Florence, goods could be evilly acquired,
evilly distributed, or evilly consumed (_Irish Theological Quarterly_,
vol. vii. p. 146).]

[Footnote 5: On the application of this principle by the popes in the
thirteenth and fifteenth centuries in the case of their own estates,
see Ardant, _Papes et Paysans_, a work which must be read with a
certain degree of caution (Nitti, _Catholic Socialism_, p. 290).]

These principles for the guidance of the owner of property are
not collected under any single heading in the _Summa_, but must be
gathered from the various sections dealing with man's duty to his
fellow-men and to himself. One leading virtue which was inculcated
with great emphasis by Aquinas was that of temperance. 'All
pleasurable things which come within the use of man,' we read in the
section dealing with this subject, 'are ordered to some necessity of
this life as an end. And therefore temperance accepts the necessity
of this life as a rule or measure of the things one uses, so that,
to wit, they should be used according as the necessity of this life
requires.'[1] St. Thomas explains, moreover, that 'necessary' must be
taken in the broad sense of suitable to one's condition of life,
and not merely necessary to maintain existence.[2] The principles of
temperance did not apply in any special way to the user of property
more than to the enjoyment of any other good;[3] but they are relevant
as laying down the broad test of right and wrong in the user of one's
goods.

[Footnote 1: II. ii. 141, 5.]

[Footnote 2: _Ibid._, ad. 2. As Buridan puts it (_Eth._, iv. 4), 'If
any man has more than is necessary for his own requirements, and
does not give away anything to the poor, and to his relations and
neighbours, he is acting against right reason.']

[Footnote 1: 'Rationalis creaturae* vera perfectio est unamquamque
rem tanti habere quanti habenda est, sicut pluris est anima quam esca;
fides et aequitas* quam pecunia' (Gerson, _De. Cont._).]

More particularly relevant to the subject before us is the teaching of
Aquinas on liberality, which is a virtue directly connected with the
user of property. Aquinas defines liberality as 'a virtue by which
men use well all those exterior things which are given to us for
sustenance.'[1] The limitations within which liberality should be
practised are stated in the same article: 'As St. Basil and St.
Ambrose say, God has given to many a superabundance of riches, in
order that they might gain merit by their dispensing them well. Few
things, however, suffice for one man; and therefore the liberal man
will advantageously expend more on others than on himself. In the
spiritual sphere a man must always care for himself before his
neighbours; and also in temporal things liberality does not demand
that a man should think of others to the exclusion of himself and
those dependent on him.'[2]

[Footnote 1: II. ii. 117, 1.]

[Footnote 2: _Ibid._, ad. 1.]

'It is not necessary for liberality that one should give away so much
of one's riches that not enough remains to sustain himself and to
enable him to perform works of virtue. This complete giving away
without reserve belongs to the state of the perfection of spiritual
life, of which we shall treat lower down; but it must be known that to
give one's goods liberally is an act of virtue which itself produces
happiness.'[1] The author proceeds to discuss whether making use of
money might be an act of liberality, and replies that 'as money is by
its very nature to be classed among useful goods, because all exterior
things are destined for the use of man, therefore the proper act of
liberality is the good use of money and other riches.'[2] Moreover,
'it belongs to a virtuous man not simply to use well the goods which
form the matter of his actions, but also to prepare the means and the
occasions to use them well; thus the brave soldier sharpens his blade
and keeps it in the scabbard, as well as exercising it on the enemy;
in like manner, the liberal man should prepare and reserve his riches
for a suitable use.'[3] It appears from this that to save part of
one's annual income to provide against emergencies in the future,
either by means of insurance or by investing in productive
enterprises, is an act of liberality.

[Footnote 1: II. ii. 117, ad. 2.]

[Footnote 2: _Ibid._, ad. 3.]

[Footnote 3: _Ibid._, ad. 2. 'Potest concludi quod accipere et
custodire modificata sunt acta liberalitatis.... Major per hoc
probatur quod dantem multotiens et consumentem, nihil autem
accipientem et custodientem cito derelinqueret substantia temporalis;
et ita perirent omnis ejus actus quia non habent amplius quid dare
et consumere.... Hic autem acceptio et custodia sic modificari debet.
Primo quidem oportet ut non sit injusta; secundo quod non sit de
cupiditate vel avaritia suspecta propter excessum; tertio quod non
permittat labi substantiam propter defectum ... Dare quando oportet et
custodire quando oportet dare contrariantur; sed dare quando oportet
et custodire quando oportet non contrariantur' (Buridan, _Eth._, iv.
2).]

The question is then discussed whether liberality is a part of
justice. Aquinas concludes 'that liberality is not a species
of justice, because justice renders to another what is his, but
liberality gives him what is the giver's own. Still, it has a certain
agreement with justice in two points; first that it is to another,
as justice also is; secondly, that it is about exterior things like
justice, though in another way. And therefore liberality is laid down
by some to be a part of justice as a virtue annexed to justice as an
accessory to a principal.'[1] Again, 'although liberality supposes not
any legal debt as justice does, still it supposes a certain moral debt
considering what is becoming in the person himself who practises the
virtue, not as though he had any obligation to the other party;
and therefore there is about it very little of the character of a
debt.'[2]

[Footnote 1: II. ii. 117, art. 5.]

[Footnote 2: _Ibid._, ad. 1.]

It is important to draw attention to the fact that _liberalitas_
consists in making a good use of property, and not merely in
distributing it to others, as a confusion with the English word
'liberality' might lead us to believe. It is, as we said above,
therefore certain that a wise and prudent saving of money for
investment would be considered a course of conduct within the meaning
of the word _liberalitas_, especially if the enterprise in which the
money were invested were one which would benefit the community as
a whole. 'Modern industrial conditions demand that a man of wealth
should distribute a part of his goods indirectly--that is, by
investing them in productive and labour-employing enterprises.'[1]

[Footnote 1: Ryan, _The Alleged Socialism of the Church Fathers_, p.
20, and see Goyau, _Le Pape et la Question Sociale_, p. 79.]

The nature of the virtue of _liberalitas_ may be more clearly
understood by an explanation of the vices which stand opposed to it.
The first of these treated by Aquinas is avarice, which he defines as
'superfluus amor habendi divitias.' Avarice might be committed in
two ways--by harbouring an undue desire of acquiring wealth, or by
an undue reluctance to part with it--'primo autem superabundant
in retinendo ... secundo ad avaritiam pertinet superabundare in
accipiendo.'[1] These definitions are amplified in another part of the
same section. 'For in every action that is directed to the attainment
of some end goodness consists in the observance of a certain measure.
The means to the end must be commensurate with the end, as medicine
with health. But exterior goods have the character of things needful
to an end. Hence human goodness in the matter of these goods must
consist in the observance of a certain measure, as is done by a man
seeking to have exterior riches in so far as they are necessary to his
life according to his rank and condition. And therefore sin consists
in exceeding this measure and trying to acquire or retain riches
beyond the due limit; and this is the proper nature of avarice,
which is defined to be an immoderate love of having.'[2] 'Avarice may
involve immoderation regarding exterior things in two ways; in one way
immediately as to the receiving or keeping of them when one acquires
or keeps beyond the due amount; and in this respect it is directly a
sin against one's neighbour, because in exterior things one man cannot
have superabundance without another being in want, since temporal
goods cannot be simultaneously possessed by many. The other way in
which avarice may involve immoderation is in interior affection....'
These words must not be taken to condemn the acquisition of large
fortunes by capitalists, which is very often necessary in order that
the natural resources of a country may be properly exploited. One
man's possession of great wealth is at the present day frequently the
means of opening up new sources of wealth and revenue to the entire
community. In other words, superabundance is a relative term. This,
like many other passages of St. Thomas, must be given a _contemporanea
expositio_. 'There were no capitalists in the thirteenth century, but
only hoarders.'[3]

[Footnote 1: II. ii. 118, 4.]

[Footnote 2: _Ibid._, ad. 1.]

[Footnote 3: Rickaby, _Aquinas Ethicus_, vol. ii. p. 234.]

It must also be remembered that what would be considered avarice in
a man in one station of life would not be considered such in a man in
another. So long as one did not attempt to acquire an amount of wealth
disproportionate to the needs of one's station of life, one could not
be considered avaricious. Thus a common soldier would be avaricious if
he strove to obtain a uniform of the quality worn by an officer, and
a simple cleric if he attempted to clothe himself in a style only
befitting a bishop.[1]

[Footnote 1: Aquinas, _In Orat. Dom. Expos_., iv. Ashley gives many
quotations from early English literature to show how fully the idea of
_status_ was accepted (_Economic History_, vol. i. pt. ii. p. 389).
On the warfare waged by the Church on luxury in the Middle Ages, see
Baudrillard, _Histoire du Luxe privé et publique_, vol. iii. pp. 630
_et seq._]

The avaricious man offended against liberality by caring too much
about riches; the prodigal, on the other hand, cared too little about
them, and did not attach to them their proper value. 'In affection
while the prodigal falls short, not taking due care of them, in
exterior behaviour it belongs to the prodigal to exceed in giving, but
to fail in keeping or acquiring, while it belongs to the miser to
come short in giving, but to superabound in getting and in
keeping. Therefore it is clear that prodigality is the opposite of
covetousness.'[1] A man, however, might commit both sins at the same
time, by being unduly anxious to acquire wealth which he distributed
prodigally.[2] Prodigality could always be distinguished from extreme
liberality by a consideration of the circumstances of the particular
case; a truly liberal man might give away more than a prodigal in
case of necessity.[3] Prodigality, though a sin, was a sin of a less
grievous kind than avarice.[4]

[Footnote 1: II. ii. 119, 1.]

[Footnote 2: _Ibid._, ad. 1.]

[Footnote 3: _Ibid._, ad. 3.]

[Footnote 4: _Ibid._, art. 3. 'Per prodigalitatem intelligimus habitum
quo quis præter vel contra dictamen rectae rationis circa
pecunias excedit in datione vel consumptione vel custodia; et per
illiberalitatem intelligimus habitum quo quis contra dietamen rectae
rationis deficit circa pecunias in datione vel consumptione, vel
superabundat in acceptione vel custodia ipsarum' (Buridan, _Eth._, iv.
3).]

In addition to the duties which were imposed on the owners of property
in all circumstances there was a further duty which only arose on
special occasions, namely, _magnificentia_, or munificence. This
virtue is discussed by Aquinas[1], but we shall quote the passages of
Buridan which explain it, not because they depart in any way from the
teaching of Aquinas, but because they are clearer and more scientific.
'By munificence, we understand a habit inclining one to the
performance of great works, or to the incurring of great expenses,
when, where, and in the manner in which they are called for (_fuerit
opportunum_), for example, building a church, assembling great
armies for a threatened war, and giving splendid marriage feasts.' He
explains that 'munificence stands in the same relation to liberality
as bravery acquired by its exercise in danger of death in battle does
to bravery simply and commonly understood.' Two vices stand opposed
to munificentia: (1) _parvificentia_, 'a habit inclining one not
to undertake great works, when circumstances call for them, or to
undertaking less, or at less expense, than the needs of the situation
demand,' and (2) (_[Greek: banousia]_,) 'a habit inclining one to
undertaking great works, which are not called for by circumstances,
or undertaking them on a greater scale or at a greater expense than is
necessary[2].'

[Footnote 1: II. ii. 134.]

[Footnote 2: _Eth._, iv. 7.]

Both in the case of avarice and prodigality the offending state
of mind consisted in attaching a wrong value to wealth, and the
inculcation of the virtue of liberality must have been attended
with good results not alone to the souls of individuals, but to the
economic condition of the community. The avaricious man not only
imperilled his own soul by attaching too much importance to temporal
gain, but he also injured the community by monopolising too large a
share of its wealth; the prodigal man, in addition to incurring
the occasion of various sins of intemperance, also impoverished the
community by wasting in reckless consumption wealth which might have
been devoted to productive or charitable purposes. He who neglected
the duty of munificence, either by refusing to make a great
expenditure when it was called for (_parvificentia_) or by making one
when it was unnecessary (_[Greek: banousia]_) was also deemed to have
done wrong, because in the one case he valued his money too highly,
and in the other not highly enough. In other words, he attached a
wrong value to wealth. Nothing could be further from the truth than
the suggestion that the schoolmen despised or belittled temporal
riches. Quite on the contrary, they esteemed it a sin to conduct
oneself in a manner which showed a defective appreciation of their
value[1]. Riches may have been the occasion of sin; but so was
poverty. 'The occasions of sin are to be avoided,' says Aquinas, 'but
poverty is an occasion of evil, because theft, perjury, and flattery
are frequently brought about by it.

[Footnote 1: 'Non videtur secundum humanam rationem esse boni et
perfecti divitias abjicere totaliter, sed eis uti bene et reficiendo
superfluas pauperibus subvenire et amicis' (Buridan, _Eth._, iv. 3).]

Therefore poverty should not be voluntarily undertaken, but rather
avoided.'[1] Buridan says: 'There is no doubt that it is much more
difficult to be virtuous in a state of poverty than in one of moderate
affluence;'[2] and Antoninus of Florence expresses the opinion that
poverty is in itself an evil thing, although out of it good may
come.[3] Even the ambition to rise in the world was laudable, because
every one may rightfully desire to place himself and his dependants in
a participation of the fullest human felicity of which man is capable,
and to rid himself of the necessity of corporal labour.[4] Avarice and
prodigality alike offended against liberality, because they tended to
deprive the community of the maximum benefit which it should derive
from the wealth with which it was endowed. Dr. Cunningham may be
quoted in support of this view. 'One of the gravest defects of the
Roman Empire lay in the fact that its system left little scope for
individual aims, and tended to check the energy of capitalists and
labourers alike. But Christian teaching opened up an unending prospect
before the individual personally, and encouraged him to activity and
diligence by an eternal hope. Nor did such concentration of thought
on a life beyond the grave necessarily divert attention from secular
duties; Christianity did not disparage them, but set them in a new
light, and brought out new motives for taking them seriously....
The acceptance of this higher view of the dignity of human life
as immortal was followed by a fuller recognition of personal
responsibility. Ancient philosophy had seen that man is the master of
material things; but Christianity introduced a new sense of duty in
regard to the manner of using them.... Christian teachers were forced
to protest against any employment of wealth that disregarded the glory
of God and the good of man.'[5] It was the opinion of Knies that
the peculiarly Christian virtues were of profound economic value.
'Temperance, thrift, and industry--that is to say, the sun and rain of
economic activity---were recommended by the Church and inculcated as
Christian virtues; idleness as the mother of theft, gambling as the
occasion of fraud, were forbidden; and gain for its own sake was
classed as a kind of robbery[6].'

[Footnote 1: _Summa cont. Gent._, iii. 131.]

[Footnote 2: _Eth._, iv. 3.]

[Footnote 3: _Summa_, iv. 12, 3.]

[Footnote 4: Cajetan, _Comm._ on II. ii. 118, 1.]

[Footnote 5: _Western Civilisation_, vol. ii. pp. 8-9.]

[Footnote 6: _Politische Oekonomie vom Standpuncte der geschichtlichen
Methode_, p. 116, and see Rambaud, _Histoire_, p. 759; Champagny, _La
Bible et l'Economie politique_; Thomas Aquinas, _Summa_, II. ii.
50, 3; Sertillanges, _Socialisme et Christianisme_, p. 53. It was
nevertheless recognised and insisted on that wealth was not an end in
itself, but merely a means to an end (Aquinas, _Summa_, I. ii. 2, 1).]

The great rule, then, with regard to the user of property was
liberality. Closely allied with the duty of liberality was the duty
of almsgiving--'an act of charity through the medium of money.'[1]
Almsgiving is not itself a part of liberality except in so far as
liberality removes an obstacle to such acts, which may arise from
excessive love of riches, the result of which is that one clings
to them more than one ought[2]. Aquinas divides alms-deeds into two
kinds, spiritual and corporal, the latter alone of which concern us
here. 'Corporal need arises either during this life or afterwards. If
it occurs during this life, it is either a common need in respect
of things needed by all, or is a special need occurring through some
accident supervening. In the first case the need is either internal
or external. Internal need is twofold: one which is relieved by solid
food, viz. hunger, in respect of which we have to _feed the hungry_;
while the other is relieved by liquid food, viz. thirst, in respect
of which we have to _give drink to the thirsty_. The common need with
regard to external help is twofold: one in respect of clothing, and as
to this we have to _clothe the naked_; while the other is in
respect of a dwelling-place, and as to this we have to _harbour the
harbourless_. Again, if the need be special, it is either the result
of an internal cause like sickness, and then we have to _visit the
sick_, or it results from an external cause, and then we have to
_ransom the captive_. After this life we _give burial to the dead_.[3]
Aquinas then proceeds to explain in what circumstances the duty of
almsgiving arises. 'Almsgiving is a matter of precept. Since, however,
precepts are about acts of virtue, it follows that all almsgiving must
be a matter of precept in so far as it is necessary to virtue, namely,
in so far as it is demanded by right reason. Now right reason demands
that we should take into consideration something on the part of the
giver, and something on the part of the recipient. On the part of the
giver it must be noted that he must give of his surplus according to
Luke xi. 4, "That which remaineth give alms." This surplus is to be
taken in reference not only to the giver, but also in reference to
those of whom he has charge (in which case we have the expression
_necessary to the person_, taking the word _person_ as expressive
of dignity).... On the part of the recipient it is necessary that he
should be in need, else there would be no reason for giving him alms;
yet since it is not possible for one individual to relieve the needs
of all, we are not bound to relieve all who are in need, but only
those who could not be succoured if we did not succour them. For in
such cases the words of Ambrose apply, "Feed him that is dying of
hunger; if thou hast not fed him thou hast slain him." Accordingly
we are bound to give alms of our surplus, as also to give alms to one
whose need is extreme; otherwise almsgiving, like any other greater
good, is a matter of counsel.'[4] In replying to the objection that it
is lawful for every one to keep what is his own, St. Thomas restates
with emphasis the principle of community of user: 'The temporal goods
which are given us by God are ours as to the ownership, but as to the
use of them they belong not to us alone, but also to such others as we
are able to succour out of what we have over and above our needs.'[5]
Albertus Magnus states this in very strong words: 'For a man to give
out of his superfluities is a mere act of justice, because he is
rather then steward of them for the poor than the owner;'[6] and at an
earlier date St. Peter Damian had affirmed that 'he who gives to the
poor returns what he does not himself own, and does not dispose of his
own goods.' He insists in the same passage that almsgiving is not
an act of mercy, but of strict justice.[7] In the reply to another
objection the duty of almsgiving is stated by Aquinas with additional
vigour. 'There is a time when we sin mortally if we omit to give
alms--on the part of the recipient when we see that his need is
evident and urgent, and that he is not likely to be succoured
otherwise--on the part of the giver when he has superfluous goods,
which he does not need for the time being, so far as he can judge with
probability.'[8]

[Footnote 1: II. ii. 32, 1.]

[Footnote 2: _Ibid._, ad. 4.]

[Footnote 3: II. ii. 32, art. 2.]

[Footnote 4: II. ii. 32, art. 5.]

[Footnote 5: _Ibid._, ad. 2.]

[Footnote 6: Jarrett, _Mediæval Socialism_, p. 87.]

[Footnote 7: _De Eleemosynis_, cap. 1.]

[Footnote 8: II. ii. 32, 5, ad. 3.]

The next question which St. Thomas discusses is whether one ought to
give alms out of what one needs. He distinguishes between two kinds
of 'necessaries.' The first is that without which existence is
impossible, out of which kind of necessary things one is not bound to
give alms save in exceptional cases, when, by doing so, one would be
helping a great personage or supporting the Church or the State, since
'the common good is to be preferred to one's own.' The second kind
of necessaries are those things without which a man cannot live in
keeping with his social station. St. Thomas recommends the giving of
alms out of this part of one's estate, but points out that it is only
a matter of counsel, and not of precept, and one must not give alms
to such an extent as to impoverish oneself permanently. To this last
provision, however, there are three exceptions: one, when a man is
entering religion and giving away all his goods; two, when he can
easily replace what he gives away; and, three, when he is in presence
of great indigence on the part of an individual, or great need on the
part of the common weal. In these three cases it is praiseworthy for
a man to forgo the requisites of his station in order to provide for a
greater need.[1]

[Footnote 1: II. ii. 32, 6.]

The mediæval teaching on almsgiving is very well summarised by Fr.
Jarrett,[1] as follows: '(1) A man is obliged to help another in his
extreme need even at the risk of grave inconvenience to himself; (2) a
man is obliged to help another who, though not in extreme need, is yet
in considerable distress, but not at the risk of grave inconvenience
to himself; (3) a man is not obliged to help another when necessity is
slight, even though the risk to himself should be quite trifling.'

[Footnote 1: _Mediæval Socialism_, p. 90.]

The importance of the duty of almsgiving further appears from the
section where Aquinas lays down that the person to whom alms should
have been given may, if the owner of the goods neglects his duty,
repair the omission himself. 'All things are common property in a
case of extreme necessity. Hence one who is in dire straits may take
another's goods in order to succour himself if he can find no one who
is willing to give him something.'[1] The duty of using one's goods
for the benefit of one's neighbours was a fit matter for enforcement
by the State, provided that the burdens imposed by legislation were
equitable. 'Laws are said to be just, both from the end, when, to wit,
they are ordained to the common good--and from their author, that is
to say, when the law that is made does not exceed the power of the
law-giver--and from their form, when, to wit, burdens are laid on the
subjects according to an equality of proportion and with a view to the
common good. For, since every man is part of the community, each man
in all that he is and has belongs to the community: just as a part in
all that it is belongs to the whole; wherefore nature inflicts a loss
on the part in order to save the whole; so that on this account such
laws, which impose proportionate burdens, are just and binding in
conscience.'[2]

[Footnote 1: _Ibid._, art. 7 ad. 3.]

[Footnote 2: I. ii. 96,4.]

There can be no doubt that the practice of the scholastic teaching of
community of user, in its proper sense, made for social stability. The
following passage from Trithemius, written at the end of the fifteenth
century, is interesting as showing how consistently the doctrine of
St. Thomas was adhered to two hundred years after his death, and
also that the failure of the rich to put into practice the moderate
communism of St. Thomas was the cause of the rise of the heretical
communists, who attacked the very foundations of property itself: 'Let
the rich remember that their possessions have not been entrusted to
them in order that they may have the sole enjoyment of them, but
that they may use and manage them as property belonging to mankind at
large. Let them remember that when they give to the needy they
only give them what belongs to them. If the duty of right use and
management of property, whether worldly or spiritual, is neglected, if
the rich think that they are the sole lords and masters of that which
they possess, and do not treat the needy as their brethren, there
must of necessity arise an inner shattering of the commonwealth. False
teachers and deceivers of the people will then gain influence, as has
happened in Bohemia, by preaching to the people that earthly property
should be equally distributed among all, and that the rich must
be forcibly condemned to the division of their wealth. Then follow
lamentable conditions and civil wars; no property is spared; no right
of ownership is any longer recognised; and the wealthy may then
with justice complain of the loss of possessions which have been
unrighteously taken from them; but they should also seriously ask
themselves the question whether in the days of peace and order they
recognised in the administration of these goods the right of their
superior lord and owner, namely, the God of all the earth.'[1]

[Footnote 1: Quoted in Janssen, _op. cit._, vol. ii. p. 91.]

It must not, however, be imagined for a moment that the community
of user advocated by the scholastics had anything in common with the
communism recommended by modern Socialists. As we have seen above,
the scholastic communism did not at all apply to the procuring and
dispensing of material things, but only to the mode of using them.
It is not even correct to say that the property of an individual was
_limited_ by the duty of using it for the common good. As Rambaud
puts it: 'Les devoirs de charité, d'équité naturelle, et de simple
convenance sociale peuvent affecter, ou mieux encore, commander un
certain usage de la richesse; mais ce n'est pas le même chose que
limiter la propriété.'[1] The community of user of the scholastics was
distinguished from that of modern Socialists not less strongly by the
motives which inspired it than by the effect it produced. The former
was dictated by high spiritual aims, and the contempt of material
goods; the latter is the fruit of over-attachment to material goods,
and the envy of their possessors.[2]

[Footnote 1: _Op. cit._, p. 43. The same writer shows that there is no
authority in Christian teaching for the proposition, advanced by many
Christian Socialists, that property is a 'social function' (_ibid._,
p. 774). The right of property even carried with it the _jus
abutendi_, which, however, did not mean the right to _abuse_, but
the right to destroy by consumption (see Antoine, _Cours d'Economie
sociale_, p. 526).]

[Footnote 2: Roscher, _op. cit._, p. 5: 'Vom neuern Socialismus
freilich unterscheidet sich diese Auffassung nicht blosz durch ihre
religiöse Grundlage, sondern auch durch ihre, jedem Mammonsdienst
entgegengesetze, Verachtung der materiellen Güter.']

The large estates which the Church itself owned have frequently been
pointed to as evidence of hypocrisy in its attitude towards the common
user of property. This is not the place to inquire into the condition
of ecclesiastical estates in the Middle Ages, but it is sufficient
to say that they were usually the centres of charity, and that in the
opinion of so impartial a writer as Roscher, they rather tended to
make the rules of using goods for the common use practicable than the
contrary.[1]

[Footnote 1: Roscher, _op. cit._, p. 6.]



SECTION 3.--PROPERTY IN HUMAN BEINGS


Before we pass from the subject of property, we must deal with a
particular kind of property right, namely, that of one human being
over another. At the present day the idea of one man being owned
by another is repugnant to all enlightened public opinion, but this
general repugnance is of very recent growth, and did not exist in
mediæval Europe. In dealing with the scholastic attitude towards
slavery, we shall indicate, as we did with regard to its attitude
towards property in general, the fundamental harmony between the
teaching of the primitive and the mediæval Church on the subject. No
apology is needed for this apparent digression, as a comparison of the
teaching of the Church at the two periods of its development helps us
to understand precisely what the later doctrine was; and, moreover,
the close analogy which, as we shall see, existed between the Church's
view of property and slavery, throws much light on the true nature of
both institutions.

Although in practice Christianity had done a very great deal to
mitigate the hardships of the slavery of ancient times, and had in
a large degree abolished slavery by its encouragement of
emancipation,[1] it did not, in theory, object to the institution
itself. There is no necessity to labour a point so universally
admitted by all students of the Gospels as that Christ and His
Apostles did not set out to abolish the slavery which they found
everywhere around them, but rather aimed, by preaching charity to
the master and patience to the slave, at the same time to lighten the
burden of servitude, and to render its acceptance a merit rather
than a disgrace. 'What, in fact,' says Janet, 'is the teaching of
St. Peter, St. Paul, and the Apostles in general? It is, in the first
place, that in Christ there are no slaves, and that all men are free
and equal; and, in the second place, that the slave must obey his
master, and the master must be gentle to his slave.[2] Thus, although
there are no slaves in Christ, St. Paul and the Apostles do not deny
that there may be on earth. I am far from reproaching the Apostles for
not having proclaimed the immediate necessity of the emancipation of
slaves. But I say that the question was discussed in precisely the
same terms by the ancient philosophers of the same period. Seneca, it
is true, proclaimed not the civil, but the moral equality of men;
but St. Paul does not speak of anything more than their equality in
Christ. Seneca instructs the master to treat the slave as he would
like to be treated himself.[3] Is not this what St. Peter and St.
Paul say when they recommended the master to be gentle and good? The
superiority of Christianity over Stoicism in this question arises
altogether from the very superiority of the Christian spirit....'[4]
The article on 'Slavery' in the _Catholic Encyclopædia_ expresses the
same opinion: 'Christian teachers, following the example of St. Paul,
implicitly accept slavery as not in itself incompatible with the
Christian law. The Apostle counsels slaves to obey their masters,
and to bear with their condition patiently. This estimate of slavery
continued to prevail until it became fixed in the systematised ethical
teaching of the schools; and so it remained without any conspicuous
modification until the end of the eighteenth century.' The same
interpretation of early Christian teaching is accepted by the
Protestant scholar, Dr. Bartlett: 'The practical attitude of Seneca
and the early Christians to slavery was much the same. They bade the
individual rise to a sense of spiritual freedom in spite of outward
bondage, rather than denounce the institution as an altogether
illegitimate form of property.'[5]

[Footnote 1: See Roscher, _Political Economy_, s. 73.]

[Footnote 2: _Eph._, vi. 5, 6, 9.]

[Footnote 3: _Ep. ad Luc._, 73.]

[Footnote 4: Janet, _op. cit._, p. 317.]

[Footnote 5: 'Biblical and Early Christian Idea of Property,'
_Property, Its Duties and Rights_ (London, 1915), p. 110; Franck,
_Réformateurs et Publicistes de l'Europe: Moyen âge_--Renaissance, p.
87. On the whole question by far the best authority is volume iii. of
Wallon's _Histoire de l'Esclavage dans l'Antiquité_.]

Several texts might be collected from the writings of the Fathers
which would seem to show that according to patristic teaching the
institution of slavery was unjustifiable. We do not propose to cite
or to explain these texts one by one, in view of the quite clear and
unambiguous exposition of the subject given by St. Thomas Aquinas,
whose teaching is the more immediate subject of this essay; we shall
content ourselves by reminding the reader of the precisely similar
texts relating to the institution of property which we have examined
above, and by stating that the corresponding texts on the subject
of slavery are capable of an exactly similar interpretation. 'The
teaching of the Apostle,' says Janet, 'and of the Fathers on slavery
is the same as their teaching on property.'[1] The author from whom we
are quoting, and on whose judgment too much reliance cannot be placed,
then proceeds to cite many of the patristic texts on property, which
we quoted in the section dealing with that subject, and asks: 'What
conclusion should one draw from these different passages? It is that
in Christ there are no rich and no poor, no mine and no thine; that
in Christian perfection all things are common to all men, but that
nevertheless property is legitimate and derived from human law. Is it
not in the same sense that the Fathers condemned slavery as contrary
to divine law, while respecting it as comformable to human law? The
Fathers abound in texts contrary to slavery, but have we not seen a
great number of texts contrary to property?'[2] The closeness of the
analogy between the patristic treatment of slavery and of property
appears forcibly in the following passage of Lactantius: 'God who
created man willed that all should be equal. He has imposed on all
the same condition of living; He has produced all in wisdom; He has
promised immortality to all; no one is cut off from His heavenly
benefits. In His sight no one is a slave, no one a master; for if we
have all the same Father, by an equal right we are all His children;
no one is poor in the sight of God but he who is without justice, no
one rich but he who is full of virtue.... Some one will say, Are there
not among you some poor and others rich; some servants and others
masters? Is there not some difference between individuals? There is
none, nor is there any other cause why we mutually bestow on each
other the name of brethren except that we believe ourselves to be
equal. For since we measure all human things not by the body but by
the spirit, although the condition of bodies is different, yet we have
no servants, but we both regard them, and speak of them as brothers in
spirit, in religion as fellow-servants.'[3] Slavery was declared to
be a blessing, because, like poverty, it afforded the opportunity of
practising the virtues of humility and patience.[4] The treatment
of the institution of slavery underwent a striking and important
development in the hands of St. Augustine, who justified it as one of
the penalties incurred by man as a result of the sin of Adam and Eve.
'The first holy men,' writes the Saint, 'were rather shepherds than
kings, God showing herein what both the order of the creation desired,
and what the deserts of sin exacted. For justly was the burden of
servitude laid upon the back of transgression. And therefore in all
the Scriptures we never read the word _servus_ until Noah laid it as
a curse upon his offending son. So that it was guilt, and not nature,
that gave origin to that name.... Sin is the mother of servitude and
the first cause of man's subjection to man.'[5] St. Augustine also
justifies the enslavement of those conquered in war--'It is God's
decree to humble the conquered, either reforming their sins herein or
punishing them.'[6]

[Footnote 1: _Op. cit._, p. 318.]

[Footnote 2: _Ibid._, p. 321.]

[Footnote 3: _Div. Inst_., v. 15-16.]

[Footnote 4: Chryst., _Genes._, serm. v. i.; _Ep. ad Cor._, hom. xix.
4.]

[Footnote 5: _De Civ. Dei_, xix. 14-15.]

[Footnote 6: _Ibid._]

Janet ably analyses and expounds the advance which St. Augustine
made in the treatment of slavery: 'In this theory we must note the
following points: (1) Slavery is unjust according to the law of
nature. This is what is contrary to the teaching of Aristotle,
but conformable to that of the Stoics. (2) Slavery is just as
a consequence of sin. This is the new principle peculiar to St.
Augustine. He has found a principle of slavery, which is neither
natural inequality, nor war, nor agreement, but sin. Slavery is no
more a transitory fact which we accept provisionally, so as not to
precipitate a social revolution: it is an institution which has become
natural as a result of the corruption of our nature. (3) It must not
be said that slavery, resulting from sin, is destroyed by Christ who
destroyed sin.... Slavery, according to St. Augustine, must last as
long as society.'[1]

[Footnote 1: Janet, _op. cit._, p. 302.]

Nowhere does St. Thomas Aquinas appear as clearly as the medium of
contact and reconciliation between the Fathers of the Church and the
ancient philosophers as in his treatment of the question of slavery.
His utterances upon this subject are scattered through many portions
of his work, but, taken together, they show that he was quite prepared
to admit the legitimacy of the institution, not alone on the grounds
put forward by St. Augustine, but also on those suggested by Aristotle
and the Roman jurists.

He fully adopts the Augustinian argument in the _Summa_, where, in
answer to the query, whether in the state of innocence all men were
equal, he states that even in that state there would still have been
inequalities of sex, knowledge, justice, etc. The only inequalities
which would not have been present were those arising from sin; but
the only inequality arising from sin was slavery.[1] 'By the words
"So long as we are without sin we are equal," Gregory means to exclude
such inequality as exists between virtue and vice; the result of which
is that some are placed in subjection to others as a penalty.'[2] In
the following article St. Thomas distinguishes between political and
despotic subordination, and shows that the former might have existed
in a state of innocence. 'Mastership has a twofold meaning; first as
opposed to servitude, in which case a master means one to whom
another is subject as a slave. In another sense mastership is commonly
referred to any kind of subject; and in that sense even he who has the
office of governing and directing free men can be called a master. In
the first meaning of mastership man would not have been ruled by man
in the state of innocence; but in the latter sense man would be ruled
over by man in that state.'[3] In _De Regimine Principum_ Aquinas also
accepts what we may call the Augustinian view of slavery. 'But whether
the dominion of man over man is according to the law of nature, or is
permitted or provided by God may be certainly resolved. If we speak of
dominion by means of servile subjection, this was introduced because
of sin. But if we speak of dominion in so far as it relates to the
function of advising and directing, it may in this sense be said to be
natural.'[4]

[Footnote 1: i. 96, 3.]

[Footnote 2: _Ibid._, ad. 1.]

[Footnote 3: i. 96, 4.]

[Footnote 4: _De Reg. Prin._, iii. 9. This is one of the chapters the
authorship of which is disputed.]

St. Thomas was therefore willing to endorse the argument of St.
Augustine that slavery was a result of sin; but he also admits the
justice of Aristotle's reasoning on the subject. In the section of the
_Summa_ where the question is discussed, whether the law of nations is
the same as the natural law, one of the objections to be met is that
'Slavery among men is natural, for some are naturally slaves according
to the philosopher. Now "slavery belongs to the law of nations," as
Isidore states. Therefore the right of nations is a natural right.'[1]
In answer to this objection St. Thomas draws the distinction between
what is natural absolutely, and what is natural _secundum quid_, the
passage which we have quoted in treating of property rights.[2]
He then goes on to apply this distinction to the case of slavery.
'Considered absolutely, the fact that this particular man should be a
slave rather than another man, is based, not on natural reason, but on
some resultant utility, in that it is useful to this man to be ruled
by a wise man, and to the latter to be helped by the former, as the
philosopher states. Wherefore slavery which belongs to the law of
nations is natural in the second way, but not in the first.'[3] It
will be noted from this passage that St. Thomas partly admits, though
not entirely, the opinion of Aristotle. In the _De Regimine
Principum_ he goes much further in the direction of adopting the full
Aristotelian theory: 'Nature decrees that there should be grades in
men as in other things. We see this in the elements, a superior and
an inferior; we see in every mixture that some one element
predominates.... For we see this also in the relation of the body and
the mind, and in the powers of the mind compared with one another;
because some are ordained towards ordering and moving, such as the
understanding and the will; others to serving. So should it be among
men; and thus it is proved that some are slaves according to nature.
Some lack reason through some defect of nature; and such ought to be
subjected to servile works because they cannot use their reason, and
this is called the natural law.'[4] In the same chapter the right of
conquerors to enslave their conquered is referred to without comment,
and therefore implicitly approved by the author.

[Footnote 1: II. ii. 57, 3.]

[Footnote 2: _Supra_, p. 64.]

[Footnote 3: II. ii 57, ad. 2.]

[Footnote 4: _De Reg. Prin._, ii. 10.]

'Thus,' according to Janet, 'St. Thomas admits slavery as far as one
can admit it, and for all the reasons for which one can admit it.
He admits with Aristotle that there is a natural slavery; with St.
Augustine that slavery is the result of sin; with the jurisconsult
that slavery is the result of war and convention.'[1] 'The author
justifies slavery,' says Franck, 'in the name of St. Augustine, and in
that of Aristotle; in the name of the latter by showing that there are
two races of men, one born to command, and the other to obey; in
the name of the former in affirming that slavery had its origin in
original sin; that by sin man has forfeited his right to liberty.
Further, we must admit slavery as an institution not only of nature
and one of the consequences of the fall, we must admit a third
principle of slavery which appears to St. Thomas as legitimate as the
other two. War is necessary; therefore it is just; and if it is just
we must accept its consequences. One of these consequences is the
absolute right of the conqueror over the life, person, and goods of
the conquered.'[2]

[Footnote 1: _Op. cit._, vol. i. p. 431.]

[Footnote 2: Franck, _op cit_., p. 69.]

Aquinas returns to the question of slavery in another passage, which
is interesting as showing that he continued to make use of the analogy
between slavery and property which we have seen in the Fathers. 'A
thing is said to belong to the natural law in two ways. First,
because nature inclines thereto, _e.g._ that one should not do harm to
another. Secondly, because nature did not bring in the contrary; thus
we might say that for man to be naked is of the natural law because
nature did not give him clothes, but art invented them. In this sense
the possession of all things in common and universal freedom is
said to be of the natural law, because, to wit, the distinction of
possession and slavery were not brought in by nature, but devised by
human reason for the benefit of human life. Accordingly, the law of
nature was not changed in this respect, but by addition.'[1]

[Footnote 1: I. ii. 94, 5, ad. 3.]

Ægidius Romanus closely follows the teaching of his master on the
subject of slavery. 'What does Ægidius do? He unites Aristotle and St.
Augustine against human liberty. He declares with the latter that man
has lost the right of belonging to himself, since he has fallen from
the primitive order established by God Himself in nature. He admits
with Aristotle the existence of two races of men, the one designed
for liberty, the other for servitude.... This is not all--to this
servitude which he calls natural, the author joins another, purely
legal, but which does not seem to him less just, namely, that which is
founded on the right of war, and which obliges the conquered to become
the slaves of the conquerors--to give up their liberty in exchange for
their lives. Our author admits it is just in itself, because in his
opinion it is useful to the defence of one's country; it excites
warriors to courage by placing before their eyes the terrible
consequences of cowardice.'[1] The teachings of St. Thomas and Ægidius
were accepted by all the later scholastics.[2] Biel, whose opinion is
always very valuable as being that of the last of a long line, says
that there are three kinds of slaves--slaves of God, of sin, and of
man. The first kind of slavery is wholly good, the second wholly bad,
while the third, though not instituted by, is approved by the _jus
gentium_. He proceeds to state the four ways in which a man may
become enslaved: namely, _ex necessitate_, or by being born of a slave
mother; _ex bello_, by being captured in war; _ex delicto_, or
by sentence of the law in the case of certain crimes committed by
freedmen; and _ex propria voluntate_, or by the sale of a man of
himself into slavery.[3]

[Footnote 1: Franck, _op. cit._, p. 90.]

[Footnote 2: Franck, _op. cit._, p. 91.]

[Footnote 3: Biel, _Inventarium seu Repertorium generale super qualuor
libros Sententiarum_, iv. xv. I; and see Carletus, _Summa Angelica_,
q. ccxii.]

It must not be forgotten that we are dealing purely with theory.
In fact the Church did an inestimable amount of good to the servile
classes, and, at the time that Aquinas wrote, thanks to the operation
of Christianity in this respect, the old Roman slavery had completely
disappeared. The nearest approach to ancient slavery in the Middle
Ages was serfdom, which was simply a step in the transition from
slavery to free labour.[1] Moreover, the rights of the master over
the slave were strictly confined to the disposal of his services; the
ancient absolute right over his body had completely disappeared. 'In
those things,' says St. Thomas, 'which appertain to the disposition
of human acts and things, the subject is bound to obey his superior
according to the reason of the superiority; thus a soldier must obey
his officer in those things which appertain to war; a slave his master
in those things which appertain to the carrying out of his servile
works.'[2] 'Slavery does not abolish the natural equality of man,'
says a writer who is quoted by the _Catholic Encyclopædia_ as
correctly stating the Catholic doctrine on the subject prior to the
eighteenth century, 'hence by slavery one man is understood to become
subject to the dominion of another to the extent that the master has
a perfect right to the services which one man may justly perform
for another.'[3] Biel, who lays down the justice of slavery so
unambiguously, is no less clear in his statement of the limitations
of the right. 'The body of the slave is not simply in the power of the
master as the body of an ox is; nor can the master kill or mutilate
the slave, nor abuse him contrary to the law of God. The temporal
gains derived from the labour of the slave belong to the master;
but the master is bound to provide the slave with the necessaries of
life.'[4] Rambaud very properly points out that the reason that the
scholastic writers did not fulminate in as strong and as frequent
language against the tyranny of masters, was not that they felt less
strongly on the subject, but that the abuses of the ancient slave
system had almost entirely disappeared under the influence of
Christian teaching.[5]

[Footnote 1: Wallon, _op. cit._, vol. iii. p. 93; Brants, _op. cit._,
p. 87.]

[Footnote 2: II. ii. 104, 5.]

[Footnote 3: Gerdil., _Comp. Inst. Civ. I._, vii.]

[Footnote 4: Biel, _op. cit._, iv. xv. 5.]

[Footnote 5: _Op. cit._, p. 83.]

On the other hand, it must not be imagined, as has sometimes been
suggested, that the slavery defended by Aquinas was not real slavery,
but rather the ordinary modern relation between employer and employed.
Such an interpretation is definitely disproved by a passage of the
article on justice where Aquinas says that 'inducing a slave to leave
his master is properly an injury against the person ... and, since the
slave is his master's chattel, it is referred to theft.'[1]

[Footnote 1: II. ii. 61,3. Brants, _op. cit._, pp. 87 _et seq_., is
inclined to take a more liberal view of the scholastic doctrine on
slavery, but we cannot agree with him in view of the contemporary
texts.]




CHAPTER III

DUTIES REGARDING THE EXCHANGE OF PROPERTY



SECTION 1.--THE SALE OF GOODS


§ 1. _The Just Price_.

We dealt in the last chapter with the duties which attached to
property in respect of its acquisition and use, and we now pass to
the duties which attached to it in respect of its exchange. As we
indicated above, the right to exchange one's goods for the goods or
the money of another person was, according to the scholastics, one of
the necessary corollaries of the right of private property. In order
that such exchange might be justifiable, it must be conducted on a.
basis of commutative justice, which, as we have seen, consisted in the
observance of equality according to the arithmetical mean. We further
drew attention to the fact that exchanges might be divided into
sales of goods and sales of the use of money. In the former case the
regulating principle of the equality of justice was given effect to
by the observance of the _just price_; in the latter by that of the
_prohibition of usury_. We shall deal with the former in the present
and with the latter in the following section.

The mediæval teaching on the just price, about which there has been so
much discussion and disagreement among modern writers, was simply the
application to the particular contract of sale of the principles which
regulated contracts in general. Exchange originally took the form
of barter; but, as it was found impossible accurately to measure
the values of the objects exchanged without the intervention of
some common measure of value, money was invented to serve as such a
measure. We need not further refer to barter in this section, as the
principles which applied to it were those that applied to sale. Indeed
all sales when analysed are really barter through the medium of
money. That Aquinas simply regarded his article on just price[1] as an
explanation of the application of his general teaching on justice to
the particular case of the contract of sale is quite clear from the
article itself. 'Apart from fraud, we may speak of buying and selling
in two ways. First, as considered in themselves; and from this point
of view buying and selling seem to be established for the common
advantage of both parties, one of whom requires that which belongs
to the other, and _vice versa_. Now whatever is established for the
common advantage should not be more of a burden to one part than to
the other, and consequently all contracts between them should observe
equality of thing and thing. Again, the quality of a thing that
comes into human use is measured by the price given for it, for which
purpose money was invented. Therefore, if either the price exceed the
quantity of the thing's worth, or conversely the worth of the thing
exceed the price, there is no longer the equality of justice; and
consequently to sell a thing for more than its worth, or to buy it for
less than its worth, is in itself unjust and unlawful.'[2] When two
contracting parties make an exchange through the medium of money,
the price is the expression of the exchange value in money. 'The
just price expresses the equivalence, which is the foundation of
contractual justice.'[3]

[Footnote 1: II. ii. 77, 1.]

[Footnote 2: This opinion was accepted by all the later writers,
_e.g._ Gerson, _De Cont._, ii. 5; Biel, _op. cit._, IV. xv. 10: 'Si
pretium excedit quantitatem valoris rei, vel e converso tolleretur
equalitas, erit contractus iniquus.']

[Footnote 3: Desbuquois, 'La Justice dans l'Echange,' _Semaine
Sociale de France_, 1911, p. 167. Gerson says: 'Contractus species est
justitiae commutativae quae respicit aequalitatem rei quae venditur
ad rem quae emitur, ut servetur aequalitas justi pretii; propter quam
aequalitatem facilius observandum inventa est moneta, vel numisma, vel
pecunia,' _De Cont._, ii. 5.]

The conception of the just price, though based on Aristotelian
conceptions of justice, is essentially Christian. The Roman law had
allowed the utmost freedom of contract in sales; apart from fraud,
the two contracting parties were at complete liberty to fix a price
at their own risk; and selfishness was assumed and allowed to be the
animating motive of every contracting party. The one limitation to
this sweeping rule was in favour of the seller. By a rescript of
Diocletian and Maximian it was enacted that, if a thing were sold
for less than half its value, the seller could recover the property,
unless the buyer chose to make up the price to the full amount.
Although this rescript was perfectly general in its terms, some
authors contended that it applied only to sales of land, because the
example given was the sale of a farm.[1] However, the rescript was
quoted by the Fathers as showing that even the Roman law considered
that contracts might be questioned on equitable grounds in certain
cases.[2] The distinctively Christian notion of just price seems to
have its origin in a passage of St. Augustine;[3] but the notion was
not placed on a philosophical foundation until the thirteenth century.
Even Aquinas, however, although he treats of the just price at some
length, and expresses clear and categorical opinions upon many points
connected with it, does not state the principles on which the just
price itself should be arrived at. This omission is due, not to the
fact that Aquinas was unfamiliar with these principles, but to the
fact that he took them for granted as they were not disputed or
doubted.[4] We have consequently to look for enlightenment upon this
point in writings other than those of Aquinas. The subject can be most
satisfactorily understood if we divide its treatment into two parts:
first, a consideration of what constituted the just price in the sale
of an article, the price of which was fixed by law; and second, a
consideration of what constituted the just price of an article, the
price of which was not so fixed.

[Footnote 1: Hunter, _Roman Law_, p. 492.]

[Footnote 2: Ashley, _op. cit._, p. 133.]

[Footnote 3: 'Scio ipse hominem quum venalis codex ei fuisset oblatus,
pretiique ejus ignarum ideo quiddam exiguum poscentem cerneret
venditorem, justum pretium, quod multo amplius erat nec opinanti
dedisse' (_De Trin._, xiii. 3).]

[Footnote 4: Palgrave, _Dictionary of Political Economy_, tit. 'Justum
Pretium.']


§ 2. _The Just Price when Price fixed by Law_.

Regarding the power of the State to fix prices, the theologians and
jurists were in complete agreement. According to Gerson: 'The law
may justly fix the price of things which are sold, both movable and
immovable, in the nature of rents and not in the nature of rents, and
feudal and non-feudal, below which price the seller must not give, or
above which the buyer must not demand, however they may desire to do
so. As therefore the price is a kind of measure of the equality to be
observed in contracts, and as it is sometimes difficult to find that
measure with exactitude, on account of the varied and corrupt desires
of man, it becomes expedient that the medium should be fixed according
to the judgment of some wise man.... In the civil state, however,
nobody is to be decreed wiser than the lawgiving authority. Therefore
it behoves the latter, whenever it is possible to do so, to fix the
just price, which may not be exceeded by private consent, and which
must be enforced.'...[1] Biel practically paraphrases this passage of
Gerson, and contends that it is the duty of the prince to fix prices,
mainly on account of the difficulty which private contractors find in
doing so.[2]

[Footnote 1: _De Cont._, i. 19.]

[Footnote 2: _Op. cit._, IV. xv. 11.]

The rules which we find laid down for the guidance of the prince in
fixing prices are very interesting, as they show that the mediæval
writers had a clear idea of the constituent elements of value.
Langenstein, whose famous work on contracts was considered of high
authority by later writers, says that the prince should take account
of the condition of the place for which the price was to be fixed, the
circumstances of the time, the condition of the mass of the people.
The different kinds of need which may be felt for goods must also
be considered, _indigentice naturæ_, _status_, _voluptatis_, and
_cupiditatis_; and a distinction drawn between extensive and intensive
need--the former is greater 'quanto plures re aliqua indigent,' the
latter 'quanto minus de illa re habetur.' The general rule is that the
prince must seek to find a medium between a price so low as to render
labourers, artisans, and merchants unable to maintain themselves
suitably, and one so high as to disable the poor from obtaining the
necessaries of life. When in doubt, Langenstein concludes, the price
should err on the low rather than the high side.[1] Biel gives similar
rules: The legislator must regard the needs of man, the abundance or
scarcity of things, the difficulty, labour, and risks of production.
When all these things are carefully considered the legislator is in a
position to fix a just price.[2] According to Endemann, the labour of
production, the cost and risk of transport, and the condition of
the markets had all to be kept in mind when a fair price was being
fixed.[3] We may mention in passing that the power of fixing the just
price might be delegated; prices were frequently fixed by the town
authorities, the guilds, and the Church.[4]

[Footnote 1: Roscher, _Geschichte_, p. 19.]

[Footnote 2: _Op. cit._, IV. xv. 10.]

[Footnote 3: _Studien_, vol. ii. p. 43.]

[Footnote 4: Endemann, _Studien_, vol. i. p. 40; Roscher, _Political
Economy_, s. 114.]

The passage from Gerson which we quoted above shows that, when a just
price had been fixed by the competent authority, the parties to
a contract were bound to keep to it. In other words, the _pretium
legitimum_ was _ipso facto_ the _justum pretium_. On this point there
is complete agreement among the writers of the period. Caepolla says,
'When the price is fixed by law or statute, that is the just price,
and nobody can receive anything, however small, in excess of it,
because the law must be observed';[1] and Biel, 'When a price has been
fixed, the contracting parties have sufficient certainty about the
equality of value and the justice of the price.'[2] Cossa draws
attention to the necessity of the fixed price corresponding with
the real price in order that it should maintain its validity. 'The
schoolmen talk of the legitimate and irreducible price of a thing
which was fixed by authority, and was for obvious reasons of special
importance in the case of the necessaries of life.... The legitimate
price of a thing as fixed by authority had to be based upon the
natural price, and therefore lost its validity and became a dead
letter the moment any change of circumstances made it unfair.'[3]

[Footnote 1: _De Contractibus Simulatis_, 69.]

[Footnote 2: _Op. cit._, IV. xv. 10.]

[Footnote 3: _Op. cit._, p. 143.]



§ 3. _The Just Price when Price not fixed by Law_.

When the just price was not fixed by any outside authority, the buyer
and seller had to arrive at it themselves. The problem before them was
to equalise their respective burdens, so that there would be equality
of burden between them, or, in other words, to reduce the value of the
article sold to terms of money. In order that we may understand how
this equality was arrived at, it is important to know the factors
which were held to enter into the determination of value.

The first thing upon which the mediæval teachers insist is that value
is not determined by the intrinsic excellence of the thing itself,
because, if it were, a fly would be more valuable than a pearl, as
being intrinsically more excellent.[1] Nor is the value to be measured
by the mere utility of the object for satisfying the material needs
of man, for in that case, corn should be worth more than precious
stones.[2] The value of an object is to be measured by its capacity
for satisfying men's wants. 'Valor rerum aestimatur secundum humanam
indigentiam.... Dicendum est quod indigentia humana est mensura
naturalis commutabilium; quod probatur sic: bonitas sive valor rei
attenditur ex fine propter quem exhibetur: unde commentator secundo
Metaphysicae _nihil est bonum nisi propter causas finales_; sed finis
naturalis ad quem justitia commutativa ordinet exteriora commutabilia
est supplementum indigentiae humanae...; igitur supplementum
indigentiae humanae est vera mensura commutabilium. Sed supplementum
videtur mensurari per indigentiam; majoris enim valoris est
supplementum quod majorem supplet indigentiam.... Item hoc probatur
signo, quia videmus quod illo tempore quo vina deficiunt quia magis
indigeremus eis ipsa fiunt cariora....[3]

[Footnote 1: 'In justitia commutativa non estimatur pretium
commutabilium secundum naturalem valorem ipsorum, sic enim musca plus
valeret quam totus aurum mundi' (Buridan, _op. cit._, v. 14).]

[Footnote 2: Slater, 'Value in Theology and Political Economy,' _Irish
Ecclesiastical Record_, Sept. 1901.]

[Footnote 3: Buridan, _op. cit._, v. 14 and 16. Antoninus of Florence
says that value is determined by three factors, _virtuositas_,
_raritas_, and _placibilitas_ (_Summa_, ii. 1, 16.)]

The capacity of an object for satisfying man's needs could not be
measured by its capacity for satisfying the needs of this or that
individual, but by its capacity for satisfying the needs of the
average member of the community.[1] The Abbé Desbuquois, in the
article from which we have already quoted, finds in this elevation of
the common estimation an illustration of the general principle of the
mediævals, which we have seen at work in their teaching on the use of
property, that the individual benefit must always be subordinated to
the general welfare. According to him, it is but one application of
the duty of using one's goods for the common good. 'In the same way,
in allowing the right of exchange--a right, let us remark in passing,
which is but an application of the right of property--and in allowing
it as a means of life necessary to everybody, nature does not lose
sight of the universal destination of economic goods. One conceives
then that the variations of exchange are not permitted to be left
to the arbitrary judgment of a single man, nor to be affected by the
whims and abuses of individuals; that value is defined in view of the
general good. The exchange value, as it is in the general or social
order, proceeds from the judgment of the social environment (_milieu
social_).'[2]

[Footnote 1: 'Indigentia istius hominis vel illius non mensurat
valorem commutabilium; sed indigentia communis eorum qui inter se
commutare possunt,' Buridan, _op. cit._, v. 16. 'Prout communiter
venditur in foro,' Henri de Gand, _Quod Lib._, xiv. 14; Nider, _De
Cont. Merc._, ii. 1.]

[Footnote 2: 'La Justice dans l'Echange,' _Semaine Sociale de France_,
1911, p. 168.]

The writers of the Middle Ages show a very keen perception of the
elements which invest an object with the value which is accorded to
it by the general estimation. In Aquinas we find certain elements
recognised--'diversitas loci vel temporis, labor, raritas'--but it is
not until the authors of the fourteenth and fifteenth centuries that
we find a systematic treatment of value.[1] First and foremost there
is the cost of production of the article, especially the wages of all
those who helped to produce it. Langenstein lays down that every one
can determine for himself the just price of the wares he has to sell
by reckoning what he needs to support himself in the status which he
occupies.[2] According to the _Catholic Encyclopædia_,[3] the
just price of an article included enough to pay fair wages to the
worker--that is, enough to enable him to maintain the standard of
living of his class. This, though not stated in so many words
by Aquinas, was probably assumed by him as too obvious to need
repetition.[4] 'The cost of production of manufactured products,' says
Brants, 'is a legitimate constituent element of value; it is according
to the cost that the producer can properly fix the value of his
product and of his work.'[5]

[Footnote 1: Brants, _op. cit._, p. 69.]

[Footnote 2: _De Cont._, quoted by Roscher, _Geschichte_, p. 20.]

[Footnote 3: Tit. 'Political Economy.']

[Footnote 4: Palgrave, _Dictionary_, tit. 'Justum Pretium.']

[Footnote 5: Brants, _op. cit._, p. 202.]

The cost of the labour of production was, however, by no means the
only factor which was admitted to enter into the determination of
value. The passage from Gerson dealing with the circumstances to which
the prince must have regard in fixing a price, which we quoted above,
shows quite clearly that many other factors were recognised as no
less important. This appears with special clearness in the treatise
of Langenstein, whose authority on this subject was always ranked very
high. Bernardine of Siena is careful to point out that the expense of
production is only one of the factors which influence the value of an
object.[1] Biel explains that, when no price has been fixed by law,
the just price may be arrived at by a reference to the cost of the
labour of production, and to the state of the market, and the other
circumstances which we have seen above the prince was bound to have
regard to in fixing a price. He also allows the price to be raised on
account of any anxiety which the production of the goods occasioned
him, or any danger he incurred.[2]

[Footnote 1: 'Res potest plus vel minus valere tribus modis; primo
secundum suam virtutem; secondo modo secundum suam caritatem; tertio
modo secundum suam placibilitatem et affectionem.... Primo observat
quemdam naturalem ordinem utilium rerum, secundo observat quemdam
communem cursum copiae et inopiae, tertio observat periculum et
industriam rerum seu obsequiorum' (Funk, _Zins und Wucher_, p. 153).]

[Footnote 1: 'Sollicitudo et periculum,' _Op. cit._, IV. xv. 10.]

It will be apparent from the whole trend of the above that, whereas
the remuneration of the labour of all those who were engaged in the
production of an article, was one of the elements to be taken into
account in reckoning its value, and consequently its just price,
it was by no means the only element. Certain so-called Christian
socialists have endeavoured to find in the writings of the scholastics
support for the Marxian position that all value arises from labour.[1]
This endeavour is, however, destined to failure; we shall see in a
later chapter that many forms of unearned income were tolerated and
approved by the scholastics; but all that is necessary here is to draw
the attention of the reader to the passages on value to which we have
referred. One of the most prominent exponents of the untenable view
that the mediævals traced all value to labour is the Abbé Hohoff,
whose argument that there was a divorce between value and just price
in the scholastic writings, is ably controverted by Rambaud, who
remarks that nobody would have been more surprised than Aquinas
himself at the suggestion that he was the forerunner of Karl Marx.[2]

[Footnote 1: Even Ashley states that 'the doctrine had thus a close
resemblance to that of modern Socialists; labour it regarded both as
the sole (human) cause of wealth, and also as the only just claim to
the possession of wealth' (_Op. cit._, vol. i. part ii. p. 393).]

[Footnote 2: _Op. cit._, p. 50.]

The idea that the scholastics traced all value to the labour expended
on production is rejected by many of the most prominent writers on
mediæval economic theory. Roscher draws particular attention to the
fact that the canonist teaching assigned the correct proportions in
production to land, capital, and labour, in contrast to all the later
schools of economists, who have exaggerated the importance of one or
the other of these factors.[1] Even Knies, who was the first modern
writer to insist on the importance of the cost of production as an
element of value, states that the Church sought to fix the price of
goods in accordance with the cost of production (_Herstellungskosten_)
_and_ the consumption value (_Gebrauchswerte_).[2] Brants takes the
same view. 'The expenses of production are in practice the norm of the
fixing of the sale price in the great majority of cases, above all
in a very narrow market, where competition is limited; moreover, they
can, for reasons of public order, form the basis of a fixing that
will protect the producer and the consumer against the disastrous
consequences of constant oscillations. The vendor can in principle
be remunerated for his trouble. It is well that he should be so
remunerated; it is socially useful, and is used as a basis for fixing
price; but it cannot in any way be said that this forms the _objective
measure of value_, but that the work and expense are a sufficient
title of remuneration for the fixing of the just price of the sale
of a thing. Some writers have tried to conclude from this that the
authors of the Middle Ages saw in labour the measure of value. This
conclusion is exaggerated. We may fully admit that this element
enters into the sale price; but it is in no way the general measure
of value.... The expenses of production constitute, then, _one_ of
the legitimate elements of just price; they are not the _measure_ of
value, but a factor often influencing its determination.'[3] 'Labour,'
according to Dr. Cronin, 'is one of the most important of all the
determinants of value, for labour is the chief element in cost of
production, and cost of production is one of the chief elements in
determining the level at which it is useful to buy or sell. But labour
is not the only determinant of value; there is, _e.g._, the price of
the raw materials, a price that is not wholly determined by the labour
of producing those materials.'[4]

[Footnote 1: _Political Economy_, s. 48.]

[Footnote 2: _Politische Oekonomie vom Standpuncte der geschichtlichen
Methode_, p. 116.]

[Footnote 3: _Op. cit._, p. 112.]

[Footnote 4: _Ethics_, vol. ii. p. 181.]

The just price, then, in the absence of a legal fixing, was held to
be the price that was in accordance with the _communis estimatio_.
Of course, this did not mean that a plebiscite had to be taken before
every sale, but that any price that was in accordance with the general
course of dealing at the time and place of the sale was considered
substantially fair. 'A thing is worth what it can generally be sold
for--at the time of the contract; this means what it can be sold for
generally either on that day or the preceding or following day. One
must look to the price at which similar things are generally sold
in the open market.'[1] 'We must state precisely,' says the Abbé
Desbuquois, 'the character of this common estimation; it did not mean
the universal suffrage; although it expresses the universal interest,
it proceeds in practice from the evaluation of competent men, taken
in the social environment where the exchange value operates. If one
supposes a sovereign tribunal of arbitration where all the rights
of all the weak and all the strong economic factors are taken into
account, the just price appears as the sentence or decision of this
court.'[2] 'For the scholastics, the common estimation meant an
ethical judgment of at least the most influential members of
the community, anticipating the markets and fixing the rate of
exchange.'[3]

[Footnote 1: Caepolla, _De Cont. Sim._, 72.]

[Footnote 2: _Op. cit._, pp. 169-70.]

[Footnote 3: Fr. Kelleher in the _Irish Theological Quarterly_, vol.
xi. p. 133.]

It is quite incorrect to say, as has been sometimes said, that the
mediæval just price was in no way different from the competition
price of to-day which is arrived at by the higgling of the market.
Dr. Cunningham is very explicit and clear on this point. 'Common
estimation is thus the exponent of the natural or normal or just price
according to either the mediæval or modern view; but, whereas we rely
on the higgling of the market as the means of bringing out what is the
common estimate of any object, mediæval economists believed that it
was possible to bring common estimation into operation beforehand,
and by the consultation of experts to calculate out what was the just
price. If common estimation was thus organised, either by the town
authorities or guilds or parliament, it was possible to determine
beforehand what the price should be and to lay down a rule to this
effect; in modern times we can only look back on the competition
prices and say by reflection what the common estimation has been.'[1]
'The common estimation of which the Canonists spoke,' says Dr. Ryan,
'was conscious social judgment that fixed price beforehand, and was
expressed chiefly in custom, while the social estimate of to-day is
in reality an unconscious resultant of the higgling of the market, and
finds its expression only in market price.'[2] The phrase 'res tanti
valet quanti vendi potest,' which is so often used to prove that
the mediæval doctors permitted full competitive prices in the modern
sense, must be understood to mean that a thing could be sold at any
figure which was within the limits of the minimum and maximum just
price.[3]

[Footnote 1: _Growth of English Industry and Commerce_, vol. i. p.
353.]

[Footnote 2: _Living Wage_, p. 28.]

[Footnote 3: Lessius, _De Justitia et Jure_, xxi. 19.]

The last sentence suggests that the just price was not a fixed and
unalterable standard, but was somewhat wide and elastic. On this all
writers are agreed. 'The just price of things,' says Aquinas, 'is not
fixed with mathematical precision, but depends on a kind of estimate,
so that a slight addition or subtraction would not seem to destroy
the equality of justice,'[1] Caepolla repeats this dictum, with the
reservation that, when the just price is fixed by law, it must be
rigorously observed.[2] 'Note,' says Gerson, 'that the equality of
commutative justice is not exact or unchangeable, but has a good deal
of latitude, within the bounds of which a greater or less price may
be given without justice being infringed;'[3] and Biel insists on the
same latitude, from which he draws the conclusion that the just price
is constantly varying from day to day and from place to place.[4]
Generally it was said that there was a maximum, medium, and minimum
just price; and that any price between the maximum and minimum was
valid, although the medium was to be aimed at as far as possible.

[Footnote 1: II. ii. 77, 1, ad. 1.]

[Footnote 2: _De Cont. Sim._, 58.]

[Footnote 3: _De Cont._, ii. 11.]

[Footnote 4: _Op. cit._, IV. xv. 10.]

The price fixed by common estimation was therefore the one to be
observed in most cases, and it was at all times a safe guide to
follow. If, however, the parties either knew or had good reason to
believe that the common estimation had fixed the price wrongly,
they were not bound to follow it, but should arrive at a just
price themselves, having regard to the various considerations given
above.[1]

[Footnote 1: Nider, _De Cont. Merc._ ii.: 'Si vero scit vel credit
communitatem errare in estimatione pretii rei; tunc nullo modo debet
eam sequi; quia etiam si reciperet verum et justum pretium, tamen
faceret contra conscientiam.']

It did not make any difference whether the price was paid immediately
or at some future date. To increase the price in return for the giving
of credit was not allowed, as it was deemed usurious--as indeed it
was. It was held that the seller, in not taking his money immediately,
was simply making a loan of that amount to the buyer, and that to
receive anything more than the sum lent would be usury. Aquinas is
quite clear on this point. 'If a man wish to sell his goods at a
higher price than that which is just, so that he may wait for the
buyer to pay, it is manifestly a case of usury; because this waiting
for the payment of the price has the character of a loan, so that
whatever he demands beyond the just price in consideration of this
delay, is like a price for a loan, which pertains to usury. In like
manner, if a buyer wishes to buy goods at a lower price than what is
just, for the reason that he pays for the goods before they can
be delivered, it is likewise a sin of usury; because again this
anticipated payment of money has the character of a loan, the price of
which is the rebate on the just price of the goods sold. On the other
hand, if a man wishes to allow a rebate on the just price in order
that he may have his money sooner, he is not guilty of the sin of
usury.'[1] If, however, the seller, by giving credit, suffered any
damage, he was entitled to be recompensed; this, as we shall see, was
an ordinary feature of usury law. It could not be said that the price
was raised. The price remained the same; but the seller was entitled
to something further than the price by way of damages.[2] It was
by the application of this principle that a seller was justified in
demanding more than the current price for an article which possessed
some individual or sentimental value for him. 'In such a case the just
price will depend not only on the thing sold, but on the loss which
the sale brings on the seller.... No man should sell what is not his,
though he may charge for the loss he suffers.'[3] On the other
hand, it was strictly forbidden to raise the price on account of the
individual need of the buyer.[4]

[Footnote 1: II. ii. 78, 2, ad. 7. See _Decret. Greg._, v. 19, _de
usuris_, cc. 6 and 10.]

[Footnote 2: Endemann, _Studien_, vol. ii. pp. 49; Desbuquois, _op.
cit._, p. 174.]

[Footnote 3: II. ii. 77, 1.]

[Footnote 4: _Ibid._]



§ 4. _The Just Price of Labour_.

Particular rules were laid down for determining the just price of
certain classes of goods. These need not be treated in detail, as they
were merely applications of the general principle to particular cases,
and whatever interest they possess is in the domain of practice rather
than of theory. In the sale of immovable property the rule was that
the value should be arrived at by a consideration of the annual fruits
of the property.[1] The only one of the particular contracts which
need detain us here is that of a contract of service for wages
(_locatio operarum_). Wages were considered as ruled by the laws
relating to just price. 'That is called a wage (_merces_) which is
paid to any one as a recompense for his work and labour. Therefore,
as it is an act of justice to give a just price for a thing taken from
another person, so also to pay the wages of work and labour is an act
of justice.'[2] Again, 'Remuneration of service or work ... can be
priced at a money value, as may be seen in the case of those who offer
for hire the labour which they exercise by work or by tongue.'[3] Biel
insists that the value of labour is subject to the same influences as
the value of any other commodity which is offered for sale, and that
therefore a just price must be observed in buying it.[4]

[Footnote 1: Caepolla, _de Cont. Sim._, 78; Carletus, _Summa
Angelica_, lxv.]

[Footnote 2: Aquinas, _Summa_, II. ii. 114, 1.]

[Footnote 3: II. ii. 78, 2, ad. 3.]

[Footnote 4: _Op. cit._, IV. xv. 10. Modern Socialists caricature the
correct principle 'that labour is a commodity' into 'the labourer is
a commodity'--a great difference, which is not sufficiently understood
by many present-day writers. (See Roscher, _Political Economy_, s.
160.)]

This, according to Brants,[1] is essentially a matter upon which more
enlightenment will be found in histories of the working classes[2]
than in books dealing with the enunciation of abstract theories;
nevertheless, it is possible to state generally that it was regarded
as the duty of employers to give such a wage as would support the
worker in accordance with the requirements of his class. In the
great majority of cases the rate of wages was fixed by some
public--municipal or corporative--authority, but Langenstein
enunciates a rule which seems to approach the statement of a general
theory. According to him, when a man has something to sell, and has
no indication of the just price from its being fixed by any outside
authority, he must endeavour to get such a price as will _reasonably_
recompense him for any outlay he may have incurred, and will enable
him to provide for his needs, spiritual and temporal.[3] It was not
until the sixteenth century that the fixing of the just price of
wages was submitted to scientific discussion;[4] in the fourteenth
and fifteenth centuries there is little to be found bearing on this
subject except the passage of Langenstein which we have quoted, and
some strong exhortations by Antoninus of Florence to masters to pay
good wages.[5] The reason for this paucity of authority upon a subject
of so much importance is that in practice the machinery provided
by the guilds had the effect of preserving a substantially just
remuneration to the artisan. When a man is in perfect health he
does not bother to read medical books. In the same way, the proper
remuneration of labour was so universally recognised as a duty, and so
satisfactorily enforced, that it seems to have been taken for granted,
and therefore passed over, by the writers of the period. One may agree
with Brants in concluding that, 'the principle of just price in sales
was applied to wages; fluctuations in wages were not allowed; the just
price, as in sales, rested on the approximate equality of the services
rendered; and that this equality was estimated by common opinion.'[6]
Of course, in the case of slave labour it could not be said that any
wage was paid. The master was entitled to the services of the slave,
and in return was bound to furnish him with the necessaries of
life.[7]

[Footnote 1: _Op. cit._, p. 103.]

[Footnote 2: An excellent bibliography of books dealing with the
history of the working classes in the Middle Ages is to be found in
Brants, _op. cit._, p. 105. The need for examining concrete economic
phenomena is insisted on in Ryan's _Living Wage_, p. 28.]

[Footnote 3: _De Cont._ We have here a recognition of the principle
that the value of labour is not to be measured by anything extrinsic
to itself, _e.g._ by the value of the product, but by its own natural
function and end, and this function and end is the supplying of the
requirements of human life. The wage must, therefore, be capable of
supplying the same needs that the expenditure of a labourer's energy
is meant to supply. (See Cronin, _Ethics_, vol. ii. p. 390.)]

[Footnote 4: Brants, _op. cit._, p. 118.]

[Footnote 5: The passages from the _Summa_ of Antoninus bearing on the
subject are reprinted in Brants, _op. cit._, p. 120.]

[Footnote 6: _Op. cit._, p. 125.]

[Footnote 7: Brants, _op. cit._, p. 116, quoting _Le Lime du Trésor_
of Brunetto Latini.]


§ 5. _Value of the Conception of the Just Price_.

It is probably correct to say that the canonical teaching on just
price was negative rather than positive; in other words, that it did
not so much aim at positively fixing the price at which goods should
be sold, as negatively at indicating the practices in buying and
selling which were unjust. 'The doctrine of just price,' according to
Dr. Ryan, 'may sometimes have been associated with incorrect views
of industrial life, but all competent authorities agree that it was a
fairly sound attempt to define the equities of mediæval exchanges,
and that it was tolerably successful in practice.'[1] The condition
of mediæval markets was frequently such that the competition was not
really fair competition, and consequently the price arrived at
by competition would be unfair either to buyer or seller. 'This,'
according to Dr. Cunningham, 'was the very thing which mediæval
regulation had been intended to prevent, as any attempt to make gain
out of the necessities of others, or to reap profit from unlooked-for
occurrences would have been condemned as extortion. It is by taking
advantage of such fluctuations that money is most frequently made in
modern times; but the whole scheme of commercial life in the
Middle Ages was supposed to allow of a regular profit on each
transaction.'[2] There might be some doubt as to the positive justice
of this or that price; but there could be no doubt as to the injustice
of a price which was enhanced by the necessities of the poor, or the
engrossing of a vital commodity.[3] Merely to buy up the whole supply
of a certain commodity, even if it were bought up by a 'ring' of
merchants, provided that the commodity was resold within the limits
of the just price, was not a sin against justice, though it might be
a sin against charity.[4] If the authorities granted a monopoly, they
must at the same time fix a just price.[5] A monopoly which was not
privileged by the State, and which had for its aim the raising of
the price of goods above the just price was regarded with universal
reprobation.[6] 'Whoever buys up corn, meat, and wine,' says
Trithemius, 'in order to drive up their price and to amass money at
the cost of others is, according to the laws of the Church, no better
than a common criminal. In a well-governed community all arbitrary
raising of prices in the case of articles of food and clothing is
peremptorily stopped; in times of scarcity merchants who have supplies
of such commodities can be compelled to sell them at fair prices; for
in every community care should be taken that all the members should be
provided for, and not only a small number be allowed to grow rich,
and revel in luxury to the hurt and prejudice of the many.[7] Thus the
doctrine of the just price was a deadly weapon with which to fight the
'profiteer.' The engrosser was looked upon as the natural enemy of the
poor; and the power of the trading class was justly reckoned so great,
that in cases of doubt prices were always fixed low rather than high.
In other words, the buyer--that is to say, the community--was the
subject of protection rather than the seller.[8]

[Footnote 1: _The Living Wage_, p. 27.]

[Footnote 2: _Growth of English Industry and Commerce_, vol. i. p.
460.]

[Footnote 3: Endemann, _Studien_, vol. ii. p. 60.]

[Footnote 4: Lessius, _De Justitia et Jure_, II. xx. 1, 21.]

[Footnote 5: _Ibid._]

[Footnote 6: Langenstein, _De Cont._; Biel, _op. cit._, iv. xv. 11.]

[Footnote 7: Quoted in Janssen, _op. cit._, vol. ii. p. 102.]

[Footnote 8: Roscher, _Geschichte_, p. 12.]

It must at the same time be clearly kept in mind that the seller
was also protected. All the authorities are unanimous that it was as
sinful for the buyer to give too little as for the seller to demand
too much, and it is this aspect of the just price which appears most
favourable in comparison with the theory of price of the classical
economists. In the former case prices were fixed having regard to
the wages necessary for the producer; in the latter the wages of the
producer are determined by the price at which he can sell his
goods, exposed to the competition of machinery or foreign--possibly
slave--labour.[1] According to the _Catholic Encyclopædia_: 'To the
mediæval theologian the just price of an article included enough
to pay fair wages to the worker--that is, enough to enable him to
maintain the standard of living of his class.'[2] 'The difference,'
says Dr. Cunningham, 'which emerges according as we start from one
principle or the other comes out most distinctly with reference to
wages. In the Middle Ages wages were taken as a first charge; in
modern times the reward of the labourer cannot but fluctuate in
connection with fluctuations in the utility and market price of the
things. There must always be a connection between wages and prices,
but in the olden times wages were the first charge, and prices on the
whole depended on them, while in modern times wages are, on the other
hand, directly affected by prices.'[3] Dr. Cunningham draws attention
to the fact that the labouring classes rejected the idea of the fixing
of a just price for their services when, from a variety of causes,
a situation arose when they were able to earn by open competition a
reward higher than what was necessary to support them according
to their state in life.[4] Nowadays the reverse has taken place;
unrestricted competition has in many cases resulted in the reduction
of wages to a level below the margin of subsistence; and the general
cry of the working classes is for the compulsory fixing of minimum
rates of wages which will ensure that their subsistence will not be
liable to be impaired by the fluctuations of the markets. What
the workers of the present day look to as a desirable, but almost
unattainable, ideal, was the universal practice in the ages when
economic relations were controlled by Christian principles.

[Footnote 1: Ashley, _op. cit._, vol. i. pt. i. p. 129.]

[Footnote 2: Art. 'Political Economy.']

[Footnote 3: _Growth of English Industry and Commerce_, vol. i. p.
461.]

[Footnote 4: _Christianity and Economic Science_, p. 29.]


§ 6. _Was the Just Price Subjective or Objective_?

The question whether the just price was essentially subjective or
objective has recently formed the subject matter of an interesting
and ably conducted discussion, provoked by certain remarks in Dr.
Cunningham's _Western Civilisation_.[1] Dr. Cunningham, although
admiring the ethical spirit which animated the conception of the just
price, thought at the same time that the economic ideas underlying the
conception were so undeveloped and unsound that the theory could not
be applied in practice at the present day. 'Their economic analysis
was very defective, and the theory of price which they put forward was
untenable; but the ethical standpoint which they took is well worth
examination, and the practical measures which they recommended appear
to have been highly beneficial in the circumstances in which they had
to deal. Their actions were not unwise; their common-sense morality
was sound; but the economic theories by which they tried to give an
intellectual justification for their rules and their practice were
quite erroneous.... The attempt to determine an ideal price implies
that there can and ought to be stability in relative values and
stability in the measure of values--which is absurd. The mediæval
doctrine and its application rested upon another assumption which we
have outlived. Value is not a quality which inheres in an object so
that it can have the same worth for everybody; it arises from the
personal preference and needs of different people, some of whom desire
a thing more and some less, some of whom want to use it in one way and
some in another. Value is not objective--intrinsic in the object--but
subjective, varying with the desire and intentions of the possessors
or would-be possessors; and, because it is thus subjective, there
cannot be a definite ideal value which every article ought to possess,
and still more a just price as the measure of that ideal value.' In
these and similar observations to be found in the _Growth of English
History and Commerce_, Dr. Cunningham showed that he profoundly
misunderstood the doctrine of the just price; the objectivity which
he attributed to it was not the objectivity ascribed to it by the
scholastics. It was to correct this misunderstanding that Father
Slater contributed an article to the _Irish Theological Quarterly_[2]
pointing out that the just price was subjective rather than objective.
This article, which was afterwards reprinted in _Some Aspects of Moral
Theology_, and the conclusions of which were embodied in the same
writer's work on Moral Theology, was controverted in a series of
articles by Father Kelleher in the _Irish Theological Quarterly_.[3]

[Footnote 1: Pp. 77-9.]

[Footnote 2: Vol. iv. p. 146.]

[Footnote 1: 'Market Prices,' vol. ix. p. 398 and vol. x. p. 163; and
'Father Slater on Just Price and Value,' vol. xi. p. 159.]

Father Slater draws attention to the fact that Dr. Cunningham
overlooked to some extent the importance of common estimation in
arriving at the just price. He points out that, far from objects being
invested with some immutable objective value, their value was in fact
determined by the price which the community as a whole was willing to
pay for them: 'As the value in exchange will be determined by what the
members of the community at the time are prepared to give, ... it will
be determined by the social estimation of its utility for the support
of life and its scarcity. It will depend upon its capacity to satisfy
the wants and desires of the people with whom commercial transactions
are possible and practicable. Father Slater then goes on categorically
to refute Dr. Cunningham's presentation of the objectivity of price:
'All that that doctrine asserts is that there should be, and that
there is, an equivalent in social value between the commodity and
its price at a certain time and in a certain place; it says nothing
whatever about the stability or permanence of prices at different
times and at different places. By maintaining that the just price did
not depend upon the valuation of the individual buyer or seller the
mediæval doctors did not dream of making it intrinsic to the object.'
In the work on Moral Theology, to which we have referred, expressions
occur which lead one to believe that Father Slater did not see any
great difference between the mediæval just price arrived at by common
estimation and the modern normal or market price arrived at by
open competition. Thus, in endeavouring to correct Dr. Cunningham's
misunderstanding, Father Slater seems to have gone too far in the
other direction, and his position has been ably and, in our judgment,
successfully, controverted by Father Kelleher.

The point at issue between the upholders of the two opposing views
on just price is well stated by Father Kelleher in the first of his
articles on the subject: 'We must try to find out whether the just
and fair price determined the rate of exchange, or whether the rate
of exchange, being determined without an objective standard and merely
according to the play of human motives, determines what we call the
just and fair price.'[1] We have already demonstrated that the common
estimation referred to by the mediæval doctors was something quite
apart from the modern higgling in the market; and that, far from
being merely the result of unbridled competition on both sides, it
was rather the considered judgment of the best-informed members of the
community. As we have seen, even Dr. Cunningham admits that there
was a fundamental difference between the common estimation of
the scholastics and the modern competitive price. This is clearly
demonstrated by Father Kelleher, who further establishes the
proposition that the modern price is purely subjective, and that no
subjective price can rest on an ethical basis. The question at issue
therefore between what we may call the subjective and objective
schools is not whether the sale price was determined by competition
in the modern sense, but whether the common estimation of those best
qualified to form an opinion on the subject in itself determined the
just price, or whether it was merely the most reliable evidence of
what the just price in fact was at a particular moment.

[Footnote 1: _Irish Theological Quarterly_, vol. ix. p. 41.]

Father Kelleher draws attention to the fact that Aquinas in his
article on price did not specifically affirm that the just price
was objective, but he explains this omission by saying that the
objectivity of the price was so well and universally understood that
it was unnecessary expressly to restate it. Indeed, as we saw above,
the teaching of Aquinas on price left a great deal to be supplied by
later writers, not because he was in any doubt about the subject, but
because the theory was so well understood. 'Not even in St. Thomas can
we find a formal discussion of the moral obligation of observing an
objective equivalence in contracts of buying and selling. He simply
took it for granted, as, indeed, was inevitable, seeing that, up to
his time and for long after, all Catholic thought and legislation
proceeded on that hypothesis. But that he actually did take it for
granted, he has given many clear indications in his article on Justice
which leave us no room for reasonable doubt.'[1] As Father Kelleher
very cogently points out, the discussion in Aquinas's article on
commerce, whether it was lawful to buy cheap and sell dear, very
clearly indicates that the author maintained the objective theory,
because if the just price were simply determined by what people were
willing to give, this question could not have arisen.

[Footnote 1: _Irish Theological Quarterly_, vol. x. p. 165.]

Nor is the fact that the just price admitted of a certain elasticity
an argument in favour of its being subjective. Father Kelleher fully
admits that the common estimation was the general criterion of just
price, and, of course, the common estimation could not, of its very
nature, be rigid and immutable. Commodities should, indeed, exchange
according to their objective value, but, even so, commodities could
not carry their value stamped on their faces. Even if we assume that
the standard of exchange was the cost of production, there would still
remain room for a certain amount of difference of opinion as to what
exactly their value would be in particular instances. Suppose that the
commodity offered for sale was a suit of clothes, in estimating its
value on the basis of the cost of production, opinions might differ
as to the precise amount of time required for making it, or as to the
cost of the cloth out of which it was made. Unless recourse was to be
had to an almost interminable process of calculations, nobody could
say authoritatively what precisely the value was, and in practice the
determination of value had perforce to be left to the ordinary human
estimate of what it was, which of its very nature was bound to admit a
certain margin of fluctuation. Thus we can easily understand how, even
with an objective standard of value, the just price might be admitted
to vary within the limits of the maximum as it might be expected to
be estimated by sellers and the minimum as it would appear just to
buyers. The sort of estimation of which St. Thomas speaks is therefore
nothing else than a judgment, which, being human, is liable to be
slightly in excess or defect of the objective value about which it is
formed.'[1] As Father Kelleher puts it on a later page, 'There is a
sense certainly in which, with a solitary exception in the case of
wages, it may be said with perfect truth that the common estimation
determines the just price. That is, the common estimation is the
proximate practical criterion.'[2]

[Footnote 1: _Irish Theological Quarterly_, vol. x. p. 166.]

[Footnote 2: P. 173.]

Father Kelleher uses in support of his contention a very ingenious
argument drawn from the doctrine of usury. As we said in the first
chapter, and as we shall prove in detail in the next section, the
prohibition of usury was simply one of the applications of the theory
of equivalence in contracts--in other words, it was the determination
of the just price to be paid in an exchange of money for money. If,
asks Father Kelleher, the common estimation was the final test of just
price, why was not moderate usury allowed? That the general opinion of
the community in the Middle Ages was undoubtedly in favour of allowing
a reasonable percentage on loans is shown by the constant striving of
the Church to prevent such a practice. Nevertheless the Church did
not for a moment relax its teaching on usury in spite of the almost
universal judgment of the people. Here, therefore, is a clear example
of one contract in which the standard of value is clearly objective,
and it is only reasonable to draw the conclusion that the same
standard which applied in contracts of the exchange of money should
apply in contracts of the sale of other articles.

Father Kelleher's contention seems to be completely supported by the
passage from Nider which we have cited above, to the effect that the
common estimation ceases to be the final test of the just price when
the contracting parties know or believe that the common estimation has
erred.[1] This seems to us clearly to show that the common estimation
was but the most generally received test of what the just price
in fact was, but that it was in no sense a final or irrefutable
criterion.[2]

[Footnote 1: _De Cont. Merc._, ii. xv. Nider was regarded as a very
weighty authority on the subject of contracts (Endemann, _Studien_,
vol. ii. p. 8).]

[Footnote 2: The argument in favour of what we have called the
'objective' theory of the just price is strengthened by the
consideration that goods do not satisfy mere subjective whims, but
supply real wants. For example, food supplies a real need of the human
being, as also does clothing; in the one case hunger is appeased,
and in the other cold is warded off, just as drugs used in medical
practice produce real objective effects on the person taking them.]

The theory that the just price was objective seems to be accepted by
the majority of the best modern students of the subject. Sir William
Ashley says: 'The fundamental difference between the mediæval and
modern point of view is... that with us value is something entirely
subjective; it is what each individual cares to give for a thing. With
Aquinas it was entirely objective; something outside the will of
the individual purchaser or seller; something attached to the thing
itself, existing whether he liked it or not, and that he ought to
recognise.'[1] Palgrave's _Dictionary of Political Economy_, following
the authority of Knies, expresses the same opinion: 'Perhaps the
contrast between mediæval and modern ideas of value is best expressed
by saying that with us value is usually something subjective,
consisting of the mental determination of buyer and seller, while to
the schoolmen it was in a sense objective, something intrinsically
bound up with the commodity itself.'[2] Dr. Ryan agrees with this
view: 'The theologians of the sixteenth and seventeenth centuries
assumed that the objective price would be fair, since it was
determined by the social estimate. In their opinion the social
estimate would embody the requirements of objective justice as fully
as any device or institution that was practically available. For the
condition of the Middle Ages and the centuries immediately following,
this reasoning was undoubtedly correct. The agencies which created
the social estimate and determined prices--namely the civil law, the
guilds, and custom--succeeded fairly in establishing a price that was
equitable to all concerned.'[3] Dr. Cleary says: 'True, the _pretium
legale_ is regarded as being a just price, but in order that it may
be just, it supposes some objective basis--in other words, it rather
declares than constitutes the just price.'[4] Haney is also strongly
of opinion that the just price was objective. 'Briefly stated, the
doctrine was that every commodity had some one true value which was
objective and absolute.'[5] The greater number of modern students
therefore who have given most care and attention to the question are
inclined to the opinion that the just price was not subjective, but
objective, and we see no valid reason for disagreeing with this view,
which seems to be fully warranted by the original authorities.

[Footnote 1: _Op. cit._, vol. i. pt. i. p. 140.]

[Footnote 2: Art. 'Justum Pretium.']

[Footnote 3: 'The Moral Aspect of Monopoly,' by J.A. Ryan, D.D.,
_Irish Theological Quarterly_, in. p. 275; and see _Distributive
Justice_, pp. 332-4.]

[Footnote 4: _Op. cit._, p. 193.]

[Footnote 5: _History of Economic Thought_, p. 75.]


§7. _The Mediæval Attitude towards Commerce_.

Before passing from the question of price, we must discuss the
legitimacy of the various occupations which were concerned with buying
and selling. The principal matter which arises for consideration
in this regard is the attitude of the mediæval theologians towards
commerce. Aquinas discusses the legitimacy of commerce in the same
question in which he discusses just price, and indeed the two subjects
are closely allied, because the importance of the observance of
justice in buying and selling grew urgent as commerce extended and
advanced.

In order to understand the disapprobation with which commerce was on
the whole regarded in the Middle Ages, it is necessary to appreciate
the importance of the Christian teaching on the dignity of labour. The
principle that, far from being a degrading or humiliating occupation,
as it had been regarded in Greece and Rome, manual labour was, on
the contrary, one of the most noble ways of serving God, effected
a revolution in the economic sphere analogous to that which the
Christian sanctification of marriage effected in the domestic sphere.
The Christian teaching on labour was grounded on the Divine precepts
contained in both the Old and New Testaments,[1] and upon the example
of Christ, who was Himself a working man. The Gospel was preached
amongst the poor, and St. Paul continued his humble labours during
his apostolate.[2] A life of idleness was considered something to be
avoided, instead of something to be desired, as it had been in the
ancient civilisations. Gerson says it is against the nature of man to
wish to live without labour as usurers do,[3] and Langenstein
inveighs against usurers and all who live without work.[4] 'We read
in Sebastian Brant that the idlers are the most foolish amongst fools,
they are to every people like smoke to the eyes or vinegar to
the teeth. Only by labour is God truly praised and honoured; and
Trithemius says "Man is born to labour as the bird to fly, and hence
it is contrary to the nature of man when he thinks to live without
work."'[5] The example of the monasteries, where the performance
of all sorts of manual labour was not thought inconsistent with the
administration of the sacred offices and the pursuit of the highest
intellectual exercises, acted as a powerful assertion to the laity
of the dignity of labour in the scheme of things.[6] The value of the
monastic example in this respect cannot be too highly estimated. 'When
we consider the results of the founding of monasteries,' says Dr.
Cunningham, 'we find influences at work that were plainly economic.
These communities can be best understood when we think of them as
Christian industrial colonies, and remember that they moulded society
rather by example than by precept. We are so familiar with the attacks
and satires on monastic life that were current at the Reformation
period, that it may seem almost a paradox to say that the chief
claim of the monks to our gratitude lies in this, that they helped to
diffuse a better appreciation of the duty and dignity of labour.'[7]

[Footnote 1: Gen. iii. 19; Ps. cxxvii. 2; 2 Thess. iii. 10. The
last-mentioned text is explained, in opposition to certain Socialist
interpretations which have been put on it, by Dr. Hogan in the _Irish
Ecclesiastical Record_, vol. xxv. p. 45.]

[Footnote 2: Wallon, _op. cit._, vol. iii. p. 401.]

[Footnote 3: _De Cont._, i. 13.]

[Footnote 4: _De Cont._]

[Footnote 5: Janssen, _op. cit._, vol. ii. pp. 93-4.]

[Footnote 6: Levasseur, _Histoire des Classes ouvrières en France_,
vol. i. pp. 182 _et seq_.]

[Footnote 7: _Western Civilisation_, vol. ii. p. 35.]

The result of this teaching and example was that, in the Middle Ages,
labour had been raised to a position of unquestioned dignity. The
economic benefit of this attitude towards labour must be obvious. It
made the working classes take a direct pride and interest in their
work, which was represented to be a means of sanctification. 'Labour,'
according to Dr. Cunningham, 'was said to be pregnant with a double
advantage--the privilege of sharing with God in His work of carrying
out His purpose, and the opportunity of self-discipline and the
helping of one's fellow-men.'[1] 'Industrial work,' says Levasseur,
'in the times of antiquity had always had, in spite of the
institutions of certain Emperors, a degrading character, because it
had its roots in slavery; after the invasion, the grossness of the
barbarians and the levelling of towns did not help to rehabilitate it.
It was the Church which, in proclaiming that Christ was the son of
a carpenter, and the Apostles were simple workmen, made known to the
world that work is honourable as well as necessary. The monks proved
this by their example, and thus helped to give to the working classes
a certain consideration which ancient society had denied them. Manual
labour became a source of sanctification.'[2] The high esteem in which
labour was held appears from the whole artistic output of the Middle
Ages. 'Many of the simple artists of the time represented the saints
holding some instrument of work or engaged in some industrial pursuit;
as, for instance, the Blessed Virgin spinning as she sat by the cradle
of the divine Infant, and St. Joseph using a saw or carpenter's tools.
"Since the Saints," says the _Christian Monitor_, "have laboured, so
shall the Christian learn that by honourable labour he can glorify
God, do good, and save his own soul."'[3] Work was, alongside of
prayer and inseparable from it, the perfection of Christian life.[4]

[Footnote 1: _Christianity and Economic Science_, pp. 26-7.]

[Footnote 2: _Op. cit._, vol. i. p. 187.]

[Footnote 3: Janssen, _op. cit._, vol. ii. p. 9.]

[Footnote 4: Wallon, _op. cit._, vol. i. p. 410.]

It must not be supposed, however, that manual labour alone was thought
worthy of praise. On the contrary, the necessity for mental and
spiritual workers was fully appreciated, and all kinds of labour
were thought equally worthy of honour. 'Heavy labourer's work is the
inevitable yoke of punishment, which, according to God's righteous
verdict, has been laid upon all the sons of Adam. But many of Adam's
descendants seek in all sorts of cunning ways to escape from the yoke
and to live in idleness without labour, and at the same time to have
a superfluity of useful and necessary things; some by robbery and
plunder, some by usurious dealings, others by lying, deceit, and all
the countless, forms of dishonest and fraudulent gain, by which men
are for ever seeking to get riches and abundance without toil. But
while such men are striving to throw off the yoke righteously imposed
on them by God, they are heaping on their shoulders a heavy burden
of sin. Not so, however, do the reasonable sons of Adam proceed; but,
recognising in sorrow that for the sins of their first father God has
righteously ordained that only through the toil of labour shall they
obtain what is necessary to life, they take the yoke patiently on
them.... Some of them, like the peasants, the handicraftsmen, and the
tradespeople, procure for themselves and others, in the sweat of their
brows and by physical work, the necessary sustenance of life. Others,
who labour in more honourable ways, earn the right to be maintained by
the sweat of others' brows--for instance, those who stand at the head
of the commonwealth; for by their laborious exertion the former are
enabled to enjoy the peace, the security, without which they could not
exist. The same holds good of those who have the charge of spiritual
matters....'[1] 'Because,' says Aquinas, 'many things are necessary to
human life, with which one man cannot provide himself, it is necessary
that different things should be done by different people; therefore
some are tillers of the soil, some are raisers of cattle, some are
builders, and so on; and, because human life does not simply mean
corporal things, but still more spiritual things, therefore it
is necessary that some people should be released from the care of
attending to temporal matters. This distribution of different offices
amongst different people is in accordance with Divine providence.'[2]

[Footnote 1: Langenstein, quoted in Janssen, _op. cit._, p. 95.]

[Footnote 2: _Summa Cont. Gent_., iii. 134.]

All forms of labour being therefore admitted to be honourable and
necessary, there was no difficulty felt about justifying their reward.
It was always common ground that services of all kinds were entitled
to be properly remunerated, and questions of difficulty only arose
when a claim was made for payment in a transaction where the element
of service was not apparent.[1] The different occupations in which men
were engaged were therefore ranked in a well-recognised hierarchy
of dignity according to the estimate to which they were held to
be entitled. The Aristotelean division of industry into _artes
possessivae_ and _artes pecuniativae_ was generally followed, the
former being ranked higher than the latter. 'The industries called
_possessivae_, which are immediately useful to the individual, to the
family, and to society, producing natural wealth, are also the most
natural as well as the most estimable. But all the others should not
be despised. The natural arts are the true economic arts, but the arts
which produce artificial riches are also estimable in so far as they
serve the true national economy; the commutation of the exchanges and
the _cambium_ being necessary to the general good, are good in so far
as they are subordinate to the end of true economy. One may say the
same thing about commerce. In order, then, to estimate the value of an
industrial art, one must examine its relation to the general good.'[2]
Even the _artes possessivae_ were not all considered equally worthy of
praise, but were ranked in a curious order of professional hierarchy.
Agriculture was considered the highest, next manufacture, and lastly
commerce. Roscher says that, whereas all the scholastics were agreed
on the excellence of agriculture as an occupation, the best they could
say of manufacture was _Deo non displicet_, whereas of commerce they
said _Deo placere non potest_; and draws attention to the interesting
consequence of this, namely, that the various classes of goods that
took part in the different occupations were also ranked in a certain
order of sacredness. Immovables were thought more worthy of protection
against execution and distress than movables, and movables than
money.[3] Aquinas advises the rulers of States to encourage the _artes
possessivae_, especially agriculture.[4] The fullest analysis of the
order in which the different _artes possessivae_ should be ranked is
to be found in Buridan's _Commentaries on Aristotle's Politics_. He
places first agriculture, which comprises cattle-breeding, tillage,
and hunting; secondly, manufacture, which helps to supply man's
corporal needs, such as building and architecture; thirdly,
administrative occupations; and lastly, commerce. The Christian
Exhortation, quoted by Janssen,[5] says, 'The farmer must in all
things be protected and encouraged, for all depend on his labour,
from the monarch to the humblest of mankind, and his handiwork is in
particular honourable and well pleasing to God.'

[Footnote 1: Aquinas, _Summa_, II. ii. 77, 4; Nider, _op. cit._, II.
x.]

[Footnote 2: Brants, _op. cit._, p. 82.]

[Footnote 3: _Geschichte_, p. 7.]

[Footnote 4: _De Regimine Principum_, vol. ii. chaps, v. and vi.]

[Footnote 5: _Op. cit._, vol. i. p. 297.]

The division of occupations according to their dignity adopted by
Nicholas Oresme is somewhat unusual. He divides professions into (1)
honourable, or those which increase the actual quantity of goods in
the community or help its development, such as ecclesiastical offices,
the law, the soldiery, the peasantry, artisans, and merchants, and
(2) degrading--such as _campsores, mercatores monetae sen
billonatores.'_[1]

No occupation, therefore, which involved labour, whether manual
or mental, gave any ground for difficulty with regard to its
remuneration. The business of the trader or merchant, on the other
hand, was one which called for some explanation. It is important
to understand what commerce was taken to mean. The definition which
Aquinas gives was accepted by all later writers: 'A tradesman is one
whose business consists in the exchange of things. According to the
philosopher, exchange of things is twofold; one natural, as it were,
and necessary, whereby one commodity is exchanged for another, or
money taken in exchange for a commodity in order to satisfy the needs
of life. Such trading, properly speaking, does not belong to traders,
but rather to housekeepers or civil servants, who have to provide the
household or the State with the necessaries of life. The other kind
of exchange is either that of money for money, or of any commodity for
money, not on account of the necessities of life, but for profit; and
this kind of trade, properly speaking, regards traders.' It is to
be remarked in this definition, that it is essential, to constitute
trade, that the exchange or sale should be for the sake of profit,
and this point is further emphasised in a later passage of the same
article: 'Not every one that sells at a higher price than he bought
is a trader, but only he who buys that he may sell at a profit. If,
on the contrary, he buys, not for sale, but for possession, and
afterwards for some reason wishes to sell, it is not a trade
transaction, even if he sell at a profit. For he may lawfully do this,
either because he has bettered the thing, or because the value of the
thing has changed with the change of place or time, or on account
of the danger he incurs in transferring the thing from one place to
another, or again in having it carried by hand. In this sense neither
buying nor selling is unjust.'[2] The importance of this definition
is that it rules out of the discussion all cases where the goods have
been in any way improved or rendered more valuable by the services
of the seller. Such improvement was always reckoned as the result of
labour of one kind or another, and therefore entitled to remuneration.
The essence of trade in the scholastic sense was selling the thing
unchanged at a higher price than that at which it had been bought, for
the sake of gain.[3]

[Footnote 1: _Tractatus de Origine, etc., Monetarum_.]

[Footnote 2: _Tractatus de Origine, etc., Monetarum_, ad. 2.]

[Footnote 3: 'Fit autem mercatio cum non ut emptor ea utatur sed ut
earn carius vendat etiam non mutatam suo artificio; illa mercatio
dicitur proprie negotiatio' (Biel, _op. cit._, IV. xv. 10.)]

The legitimacy of trade in this sense was only gradually admitted. The
Fathers of the Church had with one voice condemned trade as being an
occupation fraught with danger to the soul. Tertullian argued that
there would be no need of trade if there were no desire for gain, and
that there would be no desire for gain if man were not avaricious.
Therefore avarice was the necessary basis of all trade.[1] St. Jerome
thought that one man's gain in trading must always be another's loss;
and that, in any event, trade was a dangerous occupation since it
offered so many temptations to fraud to the merchant.[2] St. Augustine
proclaimed all trade evil because it turns men's minds away from
seeking true rest, which is only to be found in God, and this opinion
was embodied in the _Corpus Juris Canonici_.[3] This early view that
all trade was to be indiscriminately condemned could not in the nature
of things survive experience, and a great step forward was taken
when Leo the Great pronounced that trade was neither good nor bad in
itself, but was rendered good or bad according as it was honestly or
dishonestly carried on.[4]

[Footnote 1: _De Idol_., xi.]

[Footnote 2: Ashley, _op. cit._, vol. i. pt. i. p. 129.]

[Footnote 3: See _Corpus Juris Canonici_, Deer. I.D. 88 c. 12.]

[Footnote 4: _Epist. ad Rusticum_, c. ix.]

The scholastics, in addition to condemning commerce on the authority
of the patristic texts, condemned it also on the Aristotelean ground
that it was a chrematistic art, and this consideration, as we have
seen above, enters into Aquinas's article on the subject.[1]

[Footnote 1: Rambaud, _op. cit._, p. 52.]

The extension of commercial life which took place about the beginning
of the thirteenth century, raised acute controversies about the
legitimacy of commerce. Probably nothing did more to broaden the
teaching on this subject than the necessity of justifying trade which
became more and more insistent after the Crusades.[1]

[Footnote 1: On the economic influence of the Crusades the following
works may be consulted: Blanqui, _Histoire de l'Economie politique_;
Heeren, _Essai sur l'Influence politique et sociale des Croisades_;
Scherer, _Histoire du Commerce_; Prutz, _Culturgeschichte der
Kreuzzüge_; Pigonneau, _Histoire du Commerce de la France_; List, _Die
Lehren der Handelspolitischen Geschichte_.]

By the time of Aquinas the necessity of commerce had come to be fully
realised, as appears from the passage in the _De Regimine Principum_:
'There are two ways in which it is possible to increase the affluence
of any State. One, which is the more worthy way, is on account of the
fertility of the country producing an abundance of all things which
are necessary for human life, the other is through the employment
of commerce, through which the necessaries of life are brought from
different places. The former method can be clearly shown to be the
more desirable.... It is more admirable that a State should possess an
abundance of riches from its own soil than through commerce. For the
State which needs a number of merchants to maintain its subsistence
is liable to be injured in war through a shortage of food if
communications are in any way impeded. Moreover, the influx of
strangers corrupts the morals of many of the citizens... whereas,
if the citizens themselves devote themselves to commerce, a door is
opened to many vices. For when the desire of merchants is inclined
greatly to gain, cupidity is aroused in the hearts of many
citizens.... For the pursuit of a merchant is as contrary as possible
to military exertion. For merchants abstain from labours, and while
they enjoy the good things of life, they become soft in mind and their
bodies are rendered weak and unsuitable for military exercises....
It therefore behoves the perfect State to make a moderate use of
commerce.'[1]

[Footnote 1: ii. 3.]

Aquinas, who, as we have seen, recognised the necessity of commerce,
did not condemn all trade indiscriminately, as the Fathers had done,
but made the motive with which commerce was carried on the test of its
legitimacy: 'Trade is justly deserving of blame, because, considered
in itself, it satisfies the greed for gain, which knows no limit, and
tends to infinity. Hence trading, considered in itself, has a certain
debasement attaching thereto, in so far as, by its very nature, it
does not imply a virtuous or necessary end. Nevertheless gain, which
is the end of trading, though not implying, by its nature, anything
virtuous or necessary, does not, in itself, connote anything sinful
or contrary to virtue; wherefore nothing prevents gain from being
directed to some necessary or even virtuous end, and thus trading
becomes lawful. Thus, for instance, a man may intend the moderate gain
which he seeks to acquire by trading for the upkeep of his household,
or for the assistance of the needy; or again, a man may take to trade
for some public advantage--for instance, lest his country lack the
necessaries of life--and seek gain, not as an end, but as payment for
his labour.'[1] This is important in connection with what we have said
above as to property, as it shows that the trader was quite justified
in seeking to obtain more profits, provided that they accrued for the
benefit of the community. This justification of trade according to the
end for which it was carried on, was not laid down for the first time
by Aquinas, but may be found stated in an English treatise of the
tenth century entitled _The Colloquy of Archbishop Alfric_, where,
when a doctor asks a merchant if he wishes to sell his goods for the
same price for which he has bought them, the merchant replies: 'I do
not wish to do so, because if I do so, how would I be recompensed for
my trouble? but I wish to sell them for more than I paid for them so
that I might secure some gain wherewith to support myself, my wife,
and family.'[2]

[Footnote 1: II. ii. 77, 4.]

[Footnote 2: Loria, _Analysi de la proprietà, capitalista_, ii. 168.]

In spite of the fact that the earlier theory that no commercial gain
which did not represent payment for labour could be justified
was still maintained by some writers--for instance, Raymond de
Pennafort[1]--the teaching of St. Thomas Aquinas was generally
accepted throughout the later Middle Ages. Canonists and theologians
accepted without hesitation the justification of trade formulated by
Aquinas.[2] Henri de Gand,[3] Duns Scotus,[4] and François de Mayronis
[5] unhesitatingly accepted the view of Aquinas, and incorporated it
in their works.[6] 'An honourable merchant,' says Trithemius, 'who
does not only think of large profits, and who is guided in all his
dealings by the laws of God and man, and who gladly gives to the needy
of his wealth and earnings, deserves the same esteem as any other
worker. But it is no easy matter to be always honourable in all
mercantile dealings and not to become usurious. Without commerce
no community can of course exist, but immoderate commerce is rather
hurtful than beneficial, because it fosters greed of gain and gold,
and enervates and emasculates the nation through love of pleasure
and luxury.'[7] Nider says that to buy not for use but for sale at a
higher price is called trade. Two special rules apply to this: first,
that it should be useful to the State, and second, that the price
should correspond to the diligence, prudence, and risk undertaken in
the transaction.[8]

[Footnote 1: _Summa Theologica_, II. vii. 5.]

[Footnote 2: Ashley, _op. cit._, p. 55.]

[Footnote 3: _Quodlib_., i. 40.]

[Footnote 4: _Lib. Quat. Sent._, xv. 2.]

[Footnote 5: iv. 16, 4.]

[Footnote 6: See Jourdain, _op. cit._, p. 20 _et seq_.]

[Footnote 7: Quoted in Janssen, _op. cit._, vol. ii. p. 97.]

[Footnote 8: _Op. cit._, iv. 10.]

The later writers hi the fifteenth century seem to have regarded trade
more liberally even than Aquinas, although they quote his dictum on
the subject as the basis of their teaching. Instead of condemning all
commerce as wrong unless it was justified by good motives, they were
rather inclined to treat commerce as being in itself colourless, but
capable of becoming evil by bad motives. Carletus says: 'Commerce in
itself is neither bad nor illegal, but it may become bad on account
of the circumstances and the motive with which it is undertaken, the
persons who undertake it, or the manner in which it is conducted. For
instance, commerce undertaken through avarice or a desire for sloth is
bad; so also is commerce which is injurious to the republic, such as
engrossing.'[1]

[Footnote 1: _Summa Angelica_, 169: 'Mercatio non est mala ex genere,
sed bona, humano convictui necessaria dum fuerit justa. Mercatio
simpliciter non est peccatum sed ejus abusus.' Biel, _op. cit._, iv.
xv. 10.]

Endemann, having thoroughly studied all the fifteenth-century writers
on the subject, says that commerce might be rendered unjustifiable
either by subjective or objective reasons. Subjective illegality would
arise from the person trading--for instance, the clergy--or the motive
with which trade was undertaken; objective illegality on account of
the object traded in, such as weapons in war-time, or the bodies
of free men.[1] Speculative trading, and what we to-day call
profiteering, were forbidden in all circumstances.[2]

[Footnote 1: _Studien_, vol. ii. p. 18.]

[Footnote 2: _The Ayenbite of Inwit_, a thirteenth-century confessor's
manual, lays it down that speculation is a kind of usury. (Rambaud,
_Histoire_, p. 56.)]

We need not dwell upon the prohibition of trading by the clergy,
because it was simply a rule of discipline which has not any bearing
upon general economic teaching, except in so far as it shows that
commerce was considered an occupation dangerous to virtue. Aquinas
puts it as follows: 'Clerics should abstain not only from things that
are evil in themselves, but even from those that have an appearance of
evil. This happens in trading, both because it is directed to worldly
gain, which clerics should despise, and because trading is open to so
many vices, since "a merchant is hardly free from sins of the lips."
[1] There is also another reason, because trading engages the mind too
much with worldly cares, and consequently withdraws it from spiritual
cares; wherefore the Apostle says:[2] "No man being a soldier to God
entangleth himself with secular business." Nevertheless it is lawful
for clerics to engage in the first-mentioned kind of exchange, which
is directed to supply the necessaries of life, either by buying or by
selling.'[3] The rule of St. Benedict contains a strong admonition to
those who may be entrusted with the sale of any of the products of the
monastery, to avoid all fraud and avarice.[4]

[Footnote 1: Eccles. xxvi. 28.]

[Footnote 2: 2 Tim. ii. 4.]

[Footnote 3: _Summa_, II. ii. 77, 4, ad. 3.]

[Footnote 4: _Beg. St. Ben._, 57.]

On the whole, the attitude towards commerce seems to have grown more
liberal in the course of the Middle Ages. At first all commerce was
condemned as sinful; at a later period it was said to be justifiable
provided it was influenced by good motives; while at a still later
date the method of treatment was rather to regard it as a colourless
act in itself which might be rendered harmful by the presence of bad
motives. This gradual broadening of the justification of commerce is
probably a reflection of the necessities of the age, which witnessed a
very great expansion of commerce, especially of foreign trade. In the
earlier centuries remuneration for undertaking risk was prohibited on
the authority of a passage in the Gregorian Decretals, but the later
writers refused to disallow it.[1] The following passage from Dr.
Cunningham's _Growth of English Industry and Commerce_ correctly
represents the attitude of the Church towards commerce at the end
of the Middle Ages: 'The ecclesiastic who regarded the merchant as
exposed to temptations in all his dealings would not condemn him as
sinful unless it were clear that a transaction were entered on
solely for greed, and hence it was the tendency for moralists to draw
additional distinctions, and refuse to pronounce against business
practices where common sense did not give the benefit of the
doubt.'[2] We have seen that one motive which would justify the
carrying on of trade was the desire to support one's self and one's
family. Of course this motive was capable of bearing a very extended
and elastic interpretation, and would justify increased commercial
profits according as the standard of life improved. The other motive
given by the theologians, namely, the benefit of the State, was also
one which was capable of a very wide construction. One must remember
that even the manual labourer was bound not to labour solely for
avaricious gain, but also for the benefit of his fellow-men. 'It is
not only to chastise our bodies,' says Basil, 'it is also by the love
of our neighbour that the labourer's life is useful so that God may
furnish through us our weaker brethren';[3] and a fifteenth-century
book on morality says: 'Man should labour for the honour of God.
He should labour in order to gain for himself and his family the
necessaries of life and what will contribute to Christian joy, and
moreover to assist the poor and the sick by his labours. He who acting
otherwise seeks only the pecuniary recompense of his work does ill,
and his labours are but usury. In the words of St. Augustine, "thou
shalt not commit usury with the work of thy hands, for thus wilt thou
lose thy soul,"'[4] The necessity for altruism and regard for the
needs of one's neighbour as well as of one's self were therefore
motives necessary to justify labour as well as commerce; and it would
be wrong to conclude that the teaching of the scholastics on the
necessity for a good motive to justify trade operated to damp
individual enterprise, or to discourage those who were inclined to
launch commercial undertakings, any more than the insistence on the
need for a similar motive in labourers was productive of idleness.
What the mediæval teaching on commerce really amounted to was that,
while commerce was as legitimate as any other occupation, owing to the
numerous temptations to avarice and dishonesty which it involved, it
must be carefully scrutinised and kept within due bounds. It was more
difficult to insure the observance of the just price in the case of
a sale by a merchant than in one by an artificer; and the power which
the merchant possessed of raising the price of the necessaries of life
on the poor by engrossing and speculation rendered him a person whose
operations should be carefully controlled.

[Footnote 1: Cunningham, _Growth of English Industry and Commerce_,
vol. i. p. 255.]

[Footnote 2: P. 255.]

[Footnote 3: _Reg. Fus. Tract._, XXXVII. i.]

[Footnote 4: Quoted in Janssen, _op. cit._, vol. ii. p. 9.]

Finally, it must be clearly understood that the attempt of some modern
writers to base the mediæval justification of commerce on an analysis
of all commercial gains as the payment for labour rests on a profound
misunderstanding. As we have already pointed out, Aquinas distinctly
rules out of consideration in his treatment of commerce the case
where the goods have been improved in value by the exertions of the
merchant. When the element of labour entered into the transaction the
matter was clearly beyond doubt, and the lengthy discussion devoted
to the question of commerce by Aquinas and his followers shows that in
justifying commercial gains they were justifying a gain resting not on
the remuneration for the labour, but on an independent title.


§ 8. _Cambium_.

There was one department of commerce, namely, _cambium_, or
money-changing, which, while it did not give any difficulty in theory,
involved certain difficulties in practice, owing to the fact that
it was liable to be used to disguise usurious transactions. Although
_cambium_ was, strictly speaking, a special branch of commerce, it was
nevertheless usually treated in the works on usury, the reason being
that many apparent contracts of _cambium_ were in fact veiled loans,
and that it was therefore a matter of importance in discussing usury
to explain the tests by which genuine and usurious exchanges could be
distinguished. Endemann treats this subject very fully and ably;[1]
but for the purpose of the present essay it is not necessary to do
more than to state the main conclusions at which he arrives.

[Footnote 1: _Studien_, vol. i. p. 75.]

Although the practice of exchange grew up slowly and gradually during
the later Middle Ages, and, consequently, the amount of space devoted
to the discussion of the theory of exchange became larger as time went
on, nevertheless there is no serious difference of opinion between
the writers of the thirteenth century, who treat the subject in
a fragmentary way, and those of the fifteenth, who deal with it
exhaustively and systematically. Aquinas does not mention _cambium_
in the _Summa_, but he recognises the necessity for some system of
exchange in the _De Eegimine Principum_.[1] All the later writers who
mention _cambium_ are agreed in regarding it as a species of commerce
to which the ordinary rules regulating all commerce apply. Francis
de Mayronis says that the art of _cambium_ is as natural as any
other kind of commerce, because of the diversity of the currencies
in different kingdoms, and approves of the campsor receiving some
remuneration for his labour and trouble.[2] Nicholas de Ausmo, in
his commentary on the _Summa Pisana_, written in the beginning of the
fifteenth century, says that the campsor may receive a gain from
his transactions, provided that they are not conducted with the sole
object of making a profit, and that the gain he may receive must
be limited by the common estimation of the place and time. This is
practically saying that _cambium_ may be carried on under the same
conditions as any other species of commerce. Biel says that _cambium_
is only legitimate if the campsor has the motive of keeping up a
family or benefiting the State, and that the contract may become
usurious if the gain is not fair and moderate.[3] The right of the
campsor to some remuneration for risk was only gradually admitted,
and forms the subject of much discussion amongst the jurists.[4]
This hesitation in allowing remuneration for risk was not peculiar
to _cambium_, but, as we have seen above, was common to all commerce.
Endemann points out how the theologians and jurists unanimously
insisted that _cambium_ could not be justified except when the just
price was observed, and that, when the doctrine attained its full
development, the element of labour was but one of the constituents in
the estimation of that price.[5]

[Footnote 1: 'Cum enim extraneae monetae communicantur in
permutationibus oportet recurrere ad artem campsoriam, cum talia
numismata non tantum valeant in regionibus extraneis quantum in
propriis (_De Reg. Prin._, ii. 13).]

[Footnote 2: In _Quot. Lib. Sent._, iv. 16, 4.]

[Footnote 3: _Op. oil_., IV. xv. 11.]

[Footnote 4: Endemann, _Studien_, vol. i. pp. 123-36.]

[Footnote 5: _Ibid._, p. 213.]

All the writers who treated of exchange divided it into three kinds;
ordinary exchange of the moneys of different currencies (_cambium
minutum_), exchange of moneys of different currencies between
different places, the justification for which rested on remuneration
for an imaginary transport (_cambium per litteras_), and usurious
exchange of moneys of the same currency (_cambium siccum_). The
former two species of cambium were justifiable, whereas the last was
condemned.[1]

[Footnote 1: Laurentius de Rodulfis, _De Usuris_, pt. iii. Nos. 1 to
5.]

The most complete treatise on the subject of money exchange is that
of Thomas da Vio, written in 1499. The author of this treatise divides
money-changing into three kinds, just, unjust, and doubtful. There
were three kinds of just change; _cambium minutum_, in which the
campsor was entitled to a reasonable remuneration for his labour;
_cambium per litteras_, in which the campsor was held entitled to a
wage (_merces_) for an imaginary transportation; and thirdly, when
the campsor carried money from one place to another, where it was of
higher value. The unjust change was when the contract was a usurious
transaction veiled in the guise of a genuine exchange. Under the
doubtful changes, the author discusses various special points which
need not detain us here.

Thomas da Vio then goes on to discuss whether the justifiable exchange
can be said to be a species of loan, and concludes that it can not,
because all that the campsor receives is an indemnity against loss
and a remuneration for his labour, trouble, outlay, and risk, which
is always justifiable. He then goes on to state the very important
principle, that in _cambium_ money is not to be considered a measure
of value, but a vendible commodity,[1] a distinction which Endemann
thinks was productive of very important results in the later teaching
on the subject.[2] The last question treated in the treatise is the
measure of the campsor's profit, and here the contract of exchange
is shown to be on all fours with every other contract, because the
essential principle laid down for determining its justice is the
observance of the equivalence between both parties.[1]

[Footnote 1: 'Numisma quamvis sit mensura et instrumentum in
permutationibus; tamen per se aliquid esse potest.' It is this
principle that justifies the treatment of _cambium_ in this section
rather than the next.]

[Footnote 2: _Studien_, vol. ii. p. 212.]



SECTION 2.--THE SALE OF THE USE OF MONEY


§ 1. _Usury in Greece and Rome_.

The prohibition of usury has always occupied such a large place in
histories of the Middle Ages, and particularly in discussions relating
to the attitude of the Church towards economic questions, that it is
important that its precise foundation and extent should be carefully
studied. The usury prohibition has been the centre of so many bitter
controversies, that it has almost become part of the stock-in-trade of
the theological mob orators. The attitude of the Church towards usury
only takes a slightly less prominent place than its attitude towards
Galileo in the utterances of those who are anxious to convict it of
error. We have referred to this current controversy, not in order that
we might take a part in it, but that, on the contrary, we might avoid
it. It is no part of our purpose in our treatment of this subject to
discuss whether the usury prohibition was or was not suitable to
the conditions of the Middle Ages; whether it did or did not impede
industrial enterprise and commercial expansion; or whether it was or
was not universally disregarded and evaded in real life. These are
inquiries which, though full of interest, would not be in place in
a discussion of theory. All we are concerned to do in the following
pages is to indicate the grounds on which the prohibition of usury
rested, the precise extent of its application, and the conceptions of
economic theory which it indicated and involved.

[Footnote 1: Brants has a very luminous and interesting section on
_Cambium, Op. cit._, p. 214 _et seq_.]

We must remark in the first place that the prohibition of usury was in
no sense peculiar to the Catholic Church in the Middle Ages, but,
on the contrary, was to be found in many other religious and legal
systems--for instance, in the writings of the Greek and Roman
philosophers, amongst the Jews, and the followers of Mohammed. We
shall give a very brief account of the other prohibitions of usury
before coming to deal with the scholastic teaching on the subject.

We can find no trace of any legal prohibition of usury in ancient
Greece. Although Solon's laws contained many provisions for the relief
of poor debtors, they did not forbid the taking of interest, nor did
they limit the rate of interest that might be taken.[1] In Rome the
Twelve Tables fixed a maximum rate of interest, which was probably
ten or twelve per cent, per annum, but which cannot be determined
with certainty owing to the doubtful signification of the expression
'_unciarum foenus_.' The legal rate of interest was gradually reduced
until the year 347 B.C., when five per cent, was fixed as a maximum.
In 342 B.C. interest was forbidden altogether by the Genucian Law;
but this law, though never repealed, was in practice quite inoperative
owing to the facility with which it could be evaded; and consequently
the oppression of borrowers was prevented by the enactment, or perhaps
it would be more correct to say the general recognition, of a maximum
rate of interest of twelve per cent. per annum. This maximum rate--the
_Centesima_--remained in operation until the time of Justinian.[2]
Justinian, who was under the influence of Christian teaching, and who
might therefore be expected to have regarded usury with unfavourable
eyes, fixed the following maximum rates of interest--maritime loans
twelve per cent.; loans to ordinary persons, not in business, six per
cent.; loans to high personages (_illustres_) and agriculturists, four
per cent.[3]

[Footnote 1: Cleary, _The Church and Usury_, p. 21.]

[Footnote 2: Hunter, _Roman Law_, pp. 652-53; Cleary, _op. cit._, pp.
22-6; Roscher, _Political Economy_, s. 90.]

[Footnote 3: _Code_ 4, 32, 26, 1.]

While the taking of interest was thus approved or tolerated by Greek
and Roman law, it was at the same time reprobated by the philosophers
of both countries. Plato objects to usury because it tends to set one
class, the poor or the borrowers, against another, the rich or the
lenders; and goes so far as to make it wrong for the borrower to repay
either the principal or interest of his debt. He further considers
that the profession of the usurer is to be despised, as it is an
illiberal and debasing way of making money.[1] While Plato therefore
disapproves in no ambiguous words of usury, he does not develop the
philosophical bases of his objection, but is content to condemn it
rather for its probable ill effects than on account of its inherent
injustice.

[Footnote 1: _Laws_, v. ch. 11-13.]

Aristotle condemns usury because it is the most extreme and dangerous
form of chrematistic acquisition, or the art of making money for
its own sake. As we have seen above, in discussing the legitimacy of
commerce, buying cheap and selling dear was one form of chrematistic
acquisition, which could only be justified by the presence of certain
motives; and usury, according to the philosopher, was a still more
striking example of the same kind of acquisition, because it consisted
in making money from money, which was thus employed for a function
different from that for which it had been originally invented. 'Usury
is most reasonably detested, as the increase of our fortune arises
from the money itself, and not by employing it for the purpose for
which it was intended. For it was devised for the sake of exchange,
but usury multiplies it. And hence usury has received the name of
[Greek: tokos], or produce; for whatever is produced is itself like
its parents; and usury is merely money born of money; so that of all
means of money-making it is the most contrary to nature.'[1] We need
not pause here to discuss the precise significance of Aristotle's
conceptions on this subject, as they are to us not so much of
importance in themselves, as because they suggested a basis for the
treatment of usury to Aquinas and his followers.[2]

[Footnote 1: Aristotle, _Politics_, i. 10.]

[Footnote 2: Cleary, _op. cit._, p. 29.]

In Rome, as in Greece, the philosophers and moralists were unanimous
in their condemnation of the practice of usury. Cicero condemns usury
as being hateful to mankind, and makes Cato say that it is on the
same level of moral obliquity as murder; and Seneca makes a point that
became of some importance in the Middle Ages, namely, that usury is
wrongful because it involves the selling of time.[1] Plutarch develops
the argument that money is sterile, and condemns the practices
of contemporary money-lenders as unjust.[2] The teaching of the
philosophers as to the unlawfulness of usury was reflected in the
popular feeling of the time.[3]

[Footnote 1: Cleary, _op. cit._, p. 29.]

[Footnote 2: _De Vitando Aere Alieno_.]

[Footnote 3: Espinas, _op. cit._, pp. 81-2; Roscher, _Political
Economy_, s. 90.]




§ 2. _Usury in the Old Testament_.


The question of usury therefore attracted considerable attention in
the teaching and practice of pagan antiquity. It occupied an equally
important place in the Old Testament. In Exodus we find the first
prohibition of usury: 'If thou lend money to any of my people being
poor, thou shalt not be to him as a creditor, neither shall ye lay
upon him usury.'[1] In Leviticus we read: 'And if thy brother be waxen
poor, and his hand fail with thee; then, thou must uphold him; as a
stranger and a sojourner shall he live with thee. Take thou no money
of him or increase, but fear thy God that thy brother may live with
thee. Thou shalt not give him thy money upon usury, nor give him
victuals for increase.'[2] Deuteronomy lays down a wider prohibition:
'Thou shalt not lend upon usury to thy brother; usury of money,
usury of victuals, usury of anything that is lent upon usury; unto
a foreigner thou mayest lend upon usury, but unto thy brother thou
mayest not lend upon usury.'[3] It will be noticed that the first and
second of these texts do not forbid usury except in the case of loans
to the poor, and, if we had them alone to consider, we could conclude
that loans to the rich or to business men were allowed. The last text,
however, extends the prohibition to all loans to one's brother--an
expression which was of importance in Christian times, as Christian
writers maintained the universal brotherhood of man.

[Footnote 1: Exod. xxii. 25.]

[Footnote 2: Lev. xxv. 35.]

[Footnote 3: Deut. xxiii. 19.]

It is unnecessary for us to discuss the underlying considerations
which prompted these ordinances. Dr. Cleary, who has studied the
matter with great care, concludes that: 'The legislator was urged
mostly by economic considerations.... The permission to extract usury
from strangers--a permission which later writers, such as Maimonides,
regarded as a command--clearly favours the view that the legislator
was guided by economic principles. It is more difficult to say whether
he based his legislation on the principle that usury is intrinsically
unjust--that is to say, unjust even when taken in moderation. There
is really nothing in the texts quoted to enable us to decide. The
universality of the prohibition when there is question solely of Jews
goes to show that usury as such was regarded as unjust; whilst its
permission as between Jew and Gentile favours the contradictory
hypothesis.'[1] Modern Jewish thought is inclined to hold the view
that these prohibitions were based upon the assumption that usury was
intrinsically unjust, but that the taking of usury from the Gentiles
was justified on the principle of compensation; in other words, that
Jews might exact usury from those who might exact it from them.[2] It
is at least certain that usury was regarded by the writers of the Old
Testament as amongst the most terrible of sins.[3]

[Footnote 1: _Op. cit._, pp. 5-6.]

[Footnote 2: _Jewish Encyclopaedia_, art. 'Usury.']

[Footnote 3: Ezek. xviii. 13; Jer. xv. 10; Ps. xiv. 5, cix. 11, cxii.
5; Prov. xxviii. 8; Hes. xviii. 8; 2 Esd. v. I _et seq._]

The general attitude of the Jews towards usury cannot be better
explained than by quoting Dr. Cleary's final conclusion on the
subject: 'It appears therefore that in the Old Testament usury was
universally prohibited between Israelite and Israelite, whilst it
was permitted between Israelite and Gentile. Furthermore, it
seems impossible to decide what was the nature of the obligations
imposed--whether the prohibition supposed and ratified an already
existing universal obligation, in charity or justice, or merely
imposed a new obligation in obedience, binding the consciences of men
for economic or political reasons. So, too, it seems impossible to
decide absolutely whether the decrees were intended to possess eternal
validity; the probabilities, however, seem to favour very strongly the
view that they were intended as mere economic regulations suited to
the circumstances of the time. This does not, of course, decide the
other question, whether, apart from such positive regulations, there
already existed an obligation arising from the natural law; nor would
the passing of the positive law into desuetude affect the existence of
the other obligation.'[1]

[Footnote 1: _Op. cit._, pp. 17-18.]

Before we pass from the consideration of the Old Testament to that of
the New, we may mention that the taking of interest by Mohammedans is
forbidden in the Koran.[2]

[Footnote 2: ii. 30. This prohibition is universally evaded. (Roscher,
_Political Economy_, s. 90.)]




§ 3. _Usury in the First Twelve Centuries of Christianity_.

The only passage in the Gospels which bears directly on the question
of usury is a verse of St. Luke, the correct reading of which is a
matter of considerable difference of opinion.[1] The Revised Version
reads: 'But love your enemies, and do them good, and lend, never
despairing (_nihil desperantes_); and your reward shall be great.' If
this be the true reading of the verse, it does not touch the question
of usury at all, as it is simply an exhortation to lend without
worrying whether the debtor fail or not.[2] The more generally
received reading of this verse, however, is that adopted by the
Vulgate, 'mutuum date, nihil inde sperantes'--'lend hoping for
nothing thereby.' If this be the correct reading, the verse raises
considerable difficulties of interpretation. It may simply mean, as
Mastrofini interprets it, that all human actions should be performed,
not in the hope of obtaining any material reward, but for the love of
God and our neighbour; or it may contain an actual precept or counsel
relating to the particular subject of loans. If the latter be the
correct interpretation, the further question arises whether the
recommendation is to renounce merely the interest of a loan or the
principal as well. We need not here engage on the details of the
controversy thus aroused; it is sufficient to say that it is the
almost unanimous opinion of modern authorities that the verse
recommends the renunciation of the principal as well as the interest;
and that, if this interpretation is correct, the recommendation is
not a precept, but a counsel.[3] Aquinas thought that the verse was a
counsel as to the repayment of the principal, but a precept as to the
payment of interest, and this opinion is probably correct.[4] With the
exception of this verse, there is not a single passage in the Gospels
which prohibits the taking of usury.

[Footnote 1: Luke vi. 35.]

[Footnote 2: Cleary, _op. cit._, p. 33, following Knabenbaur.]

[Footnote 3: Cleary, _op. cit._, p. 34.]

[Footnote 4: _Ibid._, p. 35.]

We must now give some account of the teaching on usury which was laid
down by the Fathers and early councils of the Church; but at the same
time we shall not attempt to treat this in an exhaustive way, because,
although the early Christian teaching is of interest in itself,
it exercised little or no influence upon the great philosophical
treatment of the same subject by Aquinas and his followers, which is
the principal subject to be discussed in these pages. The first thing
we must remark is that the prohibition of usury was not included by
the Council of Jerusalem amongst the 'necessary things' imposed upon
converts from the Gentiles.[1] This would seem to show that the taking
of usury was not regarded as unlawful by the Apostles, who were at
pains expressly to forbid the commission of offences, the evil of
which must have appeared plainly from the natural law--for instance,
fornication. The _Didache_, which was used as a book of catechetical
instruction for catechumens, does not specifically mention usury; the
forcing of the repayment of loans from the poor who are unable to pay
is strongly reprobated; but this is not so in the case of the rich.[2]
Clement of Alexandria expressly limits his disapprobation of usury to
the case of loans between brothers, whom he defines as 'participators
in the same word,' _i.e._ fellow-Christians; and in any event it
is clear that he regards it as sin against charity, but not against
justice.[3]

[Footnote 1: Acts xv. 29.]

[Footnote 2: _Didache_, ch. i.; Cleary, _op. cit._, p. 39.]

[Footnote 3: _Stromata_, ii. 18.]

Tertullian is one of the first of the Fathers to lay down positively
that the taking of usury is sinful. He regards it as obviously wrong
for Christians to exact usury on their loans, and interprets the
passage of St. Luke, to which we have referred, as a precept against
looking for even the repayment of the principal.[1] On the other hand,
Cyprian, writing in the same century, although he declaims eloquently
and vigorously against the usurious practices of the clergy, does not
specifically express the opinion that the taking of usury is wrong in
itself.[2]

[Footnote 1: _Ad Marcion_, iv. 17.]

[Footnote 2: _Le Lapsis_, ch. 5-6; Cleary, _op. cit._, pp. 42-3.]

Thus, during the first three centuries of Christianity, there does not
seem to have been, as far as we can now ascertain, any definite and
general doctrine laid down on the subject of usury. In the year 305
or 306 a very important step forward was taken, when the Council of
Elvira passed a decree against usury. This decree, as given by Ivo
and Gratian, seems only to have applied to usury on the part of the
clergy, but as given by Mansi it affected the clergy and laity alike.
'Should any cleric be found to have taken usury,' the latter version
runs, 'let him be degraded and excommunicated. Moreover, if any layman
shall be proved a usurer, and shall have promised, when corrected, to
abstain from the practice, let him be pardoned. If, on the contrary,
he perseveres in his evil-doing, he is to be excommunicated.'[1]
Although the Council of Elvira was but a provincial Council, its
decrees are important, as they provided a model for later legislation.
Dr. Cleary thinks that Mansi's version of this decree is probably
incorrect, and that, therefore, the Council only forbade usury on the
part of the clergy. In any event, with this one possible and extremely
doubtful exception, there was no conciliar legislation affecting the
practice of usury on the part of the laity until the eighth century.
Certain individual popes censured the taking of usury by laymen, and
the Council of Nice expressed the opinion that such a practice was
contrary to Christ's teaching, but there is nowhere to be found an
imperative and definite prohibition of the taking of usury except by
the clergy.[2]

[Footnote 1: Cleary, _op. cit._, p. 43.]

[Footnote 2: Cleary, _op. cit._, pp. 44-8.]

The inconclusive result of the Christian teaching up to the middle of
the fourth century is well summarised by Dr. Cleary: 'Hitherto we have
encountered mere prohibitions of usury with little or no attempt to
assign a reason for them other than that of positive legislation.
Most of the statements of these early patristic writers, as well
as possibly all of the early Christian legislative enactments, deal
solely with the practice of usury by the clergy; still, there is
sufficient evidence to show that in those days it was reprobated even
for the Christian laity, for the _Didache_ and Tertullian clearly
teach or presuppose its prohibition, while the oecumenical Council
of Nice certainly presupposed its illegality for the laity, though
it failed to sustain its doctrinal presuppositions with corresponding
ecclesiastical penalties. With the exception of some very vague
statements by Cyprian and Clement of Alexandria, we find no attempt to
state the nature of the resulting obligation--that is to say, we are
not told whether there is an obligation of obedience, of justice, or
of charity. The prohibition indeed seems to be regarded as universal;
and it may very well be contended that for the cases the Fathers
consider it was in fact universal--for the loans with which they are
concerned, being necessitous, should be, in accordance with Christian
charity, gratuitous--even if speculatively usurious loans in general
were not unjust.'[1]

[Footnote 1: _Op. cit._, pp. 48-9.]

The middle of the fourth century marked the opening of a new
period--'a period when oratorical denunciations are profuse, and when
consequently philosophical speculation, though fairly active, is
of too imaginative a character to be sufficiently definite.'[1]
St. Basil's _Homilies on the Fourteenth Psalm_ contain a violent
denunciation of usury, the reasoning of which was repeated by St.
Gregory of Nyssa[2] and St. Ambrose.[3] These three Fathers draw a
terrible picture of the state of the poor debtor, who, harassed by
his creditors, falls deeper and deeper into despair, until he finally
commits suicide, or has to sell his children into slavery. Usury was
therefore condemned by these Fathers as a sin against charity; the
passage from St. Luke was looked on merely as a counsel in so far as
it related to the repayment of the principal, but as a precept so
far as it related to usury; but the notion that usury was in its very
essence a sin against justice does not appear to have arisen. The
natural sterility of money is referred to, but not developed; and it
is suggested, though not categorically stated, that usury may be taken
from wealthy debtors.[4]

[Footnote 1: Cleary, _op. cit._, p. 49.]

[Footnote 2: _Contra Usurarios_.]

[Footnote 3: _De Tobia_.]

[Footnote 4: Cleary, _op. cit._, p. 52.]

The other Fathers of the later period do not throw very much light
on the question of how usury was regarded by the early Church. St.
Hilary[1] and Jerome[2] still base their objection on the ground of
its being an offence against charity; and St. Augustine, though he
would like to make restitution of usury a duty, treats the matter from
the same point of view.[3] On the other hand, there are to be found
patristic utterances in favour of the legality of usury, and episcopal
approbations of civil codes which permitted it.[4] The civil law
did not attempt to suppress usury, but simply to keep it within due
bounds.[5] The result of the patristic teaching therefore was on the
whole unsatisfactory and inconclusive. 'Whilst patristic opinion,'
says Dr. Cleary, 'is very pronounced in condemning usury, the
condemnation is launched against it more because of its oppressiveness
than for its intrinsic injustice. As Dr. Funk has pointed out, one can
scarcely cite a single patristic opinion which can be said clearly to
hold that usury is against justice, whilst there are, on the contrary,
certain undercurrents of thought in many writers, and certain explicit
statements in others, which tend to show that the Fathers would not
have been prepared to deal so harshly with usurers, did usurers not
treat their debtors so cruelly.... Of keen philosophical analysis
there is none.... On the whole, we find the teachings of the Fathers
crude and undeveloped.'[6]

[Footnote 1: In Ps. xiv.]

[Footnote 2: _Ad Ezech._]

[Footnote 3: Cleary, _op. cit._, p. 56.]

[Footnote 4: _Ibid._ pp. 56-7.]

[Footnote 5: _Justinian Code_, iv. 32.]

[Footnote 6: _Op. cit._, pp. 57-9. On the patristic teaching on usury,
see Espinas, _Op. cit._, pp. 82-4; Roscher, _Political Economy_, s.
90; Antoine, _Cours d'Economie sociale_, pp. 588 _et seq_.]

The practical teaching with regard to the taking of usury made an
important advance in the eighth and ninth centuries, although the
philosophical analysis of the subject did not develop any more
fully. A capitulary canon made in 789 decreed 'that each and all are
forbidden to give anything on usury'; and a capitulary of 813 states
that 'not only should the Christian clergy not demand usury, laymen
should not.' In 825 it was decreed that the counts were to assist the
bishops in their suppression of usury; and in 850 the Synod of Ticinum
bound usurers to restitution.[1] The underlying principles of these
enactments is as obscure as their meaning is plain and definite. There
is not a single trace of the keen analysis with which Aquinas was
later to illuminate and adorn the subject.

[Footnote 1: These are but a few of the enactments of the period
directed against usury (Cleary, _op. cit._, p. 61; Favre, _Le prêt à
intérêt dans l'ancienne France_).]


§ 4. _The Mediæval Prohibition of Usury_.

The tenth and eleventh centuries saw no advance in the teaching on
usury. The twelfth century, however, ushered in a new era. 'Before
that century controversy had been mostly confined to theologians, and
treated theologically, with reference to God and the Bible, and only
rarely with regard to economic considerations. After the twelfth
century the discussion was conducted on a gradually broadening
economic basis--appeals to the Fathers, canonists, philosophers, the
_jus divinum_, the _jus naturale_, the _jus humanum_, became the order
of the day.'[1] Before we proceed to discuss the new philosophical or
scholastic treatment of usury which was inaugurated for all practical
purposes by Aquinas, we must briefly refer to the ecclesiastical
legislation on the subject.

[Footnote 1: Böhm-Bawerk, _Capital and Interest_, p. 19.]

In 1139 the second Lateran Council issued a very strong declaration
against usurers. 'We condemn that disgraceful and detestable rapacity,
condemned alike by human and divine law, by the Old and the New
Testaments, that insatiable rapacity of usurers, whom we hereby
cut off from all ecclesiastical consolation; and we order that no
archbishop, bishop, abbot, or cleric shall receive back usurers except
with the very greatest caution, but that, on the contrary, usurers
are to be regarded as infamous, and shall, if they do not repent, be
deprived of Christian burial.'[1] It might be argued that this decree
was aimed against immoderate or habitual usury, and not against usury
in general, but all doubt as regards the attitude of the Church was
set at rest by a decree of the Lateran Council of 1179. This decree
runs: 'Since almost in every place the crime of usury has become
so prevalent that many people give up all other business and become
usurers, as if it were lawful, regarding not its prohibition in both
Testaments, we ordain that manifest usurers shall not be admitted to
communion, nor, if they die in their sins, be admitted to Christian
burial, and that no priest shall accept their alms.'[2] Meanwhile,
Alexander III., having given much attention to the subject of usury,
had come to the conclusion that it was a sin against justice. This
recognition of the essential injustice of usury marked a turning-point
in the history of the treatment of the subject; and Alexander III.
seems entitled to be designated the 'pioneer of its scientific
study.'[3] Innocent III. followed Alexander in the opinion that usury
was unjust in itself, and from his time forward there was but little
further disagreement upon the matter amongst the theologians.[4]

[Footnote 1: Cleary, _op. cit._, p. 64.]

[Footnote 2: _Ibid._]

[Footnote 3: Cleary, _op. cit._, p. 65.]

[Footnote 4: _Ibid._, p. 68.]

In 1274 Gregory X., in the Council of Lyons, ordained that no
community, corporation, or individual should permit foreign usurers to
hire houses, but that they should expel them from their territory;
and the disobedient, if prelates, were to have their lands put under
interdict, and, if laymen, to be visited by their ordinary with
ecclesiastical censures.[1] By a further canon he ordained that the
wills of usurers who did not make restitution should be invalid.[2]
This brought usury definitely within the jurisdiction of the
ecclesiastical courts.[3] In 1311 the Council of Vienne declared all
secular legislation in favour of usury null and void, and branded as
heresy the belief that usury was not sinful.[4] The precise extent and
interpretation of this decree have given rise to a considerable amount
of discussion,[5] which need not detain us here, because by that time
the whole question of usury had come under the treatment of the great
scholastic writers, whose teaching is more particularly the subject
matter of the present essay.

[Footnote 1: _Liber Sextus_, v. 5, 1.]

[Footnote 2: _Ibid._, c. 2.]

[Footnote 3: Ashley, _op. cit._, vol. i. pt. i. p. 150.]

[Footnote 4: _Clementinarum_, v. 5, 1.]

[Footnote 5: Cleary, _op. cit._, pp. 74-8.]

Even as late as the first half of the thirteenth century there was
no serious discussion of usury by the theologians. William of Paris,
Alexander of Hales, and Albertus Magnus simply pronounced it sinful
on account of the texts in the Old and New Testaments, which we have
quoted above.[1] It was Aquinas who really put the teaching on usury
upon the new foundation, which was destined to support it for so
many hundred years, and which even at the present day appeals to many
sympathetic and impartial inquirers. Mr. Lecky apologises for the
obscurity of his account of the argument of Aquinas, but adds that the
confusion is chiefly the fault of the latter;[2] but the fact that Mr.
Lecky failed to grasp the meaning of the argument should not lead one
to conclude that the argument itself was either confused or illogical.
The fact that it for centuries remained the basis of the Catholic
teaching on the subject is a sufficient proof that its inherent
absurdity did not appear apparent to many students at least as gifted
as Mr. Lecky. We shall quote the article of Aquinas at some length,
because it was universally accepted by all the theologians of the
fourteenth and fifteenth centuries, with whose opinions we are
concerned in this essay. To quote later writings is simply to repeat
in different words the conclusions at which Aquinas arrived.[3]

[Footnote 1: Jourdain, _op. cit._, p. 15.]

[Footnote 2: _Rise and Influence, of Rationalism in Europe_, vol. ii.
p. 261.]

[Footnote 3: Endemann, _Studien_, vol. i. p. 17.]

In answer to the question 'whether it is a sin to take usury for money
lent,' Aquinas replies: 'To take usury for money lent is unjust
in itself, because this is to sell what does not exist, and this
evidently leads to inequality, which is contrary to justice.

'In order to make this evident, we must observe that there are certain
things the use of which consists in their consumption; thus we consume
wine when we use it for drink, and we consume wheat when we use it for
food. Wherefore in such-like things the use of the thing must not be
reckoned apart from the thing itself, and whoever is granted the use
of the thing is granted the thing itself; and for this reason to lend
things of this kind is to transfer the ownership. Accordingly, if a
man wanted to sell wine separately from the use of the wine, he would
be selling the same thing twice, or he would be selling what does not
exist, wherefore he would evidently commit a sin of injustice. In like
manner he commits an injustice who lends wine or wheat, and asks for
double payment, viz. one, the return of the thing in equal measure,
the other, the price of the use, which is called usury.

'On the other hand, there are other things the use of which does not
consist in their consumption; thus to use a house is to dwell in it,
not to destroy it. Wherefore in such things both may be granted; for
instance, one man may hand over to another the ownership of his house,
while reserving to himself the use of it for a time, or, _vice versa_,
he may grant the use of a house while retaining the ownership. For
this reason a man may lawfully make a charge for the use of his house,
and, besides this, revendicate the house from the person to whom he
has granted its use, as happens in renting and letting a house.

'But money, according to the philosopher,[1] was invented chiefly for
the purpose of exchange; and consequently the proper and principal
use of money is its consumption or alienation, whereby it is sunk in
exchange. Hence it is by its very nature unlawful to take payment for
the use of money lent, which payment is known as usury; and, just as
a man is bound to restore other ill-gotten goods, so he is bound to
restore the money which he has taken in usury.'[2]

[Footnote 1: _Eth._ v. _Pol_. 1.]

[Footnote 2: II. ii. 78, 1.]

The essential thing to notice in this explanation is that the contract
of _mutuum_ is shown to be a sale. The distinction between things
which are consumed in use (_res fungibiles_), and which are not
consumed in use (_res non fungibiles_) was familiar to the civil
lawyers; but what they had never perceived was precisely what Aquinas
perceived, namely, that the loan of a fungible thing was in fact not
a loan at all, but a sale, for the simple reason that the ownership
in the thing passed. Once the transaction had been shown to be a sale,
the principle of justice to be applied to it became obvious. As we
have seen above, in treating of sales, the essential basis of justice
in exchange was the observance of _aequalitas_ between buyer and
seller--in other words, the fixing of a just price. The contract of
_mutuum_, however, was nothing else than a sale of fungibles,
and therefore the just price in such a contract was the return of
fungibles of the same value as those lent. If the particular fungible
sold happened to be money, the estimation of the just price was a
simple matter--it was the return of an amount of money of equal value.
As money happened to be the universal measure of value, this simply
meant the return of the same amount of money. Those who maintained
that something additional might be claimed for the use of the money
lost sight of the fact that the money was incapable of being used
apart from its being consumed.[1] To ask for payment for the sale of
a thing which not only did not exist, but which was quite incapable
of existence, was clearly to ask for something for nothing--which
obviously offended against the first principles of commutative
justice. 'He that is not bound to lend,' says Aquinas in another part
of the same article, 'may accept repayment for what he has done, but
he must not exact more. Now he is repaid according to equality of
justice if he is repaid as much as he lent, wherefore, if he exacts
more for the usufruct of a thing which has no other use but the
consumption of its substance, he exacts a price of something
non-existent, and so his exaction is unjust.'[2] And in the next
article the principle that _mutuum_ is a sale appears equally clearly:
'Money cannot be sold for a greater sum than the amount lent, which
has to be paid back.'[3]

[Footnote 1: Aquinas did not lose sight of the fact that money might,
in certain cases, be used apart from being consumed--for instance,
when it was not used as a means of exchange, but as an ornament.
He gives the example of money being sewn up and sealed in a bag to
prevent its being spent, and in this condition lent for any purpose.
In this case, of course, the transaction would not be a _mutuum_, but
a _locatio et conductio_, and therefore a price could be charged for
the use of the money (_Quaestiones Disputatae de Malo_, Q. xiii. art.
iv. ad. 15, quoted in Cronin's _Ethics_, vol. ii. p. 332).]

[Footnote 2: II. ii. 78, 1, ad. 5.]

[Footnote 3: II. ii. 78, 2, ad. 4. Biel distinguishes three kinds of
exchange: of goods for goods, or barter; of goods for money, or sale;
and of money for money; and adds, 'In his contractibus ... generaliter
justitia in hoc consistit quod fiant sine fraude, et servetur
aequalitas substantiae, qualitatis, quantitatis in commutatis (_Op.
cit._, IV. xv. 1). Buridan says that usury is contrary to natural law
'ex conditione justitiae quae in aequalitate damni et lucri consistit;
quoniam injustum est pro re semel commutata pluries pretium recipere'
(In _Lib. Pol._, iv. 6).]

The difficulty which moderns find in understanding this teaching,
is that it is said to be based on the sterility of money. A moment's
thought, however, will convince us that money is in fact sterile until
labour has been applied to it. In this sense money differs in its
essence from a cow or a tree. A cow will produce calves, or a tree
will produce fruit without the application of any exertion by its
owner; but, whatever profit is derived from money, is derived from the
use to which it is put by the person who owns it. This is all that
the scholastics meant by the sterility of money. They never thought
of denying that money, when properly used, was capable of bringing its
employer a profit; but they emphatically asserted that the profit was
due to the labour, and not to the money.

Antoninus of Florence clearly realised this: 'Money is not profitable
of itself alone, nor can it multiply itself, but it may become
profitable through its employment by merchants';[1] and Bernardine of
Sienna says: 'Money has not simply the character of money, but it
has beyond this a productive character, which we commonly call
capital.'[2] 'What is money,' says Brants, 'if it is not a means of
exchange, of which the employment and preservation will give a profit,
if he who possesses it is prudent, active, and intelligent? If this
money is well employed, it will become a capital, and one may derive
a profit from it; but this profit arises from the activity of him who
uses it, and consequently this profit belongs to him--it is the fruit,
the remuneration of his labour.... Did they (the scholastics) say
that it was impossible to draw a profit from a sum of money? No; they
admitted fully that one might _de pecunia lucrari_; but this _lucrum_
does not come from the _pecunia_, but from the application of labour
to the sum.'[3]

[Footnote 1: Quoted in Brants, _op. cit._, p. 134.]

[Footnote 2: _Ibid._]

[Footnote 3: Brants, _op. cit._, pp. 133-5; Nider, _De Cont. Merc._
iii. 15.]

Therefore, if the borrower did not derive any profit from the loan,
the sum lent had in fact been sterile, and obviously the just price of
the loan was the return of the amount lent; if, on the contrary, the
borrower had made a profit from it, it was the reward of his labour,
and not the fruit of the loan itself. To repay more than the sum lent
would therefore be to make a payment to one person for the labour of
another.[1] The exaction of usury was therefore the exploitation of
another man's exertion.[2]

[Footnote 1: Gerson, _De Cont._, iv. 15.]

[Footnote 2: Neumann, when he says that 'it was sinful to recompense
the use of capital belonging to another' (_Geschichte des Wuchers in
Deutschland_, p. 25), seems to miss the whole point of the discussion.
The teaching of the canonists on rents and partnership shows clearly
that the owner of capital might draw a profit from another's labour,
and the central point of the usury teaching was that money which has
been lent, and employed so as to produce a profit by the borrower,
belongs not 'to another,' but to the very man who employed it, namely,
the borrower.]

It is interesting to notice how closely the rules applying in the case
of sales were applied to usury. The raising of the price of a loan
on account of some special benefit derived from it by the borrower is
precisely analogous to raising the sale price of an object because it
is of some special individual utility to the buyer. On the other
hand, as we shall see further down, any special damage suffered by the
lender was a sufficient reason for exacting something over and above
the amount lent; this was precisely the rule that applied in the case
of sales, when the seller suffered any special damage from parting
with the object sold. Thus the analogy between sales and loans was
complete at every point. In both, equality of sacrifice was the test
of justice.

Nor could it be suggested that the delay in the repayment of the loan
was a reason for increasing the amount to be repaid, because this
really amounted to a sale of time, which, of its nature, could not be
owned.[1]

[Footnote 1: Rambaud, _op. cit._, p. 63; Aquinas(?), _De Usuris_, i.
4.]

The scholastic teaching, then, on the subject was quite plain and
unambiguous. Usury, or the payment of a price for the use of a sum
lent in addition to the repayment of the sum itself, was in all
cases prohibited. The fact that the payment demanded was moderate was
irrelevant; there could be no question of the reasonableness of the
amount of an essentially unjust payment.[1] Nor was the payment of
usury rendered just because the loan was for a productive purpose--in
other words, a commercial loan. Certain writers have maintained that
in this case usury was tolerated;[2] but they can easily be refuted.
As we have seen above, _mutuum_ was essentially a sale, and,
therefore, no additional price could be charged because of some
special individual advantage enjoyed by the buyer (or borrower).
It was quite impossible to distinguish, according to the scholastic
teaching, between taking an additional payment because the lender made
a profit by using the loan wisely, and taking it because the borrower
was in great distress, and therefore derived a greater advantage from
the loan than a person in easier circumstances. The erroneous notion
that loans for productive purposes were entitled to any special
treatment was finally dispelled in 1745 by an encyclical of Benedict
XIV.[3]

[Footnote 1: Jourdain, _op. cit._, p. 35.]

[Footnote 2: _E.g._ Périn, _Premiers Principes d'Économie politique_,
p. 305; Claudio Jannet, _Capital Spéculation et Finance_, p. 83; De
Metz-Noblat, _Lois économiques_, p. 293.]

[Footnote 3: Rambaud, _op. cit._, p. 69.]


§ 5. _Extrinsic Titles_.

Usury, therefore, was prohibited in all cases. Many people at the
present day think that the prohibition of usury was the same thing
as the prohibition of interest. There could not be a greater mistake.
While usury was in all circumstances condemned, interest was in every
case allowed. The justification of interest rested on precisely the
same ground as the prohibition of usury, namely, the observance of the
equality of commutative justice. It was unjust that a greater price
should be paid for the loan of a sum of money than the amount lent;
but it was no less unjust that the lender should find himself in a
worse position because of his having made the loan. In other words,
the consideration for the loan could not be increased because of any
special benefit which it conferred on the borrower, but it could
be increased on account of any special damage suffered by the
lender--precisely the same rule as we have seen applied in the case
of sales. The borrower must, in addition to the repayment of the loan,
indemnify the lender for any damage he had suffered. The measure of
the damage was the difference between the lender's condition before
the loan was made and after it had been repaid--in other words, he
was entitled to compensation for the difference in his condition
occasioned by the transaction--_id quod interest_.

Before we discuss interest properly so called, we must say a word
about another analogous but not identical title of compensation,
namely, the _poena conventionalis_. It was a very general practice,
about the legitimacy of which the scholastics do not seem to have had
any doubt, to attach to the original contract of loan an agreement
that a penalty should be paid in case of default in the repayment
of the loan at the stipulated time.[1] The justice of the _poena
conventionalis_ was recognised by Alexander of Hales,[2] and by Duns
Scotus, who gives a typical form of the stipulation as follows: 'I
have need of my money for commerce, but shall lend it to you till a
certain day on the condition that, if you do not repay it on that day,
you shall pay me afterwards a certain sum in addition, since I shall
suffer much injury through your delay.'[3] The _poena conventionalis_
must not be confused with either of the titles _damnum emergens_ or
_lucrum cessans_, which we are about to discuss; it was distinguished
from the former by being based upon a presumed injury, whereas the
injury in _damnum emergens_ must be proved; and for the latter because
the damage must be presumed to have occurred after the expiration of
the loan period, whereas in _lucrum cessans_ the damage was presumed
to have occurred during the currency of the loan period. The important
thing to remember is that these titles were really distinct.[4] The
essentials of a _poena conventionalis_ were, stipulation from the
first day of the loan, presumption of damage, and attachment to a
loan which was itself gratuitous.[5] The _Summa Astesana_ clearly
maintained the distinction between the two titles of compensation,[6]
as also did the _Summa Angelica_.[7]

[Footnote 1: Ashley, _op. cit._, vol. i. pt. i. p. 399.]

[Footnote 2: Biel, _op. cit._, iv. 15, 11.]

[Footnote 3: Cleary, _op. cit._, p. 93.]

[Footnote 4: _Ibid._, p. 95.]

[Footnote 5: Cleary, _op. cit._, p. 94.]

[Footnote 6: Endemann, _Studien_, vol. i. p. 20.]

[Footnote 7: ccxl.]

The first thing to be noted on passing from the _poena conventionalis_
to interest proper is that the latter ground of compensation was
generally divided into two kinds, _damnum emergens_ and _lucrum
cessans_. The former included all cases where the lender had incurred
an actual loss by reason of his having made the loan; whereas the
latter included all cases where the lender, by parting with his money,
had lost the opportunity of making a profit. This distinction was made
at least as early as the middle of the thirteenth century, and was
always adopted by later writers.[1]

[Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. p. 399.]

The title _damnum emergens_ never presented any serious difficulty.
It was recognised by Albertus Magnus,[1] and laid down so clearly by
Aquinas that it was not afterwards questioned: 'A lender may without
sin enter an agreement with the borrower for compensation for the loss
he incurs of something he ought to have, for this is not to sell
the use of money, but to avoid a loss. It may also happen that the
borrower avoids a greater loss than the lender incurs, wherefore the
borrower may repay the lender with what he has gained.'[2] The usual
example given to illustrate how _damnum emergens_ might arise, was
the case of the lender being obliged, on account of the failure of the
borrower, to borrow money himself at usury.[3]

[Footnote 1: Roscher, _Geschichte_, p. 27.]

[Footnote 2: II. ii. 78, 2, ad. 1.]

[Footnote 3: Ashley, _op. cit._, vol. i. pt. i. p. 400.]

Closely allied to the title of _damnum emergens_ was that of _lucrum
cessans_. According to some writers, the latter was the only true
interest. Dr. Cleary quotes some thirteenth-century documents in which
a clear distinction is made between _damnum_ and _interesse_;[1] and
it seems to have been the common custom in Germany at a later date
to distinguish between _interesse_ and _schaden_.[2] Although the
division between these two titles was very indefinite, they did not
meet recognition with equal readiness; the title _damnum emergens_
was universally admitted by all authorities; while that of _lucrum
cessans_ was but gradually admitted, and hedged round with many
limitations.[3]

[Footnote 1: _Op. cit._, p. 95.]

[Footnote 2: Ashley, _op. cit._, vol. i. pt. ii. p. 401.]

[Footnote 3: Cleary, _op. cit._, p. 98; Endemann, _Studien_, vol. ii.
p. 279; Bartolus and Baldus said that _damnum emergens_ and _lucrum
cessans_ were divided by a very narrow line, and that it was often
difficult to distinguish between them. They suggested that the
terms _interesse proximum_ and _interesse remotum_ would be more
satisfactory, but they were not followed by other writers (Endemann,
_Studien_, vol. ii, pp. 269-70).]

The first clear recognition of the title _lucrum cessans_ occurs in
a letter from Alexander III., written in 1176, and addressed to the
Archbishop of Genoa: 'You tell us that it often happens in your city
that people buy pepper and cinnamon and other wares, at the time worth
not more than five pounds, promising those from whom they received
them six pounds at an appointed time. Though contracts of this
kind and under such a form cannot strictly be called usurious, yet,
nevertheless, the vendors incur guilt, unless they are really doubtful
whether the wares might be worth more or less at the time of payment.
Your citizens will do well for their own salvation to cease from such
contracts.'[1] As Dr. Cleary points out, the trader is held by this
decision to be entitled to a recompense on account of a probable loss
of profit, and the decision consequently amounts to a recognition of
the title _lucrum cessans_.[2] The title is also recognised by Scotus
and Hostiensis.[3]

[Footnote 1: _Decr. Greg._ v. 5, 6.]

[Footnote 2: _Op. cit._, p. 67.]

[Footnote 3: _Ibid._, p. 99.]

The attitude of Aquinas to the admission of _lucrum cessans_ is
obscure. In the article on usury he expressly states that 'the lender
cannot enter an agreement for compensation through the fact that he
makes no profit out of his money, because he must not sell that which
he has not yet, and may be prevented in many ways from having.'[1] Two
comments must be made on this passage; first, that it only refers to
making a stipulation in advance for compensation for profit lost, and
does not condemn the actual payment of compensation;[2] second, that
the point is made that the probability of gaining a profit on money is
so problematical as to make it unsaleable. As Ashley points out, the
latter consideration was peculiarly important at the time when the
_Summa_ was composed; and, when in the course of the following
two centuries the opportunities for reasonably safe and profitable
business investments increased, the great theologians conceived that
they were following the real thought of Aquinas by giving to this
explanation a pure _contemporanea expositio_. The argument in favour
of this construction is strengthened by a reference to the article of
the _Summa_ dealing with restitution,[3] where it is pointed out that
a man may suffer in two ways--first, by being deprived of what he
actually has, and, second, by being prevented from obtaining what he
was on his way to obtain. In the former case an equivalent must always
be restored, but in the latter it is not necessary to make good an
equivalent, 'because to have a thing virtually is less than to have it
actually, and to be on the way to obtain a thing is to have it
merely virtually or potentially, and so, were he to be indemnified by
receiving the thing actually, he would be paid, not the exact value
taken from him, but more, and this is not necessary for salvation.
However, he is bound to make some compensation according to the
condition of persons and things.' Later in the same article we are
told that 'he that has money has the profit not actually, but only
virtually; and it may be hindered in many ways.'[4] It seems
quite clear from these passages that Aquinas admitted the right to
compensation for a profit which the lender was hindered from making on
account of the loan; but that, in the circumstances of the time, the
probability of making such a profit was so remote that it could not
be made the basis of pecuniary compensation. The probability of there
being a _lucrum cessans_ was thought small, but the justice of its
reward, if it did in fact exist, was admitted.

[Footnote 1: II. ii. 78, 2, ad. 1.]

[Footnote 2: Rambaud, _op. cit._, p. 67.]

[Footnote 3: II. ii. 62, 4.]

[Footnote 4: _Ibid._, ad. 1 and 2.]

This interpretation steadily gained ground amongst succeeding writers;
so that, in spite of some lingering opposition, the justice of the
title _lucrum cessans_ was practically universally admitted by the
theologians of the fifteenth century.[1]

[Footnote 1: Ashley, _op. cit._, p. 99. _Lucrum cessans_ was defined
by Navarrus as 'amissio facta a creditore per pecuniam sibi non
redditam' (Endemann, _Studien_, vol. ii. p. 279).]

Of course the burden of proving that an opportunity for profitable
investment had been really lost was on the lender, but this onus
was sufficiently discharged if the probability of such a loss were
established. In the fifteenth century, with the expansion of commerce,
it came to be generally recognised that such a probability could be
presumed in the case of the merchant or trader.[1] The final condition
of this development of the teaching on _lucrum cessans_ is thus stated
by Ashley:[2] 'Any merchant, or indeed any person in a trading
centre where there were opportunities of business investment (outside
money-lending itself) could, with a perfectly clear conscience,
and without any fear of molestation, contract to receive periodical
interest from the person to whom he lent money; _provided only_ that
he first lent it to him gratuitously, for a period that might be made
very short, so that technically the payment would not be reward for
the use, but compensation for the non-return of the money.' At a later
period than that of which we are treating in the present essay the
short gratuitous period could be dispensed with, but until the end of
the fifteenth century it seems to have been considered essential.[3]

[Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. p. 402.]

[Footnote 2: _Ibid._]

[Footnote 3: Ashley, _op. cit._ vol. i. pt. ii. p. 402; Endemann,
_Studien_, vol. ii. pp. 253-4; Cleary, _op. cit._, p. 100.]

Of course the amount paid in respect of _lucrum cessans_ must be
reasonable in regard to the loss of opportunity actually experienced;
'Lenders,' says Buridan, 'must not take by way of _lucrum
cessans_ more than they would have actually made by commerce or in
exchange';[1] and Ambrosius de Vignate explains that compensation
must only be made for 'the time and just _interesse_ of the lost gain,
which must be certain and proximate.'[2]

[Footnote 1: _Eth._, iv. 6.]

[Footnote 2: _De Usuris_, c. 10.]

There was another title on account of which more than the amount of
the loan could be recovered, namely, _periculum sortis_. In one sense
it was a contradiction in terms to speak of the element of risk in
connection with usury, because from its very definition usury was gain
without risk as opposed to profit from a trading partnership, which,
as we shall see presently, consisted of gain coupled with the risk of
loss. It could not be lost sight of, however, that in fact there might
be a risk of the loan not being repaid through the insolvency of the
borrower, or some other cause, and the question arose whether the
lender could justly claim any compensation for the undertaking of this
risk. 'Regarded as an extrinsic title, risk of losing the principal
is connected with the contract of _mutuum_, and entitles the lender to
some compensation for running the risk of losing his capital in order
to oblige a possibly insolvent debtor. The greater the danger of
insolvency, the greater naturally would be the charge. The contract
was indifferent to the object of the loan; it mattered not whether it
was intended for commerce or consumption; it was no less indifferent
to profit on the part of the borrower; it took account simply of the
latter's ability to pay, and made its charge accordingly. It resembled
consequently the contracts made by insurance companies, wherein there
is a readiness to risk the capital sum for a certain rate of payment;
the only difference was that the probabilities charged for were not
so much the likelihood of having to pay, as the likelihood of not
receiving back.'[1]

[Footnote 1: Cleary, _op. cit._, p. 115.]

We have referred above, when dealing with the legitimacy of commercial
profits, to the difficulty which was felt in admitting the justice
of compensation for risk, on account of the Gregorian Decretal on
the subject. The same decree gave rise to the same difficulty in
connection with the justification of a recompense for _periculum
sortis_. There was a serious dispute about the actual wording of the
decree, and even those who agreed as to its wording differed as to its
interpretation.[1] The justice of the title was, however, admitted by
Scotus, who said that it was lawful to stipulate for recompense when
both the principal and surplus were in danger of being lost[2]; by
Carletus;[3] and by Nider.[4] The question, however, was still hotly
disputed at the end of the fifteenth century, and was finally settled
in favour of the admission of the title as late as 1645.[5]

[Footnote 1: _Ibid._]

[Footnote 2: Cleary, _op. cit._, p. 117.]

[Footnote 3: _Summa Angelica Usura_, i. 38.]

[Footnote 4: _De Cont. Merc._, iii. 15.]

[Footnote 5: Cleary, _op. cit._, p. 117.]


§ 6. _Other Cases in which more than the Loan could be repaid_.

We have now discussed the extrinsic titles--_poena conventionalis,
damnum emergens, lucrum cessans_, and _periculum sortis_. There were
other grounds also, which cannot be reduced to the classification of
extrinsic titles, on which more than the amount of the loan might be
justly returned to the lender. In the first place, the lender might
justly receive anything that the borrower chose to pay over and above
the loan, voluntarily as a token of gratitude. 'Repayment for a favour
may be done in two ways,' says Aquinas. 'In one way, as a debt of
justice; and to such a debt a man may be bound by a fixed contract;
and its amount is measured according to the favour received. Wherefore
the borrower of money, or any such thing the use of which is its
consumption, is not bound to repay more than he received in loan; and
consequently it is against justice if he is obliged to pay back more.
In another way a man's obligation to repayment for favour received
is based on a debt of friendship, and the nature of this debt depends
more on the feeling with which the favour was conferred than on the
question of the favour itself. This debt does not carry with it a
civil obligation, involving a kind of necessity that would exclude the
spontaneous nature of such a repayment.'[1]

[Footnote 1: II. ii. 78, 2, ad. 2.]

It was also clearly understood that it was not wrongful to borrow at
usury under certain conditions. In such cases the lender might commit
usury in receiving, but the borrower would not commit usury in paying
an amount greater than the sum lent. It was necessary, however, in
order that borrowing at usury might be justified, that the borrower
should be animated by some good motive, such as the relief of his own
or another's need. The whole question was settled once and for all by
Aquinas: 'It is by no means lawful to induce a man to sin, yet it is
lawful to make use of another's sin for a good end, since even God
uses all sin for some good, since He draws some good from every
evil.... Accordingly it is by no means lawful to induce a man to lend
under a condition of usury; yet it is lawful to borrow for usury from
a man who is ready to do so, and is a usurer by profession, provided
that the borrower have a good end in view, such as the relief of his
own or another's need.... He who borrows for usury does not consent
to the usurer's sin, but makes use of it. Nor is it the usurer's
acceptance of usury that pleases him, but his lending, which is
good.'[1]

[Footnote 1: II. ii. 78, 4.]

We should mention here the _montes pietatis_, which occupied a
prominent place among the credit-giving agencies of the later Middle
Ages, although it is difficult to say whether their methods were
examples of or exceptions to the doctrines forbidding usury. These
institutions were formed on the model of the _montes profani_, the
system of public debt resorted to by many Italian States. Starting in
the middle of the twelfth century,[1] the Italian States had
recourse to forced loans in order to raise reserves for extraordinary
necessities, and, in order to prevent the growth of disaffection among
the citizens, an annual percentage on such loans was paid. A fund
raised by such means was generally called a _mons_ or heap. The
propriety of the payment of this percentage was warmly contested
during the fourteenth and fifteenth centuries--the Dominicans and
Franciscans defending it, and the Augustinians attacking it. But its
justification was not difficult. In the first place, the loans were
generally, if not universally, forced, and therefore the payment of
interest on them was purely voluntary. As we have seen, Aquinas was
quite clear as to the lawfulness of such a voluntary payment. In
the second place, the lenders were almost invariably members of
the trading community, who were the very people in whose favour a
recompense for _lucrum cessans_ would be allowed.[2] Laurentius de
Rodulphis argued in favour of the justice of these State loans, and
contended that the bondholders were entitled to sell their rights, but
advised good Christians to abstain from the practice of a right about
the justice of which theologians were in such disagreement[3]; and
Antoninus of Florence, who was in general so strict on the subject of
usury, took the same view.[4]

[Footnote 1: Endemann, _Studien_, vol. i. p. 433.]

[Footnote 2: Ashley, _op. cit._, vol. i. pt. i. p. 448.]

[Footnote 3: _De Usuris_.]

[Footnote 4: Ashley, _op. cit._, p. 449.]

It was probably the example of these State loans, or _montes profani_,
that suggested to the Franciscans the possibility of creating an
organisation to provide credit facilities for poor borrowers, which
was in many ways analogous to the modern co-operative credit banks.
Prior to the middle of the fifteenth century, when this experiment
was initiated, there had been various attempts by the State to provide
credit facilities for the poor, but these need not detain us here, as
they did not come to anything.[1] The first of the _montes pietatis_
was founded at Orvieto by the Franciscans in 1462, and after that
year they spread rapidly.[2] The _montes_, although their aim was
exclusively philanthropic, found themselves obliged to make a small
charge to defray their working expenses, and, although one would think
that this could be amply justified by the title of _damnum emergens_,
it provoked a violent attack by the Dominicans. The principal
antagonist of the _montes pietatis_ was Thomas da Vio, who wrote a
special treatise on the subject, in which he made the point that the
_montes_ charged interest from the very beginning of the loan, which
was a contradiction of all the previous teaching on interest.[3]

[Footnote 1: Cleary, _op. cit._, p. 108; Brants, _op. cit._, p. 159.]

[Footnote 2: Perugia, 1467; Viterbo, 1472; Sevona, 1472; Assisi,
1485; Mantua, 1486; Cesana and Parma, 1488; Interamna and Lucca,
1489; Verona, 1490; Padua, 1491, etc. (Endemann, _Studien_, vol. i. p.
463).]

[Footnote 3: _De Monte Pietatis_.]

The general feeling of the Church, however, was in favour of the
_montes_. It was felt that, if the poor must borrow, it was better
that they should borrow at a low rate of interest from philanthropic
institutions than at an extortionate rate from usurers; several
_montes_ were established under the direct protection of the Popes;[1]
and finally, in 1515, the Lateran Council gave an authoritative
judgment in favour of the _montes_. This decree contains an excellent
definition of usury as it had come to be accepted at that date: 'Usury
is when gain is sought to be acquired from the use of a thing, not
fruitful in itself, without labour, expense, or risk on the part of
the lender.'[2]

[Footnote 1: Cleary, _op. cit._, p. 111.]

[Footnote 2: Ashley, _op. cit._, vol. i. pt. ii. p. 451.]

It was generally admitted by the theologians that the taking of usury
might be permitted by the civil authorities, although it was insisted
that acting in accordance with this permission did not absolve the
conscience of the usurer. Albertus Magnus conceded that 'although
usury is contrary to the perfection of Christian laws, it is at least
not contrary to civil interests';[1] and Aquinas also justified the
toleration of usury by the State: 'Human laws leave certain things
unpunished, on account of the condition of those who are imperfect,
and who would be deprived of many advantages if all sins were strictly
forbidden and punishments appointed for them. Wherefore human law
has permitted usury, not that it looks upon usury as harmonising
with justice, but lest the advantage of many should be hindered.'[2]
Although this opinion was controverted by Ægidius Romanus,[3] it was
generally accepted by later writers. Thus Gerson says that 'the civil
law, when it tolerates usury in some cases, must not be said to be
always contrary to the law of God or the Church. The civil legislator,
acting in the manner of a wise doctor, tolerates lesser evils that
greater ones may be avoided. It is obviously less of an evil that
slight usury should be permitted for the relief of want, than that men
should be driven by their want to rob or steal, or to sell their goods
at an unfairly low price.'[4] Buridan explains that the attitude of
the State towards usury must never be more than one of toleration;
it must not actively approve of usury, but it may tacitly refuse to
punish it.[5]

[Footnote 1: Rambaud, _op. cit._, p. 65; Espinas, _op. cit._, p. 103.]

[Footnote 2: II. ii. 78, 1, ad. 3.]

[Footnote 3: _De Reg. Prin._, ii. 3, 11.]

[Footnote 4: _De Cont._, ii. 17.]

[Footnote 5: _Quaest. super. Lib. Eth._, iv. 6.]


§ 7. _The Justice of Unearned Income_.

Many modern socialists--'Christian' and otherwise--have asserted that
the teaching of the Church on usury was a pronouncement in favour of
the unproductivity of capital.[1] Thus Rudolf Meyer, one of the
most distinguished of 'Christian socialists,' has argued that if one
recognises the productivity of land or stock, one must also recognise
the productivity of money, and that therefore the Church, in denying
the productivity of the latter, would be logically driven to deny
the productivity of the former.[2] Anton Menger expresses the same
opinion: 'There is not the least reason for attacking from the moral
and religious standpoints loans at interest and usury more than any
other form of unearned income. If one questions the legitimacy of
loans at interest, one must equally condemn as inadmissible the other
forms of profit from capital and lands, and particularly the feudal
institutions of the Middle Ages.... It would have been but a logical
consequence for the Church to have condemned all forms of unearned
revenue.'[3]

[Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. p. 427.]

[Footnote 2: _Der Kapitalismus fin de siècle_, p. 29.]

[Footnote 3: _Das Recht auf den Arbeiterstrag_. See the Abbé Hohoff in
_Démocratie Chrétienne_, Sept. 1898, p. 284.]

No such conclusion, however, can be properly drawn from the mediæval
teaching. The whole discussion on usury turned on the distinction
which was drawn between things of which the use could be transferred
without the ownership, and things of which the use could not be so
transferred. In the former category were placed all things which
could be used, either by way of enjoyment or employment for productive
purposes, without being destroyed in the process; and in the latter
all things of which the use or employment involved the destruction.

With regard to income derived from the former, no difficulty was ever
felt; a farm or a house might be let at a rent without any question,
the return received being universally regarded as one of the
legitimate fruits of the ownership of the thing. With regard to the
latter, however, a difficulty did arise, because it was felt that a
so-called loan of such goods was, when analysed, in reality a sale,
and that therefore any increase which the goods produced was in
reality the property, not of the lender, but of the borrower. That
money was in all cases sterile was never suggested; on the contrary,
it was admitted that it might produce a profit if wisely and prudently
employed in industry or commerce; but it was felt that such an
increase, when it took place, was the rightful property of the owner
of the money. But when money was lent, the owner of this money was
the borrower, and therefore, when money which was lent was employed
in such a way as to produce a profit, that profit belonged to the
borrower, not the lender. In this way the schoolmen were strictly
logical; they fully admitted that wealth could produce wealth; but
they insisted that that additional wealth should accrue to the owner
of the wealth that produced it.

The fact is, as Böhm-Bawerk has pointed out, that the question of the
productivity of capital was never discussed by the mediæval schoolmen,
for the simple reason that it was so obvious. The justice of receiving
an income from an infungible thing which was temporarily lent by its
owner, was discussed and supported; but the justice of the owner of
such a thing receiving an income from the thing so long as it remained
in his own possession was never discussed, because it was universally
admitted.[1] It is perfectly correct to say that the problems which
have perplexed modern writers as to the justice of receiving an
unearned income from one's property never occurred to the scholastics;
such problems can only arise when the institution of private property
comes to be questioned; and private property was the keystone of the
whole scholastic economic conception. In other words, the justice of a
reward for capital was admitted because it was unquestioned.

[Footnote 1: _Capital and Interest_, p. 39.]

The question that caused difficulty was whether money could
be considered a form of capital. At the present day, when the
opportunities of industrial investment are wider than they ever were
before, the principal use to which money is put is the financing of
industrial enterprises; but in the Middle Ages this was not the case,
precisely because the opportunities of profitable investment were
so few. This is the reason why the mediæval writers did not find it
necessary to discuss in detail the rights of the owner of money who
used it for productive purposes. But of the justice of a profit being
reaped when money was actually so employed there was no doubt at all.
As we have seen, the borrower of a sum of money might reap a profit
from its wise employment; there was no question about the justice of
taking such a profit; and the only matter in dispute was whether that
profit should belong to the borrower or the lender of the money. This
dispute was decided in favour of the borrower on the ground that,
according to the true nature of the contract of _mutuum_, the money
was his property. It was, therefore, never doubted that even money
might produce a profit for its owner. The only difference between
infungible goods and money was that, in the case of the former, the
use might be transferred apart from the property, whereas, in the case
of the latter, it could not be so transferred.

The recognition of the title _lucrum cessans_ as a ground for
remuneration clearly implies the recognition of the legitimacy of the
owner of money deriving a profit from its use; and the slowness of the
scholastics to admit this title was precisely because of the rarity of
opportunities for so employing money in the earlier Middle Ages. The
nature of capital was clearly understood; but the possibility of money
constituting capital arose only with the extension of commerce and
the growth of profitable investments. Those scholastics who strove to
abolish or to limit the recognition of _lucrum cessans_ as a ground
for remuneration did not deny the productivity of capital, but simply
thought the money had not at that time acquired the characteristics of
capital.[1]

[Footnote 1: See Ashley, _op. cit._, vol. i. pt. ii. pp. 434-9.]

If there were any doubt about the fact that the scholastics recognised
the legitimacy of unearned income, it would be dispelled by an
understanding of their teaching on rents and partnership, in the
former of which they distinctly acknowledged the right to draw an
unearned income from one's land, and in the latter of which they
acknowledged the same right in regard to one's money.[1]

[Footnote 1: On this discussion see Ashley, _Economic History_, vol.
i. pt. ii. pp. 427 _et seq._; Rambaud, _Histoire_, pp. 57 _et seq._;
Funk, _Zins und Wucher_; Arnold, _Zur Geschichte des Eigenthums_, pp.
92 _et seq._; Böhm-Bawerk, _Capital and Interest_ (Eng. trans.), pp.
1-39.]


§ 8. _Rent Charges_.

There was never any difficulty about admitting the justice of
receiving a rent from a tenant in occupation of one's lands, because
land was understood to be essentially a thing of which the use could
be sold apart from the ownership; and it was also recognised that the
recipient of such a rent might sell his right to a third party, who
could then demand the rent from the tenant. When this was admitted it
was but a small step to admit the right of the owner of land to create
a rent in favour of another person in consideration for some
payment. The distinctions between a _census reservativus_, or a rent
established when the possession of land was actually transferred to a
tenant, and a _census constitutivus_, or a rent created upon property
remaining in the possession of the payer, did not become the subject
of discussion or difficulty until the sixteenth century.[1] The
legitimacy of rent charges does not seem to have been questioned
by the theologians; the best proof of this being the absence of
controversy about them in a period when they were undoubtedly very
common, especially in Germany.[2] Langenstein, whose opinion on
the subject was followed by many later writers,[3] thought that the
receipt of income from rent charges was perfectly justifiable, when
the object was to secure a provision for old age, or to provide an
income for persons engaged in the services of Church or State, but
that it was unjustifiable if it was intended to enable nobles to
live in luxurious idleness, or plebeians to desert honest toil. It is
obvious that Langenstein did not regard rent charges as wrongful in
themselves, but simply as being the possible occasions of wrong.[4]

[Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. p. 409.]

[Footnote 2: Endemann, _Studien_, vol. ii. p. 104.]

[Footnote 3: Endemann, _Studien_, vol. ii. p. 109.]

[Footnote 4: Roscher, _Geschichte_, p. 20.]

In the fifteenth century definite pronouncements on rent charges
were made by the Popes. A large part of the revenue of ecclesiastical
bodies consisted of rent charges, and in 1425 several persons in the
diocese of Breslau refused to pay the rents they owed to their clergy
on the ground that they were usurious. The question was referred to
Pope Martin V., whose bull deciding the matter was generally followed
by all subsequent authorities. The bull decides in favour of the
lawfulness of rent charges, provided certain conditions were observed.
They must be charged on fixed property ('super bonis suis, dominiis,
oppidis, terris, agris, praediis, domibus et hereditatibus') and
determined beforehand; they must be moderate, not exceeding seven or
ten per cent.; and they must be capable of being repurchased at any
moment in whole or in part, by the repayment of the same sum for which
they were originally created. On the other hand, the payer of the rent
must never be forced to repay the purchase money, even if the goods on
which the rent was charged had perished--in other words, the contract
creating the rent charge was one of sale, and not of loan. The bull
recites that such conditions had been observed in contracts of this
nature from time immemorial.[1] A precisely similar decree was issued
by Calixtus III. in 1455.[2]

[Footnote 1: _Extrav. Commun._, iii. 5, i.]

[Footnote 2: _Ibid._, c. 2.]

These decisions were universally followed in the fifteenth century.[1]
It was always insisted that a rent could only be charged upon
something of which the use could be separated from the ownership,
as otherwise it would savour of usury.[2] In the sixteenth century
interesting discussions arose about the possibility of creating a
personal rent charge, not secured on any specific property, but such
discussions did not trouble the writers of the period which we are
treating. The only instance of such a contract being considered is
found in a bull of Nicholas V. in 1452, permitting such personal rent
charges in the kingdoms of Aragon and Sicily, but this permission was
purely local, and, as the bull itself shows, was designed to meet the
exigencies of a special situation.[3]

[Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. p. 410.]

[Footnote 2: Biel, _op. cit._, Sent. IV. xv. 12.]

[Footnote 3: Cleary, _op. cit._, p. 124.]



§ 9. _Partnership_.

The teaching on partnership contains such a complete disproof of
the contention that the mediæval teaching on usury was based on the
unproductivity of capital, that certain writers have endeavoured
to prove that the permission of partnership was but a subterfuge,
consciously designed to justify evasions of the usury law. Further
historical knowledge, however, has dispelled this misconception;
and it is now certain that the contract of partnership was widely
practised and tolerated long before the Church attempted to insist
on the observance of its usury laws in everyday commercial life.[1]
However interesting an investigation into the commercial and
industrial partnerships of the Middle Ages might be, we must not
attempt to pursue it here, as we have rigidly limited ourselves to a
consideration of teaching. We must refer, however, to the _commenda_,
which was the contract from which the later mediæval partnership
(_societas_) is generally admitted to have developed, because the
_commenda_ was extensively practised as early as the tenth century,
and, as far as we know, never provoked any expression of disapproval
from the Church. This silence amounts to a justification; and we may
therefore say that, even before Aquinas devoted his attention to the
subject, the Church fully approved of an institution which provided
the owner of money with the means of procuring an unearned income.

[Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. p. 411; Weber,
_Handelsgesellschaften_, pp. 111-14.]

The _commenda_ was originally a contract by which merchants who wished
to engage in foreign trade, but who did not wish to travel themselves,
entrusted their wares to agents or representatives. The merchant was
known as the _commendator_ or _socius stans_, and the agent as the
_commendatarius_ or _tractator_. The most usual arrangement for the
division of the profits of the adventure was that the _commendatarius_
should receive one-fourth and the _commendator_ three-fourths. At
a slightly later date contracts came to be common in which the
_commendatarius_ contributed a share of capital, in which case he
would receive one-fourth of the whole profit as _commendatarius_, and
a proportionate share of the remainder as capitalist. This contract
came to be generally known as _collegantia_ or _societas_. Contracts
of this kind, though originally chiefly employed in overseas
enterprise, afterwards came to be utilised in internal trade and
manufacturing industry.[1]

[Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. pp. 412-14.]

The legitimacy of the profits of the _commendator_ never seems to have
caused the slightest difficulty to the canonists. In 1206 Innocent
III. advised the Archbishop of Genoa that a widow's dowry should be
entrusted to some merchant so that an income might be obtained by
means of honest gain.[1] Aquinas expressly distinguishes between
profit made from entrusting one's money to a merchant to be employed
by him in trade, and profit arising from a loan, on the ground that
in the former case the ownership of the money does not pass, and that
therefore the person who derives the profit also risks the loan. 'He
who lends money transfers the ownership of the money to the borrower.
Hence the borrower holds the money at his own risk, and is bound to
pay it all back: wherefore the lender must not exact more. On the
other hand, he that entrusts his money to a merchant or craftsman so
as to form a kind of society does not transfer the ownership of the
money to them, for it remains his, so that at his risk the merchant
speculates with it, or the craftsman uses it for his craft, and
consequently he may lawfully demand, as something belonging to him,
part of the profits derived from his money.'[2] This dictum of Aquinas
was the foundation of all the later teaching on partnership, and the
importance of the element of risk was insisted on in strong terms by
the later writers. According to Baldus, 'when there is no sharing
of risk there is no partnership';[3] and Paul de Castro says, 'A
partnership when the gain is shared, but not the loss, is not to be
permitted.'[4] 'The legitimacy,' says Brants, 'of the contract of
_commenda_ always rested upon the same principle; capital could not be
productive except for him who worked it himself, or who caused it
to be worked on his own responsibility. This latter condition was
realised in _commenda_.'[5]

[Footnote 1: _Greg. Decr._, iv. 19, 7.]

[Footnote 2: II. ii. 78, 2, ad. 5.]

[Footnote 3: Brants, _op. cit._, p. 167.]

[Footnote 4: _Consilia_, ii. 55; also Ambrosius de Vignate, _De
Usuris_, i. 62; Biel, _Op. cit._, IV. xv. 11.]

[Footnote 5: _Op. cit._, p. 172.]

Although the contract of partnership was fully recognised by the
scholastics, it was not very scientifically treated, nor were the
different species of the contract systematically classified. The only
classification adopted was to divide contracts of partnership into
two kinds--those where both parties contributed labour to a joint
enterprise, and those where one party contributed labour and the other
party money. The former gave no difficulty, because the justice of the
remuneration of labour was admitted; but, while the latter was no
less fully recognised, cases of it were subjected to careful scrutiny,
because it was feared that usurious contracts might be concealed under
the appearance of a partnership.[1] The question which occupied the
greatest space in the treatises on the subject was the share in which
the profits should be divided between the parties. The only rule which
could be laid down, in the absence of an express contract, was that
the parties should be remunerated in proportion to the services which
they contributed--a rule the application of which must have been
attended with enormous difficulties. Laurentius de Rodulphis insists
that equality must be observed;[2] and Angelus de Periglis de Perusio,
the first monographist on the subject, does not throw much more light
on the question. The rule as stated by this last writer is that in the
first place the person contributing money must be repaid a sum equal
to what he put in, and the person contributing labour must be paid
a sum equal to the value of his labour, and that whatever surplus
remains must be divided between the two parties equally.[3] The
question of the shares in which the profits should be distributed was
not one, however, that frequently arose in practice, because it was
the almost universal custom for the partners to make this a term of
their original contract. Within fairly wide limits it was possible
to arrange for the division of the profits in unequal shares--say
two-thirds and one-third. The shares of gain and loss must, however,
be the same; one party could not reap two-thirds of the profit and
bear only one-third of the loss; but it might be contracted that, when
the loss was deducted from the gain, one party might have two-thirds
of the balance, and the other one-third.[4] In no case, of course,
could the party contributing the money stipulate that his principal
should in all cases be returned, because that was a _mutuum_. The
party contributing the labour might validly contract that he should
be paid for his labour in any case, but, if this was so, the contract
ceased to be a _societas_ and became a _locatio operarum_, or ordinary
contract of work for wages. In all cases, common participation in the
gains and losses of the enterprise was an essential feature of the
contract of partnership.[5]

[Footnote 1: _Summa Astesana_, iii. 12.]

[Footnote 2: _De Usuris_, i. 19.]

[Footnote 3: _De Societatibus_, i. 130.]

[Footnote 4: _De Societatibus_, i. 130.]

[Footnote 5: _Ibid._]

Before concluding the subject of partnership, we must make reference
to the _trinus contractus_, which caused much discussion and great
difficulty. As we have seen, a contract of partnership was good so
long as the person contributing money did not contract that he should
receive his original money back in all circumstances. A contract of
insurance was equally justifiable. There was no doubt that A might
enter into partnership with B; he could further insure himself with C
against the loss of his capital, and with D against damage caused
by fluctuations in the rate of profits. Why, then, should he not
simultaneously enter into all three contracts with B? If he did so, he
was still B's partner, but at the same time he was protected against
the loss of his principal and a fair return upon it--in other words,
he was a partner, protected against the risks of the enterprise. The
legitimacy of such a contract--the _trinus contractus_, as it was
called--was maintained by Carletus in the _Summa Angelica_, which was
published about 1476, and by Biel.[1] Early in the sixteenth century
Eck, a young professor at Ingolstadt, brought the question of the
legitimacy of this contract before the University of Bologna, but no
formal decision was pronounced, and, had it not been for the reaction
following the Reformation, the _trinus contractus_ would probably have
gained general acceptance. As it was, it was condemned by a provincial
synod at Milan in 1565, and by Sixtus V. in 1585.[2]

[Footnote 1: _Op. cit._, IV. xv. 11. Lecky attributed the invention of
the _trinus contractus_ to the Jesuits--who were only founded in 1534
(_History of Rationalism_, vol. ii. p. 267).]

[Footnote 2: Ashley, _op. cit._, vol. i. pt. ii. pp. 439 _et seqq._;
Cleary, _op. cit._, pp. 126 _et seqq._]

We should also refer to the contract of bottomry, which consisted of a
loan made to the owner--or in some cases the master--of a ship, on
the security of the ship, to be repaid with interest upon the safe
conclusion of a voyage. This contract could not be considered a
partnership, inasmuch as the property in the money passed to the
borrower; but it probably escaped condemnation as usurious on the
ground that the lender shared in the risk of the enterprise. The
payment of some additional sum over and above the money lent might
thus be justified on the ground of _periculum sortis_. The contract,
moreover, was really one of insurance for the shipowner, and contracts
of insurance were clearly legitimate. In any event the legitimacy of
loans on bottomry was not questioned before the sixteenth century.[1]

[Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. pp. 421-3; Palgrave,
_Dictionary of Political Economy_, art. 'Bottomry'; Cunningham,
_Growth of English Industry and Commerce_, vol i. p. 257.]


§ 10. _Concluding Remarks on Usury_.

It is to be hoped that the above exposition of the mediæval doctrine
on usury will dispel the idea that the doctrine was founded upon the
injustice of unearned income. Far from the receipt of an unearned
income from money or other capital being in all cases condemned, it
was unanimously recognised, provided that the income accrued to the
owner of the capital, and not to somebody else, and that the rate
of remuneration was just. The teaching on partnership rested on the
fundamental assumption that a man might trade with his money, either
by using it himself, or by allowing other people to use it on his
behalf. In the latter case, the person making use of the money might
be either assured of being paid a fixed remuneration for his services,
in which case the contract was one of _locatio operarum_, or he might
be willing to let his remuneration depend upon the result of the
enterprise, in which case the contract was one of _societas_. In
either case the right of the owner of the money to reap a profit from
the operation was unquestioned, provided only that he was willing to
share the risks of loss. But if, instead of making use of his money
for trading either by his own exertions or by those of his partner
or agent, he chose to sell his money, he was not permitted to receive
more for it than its just price--which was, in fact, the repayment of
the same amount. This was what happened in the case of a _mutuum_. In
that case the ownership of the money was transferred to the borrower,
who was perfectly at liberty to trade with it, if he so desired, and
to reap whatever gain that trade produced. The prohibition of usury,
far from being proof of the injustice of an income from capital, is
proof of quite the contrary, because it was designed to insure that
the income from capital should belong to the owner of that capital and
to no other person.[1] Although, therefore, no price could be paid for
a loan, the lender must be prevented from suffering any damage from
making the loan, and he might make good his loss by virtue of the
implied collateral contract of indemnity, which we discussed above
when treating of extrinsic titles. If the lender, through making the
loan, had been prevented from making a profit in trade, he might be
indemnified for that loss. All through the discussions on usury we
find express recognition of the justice of the owner of money deriving
an income from its employment; all that the teaching of usury was at
pains to define was who the person was to whom money, which was the
subject matter of a _mutuum_, belonged. It is quite impossible to
comprehend how modern writers can see in the usury teaching of the
scholastics a fatal discouragement to the enterprise of traders and
capitalists; and it is equally impossible to understand how
socialists can find in that doctrine any suggestion of support for the
proposition that all unearned income is immoral and unjust.

[Footnote 1: See Rambaud, _op. cit._, p. 59.]



SECTION 3.--THE MACHINERY OF EXCHANGE


We have already drawn attention to the fact that there was no branch
of economics about which such profound ignorance ruled in the earlier
Middle Ages as that of money. As we stated above, even as late as
the twelfth century, the theologians were quite content to quote the
ill-founded and erroneous opinions of Isidore of Seville as final
on the subject. It will be remembered that we also remarked that
the question of money was the first economic question to receive
systematic scientific treatment from the writers of the later Middle
Ages. This remarkable development of opinion on this subject is
practically the work of one man, Nicholas Oresme, Bishop of Lisieux,
whose treatise, _De Origine, Natura, Jure et Mutationibus Monetarum_,
is the earliest example of a pure economic monograph in the modern
sense. 'The scholastics,' says Roscher, 'extended their inquiries from
the economic point of view further than one is generally disposed to
believe; although it is true that they often did so under a singular
form.... We can, however, single out Oresme as the greatest scholastic
economist for two reasons: on account of the exactitude and clarity
of his ideas, and because he succeeded in freeing himself from the
pseudo-theological systematisation of things in general, and from the
pseudo-philosophical deduction in details.'[1]

[Footnote 1: Quoted in the Introduction to Wolowski's edition of
Oresme's _Tractatus_ (Paris, 1864).]

Even in the thirteenth century natural economy had not been
replaced to any large extent by money economy. The great majority
of transactions between man and man were carried on without the
intervention of money payments; and the amount of coin in circulation
was consequently small.[1] The question of currency was not therefore
one to engage the serious attention of the writers of the time.
Aquinas does not deal with money in the _Summa_, except
incidentally, and his references to the subject in the _De Regimine
Principum_--which occur in the chapters of that work of which
the authorship is disputed--simply go to the length of approving
Aristotle's opinions on money, and advising the prince to exercise
moderation in the exercise of his power of coining _sive in mutando
sive in diminuendo pondus_.[2]

[Footnote 1: Brants, _op. cit._, p. 179; Rambaud, _op. cit._, p. 73.]

[Footnote 2: _De Reg. Prin._, ii. 13.]

As is often the case, the discussion of the rights and duties of the
sovereign in connection with the currency only arose when it became
necessary for the public to protest against abuses. Philip the Fair of
France made it part of his policy to increase the revenue by tampering
with the coinage, a policy which was continued by his successors,
until it became an intolerable grievance to his subjects. In vain did
the Pope thunder against Philip;[1] in vain did the greatest poet of
the age denounce

                    'him that doth work
  With his adulterate money on the Seine.'[2]

[Footnote 1: Le Blant, _Traité historique des Monnaies de France_, p.
184.]

[Footnote 2: Dante, _Paradiso_, xix.]

Matters continued to grow steadily worse until the middle of the
fourteenth century. During the year 1348 there were no less than
eleven variations in the value of money in France; in 1349 there were
nine, in 1351 eighteen, in 1353 thirteen, and in 1355 eighteen again.
In the course of a single year the value of the silver mark sprang
from four to seventeen livres, and fell back again to four.[1] The
practice of fixing the price of many necessary commodities must have
aggravated the natural evil consequences of such fluctuations.[2]

[Footnote 1: Wolowski's Introduction to Oresme's _Tractatus_, p.
xxvii.]

[Footnote 2: See Endemann, _Studien_, vol. ii. p. 34.]

This grievance had the good result of fixing the attention of scholars
on the money question. 'Under the stress of facts and of necessity,'
says Brants, 'thinkers applied their minds to the details of the
theory of money, which was the department of economics which, thanks
to events, received the earliest illumination. Lawyers, bankers,
money-changers, doctors of theology, and publicists of every kind,
attached a thoroughly justifiable importance to the question of money.
We are no doubt far from knowing all the treatises which saw the light
in the fourteenth century upon this weighty question; but we know
enough to affirm that the monetary doctrine was very developed and
very far-seeing.'[1] Buridan analysed the different functions and
utilities of money, and explained the different ways in which its
value might be changed.[2] He did not, however, proceed to discuss the
much more important question as to when the sovereign was entitled
to make these alterations. This was reserved for Nicholas Oresme, who
published his famous treatise about the year 1373. The merits of this
work have excited the unanimous admiration of all who have studied it.
Roscher says that it contains 'a theory of money, elaborated in the
fourteenth century, which remains perfectly correct to-day, under the
test of the principles applied in the nineteenth century, and that
with a brevity, a precision, a clarity, and a simplicity of language
which is a striking proof of the superior genius of its author.'[3]
According to Brants, 'the treatise of Oresme is one of the first to
be devoted _ex professo_ to an economic subject, and it expresses many
ideas which are very just, more just than those which held the field
for a long period after him, under the name of mercantilism, and more
just than those which allowed of the reduction of money as if it were
nothing more than a counter of exchange.'[4] 'Oresme's treatise on
money,' says Macleod, 'may be justly said to stand at the head of
modern economic literature. This treatise laid the foundations of
monetary science, which are now accepted by all sound economists.'[5]
'Oresme's completely secular and naturalistic method of treating one
of the most important problems of political economy,' says Espinas,
'is a signal of the approaching end of the Middle Ages and the dawn of
the Renaissance.'[6] Dr. Cunningham adds his tribute of praise: 'The
conceptions of national wealth and national power were ruling ideas in
economic matters for several centuries, and Oresme appears to be the
earliest of the economic writers by whom they were explicitly adopted
as the very basis of his argument.... A large number of points
of economic doctrine in regard to coinage are discussed with much
judgment and clearness.'[7] Endemann alone is[8] inclined to quarrel
with the pre-eminence of Oresme; but on this question, he is in a
minority of one.[9]

[Footnote 1: _Op. cit._, p. 186.]

[Footnote 2: _Quaest. super Lib. Eth._, v. 17; _Quaest. super Lib.
Pol._, i. 11.]

[Footnote 3: Quoted in Wolowski, _op. cit._, and see Roscher,
_Geschichte_, p. 25.]

[Footnote 4: _Op. cit._, p. 190.]

[Footnote 5: _History of Economics_, p. 37.]

[Footnote 6: _Op. cit._, p. 110.]

[Footnote 7: _Growth of English Industry and Commerce_, vol. i. p.
359.]

[Footnote 8: _Grundsätze_, p. 75.]

[Footnote 9: See an interesting note in Brants, _op. cit._, p. 187.]

The principal question which Oresme sets out to answer, according to
the first chapter of this treatise, is whether the sovereign has the
right to alter the value of the money in circulation at his pleasure,
and for his own benefit. He begins the discussion by going over the
same ground as Aristotle in demonstrating the origin and utility of
money, and then proceeds to discuss the most suitable materials
which can be made to serve as money. He decides in favour of gold and
silver, and shows himself an unquestioning bimetallist. He further
admits the necessity of some token money of small denominations, to be
composed of the baser metals. Having drawn attention to the transition
from the circulation of money, the value of which is recognised
solely by weight, to the circulation of that which is accepted for its
imprint or superscription, the author insists that the production of
such an imprinted coinage is essentially a matter for the sovereign
authority in the State. Oresme now comes to the central point of his
thesis. Although, he says, the prince has undoubtedly the power to
manufacture and control the coinage, he is by no means the owner of it
after it has passed into circulation, because money is a thing which
in its essence was invented and introduced in the interests of society
as a whole.

Oresme then proceeds to apply this central principle to the solution
of the question which he sets himself to answer, and concludes that,
as money is essentially a thing which exists for the public benefit,
it must not be tampered with, nor varied in value, except in cases of
absolute necessity, and in the presence of an uncontroverted general
utility. He bases his opposition to unnecessary monetary variation on
the perfectly sound ground that such variation is productive of loss
either to those who are bound to make or bound to receive fixed sums
in payment of obligations. The author then goes on to analyse the
various kinds of variation, which he says are five--_figurae_,
_proportionis_, _appellationis_, _ponderis_, and _materiae_. Changes
of form (_figurae_) are only justified when it is found that the
existing form is liable to increase the damage which the coins suffer
from the wear and tear of usage, or when the existing currency has
been degraded by widespread illegal coining; changes _proportionis_
are only allowable when the relative value of the different metals
constituting the coinage have themselves changed; simple changes of
name (_appellationis_), such as calling a mark a pound, are never
allowed. Changes of the weight of the coins (_ponderis_) are
pronounced by Oresme to be just as gross a fraud as the arbitrary
alteration of the weights or measures by which corn or wine are sold;
and changes of matter (_materiae_) are only to be tolerated when the
supply of the old metal has become insufficient. The debasement of the
coinage by the introduction of a cheaper alloy is condemned.

In conclusion, Oresme insists that no alteration of any of the above
kinds can be justified at the mere injunction of the prince; it must
be accomplished _per ipsam communitatem_. The prince exercises
the functions of the community in the matter of coinage not as
_principalis actor_, but as _ordinationis publicae executor_. It is
pointed out that arbitrary changes in the value of money are really
equivalent to a particularly noxious form of taxation; that they
seriously disorganise commerce and impoverish many merchants; and
that the bad coinage drives the good out of circulation. This last
observation is of special interest in a fourteenth-century writer,
as it shows that Gresham's Law, which is usually credited to a
sixteenth-century English economist, was perfectly well understood in
the Middle Ages.[1]

[Footnote 1: The best edition of Oresme's _Tractatus_ is that by
Wolowski, published at Paris in 1864, which includes both the Latin
and French texts.]

This brief account of the ground which Oresme covered, and the
conclusions at which he arrived, will enable us to appreciate his
importance. Although his clear elucidation of the principles which
govern the questions of money was not powerful enough to check the
financial abuses of the sovereigns of the later Middle Ages, they
exercised a profound influence on the thought of the period, and were
accepted by all the theologians of the fifteenth century.[2]

[Footnote 2: Biel, _op. cit._, IV. xv. 11; _De Monetarum Potestate et
Utilitate_, referred to in Jourdain, _op. cit._, p. 34.]




CHAPTER IV

CONCLUSION


We have now passed in review the principal economic doctrines of the
mediæval schoolmen. We do not propose to attempt here any detailed
criticism of the merits or demerits of the system which we have but
briefly sketched. All that we have attempted to do is to present the
doctrines in such a way that the reader may be in a position to pass
judgment on them. There is one aspect of the subject, however, to
which we may be allowed to direct attention before concluding this
essay. It is the fashion of many modern writers, especially those
hostile to the Catholic Church, to represent the Middle Ages as a
period when all scientific advance and economic progress were impeded,
if not entirely prevented, by the action of the Church. It would be
out of place to inquire into the advances which civilisation achieved
in the Middle Ages, as this would lead us into an examination of the
whole history of the period; but we think it well to inquire briefly
how far the teaching of the Church on economic matters was calculated
to interfere with material progress. This is the lowest standard
by which we can judge the mediæval economic teaching, which was
essentially aimed at the moral and spiritual elevation of mankind; but
it is a standard which it is worth while to apply, as it is that
by which the doctrines of the scholastics have been most generally
condemned by modern critics. To test the mediæval economic doctrine
by this, the lowest standard, it may be said that it made for the
establishment and development of a rich and prosperous community. We
may summarise the aim of the mediæval teaching by saying that, in the
material sphere, it aimed at extended production, wise consumption,
and just distribution, which are the chief ends of all economic
activity.

It aimed at extended production through its insistence on the
importance and dignity of manual labour.[1] As we showed above, one of
the principal achievements of Christianity in the social sphere was
to elevate labour from a degrading to an honourable occupation. The
example of Christ Himself and the Apostles must have made a deep
impression on the early Christians; but no less important was the
living example to be seen in the monasteries. The part played by the
great religious orders in the propagation of this dignified conception
cannot be exaggerated. St. Anthony had advised his imitators to busy
themselves with meditation, prayer, and the labour of their hands, and
had promised that the fear of God would reside in those who laboured
at corporal works; and similar exhortations were to be found in the
rules of Saints Macarius, Pachomius, and Basil.[2] St. Augustine and
St. Jerome recommended that all religious should work for some
hours each day with their hands, and a regulation to this effect was
embodied in the Rule of St. Benedict.[3] The example of educated
and holy men voluntarily taking upon themselves the most menial and
tedious employments must have acted as an inspiration to the laity.
The mere economic value of the monastic institutions themselves must
have been very great; agriculture was improved owing to the assiduity
and experiments of the monks;[4] the monasteries were the nurseries
of all industrial and artistic progress;[5] and the example of
communities which consumed but a small proportion of what they
produced was a striking example to the world of the wisdom and virtue
of saving.[6] Not the least of the services which Christian teaching
rendered in the domain of production was its insistence upon the
dominical repose.[7]

[Footnote 1: See Sabatier, _L'Eglise et le Travail manuel_, and
Antoine, _Cours d'Economie sociale_, p. 159.]

[Footnote 2: Levasseur, _Histoire des Classes ouvrières en France_,
vol. i. pp. 182-3.]

[Footnote 3: _Reg. St. Ben._, c. 48.]

[Footnote 4: List, _National System of Political Economy_, ch. 6.]

[Footnote 5: Janssen, _History of the German People_, vol. ii. p. 2.]

[Footnote 6: _Dublin Review_, N.S., vol. vi. p. 365; see Goyau,
_Autour du Catholicisme sociale_, vol. ii. pp. 79-118; Gasquet, _Henry
VIII. and the English Monasteries_, vol. ii. p. 495.]

[Footnote 7: _Dublin Review_, vol. xxxiii. p. 305. See Goyau, _Autour
du Catholicisme sociale_, vol. ii. pp. 93 _et seq._]

The importance which the scholastics attached to an extended and
widespread production is evidenced by their attitude towards the
growth of the population. The fear of over-population does not
appear to have occurred to the writers of the Middle Ages;[1] on
the contrary, a rapidly increasing population was considered a great
blessing for a country.[2] This attitude towards the question of
population did not arise merely from the fact that Europe was very
sparsely populated in the Middle Ages, as modern research has proved
that the density of population was much greater than is generally
supposed.[3]

[Footnote 1: Brants, _op. cit._, p. 235, quoting Sinigaglia, _La
Teoria Economica della Populazione in Italia_, Archivio Giuridico,
Bologna, 1881.]

[Footnote 2: _Catholic Encyclopædia_, art. 'Population.' Brants draws
attention to the interesting fact that a germ of Malthusianism is to
be found in the much-discussed _Songe du Vergier_, book ii. chaps.
297-98, and Franciscus Patricius de Senis, writing at the end of
the fifteenth century, recommends emigration as the remedy against
over-population (_De Institutione Reipublicae_, ix.).]

[Footnote 3: Dureau de la Malle, 'Mémoire sur la Population de la
France au xiv^e Siècle,' _Mémoires de l'Académie des Inscriptions et
Belles-Lettres_, vol. xiv. p. 36.]

The mediæval attitude towards population was founded upon the sanctity
of marriage and the respect for human life. The utterances of Aquinas
on the subject of matrimony show his keen appreciation of the natural
social utility of marriage from the point of view of increasing the
population of the world, and of securing that the new generation
shall be brought up as good and valuable citizens.[1] While voluntary
virginity is recommended as a virtue, it is nevertheless distinctly
recognised that the precept of virginity is one which by its very
nature can be practised by only a small proportion of the human race,
and that it should only be practised by those who seek by detachment
from earthly pleasures to regard divine things.[2] Aquinas further
says that large families help to increase the power of the State, and
deserve well of the commonwealth,[3] and quotes with approbation the
Biblical injunction to 'increase and multiply.'[4] Ægidius Romanus
demonstrates at length the advantages of large families in the
interests of the family and the future of the nation.[5]

[Footnote 1: _Summa Cont. Gent._, iii. 123, 136.]

[Footnote 2: _Summa_, II. ii. 151 and 152.]

[Footnote 3: _De Reg. Prin._, iv. 9.]

[Footnote 4: Gen. i. 28.]

[Footnote 5: _De Reg. Prin._, ii. 1, 6.]

The growth of a healthy population was made possible by the
reformation of family life, which was one of the greatest achievements
of Christianity in the social sphere. In the early days of the Church
the institution of the family had been reconstituted by moderating the
harshness of the Roman domestic rule (_patria potestas_), by raising
the moral and social position of women, and by reforming the system of
testamentary and intestate successions; and the great importance which
the early Church attached to the family as the basic unit of social
life remained unaltered throughout the Middle Ages.[5]

[Footnote 5: Troplong, _De l'Influence du Christianisme sur le Droit
civil des Romains_; Cossa, _Guide_, p. 99; Devas, _Political Economy_,
p. 168; Périn, _La Richesse dans les Sociétés chrétiennes_, i. 541 _et
seq._; Hettinger, _Apologie du Christianisme_, v. 230 _et seq._]

The Middle Ages were therefore a period when the production of wealth
was looked upon as a salutary and honourable vocation. The wonderful
artistic monuments of that era, which have survived the intervening
centuries of decay and vandalism, are a striking testimony to
the perfection of production in a civilisation in which work was
considered to be but a form of prayer, and the manufacturer was
prompted to be, not a drudge, but an artist.

In the Middle Ages, however, as we have said before, man did not exist
for the sake of production, but production for the sake of man; and
wise consumption was regarded as at least as important as extended
production. The high estimation in which wealth was held resulted in
the elaboration of a highly developed code of regulation as to the
manner in which it should be enjoyed. We do not wish to weary
the reader with a repetition of that which we have already fully
discussed; it is enough to call attention to the fact that the golden
mean of conduct was the observance of liberality, as distinguished,
on the one hand, from avarice, or a too high estimation of material
goods, and, on the other hand, from prodigality, or an undue disregard
for their value. Social virtue consisted in attaching to wealth its
proper value.

Far more important than its teaching either on production or
consumption was the teaching of the mediæval Church on distribution,
which it insisted must be regulated on a basis of strict justice.
It is in this department of economic study that the teaching of the
mediævals appears in most marked contrast to the teaching of the
present day, and it is therefore in this department that the study of
its doctrines is most valuable. As we said above, the modern world has
become convinced by bitter experience of the impracticability of mere
selfishness as the governing factor in distribution; and the economic
thought of the time is concentrated upon devising some new system
of society which shall be ruled by justice. On the one hand, we see
socialists of various schools attempting to construct a Utopia
in which each man shall be rewarded, not in accordance with his
opportunities of growing rich at the expense of his fellow-man, but
according to the services he performs; while, on the other hand,
we find the Christian economists striving to induce a harassed and
bewildered world to revert to an older and nobler social ethic.

It is no part of our present purpose to estimate the relative merits
of these two solutions for our admittedly diseased society. Nor is it
our purpose to attempt to demonstrate how far the system of economic
teaching which we have sketched in the foregoing pages is applicable
at the present day. We must, however, in this connection draw
attention to one important consideration, namely, that the mediæval
economic teaching was expressly designed to influence the only
constant element in human society at every stage of economic
development. Methods of production may improve, hand may give place to
machine industry, and mechanical inventions may revolutionise all our
conceptions of transport and communication; but there is one element
in economic activity that remains a fixed and immutable factor
throughout the ages, and that element is man. The desires and the
conscience of man remain the same, whatever the mechanical environment
with which he is encompassed. One reason which suggests the view that
the mediæval teaching is still perfectly applicable to economic life
is that it was designed to operate upon the only factor of economic
activity that has not changed since the Middle Ages--namely, the
desires and conscience of man.

It is important also to draw attention to the fact that the acceptance
of the economic teaching of the mediæval theologians does not
necessarily imply acceptance of their teaching on other matters. There
is at the present day a growing body of thinking men in every country
who are full of admiration for the ethical teaching of Christianity,
but are unable or unwilling to believe in the Christian religion. The
fact of such unbelief or doubt is no reason for refusing to adopt the
Christian code of social justice, which is founded upon reason rather
than upon revelation, and which has its roots in Greek philosophy and
Roman law rather than in the Bible and the writings of the Fathers.
It has been said that Christianity is the only religion which combines
religion and ethics in one system of teaching; but although Christian
religious and ethical teaching are combined in the teaching of the
Catholic Church, they are not inseparable. Those who are willing to
discuss the adoption of the Socialist ethic, which is not combined
with any spiritual dogmas, should not refuse to consider the Christian
ethic, which might equally be adopted without subscribing to the
Christian dogma.

As we said above, it is no part of our intention to estimate the
relative merits of the solutions of our social evils proposed by
socialists and by Catholic economists. One thing, however, we feel
bound to emphasise, and that is that these two solutions are not
identical. It is a favourite device of socialists, especially in
Catholic countries, to contend that their programme is nothing more
than a restatement of the economic ideals of the Catholic Church as
exhibited in the writings of the mediæval scholastics. We hope that
the foregoing pages are sufficient to demonstrate the incorrectness of
this assertion. Three main principles appear more or less clearly in
all modern socialistic thought: first, that private ownership of the
means of production is unjustifiable; second, that all value comes
from labour; and, third, that all unearned income is unjust. These
three great principles may or may not be sound; but it is quite
certain that not one of them was held by the mediæval theologians.
In the section on property we have shown that Aquinas, following the
Fathers and the tradition of the early Church, was an uncompromising
advocate of private property, and that he drew no distinction between
the means of production and any other kind of wealth; in the section
on just price we have shown that labour was regarded by the
mediævals as but a single one of the elements which entered into the
determination of value; and in the section on usury we have shown that
many forms of unearned income were not only tolerated, but approved by
the scholastics.

We do not lose sight of the fact that socialism is not a mere economic
system, but a philosophy, and that it is founded on a philosophical
basis which conflicts with the very foundations of Christianity.
We are only concerned with it here in its character of an economic
system, and all we have attempted to show is that, as an economic
system, it finds no support in the teaching of the scholastic writers.
We do not pretend to suggest which of these two systems is more likely
to bring salvation to the modern world; we simply wish to emphasise
that they are two systems, and not one. One's inability to distinguish
between Christ and Barabbas should not lead one to conclude that they
are really the same person.




INDEX


  Abelard, 14.
  _Acts of the Apostles_, 168.
      communism in, 44, 46.
  Adam, 140.
    and Eve, slavery the result of their sin, 92.
  Administrative occupations, position in _artes possessivae_, 143.
  Ægidius Romanus, 98, 197, 225.
  Agriculture, position in _artes possessivae_, 142, 143.
    its encouragement recommended, 143.
  Albertus Magnus, 16, 82, 176, 186, 197.
  Albigenses, the, belief in communism, 66.
  Alcuin, 14.
  Alexander of Hales, 176, 185.
  Alexander III., Pope, 187.
    attitude to usury, 174.
  Alfric, see _Colloquy of Archbishop, The_.
  Almsgiving, as justice, not charity, 69.
    duty of, 80.
    enforcement by the State, 85.
    summary of mediæval teaching on, 84.
    the early Church on, 52.
  Ambition, a virtue, 79.
  Ambrosius de Vignate, 191, 208.
  Ananias, 46, 52.
  Ancients, loss of economic teaching of, 15.
  Angelus de Periglis de Perusio, 209, 210.
  Antoine, 87, 172, 223.
  Antoninus of Florence, 9, 68, 79, 110, 122, 181, 196.
  Ape of Aristotle, the, _see_ Albertus Magnus.
  Apostles, the, attitude to manual labour, 223.
    attitude to private property and communism, 48.
    attitude to usury, 168.
  Apostles, the, fornication expressly forbidden by, 168.
    teaching regarding slavery, 89.
  Apostoli, the, belief in communism, 66.
  Aquinas, _see_ Thomas Aquinas.
  Aragon, personal rent charges permitted in, 205.
  Architecture, _see_ Manufacture.
  Archivio Giuridico, 225.
  Ardant, 69.
  Aristotle, 14, 16, 36, 97, 98, 142, 146, 169, 215, 219.
    as source for Thomas Aquinas, 62.
    attitude of Thomas Aquinas to his opinion, 94 _et seq._
    Cossa on his influence, 17.
    his principles maintained through Thomas Aquinas, 19.
    his theory of slavery opposed to that of St. Augustine, 93.
    influence on controversies of the schools, 17.
    influence on mediæval thought, 16.
    renewed study of, 16.
  Arnold, 203.
  _Artes pecuniativae_, 142.
  _Artes possessivae_, 142.
      encouragement recommended by Aquinas, 143.
  Arnobius, 45.
  Ashley, Sir W.H., 3, 6, 7, 18, 21, 23, 27, 29, 30, 33, 40, 76,
          105, 113, 126, 134, 146, 149, 175, 185, 186, 187, 188,
          190, 191, 195, 196, 197, 198, 202, 203, 205, 206, 207,
          211, 212.
  Augustinians, the, 195.
  Ausmo, Nicholas de, 156.
  Avarice, an offence against liberality, 79.
    a sin towards the individual himself and the community, 78.
    relativity of, 75.
  Avarice, the necessary basis of trade, 145.
  _Ayenbite of Inwit, The_, 151.

  Baldus, 187, 208.
  [Greek: banousia], a sin, 77, 78.
  Barabbas, 231.
  Bartlett, Dr. V., 56, 90.
  Bartolus, 187.
  Baudrillard, 76.
  Beauvais, Vincent de, 7, 16.
  Bégards, the, belief in communism, 66.
  Benedict XIV., Pope, an encyclical of, 183.
  Benigni, 61.
  Bergier, 45.
  Bernardine of Siena, 112, 181.
  Biel, 99, 100, 104, 106, 107, 108, 112, 118, 121, 124, 145, 150,
       156, 180, 185, 205, 208, 211, 221.
  Bimetallism, Oresme's support of, 219.
  Blanqui, 146.
  Bohemia, communistic teaching in, 86.
  Böhm-Bawerk, 174, 200, 203, 211.
  Bottomry, contract of, 211.
  Brant, Sebastian, 137.
  Brants, V.L.J.L., 9, 10, 13, 19, 21, 66, 101, 111, 112, 114, 121,
             122, 123, 142, 159, 181, 208, 215, 216, 217, 218, 225.
  Breslau, refusal to pay rent in, 204.
  Brunetto Latini, 123.
  Building, _see_ Manufacture.
  Buridan, 70, 72, 76, 77, 78, 109, 110, 143, 180, 191, 198, 217.

  Cabet, 42.
  Caepolla, 108, 118, 120.
  Cajetan, 65, 79.
    on the _Summa_, 68.
  Calippe, Abbé, 49, 62.
    on Thomas Aquinas, 68.
  Calixtus III., Pope, decree regarding rent, 205.
  _Cambium_, 155.
    conditions justifying, 157.
    dealt with by Brants, 159.
    _minutum_, 157, 158.
    motives justifying, 157.
    _per litteras_, 157, 158.
    _siccum_, 157.
    the three kinds of, 157, 158.
    when justifiable, not a loan, 158.
  Campsor, the, his remuneration approved, 156.
  Canon law the source of knowledge of Christian economic teaching, 13.
  Canonist doctrine, dealt with by Sir W. Ashley, 2.
      Dr. Cunningham's estimate of its importance, 27.
      its impracticability demonstrated by Endemann, 20.
      value of the study of, 29.
  Canonists, the, 117.
  Capital, question of the productivity of, 198 _et seq._
  Carletus, 120, 150, 193, 211.
  Carlyle, Dr., 44, 58, 63.
  Castro, Paul, 208.
  _Catholic Encyclopaedia, The_, definition of 'Middle Ages,' 3.
      on Communism, 46.
      on Just Price, 112, 126.
      on Political Economy, 30.
      on Population, 225.
      on Slavery, 90, 100.
  Cato, 162.
  Cattle-breeding, _see_ Agriculture.
  _Census constitutivus_, 203.
      _reservativus_, 203.
  _Centesima_, the maximum rate of interest in Borne, 161.
  Cesana, _montes pietatis_ at, 196.
  Champagny, 80.
  Change, see _Cambium_.
  Chevallier, 20.
  Christ, 42, 231.
    a working man, 137.
    attitude to manual labour, 223.
    attitude to private property and communism, 47.
    teaching regarding slavery, 89.
  Christendom, economic unity of, 11.
  Christian economic teaching, 13.
    economists, their attempts to reinstitute mediæval economics, 228.
  _Christian Monitor, The_, 139.
  Christian Exhortation, The, on the protection of the farmer, 143.
  Christianity, as providing an ethical basis of society, 31.
    attitude to manual labour, 137, 223.
    attitude to slavery, 88.
    foundations and origin of its code of social justice, 229.
  Christianity, influence in abolition of Roman slavery, 99 _et seq._
    possibility of adopting ethics without dogmas of, 229.
    reformation of family life by, 226.
    relation of economic teaching of, to socialism, 33.
    social theory of, 12.
  Church, economic teaching of the mediæval, 12.
    the, attitude to commerce at end of the Middle Ages, 152.
    the, attitude to _monies pietatis_, 197.
    the, effect of economic teaching of, on material progress, 223.
    the, necessity for understanding economic teaching of, 32.
    the, principles followed by, in fixing price, 114.
    the, prohibition of usury not peculiar to, 160.
    the, socialist view of its teaching on usury, 198.
    the early, 230.
      the early teaching on usury, 167 _et seq._
  Cicero, 56, 58, 162.
  Civil Law, Commentaries on, a source of knowledge of Christian
economic teaching, 13.
  Civilisation, result of its advance in the thirteenth century, 15.
  Classical economists, recent reaction against, 29.
  Cleary, Dr., 35, 135, 160, 161, 162, 163, 164, 165, 166, 167, 168,
169, 170, 171, 172, 173, 174, 175, 185, 186, 187, 188, 191, 192, 193,
196, 197, 205.
  Clement of Alexandria, _see_ St. Clement.
    of Rome, _see_ St. Clement.
  Clergy, the, and usury, 169.
    the, prohibition of trading by, 151.
  Coinage, _see_ Money.
  _Collegantia_, 207.
  _Colloquy of Archbishop Alfric, The_, 149.
  _Commenda_, the, 206.
  _Commendatarius_, the, 207.
  _Commendator_, the, 207.
  Common estimation, of just price not the final criterion, 134.
  Commerce, attitude of later fifteenth century to, 150.
    attitude of mediæval theologians to, 136.
    attitude of the Church at end of Middle Ages, 152.
    condemnation of, by early Christians, 145.
    condemnation of, by scholastics, 146.
    dangerous to virtue, 145, 151.
    definition of, 144.
    extension of, in thirteenth century, 15.
    factors making for its illegality, 151.
    gradual change of mediæval attitude to, 152.
    justification of, not based on payment for labour, 154.
    legitimacy dependent on methods, 146.
    legitimacy dependent on motives, 148.
    motives regarded as justifying, 153.
    necessity for, realised, 147.
    necessity of controlling its operations, 154.
    not dealt with by early writers, 13.
    position in the _artes possessivae_, 143.
    prohibition of speculative, 151.
    rules applying to, defined by Nider, 150.
  Communism, alleged, of early Christians, 43.
    not part of scholastic teaching, 66.
  Community of user, doctrine of, 85.
      no relation to modern socialistic communism, 86.
  Commutations, _see_ Exchange.
  Compensation, for failure to repay loans by date stipulated, 185.
    for profit hindered, 189.
  Competition, effect of unrestricted, 31.
  Comte, his definition of 'Middle Ages' followed by Dr. Ingram, 3.
  Conquerors, their right to enslavement of the conquered adopted
by Aquinas, 96.
  Constantine, 43.
  Constantinople, fall of, regarded as end of the Middle Ages, 4.
  Consumption, regulation of, 32.
    wise, importance of, 227.
    wise, the aim of mediæval teaching, 223.
  Contract, Thomas Aquinas on, 38.
  _Corinthians, Epistle to the_, 48.
  Corpus Juris Canonici, 13, 146.
  Cossa, L.,5, 6, 17, 108, 220.
  Credit, 119.
  Crusades, the, influence of, 15.
    the, influence on trade, 146.
  Cunningham, Dr. W., 2, 9, 10, 11, 13, 23, 24, 26, 27, 79, 116,
122, 124, 126, 127, 128, 129, 130, 138, 139, 152, 212, 218.
  Currency, _see_ Money.
  Cyprian, 168, 170.
    attitude to property, 50.

  Damnum emergens, 185, 196.
      nature of, 186.
      universal admission of, 187.
  Dante, 216.
  _De Regimine Principum_, doubtful authorship of, 20.
  Delisle, 27.
  _Démocratie Chrétienne_, 199.
  Deposit, Thomas Aquinas on, 38.
  Desbuquois, Abbé, 36, 39, 104, 110, 116, 120.
  _Deuteronomy_, 163.
  Devas, 30, 49, 226.
  _Dictionary of Political Economy_, 30, 105, 112, 135, 212.
  _Dictionnaire de Théologie_, 45.
  _Didache_, the, attitude to usury, 168, 170.
  Diocletian rescript, regarding sales, 104.
  Distribution, just, the aim of mediæval teaching, 223.
    need for just, 31, 227.
    regulation of, 32.
  Dominicans, the, 195, 196.
  _Dominium eminens_ of the State, 69.
  Donatus, 14.
  _Dublin Review, The_, 43.
  Duns Scotus, 149, 185, 188, 192.
  Dureau de la Malle, 225.

  _Ecclesiastes_, 151.
  Eck, 211.
  'Economic,' interpretation of, 3, 6 _et seq._
  'Economic Man,' imaginary figure conceived by classical economists, 8.
  _Economic Review, The_, 44.
  Economics, causes of lack of interest in, 14.
  Elvira, the Council of, decree against usury, 169.
  Emperor, the, temporal vicar of God, 11.
  _Encyclopaedia Britannica, The_, definition of 'Middle Ages,' 4.
  Endemann, 19, 20, 23, 27, 34, 108, 120, 124, 134, 151, 155, 157, 158,
177, 186, 187, 190, 191, 195, 196, 203, 204, 216, 218.
  _Ephesians, Epistle to the_, 89.
  Equality, of men, 94.
  _Esdras_, 165.
  Espinas, A., 8, 17, 163, 197, 218.
  Essenes, the, and communism, 47.
  Ethics, error of disregarding in economics, 29.
  Eve, _see_ Adam and.
  Exchange, regulation of, 32.
    justice in, 36 _et seq._
    theory of, see _Cambium_.
  _Exodus_, 163.
  _Ezekiel_, 165.

  Fathers, the, _see_ Church, the early.
  Favre, 173.
  Feudalism, increased organisation of, in thirteenth century, 15.
  Fornication, expressly forbidden by the Apostles, 168.
  Franciscans, the, 195, 196.
  Franciscus Patricius de Senlis, 225.
  Franck, A., 20, 90, 97.
  Fratricelli, the, belief in communism, 66.
  _Fundamentum_, distinction from _titulus_, 64 _et seq._
  Funk, Dr., 113, 172, 203.

  Galileo, 159.
  Gand, Henri de, 110, 149.
  Garden of Eden, private property in, 55.
  Gasquet, 224.
  _Genesis_, 137, 226.
  Genoa, the Archbishop of, 207.
      letter from Alexander III. to, 187.
  Gentile, prohibition of usury between Jew and, 164.
  Gentiles, prohibition of usury not imposed on converts from, 168.
    taking of usury from, justified, 165.
  Genucian Law, the, interest prohibited by, 160.
  Gerbert, 14.
  Gerdilius, 100.
  Gerson, 39, 71, 104, 106, 108, 112, 118, 137, 182, 197.
  Gide and Rist, 9.
  Golden Age, the, private property in, 55.
  Gospel, the, preached to the poor, 137.
  Gospels, the, on usury, 166.
  Goyau, G., 67, 224.

  Haney, L.H., 2, 5, 41, 136.
  Heeren, A.H.L., 146.
  Hettinger, 226.
  Hilary of Poictiers, 60.
  Hincmar, 14.
  Hiring, Thomas Aquinas on, 38.
  Hogan, Dr., 43, 47, 49, 137.
  Hohoff, Abbé, 114, 199.
  Hostiensis, 188.
  Hoyta, Henricus de, 19.
  Huet, 47.
  Hunter, W.A., 105, 161.
  Hunting, _see_ Agriculture.

  Idleness, contrasted attitudes of ancient and Christian civilisations
to, 137.
  Income, unearned, approved by scholastics, 113.
      justice of, 198 _et seq._
      socialist theory of its injustice not supported by scholastics, 214.
      recognition of, 212.
  Individualism, of Christianity, 12.
  Industry, development of, in thirteenth century, 15.
  Ingolstadt, 211.
  Ingram, Dr. J.K., 2, 3, 4, 12, 17, 18, 23, 24.
  Innocent III., Pope, attitude to usury, 175.
    in favour of unearned income, 207.
  Insurance, a contract of, 210.
  Interamna, _montes pietatis_ at, 196.
  _Interesse proximum_, suggested alternative term to _damnum emergens_,
187.
  _Interesse remotum_, suggested alternative term to _lucrum cessans_, 187.
  Interest, justification of, 184.
  Interest, laws regarding, in Rome, 160.
    taking of, disapproved by Greek and Roman philosophers, 161.
    _see_ also Usury.
  _Irish Ecclesiastical Record, The_, 43, 47, 49, 109, 137.
  _Irish Theological Quarterly, The_, 9, 68, 128, 129, 130, 132, 135.
  Isidore, 95.
  Isidore of Seville, 15.
      his opinions on money regarded as final, 214.
  Italian States, forced loans in the, 195.
  Ivo, 169.

  Janet, P.A.R., 59, 61, 89, 91, 93, 97.
  Jannet, Claudio, 183.
  Janssen, J., 28, 68, 86, 125, 138, 139, 141, 143, 150, 154, 224.
  Jarrett, Fr., 83, 84.
  _Jeremiah_, 165.
  Jerusalem, the Church of, social system in, 44 _et seq._
    St. Paul's appeal for funds, 48.
    the Council of, prohibition of usury not imposed on converts by, 168.
  Jesuits, the, invention of _trinus contractus_ attributed to, 211.
  _Jewish Encyclopaedia, The_, on usury, 165.
  Jews, attitude to usury, 160, 165.
    prohibition of usury between, 164.
  John of Salisbury, 14.
  Jourdain, 5, 14, 16, 149, 176, 183, 221.
  _Jus abutendi_, 87.
    _divinum_, 173.
    _humanum_, 174.
    _naturale_, 173.
  Just price, a Christian conception, 104.
      authorities empowered to fix, 108.
      comparison of mediæval theory with that of classical economists, 125.
      difference from modern competition price, 116.
      elasticity of, 117.
      factors determining, 109 _et seq._
  Just price, fixed by common estimation, 115 _et seq._
      fixing of, by law, 106.
      in money-lending, 179.
      mediæval teaching on, 103.
      necessity for adhering to, 108.
      of wages, _see_ Wages.
      rules for guidance in fixing by law, 107.
      nature of, 127 _et seq._
      value of canonical doctrine, 123.
  Justinian, rates of interest fixed by, 161.
  Justinian Code, 28, 172.

  Kelleher, Father, 129, 130, 131, 132, 133, 134.
  Knabenbaur, 166.
  Knies, 80, 114, 135.
  Koran, the, the taking of interest forbidden in, 166.

  Labour, as title to property, 65.
    Christian teaching on its dignity, 137.
    division into honourable and degrading, 141.
    necessity and honourableness of all forms of, 140.
    only one constituent in the estimation of just price, 157.
    relative importance of, in determining value, 113.
    the motives which should actuate, 153.
  Lactantius, 45, 56 _et seq._, 91.
  Langenstein, 19, 107, 111, 112, 121, 122, 124, 137, 141, 203.
  Larceny Act, the, 27.
  Lateran Council, the, judgment in favour of _montes pietatis_, 197.
    Councils, the, of 1139 and 1179, declaration against usurers by, 174.
  Laurentius de Rodulphis, 157, 195, 209.
  Law, natural and positive, in relation to property, 64.
  Le Blant, 216.
  Lecky, 176, 211.
  Leo the Great, 146.
  Lessius, 117, 124.
  Letting, Thomas Aquinas on, 38.
  Levasseur, 138, 139, 224.
  Leviticus, 163.
  _Liberalitas_, its opposing vices, 74.
    meaning of, 73.
  Liberality, relation to justice, 73.
  Lisieux, Bishop of, _see_ Oresme, Nicholas.
  List, 146, 224.
  Loan, Thomas Aquinas on, 38.
  Loans, analogy between sales and, 182.
    forced, in the Italian States, 195.
    the real nature of, 178.
  _Locatio operarum_, 210, 213.
  Logic, mediæval study of, 14.
  Loria, 149.
  Lucca, _montes pietatis_ at, 196.
  _Lucrum cessans_, 185, 186, 195, 202.
      recognition of, 187 _et seq._
  Lyons, Council of, ordinances against usurers, 175.

  Macleod, 218.
  _Magnificentia_, duty of, 77.
  Maimonides, 164.
  Malthusianism, 225.
  Mansi, 169.
  Mantua, _montes pietatis_ at, 196.
  Manufacture, position in the _artes possessivae_, 142 _et seq._
  Marcian Capella, 15.
  Marriage, attitude of Thomas Aquinas towards, 225.
  Marshall, 30.
  Martin V., Pope, his bull on rent, 204.
  Marx, Karl, theory of value not supported by scholastics, 113, 114.
  Mastrofini, his interpretation of a verse of St. Luke, 166.
  Maximian, rescript regarding sales, 105.
  Mayronis, François de, 149, 156.
  Mediæval, interpretation of, 3 _et seq._
  Menger, Anton, 199.
  Merchant, the, necessity for control of, _see_ Commerce.
  Metz-Noblat, de, 183.
  Meyer, Rudolph, 198.
  Middle Ages, definition of the term by various authorities, 3 _et seq._
      early writers of, no reference to economic questions, 13.
  Milan, 211.
  Mohammed, prohibition of usury by his followers, 160.
  Mohammedans, taking of interest by, forbidden, 166.
  Monasteries, the, their example in manual labour, 138, 223.
  Money, as a form of capital, 201.
    a vendible commodity, 158.
    changing, see _Cambium_.
    different kinds of variation of, 219 _et seq._
    ignorance of early Middle Ages regarding, 214 _et seq._
    invention of, 103.
    most suitable metals for, 219.
    not discussed by early mediæval writers, 14.
    sterility of, 180.
    the sovereign's power in relation to, 219.
    treatment of, by Isidore of Seville, 15.
    utility of, as treated by Aristotle, 16.
    variations in value of, 216 _et seq._
    value of, not to be changed unnecessarily, 219.
  Monopolies, mediæval views on, 124.
  _Montes pietatis_, 194.
      attitude of the Church to, 197.
      controversy over interest charged by, 196.
  _Montes profani_, 195 _et seq._
  Moral theology, 130.
  Morality, economic, in the Middle Ages, 10.
  More, Sir Thomas, 48.
  Mosheim, 44.
  Munificence, duty of, 77.
  _Mutuum_, 202, 210, 213, 214.
    nature of, 178, 183.
    risk involved in, 192.

  Natural rights, distinction between absolute and commensurate
in slavery, 95.
  Navarrus, 190.
  Necessaries, two kinds distinguished by Thomas Aquinas, 83.
  Neumann, 182.
  New Testament, the, 176.
      cited in support of prohibition of usury, 174.
  Nice, Council of, on usury, 169, 170.
  Nicholas v., Pope, bull on personal rent charges, 205.
  Nider, 39, 110, 118, 134, 150, 181, 193.
  Nitti, F.S., 43, 69.
  Noel, Conrad, 49.
  Numa, as origin of 'nummi,' 15.

  Occupancy, as title to property, 65.
  Old Testament, the, 176.
      attitude to usury, 163, 165.
      cited in support of prohibition of usury, 174.
  Oresme, Nicholas, 143, 215, 216, 219.
      his influence, 221.
      his work on money, 214, 217 _et seq._
  Origen, 45.
  Orvieto, first _montes pietatis_ started at, 196.
  Ownership, _see_ Property.

  Padua, _montes pietatis_ at, 196.
  Palgrave, 30, 105, 112, 135, 212.
  Parma, _montes pietatis_ at, 196.
  Partnership, division of remuneration, 209.
    scholastic teaching on, 202, 205 _et seq._
    the two kinds of, 209.
  _Parvificentia_, a sin, 77, 78.
  _Patria, potestas_, 226.
  Pelagius, views condemned by Council, A.D. 415, 61.
  Pennafort, Raymond de, 27, 149.
  _Periculum sortis_, 191, 192, 212.
  Périn, 183, 226.
  Perugia, _montes pietatis_ at, 196.
  Philip the Fair, his method of increasing the revenue, 216.
  Philosophers, the, their condemnation of usury, 161.
  Pigonneau, 146.
  Plato, his objection to usury, 161.
  Plutarch, attitude to usury, 163.
  _Poena conventionalis_, 185.
      difference from interest, 186.
  Political economy, errors of classical school, 8.
      difference between mediæval and modern methods, 6.
  Pope, the, his denunciation of Philip the Fair, 216.
      the spiritual vicar of God, 10.
  Popes, the, and almsgiving, 69.
    pronouncements by, on rent, 204.
    their protection of _montes pietatis_, 197.
  Population, mediæval attitude to, 224.
  Poverty, as the cause of sin, 78.
  Prescription, as title to property, 65.
  Price, just, _see_ Just price.
  Priscian, 14.
  Prodigality, an offence against liberality, 79.
    a sin towards the individual and the community, 78.
    distinction from liberality, 76.
  Production, an honourable vocation, 226.
    cost of, as a factor in determining value, 111 _et seq._
    extended, the aim of mediæval teaching, 223.
    regulation of, 32.
  Professions, _see_ Labour.
  Profit, of the campsor to be determined by just price, 158.
  'Profiteer,' the, doctrine of just price a weapon against, 125.
  Profiteering, prohibition of, 151.
  Property, duties attaching to, 69.
    duties in respect of exchange of, 102.
    immovable, rule for determining value, 120.
    in human beings, 88.
    private, duties attaching to, 40.
      right of, 39.
      teaching of mediæval Church, 41 _et seq._
      the foundation of mediæval economics, 40.
      the keystone of economic system of later theologians, 66.
  _Proverbs_, 165.
  Prutz, 146.
  _Psalms_, 137, 165, 171.

  Rabanas Mauras, 14.
  Rambaud, 7, 8, 13, 80, 87, 100, 114, 146, 151, 182, 183, 188, 197,
203, 213, 215.
  Reformation, the, 211.
    attacks on monastic life during, 138.
  Renaissance, the, 218.
  Rent, pronouncements on, by the Popes, 204.
    refusal to pay, in Breslau, 204.
    scholastic teaching on, 202 _et seq._
  _Revue Archéologique, La_, 61.
  Riches, the early Church on their abuse, 53.
  Rickaby, 75.
  Risk, remuneration for, 152, 157, 191.
  Rist, _see_ Gide.
  Roman Empire, the, fall of, regarded as beginning of Middle Ages, 3.
    jurists, their views on slavery accepted by Thomas Aquinas, 94.
  _Romans, Epistle to the_, 48.
  Rome, condemnation of usury by the philosophers of, 162.
    laws regarding interest in, 160.
    Numa, King of, 15.
    policy of, enforced by clergy, 11.
    the attitude to manual labour in, 137.
  Roscher, W.G.F., 5, 13, 19, 34, 46, 48, 87, 88, 107, 108, 112, 114,
121, 125, 142, 163, 166, 172, 186, 204, 215, 217.
  Ryan, Dr. J.A., 49, 74, 117, 123, 135.

  Sabatier, 223.
  St. Ambrose, 49, 52, 60, 82, 171.
    quoted by Aquinas, 71.
  St. Anselm, 14.
  St. Anthony, advice to his followers, 223.
  St. Augustine, 49, 57, 60, 63, 92, 93, 97, 98, 105, 146, 154, 172, 224.
    theory of slavery analysed by Janet, 93.
    views on slavery accepted by Aquinas, 94 _et seq._
  St. Barnabas, 45.
  St. Basil, 49, 153, 171, 224.
    quoted by Aquinas, 71.
  St. Benedict, 152.
    Rule of, 224.
  St. Clement of Alexandria, 45, 49, 54, 168, 170.
  St. Clement of Rome, 49, 54.
  St. Cyprian, 45, 50, 168, 170.
  St. Gregory Nazianzen, 54.
  St. Gregory of Nyssa, 171.
  St. Gregory the Great, 49.
  St. Hilary, 171.
  St. Isidore, 62.
  St. Jerome, 49, 145, 171, 224.
  St. John Chrysostom, 49, 51, 52.
  St. Joseph, represented as a carpenter, 139.
  St. Justin, 45.
  St. Justin Martyn, 49.
  St. Lucian, 45.
  St. Luke, 82.
  St. Luke, doubtful meaning of a verse in, 168.
    interpretation of a doubtful verse in, 168, 171.
  St. Macharius, 223.
  St. Matthew, 38, 47.
  St. Pachomius, 223.
  St. Paul, 137.
    attitude to private property and communism, 48.
    on possession, cited by St. Augustine, 60.
    teaching on slavery, 89.
        followed by Christian teachers, 90.
  St. Peter, 46.
    teaching on slavery, 89.
  St. Peter Damian, 83.
  St. Thomas, _see_ Thomas Aquinas.
  Sale, Roman law as applied to, 104.
    Thomas Aquinas on, 38.
    treatment by fifteenth-century writers, 18.
  Sales, analogy between loans and, 182.
  Salvador, 48.
  Salvian, 55.
  Sapphira, 46, 52.
  Saturnus, result of banishment from heaven, 56.
  Saving, an act of liberality, 72 _et seq._
  Scherer, 146.
  Scotus, Duns, _see_ Duns.
  Scotus Erigenus, 14.
  _Semaine Sociale de France, La_, 49, 62, 68, 104, 111.
  Seneca, 59, 89, 90.
    view of usury, 163.
  Serfdom, 99.
  Sertillanges, 80.
  _Servus_, St. Augustine's theory of origin, 93.
  Sevona, _montes pietatis_ at, 196.
  Sicily, personal rent charges permitted in, 205.
  Sidgwick, Professor Henry, 29, 31.
  Sinigaglia, 225.
  Sixtus V., Pope, condemnation of _trinus contractus_, 211.
  Slater, Father, 109, 128, 129, 130.
  Slavery, analogy with property, 97.
    attitude of Christianity to, 88.
    limits of master's rights, 100.
    three kinds of, 99.
    views of Christian Church and philosophers reconciled by
Aquinas, 93 _et seq._
  Smith, Adam, 29.
  _Societas_, 206, 207, 210, 213.
  Socialism, as providing an ethical basis of society, 31.
    danger of, 32.
    relation of its economic teaching to Christianity, 33.
  Socialists, claim to authority of the early Christians, 49 _et seq._
    attempts to construct Utopia, 228.
    their communism not the 'community of user' advocated by
scholastics, 86.
    their interpretations of St. Augustine, 58.
    their main principles, 230.
    their philosophy at variance with Christianity, 231.
    their principles not derived from mediæval teaching, 230.
    their view of the Church's teaching on usury, 198.
  _Socius stans_, 207.
  Solon, laws of, as affecting usury, 160.
  _Songe du Vergier_, 225.
  Stagyrite, the, _see_ Aristotle.
  Stoic tradition, the, 58.
  Stoicism, inferiority to Christian teaching on slavery, 89.
  Stoics, the, 93.
  Stintzing, 20.
  Sudre, 47, 48.
  _Summa Angelica_, 186.
    _Astesana_, 186.
    _Pisana_, 156.
  Superabundance, relativity of, 75.

  'Teaching,' interpretation of, 3, 19 _et seq._
    mediæval, its relation to practice, 21.
    ethical nature of, 27.
  Temperance, in the use of goods, 70.
  Tertullian, 45, 49, 145, 168, 170.
  _Thessalonians, Epistle to the_, 137.
  Thirteenth century, progress made in the, 15.
  Thomas Aquinas, 7, 16, 17, 18, 19, 20, 36, 41, 42, 46, 52, 62
_et seq._, 67, 69, 70, 71 _et seq._, 74 _et seq._, 77, 78, 80, 81,
82, 83, 84, 85, 91, 93, 94, 95, 96, 97, 99, 101, 105, 111, 112, 114,
117, 119, 121, 131, 132, 133, 135, 136, 141, 143, 144, 146, 147,
148, 149, 150, 151, 154, 156, 162, 167, 173, 174, 176, 182, 186,
188, 189, 193, 194, 195, 197, 206, 207, 208, 215, 230.
  Ticinum, Synod of, decree on usury, 173.
  Tillage, _see_ Agriculture.
  Time, the sale of, 182.
  _Timothy_, 151.
  _Titulus_, distinction from _fundamentum_, 64.
  _Tractatus Universi Juris_, 19.
  Tradesman, _see_ Commerce.
  Trade, _see_ Commerce.
  Troplong, 226.
  _Trinus contractus_, 210, 211.
  Trithemius, 85, 124, 137, 149.
  Twelve Tables, the, maximum rate of interest fixed by, 160.

  _Unciarum foenus_, doubtful meaning of, 160.
  Usufruct, Aquinas on, 38.
  Usurers, _see_ Usury.
  Usury and the clergy, 169.
    a sin against justice, 175.
    attitude of the Apostles, 168.
    attitude of various religious and legal systems, 160.
    borrowing at, circumstances justifying, 194.
    broader basis of discussion after twelfth century, 173.
    dealt with by ecclesiastical courts, 175.
    condemned by Councils, 13.
      by philosophers, 161, 162.
      as a sin against charity, 168, 171.
    controversies over prohibition, 159.
    definition of, by Lateran Council, 197.
    doubt as to Gospel teaching on, 167.
  Usury, ecclesiastical legislation on, 174.
    inconclusive teaching of the early Church, 172.
    increased payment for credit regarded as, 119.
    injustice of, according to Aristotle, 16.
    in the Old Testament, 163.
    not suppressed by civil law, 172.
    patristic and episcopal utterances in favour of, 172.
    not permitted by civil authorities, 197 _et seq._
    popular attitude to, 163.
    prohibition of, 133, 173, 183, 184.
      proof of justice of unearned income, 213.
      position in canonist doctrine, 33.
      not imposed on converts from Gentiles, 168.
    secular legislation in favour of, declared void, 175.
    teaching of the early Church, 167 _et seq._
    treatment by fifteenth-century writers, 18.

  Value, factors determining, 129.
    not systematically treated till fourteenth and fifteenth
centuries, 111.
    _See_ also Price.
  Vaudois, the, belief in communism, 66.
  Verona, _montes pietatis_ at, 196.
  Vienne, Council of, 175.
  Vio, Thomas da, 196.
  Virgin, the Blessed, represented spinning, 139.
  Virginity, recommended for the few, 225.
  Viterbo, _montes pietatis_ at, 196.

  Wages, rules determining, 120.
    as factor in cost of production, 111.
    attitude of mediæval and modern working classes towards
fixing, 126 _et seq._
    fixed by a public authority, 121.
  Wages, paucity of authority on, before sixteenth century, 121.
  Wallon, 90, 137, 140.
  Wealth, theory of, according to Aristotle, 16.
  Wealth, not an end in itself, 80.
  Weber, 206.
  William of Paris, 176.
  Wolowski, 216, 217, 221.