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 kindnessin reading the manuscript, and for many valuable suggestions which hemade; also to Father T. A. Finlay, S. J. , and Mr. Arthur Cox for havinggiven 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 aform as possible the principles and rules which guided and regulatedmen in their economic and social relations during the period known asthe Middle Ages. The failure of the teaching of the so-called orthodoxor classical political economists to bring peace and security tosociety has caused those interested in social and economic problems toinquire with ever-increasing anxiety into the economic teaching whichthe orthodox economy replaced; and this inquiry has revealed that eachsystem of economic thought that has from time to time been acceptedcan be properly understood only by a knowledge of the earlier systemout of which it grew. A process of historical inquiry of this kindleads one ultimately to the Middle Ages, and it is certainly not toomuch to say that no study of modern European economic thought can becomplete or satisfactory unless it is based upon a knowledge of theeconomic teaching which was accepted in mediæval Europe. Therefore, while many will deny that the economic teaching of that period isdeserving of approval, or that it is capable of being applied to theconditions of the present day, none will deny that it is worthy ofcareful and impartial investigation. 

There is thus a demand for information upon the subject dealt with inthis essay. On the other hand, the supply of such information in theEnglish language is extremely limited. The books, such as Ingram's_History of Political Economy_ and Haney's _History of EconomicThought_, which deal with the whole of economic history, necessarilydevote 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 informationon particular branches of the mediæval doctrines, they do not perhapssufficiently indicate the relation between them, nor do they laysufficient emphasis upon the fundamental philosophical principles outof which the whole system sprang. One cannot sufficiently acknowledgethe debt which English students are under to Sir William Ashley forhis examination of mediæval opinion on economic matters; his bookis frequently and gratefully cited as an authority in the followingpages; but it is undeniable that his treatment of the subject sufferssomewhat on account of its being introduced but incidentally into awork dealing mainly with English economic practice. Dr. Cunninghamhas also made many valuable contributions to particular aspects of thesubject; and there have also been published, principally in Catholicperiodicals, many important monographs on special points; but sofar there has not appeared in English any treatise, which is devotedexclusively to mediæval economic opinion and attempts to treat thewhole subject completely. It is this want in our economic literaturethat has tempted the author to publish the present essay, although heis fully aware of its many defects. 

It is necessary, in the first place, to indicate precisely the extentof the subject with which we propose to deal; and with this end inview 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 theopinion of Comte, refuses to consider the fourteenth and fifteenthcenturies as part of the Middle Ages. [1] We intend, however, to treatof economic teaching up to the end of the fifteenth century. The bestmodern judges are agreed that the term Middle Ages must not be givena hard-and-fast meaning, but that it is capable of bearing a veryelastic interpretation. The definition given in the _CatholicEncyclopædia_ is: 'a term commonly used to designate that period ofEuropean history between the Fall of the Roman Empire and about themiddle of the fifteenth century. The precise dates of the beginning, culmination, and end of the Middle Ages are more or less arbitrarilyassumed according to the point of view adopted. ' The eleventh editionof the _Encyclopædia Britannica_ contains a similar opinion: 'Thisname is commonly given to that period of European history which liesbetween what are known as ancient and modern times, and which hasgenerally been considered as extending from about the middle of thefifth to about the middle of the fifteenth centuries. The two datesadopted in old text-books were 476 and 1453, from the setting asideof the last emperor of the west until the fall of Constantinople. Inreality it is impossible to fix any exact dates for the opening andclose of such a period. '

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

We are therefore justified in considering the fifteenth century ascomprised hi the Middle Ages. This is especially so in the domainof economic theory. In actual practice the fourteenth and fifteenthcenturies may have presented the appearance rather of the first stageof 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 thewritings of an author of the thirteenth century. Ingram admits thisincidentally: 'During the fourteenth and fifteenth centuries theCatholic-feudal system was breaking down by the mutual conflicts ofits own official members, while the constituent elements of a neworder were rising beneath it. The movements of this phase can scarcelybe said to find an echo in any contemporary economic literature. '[1]We need not therefore apologise further for including a considerationof the fourteenth and fifteenth centuries in our investigations as tothe economic teaching of the Middle Ages. We are supported in doingso by such excellent authorities as Jourdain, [2] Roscher, [3] andCossa. [4] Haney, in his _History of Economic Thought_, [5] says: 'Itseems more nearly true to regard the years about 1500 as marking theend of mediæval times. .. . On large lines, and from the viewpoint ofsystems of thought rather than systems of industry, the Middle Agesmay with profit be divided into two periods. From 400 down to 1200, or shortly thereafter, constitutes the first. During these yearsChristian theology opposed Roman institutions, and Germanic customswere superposed, until through action and reaction all were blended. This was the reconstruction; it was the "stormy struggle" to found anew ecclesiastical and civil system. From 1200 on to 1500 the worldof thought settled to its level. Feudalism and scholasticism, thecorner-stones of mediævalism, emerged and were dominant. '

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

[Footnote 2: _Mémoires sur les commencements de l'économie politiquedans les écoles du moyen âge_, Académie des Inscriptions etBelles-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 thesixteenth century. It is true that, if we were to refer to severalsixteenth-century authors, we should be in possession of a very highlydeveloped and detailed mass of teaching on many points whichearlier authors left to some extent obscure. We deliberatelyrefrain nevertheless from doing so, because the whole nature of thesixteenth-century literature was different from that of the fourteenthand fifteenth; the early years of the sixteenth century witnessed theabrogation of the central authority which was a basic condition ofthe success of the mediæval system; and the same period also witnessed'radical economic changes, reacting more and more on the scholasticdoctrines, which found fewer and fewer defenders in their originalform. '[1]

[Footnote 1: Cossa, _op. Cit. _, p. 151. Ashley warns us that 'we mustbe careful not to interpret the writers of the fifteenth century bythe writers of the seventeenth' (_Economic History_, vol. I. Pt. Ii. P. 387). These later writers sometimes contain historical accountsof controversies in previous centuries, and are relevant on thisaccount. ]

§ 2. _Economic_. 

It must be clearly understood that the political economy of themediævals was not a science, like modern political economy, but anart. 'It is a branch of the virtue of prudence; it is half-way betweenmorality, which regulates the conduct of the individual, and politics, which regulates the conduct of the sovereign. It is the morality ofthe family or of the head of the family, from the point of view of thegood administration of the patrimony, just as politics is the moralityof the sovereign, from the point of view of the good government of theState. There is as yet no question of economic laws in the senseof historical and descriptive laws; and political economy, not yetexisting in the form of a science, is not more than a branch of thatgreat tree which is called ethics, or the art of living well. '[1] 'Thedoctrine of the canon law, ' says Sir William Ashley, 'differed frommodern economics in being an art rather than a science. It was a bodyof rules and prescriptions as to conduct, rather than of conclusionsas to fact. All art indeed in this sense rests on science; but thescience on which the canonist doctrine rested was theology. Theology, or rather that branch of it which we may call Christian ethics, laiddown certain principles of right and wrong in the economic sphere;and it was the work of the canonists to apply them to specifictransactions and to pronounce judgment as to their permissibility. '[2]The conception of economic laws, in the modern sense, was quiteforeign to the mediæval treatment of the subject. It was only inthe middle of the fourteenth century that anything approaching ascientific examination of the phenomena of economic life appeared, and that was only in relation to a particular subject, namely, thedoctrine of money. [3]

[Footnote 1: Rambaud, _Histoire des Doctrines Économiques_, p. 39. 'Itis evident that a household is a mean between the individual andthe city or Kingdom, since just as the individual is part of thehousehold, so is the household part of the city or Kingdom, andtherefore, just as prudence commonly so called which governs theindividual is distinct from political prudence, so must domesticprudence (oeconomica) be distinct from both. Riches are related todomestic prudence, not as its last end, but as its instrument. On theother hand, the end of political prudence is a good life in general asregards the conduct of the household. In _Ethics_ i. The philosopherspeaks 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 scientiaest, quae recte vivendi modum ac disciplinae formam secundum virtutuminstitutionem disponit. Et haec dividitur in tres, scilicet: primoethicam, 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. Somarked was the contrast between the mediæval and modern conceptionsof economics that the appearance of this one treatise has been saidby one high authority to have been the signal of the dawn of theRenaissance (Espinas, _Histoire des Doctrines Économiques_, p. 110). ]

To say that the mediæval method of approaching economic problems wasfundamentally different from the modern, is not in any sense to betaken as indicating disapproval of the former. On the contrary, it isthe general opinion to-day that the so-called classical treatment ofeconomics has proved disastrous in its application to real life, and that future generations will witness a retreat to the earlierposition. The classical economists committed the cardinal error ofsubordinating man to wealth, and consumption to production. In theirattempt to preserve symmetry and order in their generalisations theyconstructed a weird creature, the economic man, who never existed, andnever could exist. The mediævals made no such mistake. They insistedthat all production and gain which did not lead to the good of man wasnot alone wasteful, but positively evil; and that man was infinitelymore important than wealth. When he exclaims that 'Production is onaccount of man, not man of production, ' Antoninus of Florence sumsup in a few words the whole view-point of his age. [1] 'Consumption, 'according to Dr. Cunningham, 'was the aspect of human nature whichattracted most attention. .. . Regulating consumption wisely was thechief practical problem in mediæval economics. '[2] The greatpractical benefits of such a treatment of the problems relating to theacquisition and enjoyment of material wealth must be obvious to everyone who is familiar with the condition of the world after a century ofclassical political economy. 'To subordinate the economic order tothe social order, to submit the industrial activity of man to theconsideration of the final and general end of his whole being, isa principle which must exert on every department of the scienceof wealth, an influence easy to understand. Economic laws are thecodification of the material activity of a sort of _homo economicus_;of a being, who, having no end in view but wealth, produces all hecan, distributes his produce in the way that suits him best, and consumes as much as he can. Self interest alone dictates hisconduct. '[3] Economics, far from being a science whose highest aimwas to evolve a series of abstractions, was a practical guide to theconduct of everyday affairs. [4] 'The pre-eminence of morality inthe domain of economics constitutes at the same time the distinctivefeature, the particular merit, and the great teaching of the economiclessons 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 sucha universally received code of economic morality was largely due tothe comparative simplicity of the mediæval social structure, wherethe _relations of persons_ were all important, in comparison with themodern order, where the _exchange of things_ is the dominant factor. He further draws attention to the changes which affected the wholeconstitution of society in the sixteenth and seventeenth centuries, and proceeds: 'These changes had a very important bearing on allquestions of commercial morality; so long as economic dealings werebased on a system of personal relationships they all bore an impliedmoral character. To supply a bad article was morally wrong, to demandexcessive payment for goods or for labour was extortion, and theright or wrong of every transaction was easily understood. '[1] Theapplication of ethics to economic transactions was rendered possibleby the existence of one universally recognised code of morality, and the presence of one universally accepted moral teacher. 'In thethirteenth century, the ecclesiastical organisation gave a unity tothe social structure throughout the whole of Western Europe; over thearea in which the Pope was recognised as the spiritual and the Emperoras the temporal vicar of God, political and racial differences wererelatively unimportant. For economic purposes it is scarcely necessaryto distinguish different countries from one another in the thirteenthcentury, for there were fewer barriers to social intercoursewithin the limits of Christendom than there are to-day. .. . Similarecclesiastical canons, and similar laws prevailed over large areas, where very different admixtures of civil and barbaric laws were invogue. 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 ofall there was a common religious life, with the powerful weapons ofspiritual censure and excommunication which it placed in the hands ofthe clergy, so that they were able to enforce the line of policy whichRome approved. Then there was the great judicial system of canonlaw, a common code with similar tribunals for the whole of WesternChristendom, dealing not merely with strictly ecclesiastical affairs, but with many matters that we should regard as economic, such asquestions of commercial morality, and also with social welfare asaffected by the law of marriage and the disposition of property bywill. .. . '[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 dailytransactions. Besides the teaching of the sacred books there was amass of ecclesiastical legislation providing specific prescriptionsfor the conduct of the faithful. And this legislation dealt with theeconomic 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 affairswas but the application to particular facts and cases of its generalmoral teaching. The suggestion, so often put forward by so-calledChristian socialists, that Christianity was the exponent of a specialsocial theory of its own, is unfounded. The direct opposite would benearer the truth. Far from concerning itself with the outward formsof the political or economic structure, Christianity concentrated itsattention on the conduct of the individual. If Christianity can besaid to have possessed any distinctive social theory, it was intenseindividualism. 'Christianity brought, from the point of view ofmorals, an altogether new force by the distinctly individual andpersonal character of its precepts. Duty, vice or virtue, eternalpunishment--all are marked with the most individualist imprint thatcan be imagined. No social or political theory appeared, because itwas through the individual that society was to be regenerated. .. . We can say with truth that there is not any Christian politicaleconomy--in the sense in which there is a Christian morality ora Christian dogma--any more than there is a Christian physic or aChristian medicine. '[1] In seeking to learn Christian teaching ofthe Middle Ages on economic matters, we must therefore not lookfor special economic treatises in the modern sense, but seek ourprinciples in the works dealing with general morality, in the CanonLaw, and in the commentaries on the Civil Law. 'We find the firstworked out economic theory for the whole Catholic world in the _CorpusJuris Canonici_, that product of mediæval science in which for somany centuries theology, jurisprudence, philosophy, and politics weretreated. .. . '[2]

[Footnote 1: Rambaud, _op. Cit. _, pp. 34-5; Cunningham, _WesternCivilisation_, vol. Ii. P. 8. ]

[Footnote 2: Roscher, _op. Cit. _, p. 5. It must not be concludedthat all the opinions expressed by the theologians and lawyers werenecessarily the official teaching of the Church. Brants says: 'It isnot our intention to attribute to the Church all the opinions ofthis period; certainly the spirit of the Church dominated the greatmajority of the writers, but one must not conclude from this thatall 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, thatis to say from the eighth to the thirteenth centuries, a trace of anyattention given to what we at the present day would designate economicquestions. Usury was condemned by the decrees of several councils, butthe reasons of this prohibition were not given, nor was the questionmade the subject of any dialectical controversy; commerce was soundeveloped as to escape the attention of those who sought toguide the people in their daily life; and money was accepted as theinevitable instrument of exchange, without any discussion of itsorigin or the laws which regulated it. 

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

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

Two causes contributed to produce this almost total lack of interestin economic subjects. One was the miserable condition of society, still only partially rescued from the ravages of the barbarians, andhalf organised, almost without industry and commerce; the otherwas the absence of all economic tradition. The existence of the_Categories_ and _Hermenia_ of Aristotle ensured that the chainof logical study was not broken; the works of Donatus and Prisciansustained some glimmer of interest in grammatical theory; certain rudenotions of physics and astronomy were kept alive by the preservationof such ancient elementary treatises as those of Marcian Capella; buteconomics had no share in the heritage of the past. Not only had thewritings of the ancients, who dealt to some extent with the theory ofwealth, been destroyed, but the very traces of their teaching had beenlong forgotten. A good example of the state of thought in economicmatters is furnished by the treatment which money receives in the_Etymologies_ of Isidore of Seville, which was regarded in the earlyMiddle Ages as a reliable encyclopædia. 'Money, ' according to Isidore, 'is so called because it warns, _monet_, lest any fraud should enterinto its composition or its weight. The piece of money is the coin ofgold, silver, or bronze, which is called _nomisma_, because it bearsthe imprint of the name and likeness of the prince. .. . The pieces ofmoney _nummi_ have been so called from the King of Rome, Numa, who wasthe first among the Latins to mark them with the imprint of his imageand name. '[1] Is it any wonder that the early Middle Ages were barrenof economic doctrines, when this was the best instruction to whichthey had access?

[Footnote 1: _Etymol_. Xvi. 17. ]

In the course of the thirteenth century a great change occurred. Theadvance of civilisation, the increased organisation of feudalism, thedevelopment of industry, and the extension of commerce, largely underthe influence of the Crusades, all created a condition of affairs inwhich economic questions could no longer be overlooked or neglected. At the same time the renewed study of the writings of Aristotle servedto throw a flood of new light on the nature of wealth. 

The _Ethics_ and _Politics_ of Aristotle, although they are notprincipally devoted to a treatment of the theory of wealth, do infact deal with that subject incidentally. Two points in particularare touched on, the utility of money and the injustice of usury. The passages of the philosopher dealing with these subjects are ofparticular interest, as they may be said, with a good deal of truth, to be the true starting point of mediæval economics. [1] The writingsof Aristotle arrested the attention, and aroused the admiration ofthe theologians of the thirteenth century; and it would be quiteimpossible to exaggerate the influence which they exercised on thelater 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 bedubbed by some 'the ape of Aristotle. ' Aquinas, who was a pupil ofAlbertus, also studied and commented on Aristotle, whose aid he wasalways ready to invoke in the solution of all his difficulties. Withthe single and strange exception of Vincent de Beauvais, Aristotle'steaching on money was accepted by all the writers of the thirteenthcentury, and was followed by later generations. [2] The influenceof Aristotle is apparent in every article of the _Summa_, which wasitself the starting point from which all discussion sprang for thefollowing two centuries; and it is not too much to say that theStagyrite had a decisive influence on the introduction of economicnotions into the controversies of the Schools. 'We find in thewritings of St. Thomas Aquinas, ' says Ingram, 'the economic doctrinesof Aristotle reproduced with a partial infusion of Christianelements. '[3]

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

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

[Footnote 3: _Op. Cit. _, p. 27. Espinas thinks that the influenceof Aristotle in this respect has been exaggerated. (_Histoire desDoctrines Économiques_, p. 80. )]

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

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

The teaching of Aquinas upon economic affairs remained the groundworkof all the later writers until the end of the fifteenth century. His opinions on various points were amplified and explained bylater authors in more detail than he himself employed; monographs ofconsiderable length were devoted to the treatment of questions whichhe dismissed in a single article; but the development which tookplace was essentially one of amplification rather than opposition. Themonographists of the later fifteenth century treat usury and sale inconsiderable detail; many refinements are indicated which are notto be found in the _Summa_; but it is quite safe to say that noneof these later writers ever pretended to supersede the teaching ofAquinas, who was always admitted to be the ultimate authority. 'Duringthe fourteenth and fifteenth centuries, the general political doctrineof Aquinas was maintained with merely subordinate modifications. '[1]'The canonist doctrine of the fifteenth century, ' according to SirWilliam Ashley, 'was but a development of the principles to which theChurch had already given its sanction in earlier centuries. It was theoutcome of these same principles working in a modified environment. But it may more fairly be said to present a _system_ of economicthought, because it was no longer a collection of unrelated opinions, but a connected whole. The tendency towards a separate department ofstudy is shown by the ever-increasing space devoted to the discussionof general economic topics in general theological treatises, andmore notably still in the manuals of casuistry for the use of theconfessional, and handbooks of canon law for the use of ecclesiasticallawyers. It was shown even more distinctly by the appearance of ashoal 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, byAristotle, though they may have been illustrated and applied to newinstances, were never rejected. The study of the writers of thisperiod is therefore the study of an organic whole, the germ of whichis 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 oneconomic matters dating from the fourteenth and fifteenth centuries iscolossal. By far the best account of it is to be found in Endemann's_Studien in der Romanisch-canonistischen Wirthschafts- undRechtslehre_, vol. I. Pp. 25 _et seq_. Many of the more importantworks written during the period are reprinted in the _TractatusUniversi Juris_, vols. Vi. And vii. The appendix to the first chapterof Reseller's _Geschichte_ also contains a valuable account of certaintypical writers, especially of Langenstein and Henricus de Hoyta. Brants gives a useful bibliographical list of both mediæval and modernauthorities in the second chapter of his _Théories économiques auxxiii^{e} et xiv^{e} siècles_. Those who desire further informationabout any particular writer of the period will find it in Stintzing, _Literaturgeschichte des röm. Rechts_, or in Chevallier's _Répertoirehistorique des Sources du moyen âge; Bio-bibliographie_. Theauthorship of the treatise _De Regimine Principum_, from which weshall frequently quote, often attributed to Aquinas, is very doubtful. The most probable opinion is that the first book and the first threechapters of the second are by Aquinas, and the remainder by anotherwriter. (See Franck, _Réformateurs et Publicistes_, vol. I. P. 83. )]

§ 3. _Teaching_. 

We shall confine our attention in this essay to the economic teachingof the Middle Ages, and shall not deal with the actual practice of theperiod. It may be objected that a study of the former without a studyof the latter is futile and useless; that the economic teaching of aperiod can only be satisfactorily learnt from a study of its actualeconomic institutions and customs; and that the scholastic teachingwas nothing but a casuistical attempt to reconcile the early Christiandogmas with the ever-widening exigencies of real life. Endemann, forinstance, devotes a great part of his invaluable books on the subjectto demonstrating how impracticable the canonist teaching was when itwas applied to real life, and recounting the casuistical devices thatwere resorted to in order to reconcile the teaching of the Church withthe accepted mercantile customs of the time. Endemann, however, in spite of his colossal research and unrivalled acquaintance withoriginal authorities, was essentially hostile to the system which heundertook to explain, and thus lacked the most essential quality of asatisfactory expositor, namely, sympathy with his subject. He doesnot appear to have realised that development and adaptability to newsituations, far from being marks of impracticability, are rather thesigns of vitality and of elasticity. This is not the place to discusshow far the doctrine of the late fifteenth differed from that of theearly thirteenth century; that is a matter which will appear belowwhen each of the leading principles of scholastic economic teachingis separately considered; it is sufficient to say here that we agreeentirely with Brants, in opposition to Endemann, that the changewhich took place in the interval was one of development, and not ofopposition. 'The law, ' says Brants, 'remained identical and unchanged;justice and charity--nobody can justly enrich himself at the expenseof his neighbour or of the State, but the reasons justifying gainare multiplied according as riches are developed. '[1] 'The canonistdoctrine of the fifteenth century was but a development of theprinciples to which the Church had already given its sanction inearlier centuries. It was the outcome of these same principles workingin a modified environment. '[2] With these conclusions of Brants andAshley 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 teachinggrew out of contemporary practice, rather than that the latter grewout of the former, is one which does not find acceptance among themajority of the students of the subject. The problem whether a correctunderstanding of mediæval economic life can be best attained by firststudying the teaching or the practice is possibly no more soluble thanthe old riddle of the hen and the egg; but it may at least be arguedthat there is a good deal to be said on both sides. The supporters ofthe view that practice moulded theory are by no means unopposed. There is no doubt that in many respects the exigencies of everydaycommercial concerns came into conflict with the tenets of canon lawand scholastic opinion; but the admission of this fact does not atall prove that the former was the element which modified the latter, rather than the latter the former. In so far as the expansion ofcommerce and the increasing complexity of intercourse raised questionswhich seemed to indicate that mercantile convenience conflicted withreceived teaching, it is probable that the difficulty was not so muchcaused by a contradiction between the former and the latter, as by thefact that an interpretation of the doctrine as applied to the factsof the new situation was not available before the new situation hadactually arisen. This is a phenomenon frequently met with at thepresent day in legal practice; but no lawyer would dream of assertingthat, because there had arisen an unprecedented state of facts, towhich the application of the law was a matter of doubt or difficulty, therefore the law itself was obsolete or incomplete. Examples of sucha conflict are familiar to any one who has ever studied the case lawon any particular subject, either in a country such as England, wherethe law is unwritten, or in continental countries, where the mostexhaustive and complete codes have been framed. Nevertheless, in spiteof the occurrence of such difficulties, it would be foolish to contendthat the laws in force for the time being have not a greater influenceon the practice of mercantile transactions than the convenience ofmerchants has upon the law. How much more potent must this influencehave 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 onmediæval practice is supported by authorities of the weight of Ashley, Ingram, and Cunningham, [1] the last of whom was in some respectsunsympathetic to the teaching the influence of which he rates sohighly. 'It has indeed, ' writes Sir William Ashley, 'not infrequentlybeen hinted that all the elaborate argumentation of canonists andtheologians was "a cobweb of the brain, " with no vital relation toreal life. Certain German writers have, for instance, maintained that, alongside of the canonist doctrine with regard to trade, there existedin 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 ofpartnership, had to a large extent originated in the social conditionsof the time, and would have probably made their appearance evenif there had been no canon law or theology. But though there werebranches of commercial law which were, in the main, independent ofthe canonist doctrine, there were none that were opposed to it. Onthe fundamental points of usury and just price, commercial law in thelater Middle Ages adopted completely the principles of the canonists. How entirely these principles were recognised in the practice of thecourts which had most to do with commercial suits, viz. Those of thetowns, is sufficiently shown by the frequent enactments as to usuryand as to reasonable price which are found in the town ordinancesof the Middle Ages; in England as well as in the rest of WesternEurope. .. . Whatever may have been the effect, direct or indirect, ofthe canonist doctrine on legislation, it is certain that on its otherside, as entering into the moral teaching of the Church through thepulpit and the confessional, its influence was general and persistent, even if it were not always completely successful. '[2] 'Every greatchange of opinion on the destinies of man, ' says Ingram, 'and theguiding principles of conduct must react in the sphere of materialinterests; and the Catholic religion had a profound influence on theeconomic life of the Middle Ages. .. . The constant presentations to thegeneral mind and conscience of Christian ideas, the dogmatic basesof which were as yet scarcely assailed by scepticism, must have had apowerful effect in moralising life. '[3] According to Dr. Cunningham:'The mediæval doctrine of price was not a theory intended to explainthe phenomena of society, but it was laid down as the basis of ruleswhich should control the conduct of society and of individuals. Atthe same time current opinion seems to have been so fully formed inaccordance with it that a brief enumeration of the doctrine of a justprice will serve to set the practice of the day in clearer light. Inregard to other matters, it is difficult to determine how far publicopinion was swayed by practical experience, and how far it was reallymoulded by Christian teaching--this is the case in regard to usury. But there can be little doubt about the doctrine of price--whichreally underlies a great deal of commercial and gild regulations, and is constantly implied in the early legislation on mercantileaffairs. '[4] The same author expresses the same opinion in anotherwork: 'The Christian doctrine of price, and Christian condemnationof gain at the expense of another man, affected all the mediævalorganisation of municipal life and regulation of inter-municipalcommerce, and introduced marked contrasts to the conditions ofbusiness in ancient cities. The Christian appreciation of the duty ofwork rendered the lot of the mediæval villain a very different thingfrom that of the slave of the ancient empire. The responsibility ofproprietors, like the responsibility of prices, was so far insistedon as to place substantial checks on tyranny of every kind. For theseprinciples were not mere pious opinions, but effective maxims inpractical life. Owing to the circumstances in which the vestiges ofRoman civilisation were locally maintained, and the foundations ofthe new society were laid, there was ample opportunity forChristian teaching and example to have a marked influence on itsdevelopment. '[5] In Dr. Cunningham's book entitled _Politics andEconomics_ the same opinion is expressed:[6] 'Religious and industriallife were closely interconnected, and there were countless points atwhich the principles of divine law must have been brought to bearon the transaction of business, altogether apart from any formaltribunal. Nor must we forget the opportunities which directors had forinfluencing the conduct of penitents. .. . Partly through the operationof the royal power, partly through the decisions of ecclesiasticalauthorities, but more generally through the influence of a Christianpublic opinion which had been gradually created, the whole industrialorganism took its shape, and the acknowledged economic principles wereframed. ' We have quoted these passages from Dr. Cunningham's works atlength because they are of great value in helping us to estimatethe rival parts played by theory and practice in mediæval economicteaching; in the first place, because the author was by no meansprepossessed in favour of the teaching of the canonists, but ratherunsympathetic to it; in the second place, because, although his workwas concerned primarily with practice, he found himself obligedto make a study of theory before he could properly understand thepractice; and lastly, because they point particularly to the effect ofthe teaching on just price. When we come to speak of this part of thesubject we shall find that Dr. Cunningham failed to appreciate thetrue significance of the canonist doctrine. If an eminent author, whodoes not quite appreciate the full import of this doctrine, and whois to some extent contemptuous of its practical value, neverthelessasserts that it exercised an all-powerful influence on the practice ofthe age in which it was preached, we are surely justified inasserting that the study of theory may be profitably pursued without apreliminary history of the contemporary practice. 

[Footnote 1: Even Endemann warns his readers against assuming that thecanonist 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 conflictsbetween the teaching and the practice of the Middle Ages. As we haveseen, the economic teaching of that period was ethical, and it wouldbe absurd to assert that every man who lived in the Middle Ages livedup to the high standard of ethical conduct which was proposed by theChurch. [1] One might as well say that stealing was an unknown crimein England since the passing of the Larceny Act. All we do suggest isthat the theory had such an important and incalculable influenceupon practice that the study of it is not rendered futile or uselessbecause of occasional or even frequent departures from it in reallife. Even Endemann says: 'The teaching of the canon law presents anoble edifice not less splendid in its methods than in its results. It embraces the whole material and spiritual natures of human societywith such power and completeness that verily no room is left forany other life than that decreed by its dogmas. '[2] 'The aim of theChurch, ' says Janssen, 'in view of the tremendous agencies throughwhich it worked, in view of the dominion which it really exercised, cannot have the impression of its greatness effaced by the unfortunatefact that all was not accomplished that had been planned. '[3] The factthat tyranny may have been exercised by some provincial governor inan outlying island of the Roman Empire cannot close our eyes to thebenefits to be derived from a study of the code of Justinian; nor cana remembrance of the manner in which English law is administered inIreland in times of excitement, blind us to the political lessons tobe learned from an examination of the British constitution. 

[Footnote 1: The many devices which were resorted to in order to evadethe prohibition of usury are explained in Dr. Cunningham's _Growthof English Industry and Commerce_, vol. I. P. 255. See also Delisle, _L'Administration financière des Templiers_, Académie des Inscriptionset Belles-Lettres, 1889, vol. Xxxiii. Pt. Ii. , and Ashley, _EconomicHistory_, vol. I. Pt. Ii. P. 426. The _Summa Pastoralis_ of Raymond dePennafort analyses and demolishes many of the commoner devices whichwere 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 canonistischenLehre_, 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 economicteaching, which, even if it ever did receive anything approachinguniversal assent, has long since ceased to do so, is not a waste oflabour. We can answer that question in the negative, for two reasons. In the first place, as we said above, a proper understanding ofthe earlier periods of the development of a body of knowledge isindispensable for a full appreciation of the later. Even if thecanonist system were not worth studying for its own sake, it wouldbe deserving of attention on account of the light it throws on thedevelopment of later economic doctrine. 'However the canonist theorymay contrast with or resemble modern economics, it is too importanta part of the history of human thought to be disregarded, ' says SirWilliam Ashley. 'As we cannot fully understand the work of Adam Smithwithout giving some attention to the physiocrats, nor the physiocratswithout looking at the mercantilists: so the beginnings of mercantiletheory are hardly intelligible without a knowledge of the canonistdoctrine towards which that theory stands in the relation partly of acontinuation, 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, farfrom being useful simply as an introduction to later theories, is ofgreat value in furnishing us with assistance in the solution of theeconomic and social problems of the present day. The last fifty yearshave witnessed a reaction against the scientific abstractions of theclassical economists, and modern thinkers are growing more and moredissatisfied with an economic science which leaves ethics out ofaccount. [1] Professor Sidgwick, in his _Principles_ _of PoliticalEconomy_, published in 1883, devotes a separate section to 'The Artof Political Economy, ' in which he remarks that 'The principles ofPolitical Economy are still most commonly understood even in England, and in spite of many protests to the contrary, to be practicalprinciples--rules of conduct, public or private. '[2] The manyindications in recent literature and practice that the regulation ofprices should be controlled by principles of 'fairness' would take toolong to recite. It is sufficient to refer to the conclusion of Devason this point: 'The notion of just price, worked out in detail by thetheologians, and in later days rejected as absurd by the classicaleconomists, has been rightly revived by modern economists. '[3] Notalone in the sphere of price, but in that of every other departmentof economics, the impossibility of treating the subject as an abstractscience without regard to ethics is being rapidly abandoned. 'The bestusage of the present time, ' according to the _Catholic Encyclopædia_, 'is to make political economy an ethical science--that is, to make itinclude a discussion of what ought to be in the economic world as wellas what is. '[4] We read in the 1917 edition of Palgrave's _Dictionaryof Political Economy_, that 'The growing importance of distribution asa practical problem has led to an increasing mutual interpenetrationof economic and ethical ideas, which in the development of economicdoctrine during the last century and a half has taken various forms. '[5] The need for some principle by which just distribution can beattained has been rendered pressing by the terrible effects of aperiod of unrestricted competition. 'It has been widely maintainedthat a strictly competitive exchange does not tend to be reallyfair--some say cannot be really fair--when one of the parties isunder pressure of urgent need; and further, that the inequality ofopportunity which private property involves cannot be fully justifiedon the principle of maintaining equal freedom, and leads, in fact, tograve social injustice. '[5] In other words, the present condition ofaffairs is admitted to be intolerable, and the task before theworld is to discover some alternative. The day when economics can bedivorced from ethics has passed away; there is a world-wide endeavourto establish in the place of the old, a new society founded on anethical basis. [7] There are two, and only two, possible ways tothe attainment of this ideal--the way of socialism and the way ofChristianity. There can be no doubt the socialist movement derives agreat part of its popularity from its promise of a new order, based, not on the unregulated pursuit of selfish desires, but on justice. 'Tothis view of justice or equity, ' writes Dr. Sidgwick, 'the socialisticcontention that labour can only receive its due reward if land andother instruments of production are taken into public ownership, and education of all kinds gratuitously provided by Government--haspowerfully appealed; and many who are not socialists, nor ignorant ofeconomic science, have been led by it to give welcome to the notionthat the ideally "fair" price of a productive service is a price atleast rendering possible the maintenance of the producers and theirfamilies in a condition of health and industrial efficiency. ' Thisis not the place to enter into a discussion as to the meritsor practicability of any of the numerous schemes put forward bysocialists; it is sufficient to say that socialism is essentiallyunhistorical, and that in our opinion any practical benefits whichit might bestow on society would be more than counterbalanced by theinnumerable evils which would be certain to emerge in a system basedon unsatisfactory foundations. 

[Footnote 1: We must guard against the error, which is frequentlymade, that, because the classical economists assumed self-interestas the sole motive of economic action, they therefore approved of andinculcated it. ]

[Footnote 2: P. 401, and see Marshall's Preface to Price's _IndustrialPeace_, 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 thenon-ethical schools of economists see Keynes, _Scope and Method_, pp. 20 _et seq_. ]

The other road to the establishment of a society based on justiceis the way of Christianity, and, if we wish to attempt this path, itbecomes vitally important to understand what was the economic teachingof the Church in the period when the Christian ethic was universallyrecognised. During the whole Middle Ages, as we have said above, theCanon Law was the test of right and wrong in the domain of economicactivity; production, consumption, distribution, and exchange were allregulated by the universal system of law; once before economic lifewas considered within the scope of moral regulation. It cannot bedenied that a study of the principles which were accepted during thatperiod may be of great value to a generation which is striving toplace its economic life once more upon an ethical foundation. 

One error in particular we must be on our guard to avoid. We saidabove that both the socialists and the Christian economists are agreedin their desire to reintroduce justice into economic life. We must notconclude, however, that the aims of these two schools are identical. One very frequently meets with the statement that the teachings ofsocialism are nothing more or less than the teachings of Christianity. This contention is discussed in the following pages, where theconclusion will be reached that, far from being in agreement, socialism and Christian economics contradict each other on manyfundamental points. It is, however, not the aim of the discussion toappraise the relative merits of either system, or to applaud one anddisparage the other. All that it is sought to do is to distinguishbetween them; and to demonstrate that, whatever be the merits ordemerits 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 mediævalChurch which permeated the whole of its economic thought was thedoctrine of usury. The holders of this view may lay claim to veryinfluential supporters among the students of the subject. Ashley saysthat 'the prohibition of usury was clearly the centre of the canonistdoctrine. '[1] Roscher expresses the same opinion in practically thesame words;[2] and Endemann sees the whole economic development of theMiddle Ages and the Renaissance as the victorious destruction of theusury law by the exigencies of real life. [3] However impressed wemay 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 impressesthe modern mind most deeply is the usury prohibition, partly becauseit is not generally realised that the usury doctrine would not haveforbidden the receipt of any of the commonest kinds of unearnedrevenue of the present day, and partly because the discussion of usuryoccupies such a very large part of the writings of the canonists. Itmay be quite true to say that the doctrine of usury was that whichgave the greatest trouble to the mediæval writers, on account of thenicety of the distinctions with which it abounded, and on account ofthe ingenuity of avaricious merchants, who continually sought toevade the usury laws by disguising illegal under the guise oflegal transactions. In practice, therefore, the usury doctrine wasundoubtedly the most prominent part of the canonist teaching, becauseit was the part which most tempted evasion; but to admit that is notto agree with the proposition that it was the centre of the canonistdoctrine. 

[Footnote: 1 _Op. Cit. _, vol. I. Pt. Ii. P. 399. ]

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

[Footnote: 3 _Studien_, vol. I. P. 2 and _passim_. At vol. Ii. P. 31it is stated that the teaching on just price is a corollary of theusury 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 theapplications of the doctrine that all voluntary exchanges of propertymust be regulated by the precepts of commutative justice. In one senseit might be said to be a corollary of the doctrine of just price. Thisis apparently the suggestion of Dr. Cleary in his excellent book onusury: 'It seems to me that the so-called loan of money is reallya sale, and that a loan of meal, wine, oil, gunpowder, and similarcommodities--that is to say, commodities which are consumed in use--isalso a sale. If this is so, as I believe it is, then loans of allthese consumptible goods should be regulated by the principles whichregulate sale contracts. A just price only may be taken, and thereturn must be truly equivalent. '[1] This statement of Dr. Cleary'sseems well warranted, and finds support in the analogy which was drawnbetween the legitimacy of interest--in the technical sense--and thelegitimacy of a vendor's increasing the price of an article by reasonof some special inconvenience which he would suffer by parting withit. Both these titles were justified on the same ground, namely, thatthey were in the nature of compensations, and arose independently ofthe main contract of loan or sale as the case might be. 'Le vendeurest en présence de l'acheteur. L'objet a pour lui une valeurparticulière: c'est un souvenir, par exemple. A-t-il le droit demajorer le prix de vente? de dépasser le juste prix convenu? . .. Avecl'unanimité des docteurs on peut trouver légitime la majoration duprix. L'évaluation commune distingue un double élément dans l'objet:sa valeur ordinaire à laquelle répond le juste prix, et cette valeurextraordinaire qui appartient au vendeur, dont il se prive et quimérite une compensation: il le fait pour ainsi dire l'objet d'unsecond contrat qui se superpose au premier. Cela est si vrai que lesupplément 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 justprice and usury in detail; it is simply referred to here in support ofthe proposition that, far from being a special doctrine _sui generis_, the usury doctrine of the Church was simply an application to the saleof consumptible things of the universal rules which applied to allsales. In other words, the doctrines of the just price and of usurywere founded on the same fundamental precept of justice in exchange. If we indicate what this precept was, we can claim to have indicatedwhat 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 Socialede France_, 1911, p. 174. ]

The scholastic teaching on the subject of the rules of justice inexchange 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 beobserved in the same way in distributive as in commutative justice?'we find a clear exposition: 'In commutations something is delivered toan individual on account of something of his that has been received, as may be seen chiefly in selling and buying, where the notion ofcommutation is found primarily. Hence it is necessary to equalisething with thing, so that the one person should pay back to the otherjust so much as he has become richer out of that which belonged tothe other. The result of this will be equality according to the_arithmetical_ mean, which is gauged according to equal excess inquantity. Thus 5 is the mean between 6 and 4, since it exceeds thelatter, and is exceeded by the former by 1. Accordingly, if at thestart both persons have 5, and one of them receives 1 out of theother's belongings, the one that is the receiver will have 6, and theother will be left with 4: and so there will be justice if both arebrought back to the mean, I being taken from him that has 6 and givento 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 isdiscussed. We are told that: 'Justice is about certain externaloperations, namely, distribution and commutation. These consist in theuse of certain externals, whether things, persons, or even works: ofthings as when one man takes from or restores to another that whichis his: of persons as when a man does an injury to the very person ofanother. .. : and of works as when a man justly enacts a work of anotheror does a work for him. .. . Commutative justice directs commutationsthat can take place between two persons. Of these some areinvoluntary, some voluntary. .. . Voluntary commutations are when aman voluntarily transfers his chattel to another person. And if hetransfer it simply so that the recipient incurs no debt, as in thecase of gifts, it is an act not of justice, but of liberality. Avoluntary transfer belongs to justice in so far as it includes thenotion of debt. ' Aquinas then goes on to distinguish between thedifferent kinds of contract, sale, usufruct, loan, letting and hiring, and deposit, and concludes, 'In all these actions the mean is taken inthe same way according to the equality of repayment. Hence all theseactions belong to the one species of justice, namely, commutativejustice. '[2]

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

[Footnote 2: ii. Ii. 61, 3. The reasoning of Aristotle ischaracteristically reinforced by the quotation of Matt. Vii. 12; ii. Ii. 77, 1. ]

This is not the place to discuss the precise meaning of the equalityupon which Aquinas insists, which will be more properly consideredwhen we come to deal with the just price. What is to be noticed atpresent is that all the transactions which are properly comprised ina discussion of economic theory--sales, loans, etc. --are groupedtogether as being subject to the same regulative principle. Ittherefore appears more correct to approach the subject which we areattempting to treat by following that principle into its variousapplications, than by making one particular application of theprinciple the starting-point of the discussion. 

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

[Footnote 1: _De Contractibus_, i. 4 'Inventa est autem commutatiocivilis post peccatum quoniam status innocentias habuit omniacommunia. ']

[Footnote 2: _De Contractibus_, v. 1: 'Nunc videndum est breviter undeoriginaliter proveniat quod rerum dominia sunt distincta, sic quodhoc dicatur meum et illud tuum; quia illud est fundamentum omnisinjustitiae in contractando rem alienam, et post omnis injustitiareddendo eam. ']

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

We shall therefore deal in the first place with the right of privateproperty, which we shall show to have been fully recognised by themediæval writers. We shall then point out the duties which thisright entailed, and shall establish the position that the scholasticteaching was directed equally against modern socialistic principlesand modern unregulated individualism. The next point with which weshall deal is the exchange of property between individuals, which is anecessary corollary of the right of property. We shall show that suchexchanges were regulated by well-defined principles of commutativejustice, which applied equally in the case of the sale of goods and inthe case of the sale of the use of money. The last matter with whichwe shall deal is the machinery by which exchanges are conducted, namely, money. Many other subjects, such as slavery and the legitimacyof commerce, will be treated as they arise in the course of ourtreatment of these principal divisions. 

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

It must not be understood that the mediæval writers treated economicsubjects in this order, or in any order at all. As we have alreadysaid, economic matters are simply referred to in connection withethics, and were not detached and treated as making up a distinctbody of teaching. Ashley says: 'The reader will guard himself againstsupposing that any mediæval writer ever detached these ideas fromthe body of his teaching, and put them together as a modern text-bookwriter might do; or that they were ever presented in this particularorder, 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 wasperfectly simple and clear. Aquinas devoted a section of the _Summa_to it, and his opinion was accepted as final by all the later writersof the period, who usually repeat his very words. However, beforecoming to quote and explain Aquinas, it is necessary to deal witha difficulty that has occurred to several students of Christianeconomics, namely, that the teaching of the scholastics on the subjectof property was in some way opposed to the teaching of the earlyChurch and of Christ Himself. Thus Haney says: 'It is necessary tokeep the ideas of Christianity and the Church separate, for fewwill deny that Christianity as a religion is quite distinct from thevarious institutions or Churches which profess it. .. . ' And he goeson to point out that, whereas Christianity recommended community ofproperty, the Church permitted private property and inequality. [1]Strictly speaking, the reconciliation of the mediæval teaching withthat of the primitive Church might be said to be outside the scope ofthe present essay. In our opinion, however, it is important to insistupon the fundamental harmony of the teaching of the Church in the twoperiods, in the first place, because it is impossible to understandthe later without an understanding of the earlier doctrine from whichit developed, and secondly, because of the widespread prevalence, evenamong Catholics, of the erroneous idea that the scholastic teachingwas opposed to the ethical principle laid down by the Founder ofChristianity. 

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

Amongst the arguments which are advanced by socialists none is moreoften met than the alleged socialist teaching and practice of theearly Christians. For instance, Cabet's _Voyage en Icarie_ containsthe following passage: 'Mais quand on s'enfonce sérieusement etardemment dans la question de savoir comment la société pourrait êtreorganisée en Démocratie, c'est-à-dire sur les bases de l'Égalité et dela Fraternité, on arrive à reconnaître que cette organisation exigeet entraîne nécessairement la communauté de biens. Et nous hâtonsd'ajouter que cette communauté était également proclamée parJésus-Christ, par tous ses apôtres et ses disciples, par tous lespères de l'Église et tous les Chrétiens des premiers siècles. ' Thefact that St. Thomas Aquinas, the great exponent of Catholic teachingin the Middle Ages, defends in unambiguous language the institution ofprivate property offers no difficulties to the socialist historian ofChristianity. He replies simply that St. Thomas wrote in an age whenthe Church was the Church of the rich as well as of the poor; thatit had to modify its doctrines to ease the consciences of its richmembers; and that, ever since the conversion of Constantine, theprimitive Christian teaching on property had been progressivelycorrupted by motives of expediency, until the time of the _Summa_, when it had ceased to resemble in any way the teaching of theApostles. [1] We must therefore first of all demonstrate that there isno such contradiction between the teaching of the Apostles and that ofthe mediæval Church on the subject of private property, but that, on the contrary, the necessity of private property was at all timesrecognised and insisted on by the Catholic Church. As it is put in ananonymous article in the _Dublin Review_: 'Among Christian nations wediscover at a very early period a strong tendency towards a generaland equitable distribution of wealth and property among the whole bodypolitic. Grounded on an ever-increasing historical evidence, we mightpossibly affirm that the mediæval Church brought her whole weight tobear 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 themeanest, most selfish, and most corrupt utilitarianism in her attitudetowards the question of wealth and property. She was communistic whenshe had nothing. She blessed poverty in order to fill her own coffers. And when the coffers were full she took rank among the owners ofland and houses, she became zealous in the interests of property, andproclaimed that its origin was divine' ('The Fathers of the Church andSocialism, ' 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 versesof the Acts of the Apostles describing the condition of the Church ofJerusalem. 'And they that believed were together and had all thingscommon; And sold their possessions and goods, and parted them toall men, as every man had need. '[1] 'And the multitude of them thatbelieved were of one heart and of one soul: neither said any of themthat aught of the things which he possessed was his own; but they hadall things common. Neither was there any amongst them that lacked: foras many as were possessors of land or houses sold them, and broughtthe price of the things that were sold, And laid them down at theapostles' feet: and distribution was made unto every man according ashe 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 depictedreally amounted to communism in the strict sense. Several of the mostenlightened students of the Bible have come to the conclusion that theverses quoted simply express in a striking way the great liberalityand benevolence which prevailed among the Christian fraternity atJerusalem. This view was strongly asserted by Mosheim, [1] and is heldby Dr. Carlyle. 'A more careful examination of the passages in theActs, ' says the latter, [2] 'show clearly enough that this was nosystematic division of property, but that the charitable instinctof the infant Church was so great that those who were in want werecompletely supported by those who were more prosperous. .. . Still therewas no systematic communism, no theory of the necessity of it. ' Colouris lent to this interpretation by the fact that similar wordsand phrases were used to emphasise the prevalence of charity andbenevolence in later communities of Christians, amongst whom, aswe know from other sources, the right of private property was fullyadmitted. Thus Tertullian wrote:[3] 'One in mind and soul, we do nothesitate to share our earthly goods with one another. All things arecommon among us but our wives. ' This passage, if it were taken alone, would be quite as strong and unambiguous as those from the Acts; butfortunately, a few lines higher up, Tertullian had described how theChurch was supported, wherein he showed most clearly that privateproperty was still recognised and practised: 'Though we have ourtreasure-chest, it is not made up of purchase-money, as of a religionthat has its price. On the monthly collection day, if he likes, eachputs in a small donation; but only if he has pleasure, and only ifhe 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 andLactantius, say that among the Christians all goods are common; therewas then certainly no question of a communism of goods taken in thestrict 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 inthe Acts, practised communism at all, as apart from great liberalityand benevolence. Assuming, however, that the Acts should beinterpreted in their strict literal sense, let us see to what theso-called communism amounted. 

In the first place, it is plain from Acts iv. 32 that the communismwas one of use, not of ownership. It was not until the individualowner had sold his goods and placed the proceeds in the common fundthat any question of communism arose. 'Whiles it remained was it notthine own, ' said St. Peter, rebuking Ananias, 'and after it was soldwas it not in thine own power?'[1] This distinction is particularlyimportant in view of the fact that it is precisely that insisted on bySt. Thomas Aquinas. There is no reason to suppose that the communityof use practised at Jerusalem was in any way different from thatadvocated by Aquinas--namely, 'the possession by a man of externalthings, not as his own, but in common, so that, to wit, he is ready tocommunicate 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 theActs was purely voluntary. This is quite obvious from the relation inthe fifth chapter of the incident of Ananias and Sapphira. There isno indication that the abandonment of one's possessory rights waspreached by the Apostles. Indeed, it would be difficult to understandwhy they should have done so, when Christ Himself had remainedsilent on the subject. Far from advocating communism, the Founderof Christianity had urged the practice of many virtues for whichthe possession of private property was essential. 'What Christrecommended, ' says Sudre, [1] 'was voluntary abnegation or almsgiving. But the giving of goods without any hope of compensation, thespontaneous deprivation of oneself, could not exist except under asystem of private property . .. They were one of the ways of exercisingsuch rights. ' Moreover, as the same author points out, privateproperty was fully recognised under the Jewish dispensation, andChrist would therefore have made use of explicit language if he hadintended to alter the old law in this fundamental respect. 'Think notthat I am come to destroy the law or the prophets: I am not cometo destroy, but to fulfil. '[2] At the time of Christ's preaching, aJewish sect, the Essenes, were endeavouring to put into practice theideals of communism, but there is not a word in the Gospels to suggestthat He ever held them up as an example to His followers. 'Communismwas never preached by Christ, although it was practised under Hisvery eyes by the Essenes. This absolute silence is equivalent to animplicit 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 'HistoricPhases of Socialism, ' by Dr. Hogan, _Irish Ecclesiastical Record_, vol. Xxv. P. 334. Even Huet discounts the importance of this instanceof communism, _Le Règne social du Christianisme_, p. 38. ]

Nor was communism preached as part of Christ's doctrine as taughtby the Apostles. In Paul's epistles there is no direction to thecongregations addressed that they should abandon their privateproperty; on the contrary, the continued existence of such rights isexpressly recognised and approved in his appeals for funds for theChurch at Jerusalem. [1] Can it be that, as Roscher says, [2] theexperiment in communism had produced a chronic state of poverty in theChurch at Jerusalem? Certain it is the experiment was never repeatedin any of the other apostolic congregations. The communism atJerusalem, if it ever existed at all, not only failed to spread toother Churches, but failed to continue at Jerusalem itself. It isuniversally admitted by competent students of the question that thephenomenon 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 saDoctrine_, vol. Ii. P. 221. See More's _Utopia_. ]

The utterances of the Fathers of the Church on property are scatteredand disconnected. Nevertheless, there is sufficient cohesion in themto enable us to form an opinion of their teaching on the subject. Ithas, as we have said, frequently been asserted that they favoureda system of communism, and disapproved of private ownership. Thesupporters of this view base their arguments on a number of isolatedtexts, taken out of their context, and not interpreted with any regardto the circumstances in which they were written. 'The mistake, ' asDevas says, [1] 'of representing the early Christian Fathers of theChurch as rank socialists is frequently made by those who are friendlyto modern socialism; the reason for it is that either they have takenpassages of orthodox writers apart from their context, and withoutdue regard to the circumstances in which they were written, and themeaning they would have conveyed to their hearers; or else, by agrosser blunder, the perversions of heretics are set forth as thedoctrine of the Church, and a sad case arises of mistaken identity. ' Acareful study of the patristic texts bearing on the subject leads oneto the conclusion that Mr. Devas's view is without doubt the correctone. [2]

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

[Footnote 2: Dr. Hogan, in an article entitled 'The Fathers of theChurch and Socialism, ' in the _Irish Ecclesiastical Record_, vol. Xxv. P. 226, has examined all the texts relative to property in thewritings 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 'TheAlleged Socialism of the Church Fathers, ' by Dr. John A. Ryan. The patristic texts are also fully examined by Abbé Calippe in 'LeCaractère sociale de la Propriété' in _La Semaine Sociale de France_, 1909, p. 111. The conclusion come to after thorough examinations suchas these is always the same. For a good analysis of the patristictexts from the communistic standpoint, see Conrad Noel, _Socialism inChurch History_. ]

The passages from the writings of the Fathers which are cited bysocialists who are anxious to support the proposition that socialismformed part of the early Christian teaching may be roughly dividedinto four groups: first, passages where the abandonment of earthlypossessions is held up as a work of more than ordinary devotion--inother words, a counsel of perfection; second, those where the practiceof almsgiving is recommended in the rhetorical and persuasive languageof the missioner--where the faithful are exhorted to exercise theircharity to such a degree that it may be said that the rich and thepoor have all things in common; third, passages directed againstavarice and the wrongful acquisition or abuse of riches; and fourth, passages where the distinction between the natural and positive law onthe matter is explained. 

The following passage from Cyprian is a good example of an utterancewhich was clearly meant as a counsel of perfection. Isolated sentencesfrom this passage have frequently been quoted to prove that Cyprianwas an advocate of communism; but there can be no doubt from thepassage as a whole, that all that he was aiming at was to cultivate inhis followers a high detachment from earthly wealth, and that, in sofar as complete abandonment of one's property is recommended, it issimply indicated as a work of quite unusual devotion. It is noteworthythat this passage occurs in a treatise on almsgiving, a practice whichpresupposes a system of individual ownership:[1] 'Let us consider whatthe congregation of believers did in the time of the Apostles, whenat the first beginnings the mind flourished with greater virtues, whenthe faith of believers burned with a warmth of faith yet new. Thusthey sold houses and farms, and gladly and liberally presented tothe Apostles the proceeds to be dispersed to the poor; selling andalienating their earthly estate, they transferred their lands thitherwhere they might receive the fruits of an eternal possession, andthere 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 ofthe things which he possessed was his own; but they had all thingscommon. " This is truly to become son of God by spiritual birth; thisis to imitate by the heavenly law the equity of God the Father. Forwhatever is of God is common in our use; nor is any one excluded fromHis benefits and His gifts so as to prevent the whole human race fromenjoying equally the divine goodness and liberality. Thus the dayequally enlightens, the sun gives radiance, the rain moistens, thewind blows, and the sleep is one to those who sleep, and the splendourof Stars and of the Moon is common. In which examples of equality hewho as a possessor in the earth shares his returns and his fruitswith the fraternity, while he is common and just in his gratuitousbounties, 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 iscapable of the same interpretation. In his commentary on thealleged communistic existence of the Apostles at Jerusalem the Saintemphasises the fact that their communism was voluntary: 'That this wasin consequence not merely of the miraculous signs, but of theirown purpose, is manifest from the case of Ananias and Sapphira. ' Hefurther insists on the fact that the members of this community wereanimated by unusual fervour: 'From the exceeding ardour of thegivers none was in want. ' Further down, in the same homily, St. JohnChrysostom 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 morallypreferable to a proprietary one. [1]

[Footnote 1: _Hom, on Acts xi_. That voluntary poverty was regardedas a counsel of perfection by Aquinas is abundantly clear from manypassages 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 everyother point, the teaching of Aquinas is in line with that of theFathers. ]

The second class of patristic texts which are relied on by socialistsare, as we have said, those 'where the practice of almsgivingis recommended in the rhetorical and persuasive language of themissioner--where the faithful are exhorted to exercise their charityto such a degree that it may be said that the rich and poor have allthings in common. ' Such passages are very frequent throughout thewritings of the Fathers, but we may give as examples two, which aremost 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 tothe poor, this mercy is justice. "He hath dispersed, he hath givento the poor; his righteousness endureth for ever. "[2] It is thereforeunjust that one should not be helped by his neighbour; when God hathwished the possession of the earth to be common to all men, and itsfruits to minister to all; but avarice established possessory rights. It is therefore just that if you lay claim to anything as your privateproperty, which is really conferred in common to the whole human race, that you should dispense something to the poor, so that you may notdeny nourishment to those who have the right to share with you. ' Thefollowing passage from Gregory the Great[3] is another example ofthis kind of passage: 'Those who rather desire what is another's, norbestow that is their own, are to be admonished to consider carefullythat the earth out of which they are taken is common to all men, andtherefore brings forth nourishment for all in common. Vainly, then, do they suppose themselves innocent who claim to their own privateuse the common gift of God; those who in not imparting what they havereceived walk in the midst of the slaughter of their neighbours; sincethey almost daily slay so many persons as there are dying poor whosesubsidies 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 iscomposed of the numerous attacks which the Fathers levelled againstthe abuse or wrongful acquisition of riches. These passages do notindicate that the Fathers favoured a system of communism, but pointin precisely the contrary direction. If property were an evil thingin itself, they would not have wasted so much time in emphasising theevil uses to which it was sometimes put. The insistence on the abusesof an institution is an implicit admission that it has its uses. Thus Clement of Alexandria devotes a whole treatise to answering thequestion 'Who is the rich man who can be saved?' in which it appearsquite plainly that it is the possible abuse of wealth, and thepossible too great attachment to worldly goods, that are the principaldangers in the way of a rich man's salvation. The suggestion thatin order to be saved a man must abandon all his property is stronglycontroverted. The following passage from St. Gregory Nazianzen[1]breathes the same spirit: 'One of us has oppressed the poor, andwrested from him his portion of land, and wrongly encroached upon hislandmarks by fraud or violence, and joined house to house, and fieldto field, to rob his neighbour of something, and has been eager tohave no neighbour, so as to dwell alone on the earth. Another hasdefiled the land with usury and interest, both gathering where he hasnot sowed and reaping where he has not strewn, farming not the landbut the necessity of the needy. .. . Another has had no pity on thewidow and orphans, and not imparted his bread and meagre nourishmentto the needy; . .. A man perhaps of much property unexpectedly gained, for this is the most unjust of all, who finds his very barns toonarrow for him, fining some and emptying others to build greater onesfor future crops. ' Similarly Clement of Rome advocates _frugality_in the enjoyment of wealth;[2] and Salvian has a long passage on thedangers 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 betweenthe natural and positive law on the matter is explained. It is herethat the greatest confusion has been created by socialist writers, whoconclude, because they read in the works of some of the Fathers thatprivate property did not exist by natural law, that it was thereforecondemned by them as an illegitimate institution. Nothing could bemore erroneous. All that the Fathers meant in these passages was thatin the state of nature--the idealised Golden Age of the pagans, or theGarden of Eden of the Christians--there was no individual ownership ofgoods. The very moment, however, that man fell from that ideal state, communism became impossible, simply on account of the change that hadtaken place in man's own nature. To this extent it is true to saythat the Fathers regarded property with disapproval; it was one of theinstitutions rendered necessary by the fall of man. Of course it wouldhave been preferable that man should not have fallen from his naturalinnocence, in which case he could have lived a life of communism;but, as he had fallen, and communism had from that moment becomeimpossible, property must be respected as the one institution whichcould put a curb on his avarice, and preserve a society of fallen menfrom chaos and general rapine. 

That this is the correct interpretation of the patristic utterancesregarding property and natural law appears from the followingpassage of _The Divine Institution_ of Lactantius--'the most explicitstatement bearing on the Christian idea of property in the first fourcenturies':[1] '"They preferred to live content with a simple modeof life, " as Cicero relates in his poems; and this is peculiar to ourreligion. "It was not even allowed to mark out or to divide the plainwith a boundary: men sought all things in common, "[2] since God hadgiven the earth in common to all, that they might pass their life incommon, not that mad and raging avarice might claim all things foritself, 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 suggestingthe idea that individuals at that time had no private property, but itmust be regarded as a poetical figure, that we may understand thatmen were so liberal, that they did not shut up the fruits of the earthproduced for them, nor did they in solitude brood over the thingsstored 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 opento all. Nor did avarice intercept the divine bounty, and thus causehunger and thirst in common; but all alike had abundance, since theywho had possessions gave liberally and bountifully to those who hadnot. But after Saturnus had been banished from heaven, and had arrivedin Latium . .. Not only did the people who had a superfluity failto bestow a share upon others, but they even seized the property ofothers, drawing everything to their private gain; and the things whichformerly even individuals laboured to obtain for the common use of allwere now conveyed to the powers of a few. For that they might subdueothers by slavery, they began to withdraw and collect together thenecessaries of life, and to keep them firmly shut up, that they mightmake the bounties of heaven their own; not on account of kindness(_humanitas_), a feeling which had no existence for them, but thatthey might sweep together all the instruments of lust and avarice. '[4]

[Footnote 1: 'The Biblical and Early Christian Idea of Property, ' byDr. 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 inwhich a system of communism existed as long since vanished, if indeedit ever had existed. The same idea emerges from the writings of St. Augustine, who drew a distinction between divine and human right. 'Bywhat right does every man possess what he possesses?' he asks. [1] 'Isit 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, thishouse is mine. By human right, therefore, is by right of the Emperor. Why so? Because God has distributed to mankind these very human rightsthrough the emperors and kings of the world. '

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

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

The correct meaning of the patristic distinction between natural andpositive law with regard to property is excellently summarised in Dr. Carlyle's essay on _Property in Mediæval Theology_:[1] 'What do theexpressions of the Fathers mean? At first sight they might seem to bean assertion of communism, or denunciation of private property as athing which is sinful or unlawful. But this is not what the Fathersmean. There can be little doubt that we find the sources of thesewords in such a phrase as that of Cicero--"Sunt autem privata nullanatura"[2]--and in the Stoic tradition which is represented in one ofSeneca's letters, when he describes the primitive life in which menlived together in peace and happiness, when there was no system ofcoercive government and no private property, and says that man passedout of this primitive condition as their first innocence disappeared, as they became avaricious and dissatisfied with the common enjoymentof the good things of the world, and desired to hold them as theirprivate possession. [3] Here we have the quasi-philosophical theory, from which the patristic conception is derived. When men wereinnocent there was no need for private property, or the other greatconventional institutions of society, but as this innocence passedaway, they found themselves compelled to organise society and todevise institutions which should regulate the ownership and use ofthe good things which men had once held in common. The institution ofproperty thus represents the fall of man from his primitive innocence, through greed and avarice, which refused to recognise the commonownership of things, and also the method by which the blind greed ofhuman nature might be controlled and regulated. It is this ambiguousorigin of the institution which explains how the Fathers could holdthat private property was not natural, that it grew out of men'svicious and sinful desires, and at the same time that it was alegitimate institution. '

Janet takes the same view of the patristic utterances on thissubject:[4] 'What do the Fathers say? It is that in Jesus Christ thereis no mine and thine. Nothing is more true, without doubt; in thedivine order, in the order of absolute charity, where men arewholly wrapt up in God, distinction and inequality of goods would beimpossible. But the Fathers saw clearly that such a state of thingswas not realisable here below. What did they do? They establishedproperty on human law, positive law, imperial law. Communism iseither a Utopia or a barbarism; a Utopia if one imagine it founded onuniversal 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 theFathers of private property is purely negative or solely derived fromthe interpretation of possibly ambiguous texts. On the contrary, the lawfulness of property is emphatically asserted on more than oneoccasion. 'To possess riches, ' says Hilary of Poictiers, [1] 'is notwrongful, but rather the manner in which possession is used. .. . Itis a crime to possess wrongfully rather than simply to possess. ' 'Whodoes not understand, ' asks St. Augustine, [2] 'that it is not sinful topossess riches, but to love and place hope in them, and to prefer themto truth or justice?' Again, 'Why do you reproach us by saying thatmen renewed in baptism ought no longer to beget children or topossess fields and houses and money? Paul allows it. '[3] According toAmbrose, [4] 'Riches themselves are not wrongful. Indeed, "redemptioanimae* viri divitiae* ejus, " because he who gives to the poor saveshis soul. There is therefore a place for goodness in these materialriches. You are as steersmen in a great sea. He who steers his shipwell, quickly crosses the waves, and comes to port; but he who doesnot know how to control his ship is sunk by his own weight. Whereforeit is written, "Possessio divitum civitas firmissima. "' A Council inA. D. 415 condemned the proposition held by Pelagius that 'the richcannot 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 thatproperty was regarded by them as one of the normal and legitimateinstitutions of human society. Benigni's conclusion, as the result ofhis exceptionally thorough researches, is that according to the earlyFathers, 'property is lawful and ought scrupulously to be respected. But property is subject to the high duties of human fellowship whichsprang from the equality and brotherhood of man. Collectivism isabsurd and immoral. '[1] Janet arrived at the same conclusion: 'Inspite of the words of the Fathers, in spite of the advice given byChrist to the rich man to sell all his goods and give to the poor, inspite of the communism of the Apostles, can one say that Christianitycondemned property? Certainly not. Christianity considered it acounsel of perfection for a man to deprive himself of his goods; itdid not abrogate the right of anybody. '[2] The same conclusion isreached by the Abbé Calippe in an excellent article published in _LaSemaine Sociale de France_, 1909. 'The right of property and of theproperty owner are assumed. '[3] 'It is only prejudiced or superficialminds which could make the writers of the fourth century theprecursors 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 thesubject of property is not at all out of harmony with that of theearlier Fathers of the Church, but, on the contrary, summarises andconsolidates it. 'It remained to elaborate, to constitute a definitetheory of the right of property. It sufficed to harmonise, tocollaborate, and to relate one to the other these elements furnishedby the Christian doctors of the first four or five centuries; and thiswas 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 mediumof St. Isidore more than their vocabulary, their formulas, theirjuridical distinctions; he also borrowed from Aristotle the argumentsupon which the philosopher based his right of property. But the groundof his doctrine is undoubtedly of Christian origin. There is, betweenthe Fathers and him, a perfect continuity. '[1] 'Community of goods, 'he writes, 'is ascribed to the natural law, not that the naturallaw dictates that all things should be possessed in common, and thatnothing should be possessed as one's own; but because the division ofpossession is not according to the natural law, but rather arose fromhuman agreement, which belongs to positive law. Hence the ownershipof possessions is not contrary to the natural law, but an additionthereto devised by human reason. ' This is simply another way ofstating St. Augustine's distinction between natural and positive law. If it speaks with more respect of positive law than St. Augustinehad done, it is because Aquinas was influenced by the Aristotelianconception of the State being itself a natural institution, owing toman being a social animal. [2]

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

[Footnote 2: See Carlyle, _Property in Mediæval Theology_. Communityof goods is said to be according to natural law in the canon law, but certain titles of acquiring private property are also said to benatural, 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 propertyalso shows how clearly he agreed with the Fathers' teaching on naturalcommunism: 'Two things are competent to man in respect of externalthings. One is the power to procure and dispense them, and in thisregard it is lawful for a man to possess property. Moreover, this isnecessary to human life for three reasons. First, because every man ismore careful to procure what is for himself alone than that which iscommon to many or to all: since each one would shirk the labour, andwould leave to another that which concerns the community, as happenswhen there is a great number of servants. Secondly, because humanaffairs are conducted in more orderly fashion if each man is chargedwith taking care of some particular thing himself, whereas therewould be confusion if everybody had to look after any one thingindeterminately. Thirdly, because a more peaceful state is ensured toman if each one is contented with his own. Hence it is to be observedthat quarrels more frequently occur when there is no division of thethings possessed. [1] It is quite clear from this passage that Aquinasregarded property as something essential to the existence of societyin the natural condition of human nature--that is to say, thecondition that it had acquired at the fall. It is precisely the greedand avarice of fallen man that renders property an indispensableinstitution. 

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

There was another sense in which property was said to be accordingto human law, in distinction to the natural law, namely, in the sensethat, whereas the general principle that men should own things mightbe said to be natural, the particular proprietary rights of eachindividual 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. Thisdistinction is stated clearly by Aquinas:[1] 'The natural right orjust is that which by its very nature is adjusted to or commensuratewith another person. Now this may happen in two ways; first, accordingas it is considered absolutely; thus the male by its very nature iscommensurate with the female to beget offspring by her, and a parentis commensurate with the offspring to nourish it. Secondly, a thingis naturally commensurate with another person, not according as itis considered absolutely, but according to something resultant fromit--for instance, the possession of property. For if a particularpiece of land be considered absolutely, it contains no reason why itshould belong to one man more than to another, but if it be consideredin respect of its adaptability to cultivation, and the unmolested useof the land, it has a certain commensuration to be the property ofone and not of another man, as the Philosopher shows. ' Cajetan'scommentary on this article clearly emphasises the distinction between_fundamentum_ and _titulus_: 'In the ownership of goods two things areto be discussed. The first is why one thing should belong to one manand another thing to another. The second is why this particular fieldshould belong to this man, that field to that man. With regard tothe former inquiry, it may be said that the ownership of things isaccording to the law of nations, but with regard to the second, it maybe said to result from the positive law, because in former times onething was appropriated by one man and another thing by another. ' Itmust not be supposed, however, from what we have just said, that thereare no natural titles to property. Labour, for instance, is a titleflowing from the natural law, as also is occupancy, and in certaincircumstances, prescription. All that is meant by the distinctionbetween _fundamentum_ and _titulus_ is that, whereas it can be clearlydemonstrated by natural law that the goods of the earth, which aregiven by God for the benefit of the whole of mankind, cannot be madeuse of to their full advantage unless they are made the subject ofprivate ownership, particular goods cannot be demonstrated to bethe lawful property of this or that person unless some human acthas intervened. This human act need not necessarily be an act ofagreement; 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 owngoods. In the latter case, the additional value of the goods becomesthe lawful property of the person who has exerted the labour. Aquinastherefore pronounced unmistakably in favour of the legitimacy ofprivate property, and in doing so was in full agreement with theFathers of the Church. He was followed without hesitation by all thelater theologians, and it is abundantly evident from their writingsthat the right of private property was the keystone of their wholeeconomic system. [2]

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

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

Communism therefore was no part of the scholastic teaching, but itmust not be concluded from this that the mediævals approved of theunregulated individualism which modern opinion allows to the owners ofproperty. The very strength of the right to own property entailed as aconsequence the duty of making good use of it; and a clear distinctionwas drawn between the power 'of procuring and dispensing' propertyand the power of using it. We have dealt with the former power in thepresent section, and we shall pass to the consideration of the latterin the next. In a later chapter we shall proceed to discuss the dutieswhich 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 importantdistinction which Aquinas draws between the power of procuring anddispensing[1] exterior things and the power of using them. 'The secondthing that is competent to man with regard to external things is theiruse. In this respect man ought to possess external things, not as hisown, but as common, so that, to wit, he is ready to communicate themto others in their need. '[2] These words wherein St. Thomas laysdown the doctrine of community of user of property were consideredas authoritative by all later writers on the subject, and wereuniversally quoted with approval by them, [3] and may therefore betaken as expressing the generally held view of the Middle Ages. Theyrequire careful explanation in order that their meaning be accuratelyunderstood. [4] Cajetan's gloss on this section of the _Summa_ enablesus to understand its significance in a broad sense, but fullerinformation must be derived from a study of other parts of the _Summa_itself. 'Note, ' says Cajetan, 'that the words that community of goodsin respect of use arises from the law of nature may be understoodin two ways, one positively, the other negatively. And if they areunderstood in their positive sense they mean that the law of naturedictates that all things are common to all men; if in their negativesense, that the law of nature did not establish private ownership ofpossessions. And in either sense the proposition is true if correctlyunderstood. In the first place, if they are taken in their positivesense, a man who is in a position of extreme necessity may takewhatever he can find to succour himself or another in the samecondition, nor is he bound in such a case to restitution, because bynatural law he has but made use of his own. And in the negative sensethey are equally true, because the law of nature did not instituteone thing the property of one person, and another thing of anotherperson. ' The principle of community of user flows logically from thevery nature of property itself as defined by Aquinas, who taught thatthe supreme justification of private property was that it was themost advantageous method of securing for the community the benefits ofmaterial riches. While the owner of property has therefore an absoluteright to the goods he possesses, he must at the same time rememberthat this right is established primarily on his power to benefithis neighbour by his proper use of it. The best evidence of thecorrectness of this statement is the fact that the scholasticsadmitted that, if the owner of property was withholding it from thecommunity, or from any member of the community who had a real need ofit, he could be forced to apply it to its proper end. If the communitycould pay for it, it was bound to do so; but if the necessitous personcould 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 thatthe 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 usualapplication of the principle enunciated by Aquinas was in the caseof one person's extreme necessity which required almsgiving fromanother's superfluity, but, even short of such cases, there were rulesof conduct in respect of the user of property on all occasions whichwere 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 constantesollicitude, et dont le second évoque l'image d'une générositésympathetique' (_Autaur du Catholicisme Sociale_, vol. Ii. P. 93). ]

[Footnote 2: II. Ii. 66, 2. In another part of the _Summa_ the samedistinction is clearly laid down. 'Bona temporalia quae* hominidivinitus conferuntur, ejus quidem sunt quantum ad proprietatem; sedquantum ad usum non solum desent esse ejus, sed aliorum qui en eissustentari 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 asfollows: 'Le droit de propriété est un droit réel; mais ce n'est pasun droit illimité, les propriétaires ont des devoirs; ils ont desdevoirs parce que Dieu qui a créé la terre ne l'a pas créée pour euxseuls, 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 thethirteenth and fifteenth centuries in the case of their own estates, see Ardant, _Papes et Paysans_, a work which must be read with acertain degree of caution (Nitti, _Catholic Socialism_, p. 290). ]

These principles for the guidance of the owner of property arenot collected under any single heading in the _Summa_, but must begathered from the various sections dealing with man's duty to hisfellow-men and to himself. One leading virtue which was inculcatedwith great emphasis by Aquinas was that of temperance. 'Allpleasurable things which come within the use of man, ' we read in thesection dealing with this subject, 'are ordered to some necessity ofthis life as an end. And therefore temperance accepts the necessityof 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 liferequires. '[1] St. Thomas explains, moreover, that 'necessary' must betaken in the broad sense of suitable to one's condition of life, and not merely necessary to maintain existence. [2] The principles oftemperance did not apply in any special way to the user of propertymore than to the enjoyment of any other good;[3] but they are relevantas laying down the broad test of right and wrong in the user of one'sgoods. 

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

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

[Footnote 1: 'Rationalis creaturae* vera perfectio est unamquamquerem 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 ofAquinas on liberality, which is a virtue directly connected with theuser of property. Aquinas defines liberality as 'a virtue by whichmen use well all those exterior things which are given to us forsustenance. '[1] The limitations within which liberality should bepractised are stated in the same article: 'As St. Basil and St. Ambrose say, God has given to many a superabundance of riches, inorder that they might gain merit by their dispensing them well. Fewthings, however, suffice for one man; and therefore the liberal manwill advantageously expend more on others than on himself. In thespiritual sphere a man must always care for himself before hisneighbours; and also in temporal things liberality does not demandthat a man should think of others to the exclusion of himself andthose 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 muchof one's riches that not enough remains to sustain himself and toenable him to perform works of virtue. This complete giving awaywithout reserve belongs to the state of the perfection of spirituallife, of which we shall treat lower down; but it must be known that togive one's goods liberally is an act of virtue which itself produceshappiness. '[1] The author proceeds to discuss whether making use ofmoney might be an act of liberality, and replies that 'as money is byits very nature to be classed among useful goods, because all exteriorthings are destined for the use of man, therefore the proper act ofliberality is the good use of money and other riches. '[2] Moreover, 'it belongs to a virtuous man not simply to use well the goods whichform the matter of his actions, but also to prepare the means and theoccasions to use them well; thus the brave soldier sharpens his bladeand keeps it in the scabbard, as well as exercising it on the enemy;in like manner, the liberal man should prepare and reserve his richesfor a suitable use. '[3] It appears from this that to save part ofone's annual income to provide against emergencies in the future, either by means of insurance or by investing in productiveenterprises, 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 etcustodire modificata sunt acta liberalitatis. .. . Major per hocprobatur quod dantem multotiens et consumentem, nihil autemaccipientem et custodientem cito derelinqueret substantia temporalis;et ita perirent omnis ejus actus quia non habent amplius quid dareet consumere. .. . Hic autem acceptio et custodia sic modificari debet. Primo quidem oportet ut non sit injusta; secundo quod non sit decupiditate vel avaritia suspecta propter excessum; tertio quod nonpermittat labi substantiam propter defectum . .. Dare quando oportet etcustodire quando oportet dare contrariantur; sed dare quando oportetet custodire quando oportet non contrariantur' (Buridan, _Eth. _, iv. 2). ]

The question is then discussed whether liberality is a part ofjustice. Aquinas concludes 'that liberality is not a speciesof justice, because justice renders to another what is his, butliberality gives him what is the giver's own. Still, it has a certainagreement with justice in two points; first that it is to another, as justice also is; secondly, that it is about exterior things likejustice, though in another way. And therefore liberality is laid downby some to be a part of justice as a virtue annexed to justice as anaccessory to a principal. '[1] Again, 'although liberality supposes notany legal debt as justice does, still it supposes a certain moral debtconsidering what is becoming in the person himself who practises thevirtue, not as though he had any obligation to the other party;and therefore there is about it very little of the character of adebt. '[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 indistributing 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 forinvestment would be considered a course of conduct within the meaningof the word _liberalitas_, especially if the enterprise in which themoney were invested were one which would benefit the community asa whole. 'Modern industrial conditions demand that a man of wealthshould distribute a part of his goods indirectly--that is, byinvesting 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 clearlyunderstood 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 intwo ways--by harbouring an undue desire of acquiring wealth, or byan undue reluctance to part with it--'primo autem superabundantin retinendo . .. Secundo ad avaritiam pertinet superabundare inaccipiendo. '[1] These definitions are amplified in another part of thesame section. 'For in every action that is directed to the attainmentof some end goodness consists in the observance of a certain measure. The means to the end must be commensurate with the end, as medicinewith health. But exterior goods have the character of things needfulto an end. Hence human goodness in the matter of these goods mustconsist in the observance of a certain measure, as is done by a manseeking to have exterior riches in so far as they are necessary to hislife according to his rank and condition. And therefore sin consistsin exceeding this measure and trying to acquire or retain richesbeyond the due limit; and this is the proper nature of avarice, which is defined to be an immoderate love of having. '[2] 'Avarice mayinvolve immoderation regarding exterior things in two ways; in one wayimmediately as to the receiving or keeping of them when one acquiresor keeps beyond the due amount; and in this respect it is directly asin against one's neighbour, because in exterior things one man cannothave superabundance without another being in want, since temporalgoods cannot be simultaneously possessed by many. The other way inwhich avarice may involve immoderation is in interior affection. .. . 'These words must not be taken to condemn the acquisition of largefortunes by capitalists, which is very often necessary in order thatthe natural resources of a country may be properly exploited. Oneman's possession of great wealth is at the present day frequently themeans of opening up new sources of wealth and revenue to the entirecommunity. In other words, superabundance is a relative term. This, like many other passages of St. Thomas, must be given a _contemporaneaexpositio_. 'There were no capitalists in the thirteenth century, butonly 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 ina man in one station of life would not be considered such in a man inanother. So long as one did not attempt to acquire an amount of wealthdisproportionate to the needs of one's station of life, one could notbe considered avaricious. Thus a common soldier would be avaricious ifhe strove to obtain a uniform of the quality worn by an officer, anda simple cleric if he attempted to clothe himself in a style onlybefitting a bishop. [1]

[Footnote 1: Aquinas, _In Orat. Dom. Expos_. , iv. Ashley gives manyquotations 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, seeBaudrillard, _Histoire du Luxe privé et publique_, vol. Iii. Pp. 630_et seq. _]

The avaricious man offended against liberality by caring too muchabout riches; the prodigal, on the other hand, cared too little aboutthem, and did not attach to them their proper value. 'In affectionwhile the prodigal falls short, not taking due care of them, inexterior behaviour it belongs to the prodigal to exceed in giving, butto fail in keeping or acquiring, while it belongs to the miser tocome short in giving, but to superabound in getting and inkeeping. Therefore it is clear that prodigality is the opposite ofcovetousness. '[1] A man, however, might commit both sins at the sametime, by being unduly anxious to acquire wealth which he distributedprodigally. [2] Prodigality could always be distinguished from extremeliberality by a consideration of the circumstances of the particularcase; a truly liberal man might give away more than a prodigal incase of necessity. [3] Prodigality, though a sin, was a sin of a lessgrievous 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 habitumquo quis præter vel contra dictamen rectae rationis circapecunias excedit in datione vel consumptione vel custodia; et perilliberalitatem intelligimus habitum quo quis contra dietamen rectaerationis deficit circa pecunias in datione vel consumptione, velsuperabundat in acceptione vel custodia ipsarum' (Buridan, _Eth. _, iv. 3). ]

In addition to the duties which were imposed on the owners of propertyin all circumstances there was a further duty which only arose onspecial occasions, namely, _magnificentia_, or munificence. Thisvirtue is discussed by Aquinas[1], but we shall quote the passages ofBuridan which explain it, not because they depart in any way from theteaching of Aquinas, but because they are clearer and more scientific. 'By munificence, we understand a habit inclining one to theperformance of great works, or to the incurring of great expenses, when, where, and in the manner in which they are called for (_fueritopportunum_), for example, building a church, assembling greatarmies for a threatened war, and giving splendid marriage feasts. ' Heexplains that 'munificence stands in the same relation to liberalityas bravery acquired by its exercise in danger of death in battle doesto bravery simply and commonly understood. ' Two vices stand opposedto munificentia: (1) _parvificentia_, 'a habit inclining one notto undertake great works, when circumstances call for them, or toundertaking less, or at less expense, than the needs of the situationdemand, ' and (2) (_[Greek: banousia]_, ) 'a habit inclining one toundertaking great works, which are not called for by circumstances, or undertaking them on a greater scale or at a greater expense than isnecessary[2]. '

[Footnote 1: II. Ii. 134. ]

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

Both in the case of avarice and prodigality the offending stateof mind consisted in attaching a wrong value to wealth, and theinculcation of the virtue of liberality must have been attendedwith good results not alone to the souls of individuals, but to theeconomic condition of the community. The avaricious man not onlyimperilled his own soul by attaching too much importance to temporalgain, but he also injured the community by monopolising too large ashare of its wealth; the prodigal man, in addition to incurringthe occasion of various sins of intemperance, also impoverished thecommunity by wasting in reckless consumption wealth which might havebeen devoted to productive or charitable purposes. He who neglectedthe duty of munificence, either by refusing to make a greatexpenditure when it was called for (_parvificentia_) or by making onewhen it was unnecessary (_[Greek: banousia]_) was also deemed to havedone wrong, because in the one case he valued his money too highly, and in the other not highly enough. In other words, he attached awrong value to wealth. Nothing could be further from the truth thanthe suggestion that the schoolmen despised or belittled temporalriches. Quite on the contrary, they esteemed it a sin to conductoneself in a manner which showed a defective appreciation of theirvalue[1]. Riches may have been the occasion of sin; but so waspoverty. 'The occasions of sin are to be avoided, ' says Aquinas, 'butpoverty is an occasion of evil, because theft, perjury, and flatteryare frequently brought about by it. 

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

Therefore poverty should not be voluntarily undertaken, but ratheravoided. '[1] Buridan says: 'There is no doubt that it is much moredifficult to be virtuous in a state of poverty than in one of moderateaffluence;'[2] and Antoninus of Florence expresses the opinion thatpoverty is in itself an evil thing, although out of it good maycome. [3] Even the ambition to rise in the world was laudable, becauseevery one may rightfully desire to place himself and his dependants ina participation of the fullest human felicity of which man is capable, and to rid himself of the necessity of corporal labour. [4] Avarice andprodigality alike offended against liberality, because they tended todeprive the community of the maximum benefit which it should derivefrom the wealth with which it was endowed. Dr. Cunningham may bequoted in support of this view. 'One of the gravest defects of theRoman Empire lay in the fact that its system left little scope forindividual aims, and tended to check the energy of capitalists andlabourers alike. But Christian teaching opened up an unending prospectbefore the individual personally, and encouraged him to activity anddiligence by an eternal hope. Nor did such concentration of thoughton a life beyond the grave necessarily divert attention from secularduties; Christianity did not disparage them, but set them in a newlight, and brought out new motives for taking them seriously. .. . The acceptance of this higher view of the dignity of human lifeas immortal was followed by a fuller recognition of personalresponsibility. Ancient philosophy had seen that man is the master ofmaterial things; but Christianity introduced a new sense of duty inregard to the manner of using them. .. . Christian teachers were forcedto protest against any employment of wealth that disregarded the gloryof God and the good of man. '[5] It was the opinion of Knies thatthe peculiarly Christian virtues were of profound economic value. 'Temperance, thrift, and industry--that is to say, the sun and rain ofeconomic activity---were recommended by the Church and inculcated asChristian virtues; idleness as the mother of theft, gambling as theoccasion of fraud, were forbidden; and gain for its own sake wasclassed 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 geschichtlichenMethode_, p. 116, and see Rambaud, _Histoire_, p. 759; Champagny, _LaBible et l'Economie politique_; Thomas Aquinas, _Summa_, II. Ii. 50, 3; Sertillanges, _Socialisme et Christianisme_, p. 53. It wasnevertheless recognised and insisted on that wealth was not an end initself, but merely a means to an end (Aquinas, _Summa_, I. Ii. 2, 1). ]

The great rule, then, with regard to the user of property wasliberality. Closely allied with the duty of liberality was the dutyof almsgiving--'an act of charity through the medium of money. '[1]Almsgiving is not itself a part of liberality except in so far asliberality removes an obstacle to such acts, which may arise fromexcessive love of riches, the result of which is that one clingsto them more than one ought[2]. Aquinas divides alms-deeds into twokinds, spiritual and corporal, the latter alone of which concern ushere. 'Corporal need arises either during this life or afterwards. Ifit occurs during this life, it is either a common need in respectof things needed by all, or is a special need occurring through someaccident supervening. In the first case the need is either internalor external. Internal need is twofold: one which is relieved by solidfood, viz. Hunger, in respect of which we have to _feed the hungry_;while the other is relieved by liquid food, viz. Thirst, in respectof which we have to _give drink to the thirsty_. The common need withregard to external help is twofold: one in respect of clothing, and asto this we have to _clothe the naked_; while the other is inrespect of a dwelling-place, and as to this we have to _harbour theharbourless_. Again, if the need be special, it is either the resultof an internal cause like sickness, and then we have to _visit thesick_, 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 ofalmsgiving arises. 'Almsgiving is a matter of precept. Since, however, precepts are about acts of virtue, it follows that all almsgiving mustbe 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 demandsthat we should take into consideration something on the part of thegiver, and something on the part of the recipient. On the part of thegiver it must be noted that he must give of his surplus according toLuke xi. 4, "That which remaineth give alms. " This surplus is to betaken in reference not only to the giver, but also in reference tothose of whom he has charge (in which case we have the expression_necessary to the person_, taking the word _person_ as expressiveof dignity). .. . On the part of the recipient it is necessary that heshould 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 needsof all, we are not bound to relieve all who are in need, but onlythose who could not be succoured if we did not succour them. For insuch cases the words of Ambrose apply, "Feed him that is dying ofhunger; if thou hast not fed him thou hast slain him. " Accordinglywe are bound to give alms of our surplus, as also to give alms to onewhose need is extreme; otherwise almsgiving, like any other greatergood, is a matter of counsel. '[4] In replying to the objection that itis lawful for every one to keep what is his own, St. Thomas restateswith emphasis the principle of community of user: 'The temporal goodswhich are given us by God are ours as to the ownership, but as to theuse of them they belong not to us alone, but also to such others as weare 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 giveout of his superfluities is a mere act of justice, because he israther then steward of them for the poor than the owner;'[6] and at anearlier date St. Peter Damian had affirmed that 'he who gives to thepoor returns what he does not himself own, and does not dispose of hisown goods. ' He insists in the same passage that almsgiving is notan act of mercy, but of strict justice. [7] In the reply to anotherobjection the duty of almsgiving is stated by Aquinas with additionalvigour. 'There is a time when we sin mortally if we omit to givealms--on the part of the recipient when we see that his need isevident and urgent, and that he is not likely to be succouredotherwise--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 withprobability. '[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 togive alms out of what one needs. He distinguishes between two kindsof 'necessaries. ' The first is that without which existence isimpossible, out of which kind of necessary things one is not bound togive alms save in exceptional cases, when, by doing so, one would behelping a great personage or supporting the Church or the State, since'the common good is to be preferred to one's own. ' The second kindof necessaries are those things without which a man cannot live inkeeping with his social station. St. Thomas recommends the giving ofalms out of this part of one's estate, but points out that it is onlya matter of counsel, and not of precept, and one must not give almsto such an extent as to impoverish oneself permanently. To this lastprovision, however, there are three exceptions: one, when a man isentering religion and giving away all his goods; two, when he caneasily replace what he gives away; and, three, when he is in presenceof great indigence on the part of an individual, or great need on thepart of the common weal. In these three cases it is praiseworthy fora man to forgo the requisites of his station in order to provide for agreater 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 hisextreme need even at the risk of grave inconvenience to himself; (2) aman is obliged to help another who, though not in extreme need, is yetin considerable distress, but not at the risk of grave inconvenienceto himself; (3) a man is not obliged to help another when necessity isslight, 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 thesection where Aquinas lays down that the person to whom alms shouldhave been given may, if the owner of the goods neglects his duty, repair the omission himself. 'All things are common property in acase of extreme necessity. Hence one who is in dire straits may takeanother's goods in order to succour himself if he can find no one whois willing to give him something. '[1] The duty of using one's goodsfor the benefit of one's neighbours was a fit matter for enforcementby the State, provided that the burdens imposed by legislation wereequitable. '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 isto say, when the law that is made does not exceed the power of thelaw-giver--and from their form, when, to wit, burdens are laid on thesubjects according to an equality of proportion and with a view to thecommon good. For, since every man is part of the community, each manin all that he is and has belongs to the community: just as a part inall that it is belongs to the whole; wherefore nature inflicts a losson the part in order to save the whole; so that on this account suchlaws, which impose proportionate burdens, are just and binding inconscience. '[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 ofcommunity of user, in its proper sense, made for social stability. Thefollowing passage from Trithemius, written at the end of the fifteenthcentury, is interesting as showing how consistently the doctrine ofSt. Thomas was adhered to two hundred years after his death, andalso that the failure of the rich to put into practice the moderatecommunism of St. Thomas was the cause of the rise of the hereticalcommunists, who attacked the very foundations of property itself: 'Letthe rich remember that their possessions have not been entrusted tothem in order that they may have the sole enjoyment of them, butthat they may use and manage them as property belonging to mankind atlarge. Let them remember that when they give to the needy theyonly give them what belongs to them. If the duty of right use andmanagement of property, whether worldly or spiritual, is neglected, ifthe rich think that they are the sole lords and masters of that whichthey possess, and do not treat the needy as their brethren, theremust of necessity arise an inner shattering of the commonwealth. Falseteachers and deceivers of the people will then gain influence, as hashappened in Bohemia, by preaching to the people that earthly propertyshould be equally distributed among all, and that the rich mustbe forcibly condemned to the division of their wealth. Then followlamentable conditions and civil wars; no property is spared; no rightof ownership is any longer recognised; and the wealthy may thenwith justice complain of the loss of possessions which have beenunrighteously taken from them; but they should also seriously askthemselves the question whether in the days of peace and order theyrecognised in the administration of these goods the right of theirsuperior 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 communityof user advocated by the scholastics had anything in common with thecommunism recommended by modern Socialists. As we have seen above, the scholastic communism did not at all apply to the procuring anddispensing 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 Rambaudputs it: 'Les devoirs de charité, d'équité naturelle, et de simpleconvenance sociale peuvent affecter, ou mieux encore, commander uncertain usage de la richesse; mais ce n'est pas le même chose quelimiter la propriété. '[1] The community of user of the scholastics wasdistinguished from that of modern Socialists not less strongly by themotives which inspired it than by the effect it produced. The formerwas dictated by high spiritual aims, and the contempt of materialgoods; 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 noauthority in Christian teaching for the proposition, advanced by manyChristian Socialists, that property is a 'social function' (_ibid. _, p. 774). The right of property even carried with it the _jusabutendi_, which, however, did not mean the right to _abuse_, butthe right to destroy by consumption (see Antoine, _Cours d'Economiesociale_, p. 526). ]

[Footnote 2: Roscher, _op. Cit. _, p. 5: 'Vom neuern Socialismusfreilich unterscheidet sich diese Auffassung nicht blosz durch ihrereligiöse Grundlage, sondern auch durch ihre, jedem Mammonsdienstentgegengesetze, Verachtung der materiellen Güter. ']

The large estates which the Church itself owned have frequently beenpointed to as evidence of hypocrisy in its attitude towards the commonuser of property. This is not the place to inquire into the conditionof ecclesiastical estates in the Middle Ages, but it is sufficientto say that they were usually the centres of charity, and that in theopinion of so impartial a writer as Roscher, they rather tended tomake the rules of using goods for the common use practicable than thecontrary. [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 aparticular kind of property right, namely, that of one human beingover another. At the present day the idea of one man being ownedby another is repugnant to all enlightened public opinion, but thisgeneral repugnance is of very recent growth, and did not exist inmediæval Europe. In dealing with the scholastic attitude towardsslavery, we shall indicate, as we did with regard to its attitudetowards property in general, the fundamental harmony between theteaching of the primitive and the mediæval Church on the subject. Noapology is needed for this apparent digression, as a comparison of theteaching of the Church at the two periods of its development helps usto understand precisely what the later doctrine was; and, moreover, the close analogy which, as we shall see, existed between the Church'sview of property and slavery, throws much light on the true nature ofboth institutions. 

Although in practice Christianity had done a very great deal tomitigate the hardships of the slavery of ancient times, and had ina large degree abolished slavery by its encouragement ofemancipation, [1] it did not, in theory, object to the institutionitself. There is no necessity to labour a point so universallyadmitted by all students of the Gospels as that Christ and HisApostles did not set out to abolish the slavery which they foundeverywhere around them, but rather aimed, by preaching charity tothe master and patience to the slave, at the same time to lighten theburden of servitude, and to render its acceptance a merit ratherthan a disgrace. 'What, in fact, ' says Janet, 'is the teaching ofSt. Peter, St. Paul, and the Apostles in general? It is, in the firstplace, that in Christ there are no slaves, and that all men are freeand equal; and, in the second place, that the slave must obey hismaster, and the master must be gentle to his slave. [2] Thus, althoughthere are no slaves in Christ, St. Paul and the Apostles do not denythat there may be on earth. I am far from reproaching the Apostles fornot having proclaimed the immediate necessity of the emancipation ofslaves. But I say that the question was discussed in precisely thesame terms by the ancient philosophers of the same period. Seneca, itis true, proclaimed not the civil, but the moral equality of men;but St. Paul does not speak of anything more than their equality inChrist. Seneca instructs the master to treat the slave as he wouldlike 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? Thesuperiority of Christianity over Stoicism in this question arisesaltogether from the very superiority of the Christian spirit. .. . '[4]The article on 'Slavery' in the _Catholic Encyclopædia_ expresses thesame opinion: 'Christian teachers, following the example of St. Paul, implicitly accept slavery as not in itself incompatible with theChristian law. The Apostle counsels slaves to obey their masters, and to bear with their condition patiently. This estimate of slaverycontinued to prevail until it became fixed in the systematised ethicalteaching of the schools; and so it remained without any conspicuousmodification until the end of the eighteenth century. ' The sameinterpretation of early Christian teaching is accepted by theProtestant scholar, Dr. Bartlett: 'The practical attitude of Senecaand the early Christians to slavery was much the same. They bade theindividual rise to a sense of spiritual freedom in spite of outwardbondage, rather than denounce the institution as an altogetherillegitimate 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. OfWallon's _Histoire de l'Esclavage dans l'Antiquité_. ]

Several texts might be collected from the writings of the Fatherswhich would seem to show that according to patristic teaching theinstitution of slavery was unjustifiable. We do not propose to citeor to explain these texts one by one, in view of the quite clear andunambiguous exposition of the subject given by St. Thomas Aquinas, whose teaching is the more immediate subject of this essay; we shallcontent ourselves by reminding the reader of the precisely similartexts relating to the institution of property which we have examinedabove, and by stating that the corresponding texts on the subjectof slavery are capable of an exactly similar interpretation. 'Theteaching of the Apostle, ' says Janet, 'and of the Fathers on slaveryis the same as their teaching on property. '[1] The author from whom weare quoting, and on whose judgment too much reliance cannot be placed, then proceeds to cite many of the patristic texts on property, whichwe quoted in the section dealing with that subject, and asks: 'Whatconclusion should one draw from these different passages? It is thatin Christ there are no rich and no poor, no mine and no thine; thatin Christian perfection all things are common to all men, but thatnevertheless property is legitimate and derived from human law. Is itnot in the same sense that the Fathers condemned slavery as contraryto divine law, while respecting it as comformable to human law? TheFathers abound in texts contrary to slavery, but have we not seen agreat number of texts contrary to property?'[2] The closeness of theanalogy between the patristic treatment of slavery and of propertyappears forcibly in the following passage of Lactantius: 'God whocreated man willed that all should be equal. He has imposed on allthe same condition of living; He has produced all in wisdom; He haspromised immortality to all; no one is cut off from His heavenlybenefits. In His sight no one is a slave, no one a master; for if wehave 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, noone rich but he who is full of virtue. .. . Some one will say, Are therenot among you some poor and others rich; some servants and othersmasters? Is there not some difference between individuals? There isnone, nor is there any other cause why we mutually bestow on eachother the name of brethren except that we believe ourselves to beequal. For since we measure all human things not by the body but bythe spirit, although the condition of bodies is different, yet we haveno servants, but we both regard them, and speak of them as brothers inspirit, in religion as fellow-servants. '[3] Slavery was declared tobe a blessing, because, like poverty, it afforded the opportunity ofpractising the virtues of humility and patience. [4] The treatmentof the institution of slavery underwent a striking and importantdevelopment in the hands of St. Augustine, who justified it as one ofthe penalties incurred by man as a result of the sin of Adam and Eve. 'The first holy men, ' writes the Saint, 'were rather shepherds thankings, God showing herein what both the order of the creation desired, and what the deserts of sin exacted. For justly was the burden ofservitude laid upon the back of transgression. And therefore in allthe Scriptures we never read the word _servus_ until Noah laid it asa 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 andthe first cause of man's subjection to man. '[5] St. Augustine alsojustifies the enslavement of those conquered in war--'It is God'sdecree to humble the conquered, either reforming their sins herein orpunishing 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. Augustinemade in the treatment of slavery: 'In this theory we must note thefollowing points: (1) Slavery is unjust according to the law ofnature. This is what is contrary to the teaching of Aristotle, but conformable to that of the Stoics. (2) Slavery is just asa consequence of sin. This is the new principle peculiar to St. Augustine. He has found a principle of slavery, which is neithernatural inequality, nor war, nor agreement, but sin. Slavery is nomore a transitory fact which we accept provisionally, so as not toprecipitate a social revolution: it is an institution which has becomenatural as a result of the corruption of our nature. (3) It must notbe said that slavery, resulting from sin, is destroyed by Christ whodestroyed sin. .. . Slavery, according to St. Augustine, must last aslong as society. '[1]

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

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

He fully adopts the Augustinian argument in the _Summa_, where, inanswer to the query, whether in the state of innocence all men wereequal, he states that even in that state there would still have beeninequalities of sex, knowledge, justice, etc. The only inequalitieswhich would not have been present were those arising from sin; butthe only inequality arising from sin was slavery. [1] 'By the words"So long as we are without sin we are equal, " Gregory means to excludesuch inequality as exists between virtue and vice; the result of whichis that some are placed in subjection to others as a penalty. '[2] Inthe following article St. Thomas distinguishes between political anddespotic subordination, and shows that the former might have existedin a state of innocence. 'Mastership has a twofold meaning; first asopposed to servitude, in which case a master means one to whomanother is subject as a slave. In another sense mastership is commonlyreferred to any kind of subject; and in that sense even he who has theoffice of governing and directing free men can be called a master. Inthe first meaning of mastership man would not have been ruled by manin the state of innocence; but in the latter sense man would be ruledover by man in that state. '[3] In _De Regimine Principum_ Aquinas alsoaccepts what we may call the Augustinian view of slavery. 'But whetherthe dominion of man over man is according to the law of nature, or ispermitted or provided by God may be certainly resolved. If we speak ofdominion by means of servile subjection, this was introduced becauseof sin. But if we speak of dominion in so far as it relates to thefunction of advising and directing, it may in this sense be said to benatural. '[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 theauthorship 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 thejustice of Aristotle's reasoning on the subject. In the section of the_Summa_ where the question is discussed, whether the law of nations isthe same as the natural law, one of the objections to be met is that'Slavery among men is natural, for some are naturally slaves accordingto the philosopher. Now "slavery belongs to the law of nations, " asIsidore states. Therefore the right of nations is a natural right. '[1]In answer to this objection St. Thomas draws the distinction betweenwhat is natural absolutely, and what is natural _secundum quid_, thepassage 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 aslave rather than another man, is based, not on natural reason, but onsome resultant utility, in that it is useful to this man to be ruledby a wise man, and to the latter to be helped by the former, as thephilosopher states. Wherefore slavery which belongs to the law ofnations is natural in the second way, but not in the first. '[3] Itwill be noted from this passage that St. Thomas partly admits, thoughnot entirely, the opinion of Aristotle. In the _De RegiminePrincipum_ he goes much further in the direction of adopting the fullAristotelian theory: 'Nature decrees that there should be grades inmen as in other things. We see this in the elements, a superior andan inferior; we see in every mixture that some one elementpredominates. .. . For we see this also in the relation of the body andthe mind, and in the powers of the mind compared with one another;because some are ordained towards ordering and moving, such as theunderstanding and the will; others to serving. So should it be amongmen; and thus it is proved that some are slaves according to nature. Some lack reason through some defect of nature; and such ought to besubjected to servile works because they cannot use their reason, andthis is called the natural law. '[4] In the same chapter the right ofconquerors 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 onecan 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 jurisconsultthat slavery is the result of war and convention. '[1] 'The authorjustifies slavery, ' says Franck, 'in the name of St. Augustine, and inthat of Aristotle; in the name of the latter by showing that there aretwo races of men, one born to command, and the other to obey; inthe name of the former in affirming that slavery had its origin inoriginal sin; that by sin man has forfeited his right to liberty. Further, we must admit slavery as an institution not only of natureand one of the consequences of the fall, we must admit a thirdprinciple of slavery which appears to St. Thomas as legitimate as theother two. War is necessary; therefore it is just; and if it is justwe must accept its consequences. One of these consequences is theabsolute right of the conqueror over the life, person, and goods ofthe 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, whichis interesting as showing that he continued to make use of the analogybetween slavery and property which we have seen in the Fathers. 'Athing is said to belong to the natural law in two ways. First, because nature inclines thereto, _e. G. _ that one should not do harm toanother. Secondly, because nature did not bring in the contrary; thuswe might say that for man to be naked is of the natural law becausenature did not give him clothes, but art invented them. In this sensethe possession of all things in common and universal freedom issaid to be of the natural law, because, to wit, the distinction ofpossession and slavery were not brought in by nature, but devised byhuman reason for the benefit of human life. Accordingly, the law ofnature 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 thesubject of slavery. 'What does Ægidius do? He unites Aristotle and St. Augustine against human liberty. He declares with the latter that manhas lost the right of belonging to himself, since he has fallen fromthe primitive order established by God Himself in nature. He admitswith Aristotle the existence of two races of men, the one designedfor liberty, the other for servitude. .. . This is not all--to thisservitude which he calls natural, the author joins another, purelylegal, but which does not seem to him less just, namely, that which isfounded on the right of war, and which obliges the conquered to becomethe slaves of the conquerors--to give up their liberty in exchange fortheir lives. Our author admits it is just in itself, because in hisopinion it is useful to the defence of one's country; it exciteswarriors to courage by placing before their eyes the terribleconsequences of cowardice. '[1] The teachings of St. Thomas and Ægidiuswere accepted by all the later scholastics. [2] Biel, whose opinion isalways very valuable as being that of the last of a long line, saysthat there are three kinds of slaves--slaves of God, of sin, and ofman. The first kind of slavery is wholly good, the second wholly bad, while the third, though not instituted by, is approved by the _jusgentium_. He proceeds to state the four ways in which a man maybecome enslaved: namely, _ex necessitate_, or by being born of a slavemother; _ex bello_, by being captured in war; _ex delicto_, orby sentence of the law in the case of certain crimes committed byfreedmen; and _ex propria voluntate_, or by the sale of a man ofhimself 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 qualuorlibros 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 servileclasses, and, at the time that Aquinas wrote, thanks to the operationof Christianity in this respect, the old Roman slavery had completelydisappeared. The nearest approach to ancient slavery in the MiddleAges was serfdom, which was simply a step in the transition fromslavery to free labour. [1] Moreover, the rights of the master overthe slave were strictly confined to the disposal of his services; theancient absolute right over his body had completely disappeared. 'Inthose things, ' says St. Thomas, 'which appertain to the dispositionof human acts and things, the subject is bound to obey his superioraccording to the reason of the superiority; thus a soldier must obeyhis officer in those things which appertain to war; a slave his masterin those things which appertain to the carrying out of his servileworks. '[2] 'Slavery does not abolish the natural equality of man, 'says a writer who is quoted by the _Catholic Encyclopædia_ ascorrectly stating the Catholic doctrine on the subject prior to theeighteenth century, 'hence by slavery one man is understood to becomesubject to the dominion of another to the extent that the master hasa perfect right to the services which one man may justly performfor another. '[3] Biel, who lays down the justice of slavery sounambiguously, is no less clear in his statement of the limitationsof the right. 'The body of the slave is not simply in the power of themaster as the body of an ox is; nor can the master kill or mutilatethe slave, nor abuse him contrary to the law of God. The temporalgains derived from the labour of the slave belong to the master;but the master is bound to provide the slave with the necessaries oflife. '[4] Rambaud very properly points out that the reason that thescholastic writers did not fulminate in as strong and as frequentlanguage against the tyranny of masters, was not that they felt lessstrongly on the subject, but that the abuses of the ancient slavesystem had almost entirely disappeared under the influence ofChristian 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 beensuggested, 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 thearticle on justice where Aquinas says that 'inducing a slave to leavehis master is properly an injury against the person . .. And, since theslave is his master's chattel, it is referred to theft. '[1]

[Footnote 1: II. Ii. 61, 3. Brants, _op. Cit. _, pp. 87 _et seq_. , isinclined to take a more liberal view of the scholastic doctrine onslavery, but we cannot agree with him in view of the contemporarytexts. ]

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 toproperty in respect of its acquisition and use, and we now pass tothe duties which attached to it in respect of its exchange. As weindicated above, the right to exchange one's goods for the goods orthe money of another person was, according to the scholastics, one ofthe necessary corollaries of the right of private property. In orderthat such exchange might be justifiable, it must be conducted on a. Basis of commutative justice, which, as we have seen, consisted in theobservance of equality according to the arithmetical mean. We furtherdrew attention to the fact that exchanges might be divided intosales of goods and sales of the use of money. In the former case theregulating principle of the equality of justice was given effect toby the observance of the _just price_; in the latter by that of the_prohibition of usury_. We shall deal with the former in the presentand with the latter in the following section. 

The mediæval teaching on the just price, about which there has been somuch discussion and disagreement among modern writers, was simply theapplication to the particular contract of sale of the principles whichregulated contracts in general. Exchange originally took the formof barter; but, as it was found impossible accurately to measurethe values of the objects exchanged without the intervention ofsome common measure of value, money was invented to serve as such ameasure. We need not further refer to barter in this section, as theprinciples which applied to it were those that applied to sale. Indeedall sales when analysed are really barter through the medium ofmoney. That Aquinas simply regarded his article on just price[1] as anexplanation of the application of his general teaching on justice tothe particular case of the contract of sale is quite clear from thearticle itself. 'Apart from fraud, we may speak of buying and sellingin two ways. First, as considered in themselves; and from this pointof view buying and selling seem to be established for the commonadvantage of both parties, one of whom requires that which belongsto the other, and _vice versa_. Now whatever is established for thecommon advantage should not be more of a burden to one part than tothe other, and consequently all contracts between them should observeequality of thing and thing. Again, the quality of a thing thatcomes into human use is measured by the price given for it, for whichpurpose money was invented. Therefore, if either the price exceed thequantity of the thing's worth, or conversely the worth of the thingexceed the price, there is no longer the equality of justice; andconsequently to sell a thing for more than its worth, or to buy it forless than its worth, is in itself unjust and unlawful. '[2] When twocontracting parties make an exchange through the medium of money, the price is the expression of the exchange value in money. 'Thejust price expresses the equivalence, which is the foundation ofcontractual 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: 'Sipretium excedit quantitatem valoris rei, vel e converso tollereturequalitas, erit contractus iniquus. ']

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

The conception of the just price, though based on Aristotelianconceptions of justice, is essentially Christian. The Roman law hadallowed the utmost freedom of contract in sales; apart from fraud, the two contracting parties were at complete liberty to fix a priceat their own risk; and selfishness was assumed and allowed to be theanimating motive of every contracting party. The one limitation tothis sweeping rule was in favour of the seller. By a rescript ofDiocletian and Maximian it was enacted that, if a thing were soldfor 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, someauthors contended that it applied only to sales of land, because theexample given was the sale of a farm. [1] However, the rescript wasquoted by the Fathers as showing that even the Roman law consideredthat contracts might be questioned on equitable grounds in certaincases. [2] The distinctively Christian notion of just price seems tohave its origin in a passage of St. Augustine;[3] but the notion wasnot placed on a philosophical foundation until the thirteenth century. Even Aquinas, however, although he treats of the just price at somelength, and expresses clear and categorical opinions upon many pointsconnected with it, does not state the principles on which the justprice itself should be arrived at. This omission is due, not to thefact that Aquinas was unfamiliar with these principles, but to thefact that he took them for granted as they were not disputed ordoubted. [4] We have consequently to look for enlightenment upon thispoint in writings other than those of Aquinas. The subject can be mostsatisfactorily understood if we divide its treatment into two parts:first, a consideration of what constituted the just price in the saleof an article, the price of which was fixed by law; and second, aconsideration of what constituted the just price of an article, theprice 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 cerneretvenditorem, justum pretium, quod multo amplius erat nec opinantidedisse' (_De Trin. _, xiii. 3). ]

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

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

Regarding the power of the State to fix prices, the theologians andjurists were in complete agreement. According to Gerson: 'The lawmay justly fix the price of things which are sold, both movable andimmovable, in the nature of rents and not in the nature of rents, andfeudal and non-feudal, below which price the seller must not give, orabove which the buyer must not demand, however they may desire to doso. As therefore the price is a kind of measure of the equality to beobserved in contracts, and as it is sometimes difficult to find thatmeasure with exactitude, on account of the varied and corrupt desiresof man, it becomes expedient that the medium should be fixed accordingto the judgment of some wise man. .. . In the civil state, however, nobody is to be decreed wiser than the lawgiving authority. Thereforeit behoves the latter, whenever it is possible to do so, to fix thejust price, which may not be exceeded by private consent, and whichmust be enforced. '. .. [1] Biel practically paraphrases this passage ofGerson, and contends that it is the duty of the prince to fix prices, mainly on account of the difficulty which private contractors find indoing 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 infixing prices are very interesting, as they show that the mediævalwriters had a clear idea of the constituent elements of value. Langenstein, whose famous work on contracts was considered of highauthority by later writers, says that the prince should take accountof the condition of the place for which the price was to be fixed, thecircumstances of the time, the condition of the mass of the people. The different kinds of need which may be felt for goods must alsobe considered, _indigentice naturæ_, _status_, _voluptatis_, and_cupiditatis_; and a distinction drawn between extensive and intensiveneed--the former is greater 'quanto plures re aliqua indigent, ' thelatter 'quanto minus de illa re habetur. ' The general rule is that theprince must seek to find a medium between a price so low as to renderlabourers, artisans, and merchants unable to maintain themselvessuitably, and one so high as to disable the poor from obtaining thenecessaries of life. When in doubt, Langenstein concludes, the priceshould err on the low rather than the high side. [1] Biel gives similarrules: The legislator must regard the needs of man, the abundance orscarcity of things, the difficulty, labour, and risks of production. When all these things are carefully considered the legislator is in aposition to fix a just price. [2] According to Endemann, the labour ofproduction, the cost and risk of transport, and the condition ofthe markets had all to be kept in mind when a fair price was beingfixed. [3] We may mention in passing that the power of fixing the justprice might be delegated; prices were frequently fixed by the townauthorities, 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, _PoliticalEconomy_, s. 114. ]

The passage from Gerson which we quoted above shows that, when a justprice had been fixed by the competent authority, the parties toa contract were bound to keep to it. In other words, the _pretiumlegitimum_ was _ipso facto_ the _justum pretium_. On this point thereis 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 beenfixed, the contracting parties have sufficient certainty about theequality of value and the justice of the price. '[2] Cossa drawsattention to the necessity of the fixed price corresponding withthe real price in order that it should maintain its validity. 'Theschoolmen talk of the legitimate and irreducible price of a thingwhich was fixed by authority, and was for obvious reasons of specialimportance in the case of the necessaries of life. .. . The legitimateprice of a thing as fixed by authority had to be based upon thenatural price, and therefore lost its validity and became a deadletter 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 buyerand seller had to arrive at it themselves. The problem before them wasto equalise their respective burdens, so that there would be equalityof burden between them, or, in other words, to reduce the value of thearticle sold to terms of money. In order that we may understand howthis equality was arrived at, it is important to know the factorswhich were held to enter into the determination of value. 

The first thing upon which the mediæval teachers insist is that valueis not determined by the intrinsic excellence of the thing itself, because, if it were, a fly would be more valuable than a pearl, asbeing intrinsically more excellent. [1] Nor is the value to be measuredby the mere utility of the object for satisfying the material needsof man, for in that case, corn should be worth more than preciousstones. [2] The value of an object is to be measured by its capacityfor satisfying men's wants. 'Valor rerum aestimatur secundum humanamindigentiam. .. . Dicendum est quod indigentia humana est mensuranaturalis commutabilium; quod probatur sic: bonitas sive valor reiattenditur ex fine propter quem exhibetur: unde commentator secundoMetaphysicae _nihil est bonum nisi propter causas finales_; sed finisnaturalis ad quem justitia commutativa ordinet exteriora commutabiliaest supplementum indigentiae humanae. .. ; igitur supplementumindigentiae humanae est vera mensura commutabilium. Sed supplementumvidetur mensurari per indigentiam; majoris enim valoris estsupplementum quod majorem supplet indigentiam. .. . Item hoc probatursigno, quia videmus quod illo tempore quo vina deficiunt quia magisindigeremus eis ipsa fiunt cariora. .. . [3]

[Footnote 1: 'In justitia commutativa non estimatur pretiumcommutabilium secundum naturalem valorem ipsorum, sic enim musca plusvaleret quam totus aurum mundi' (Buridan, _op. Cit. _, v. 14). ]

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

[Footnote 3: Buridan, _op. Cit. _, v. 14 and 16. Antoninus of Florencesays 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 bemeasured by its capacity for satisfying the needs of this or thatindividual, but by its capacity for satisfying the needs of theaverage member of the community. [1] The Abbé Desbuquois, in thearticle from which we have already quoted, finds in this elevation ofthe common estimation an illustration of the general principle of themediævals, which we have seen at work in their teaching on the use ofproperty, that the individual benefit must always be subordinated tothe general welfare. According to him, it is but one application ofthe 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 allowingit as a means of life necessary to everybody, nature does not losesight of the universal destination of economic goods. One conceivesthen that the variations of exchange are not permitted to be leftto the arbitrary judgment of a single man, nor to be affected by thewhims and abuses of individuals; that value is defined in view of thegeneral good. The exchange value, as it is in the general or socialorder, proceeds from the judgment of the social environment (_milieusocial_). '[2]

[Footnote 1: 'Indigentia istius hominis vel illius non mensuratvalorem commutabilium; sed indigentia communis eorum qui inter secommutare possunt, ' Buridan, _op. Cit. _, v. 16. 'Prout communitervenditur in foro, ' Henri de Gand, _Quod Lib. _, xiv. 14; Nider, _DeCont. 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 theelements which invest an object with the value which is accorded toit by the general estimation. In Aquinas we find certain elementsrecognised--'diversitas loci vel temporis, labor, raritas'--but it isnot until the authors of the fourteenth and fifteenth centuries thatwe find a systematic treatment of value. [1] First and foremost thereis the cost of production of the article, especially the wages of allthose who helped to produce it. Langenstein lays down that every onecan determine for himself the just price of the wares he has to sellby reckoning what he needs to support himself in the status which heoccupies. [2] According to the _Catholic Encyclopædia_, [3] thejust price of an article included enough to pay fair wages to theworker--that is, enough to enable him to maintain the standard ofliving of his class. This, though not stated in so many wordsby Aquinas, was probably assumed by him as too obvious to needrepetition. [4] 'The cost of production of manufactured products, ' saysBrants, 'is a legitimate constituent element of value; it is accordingto the cost that the producer can properly fix the value of hisproduct 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 theonly factor which was admitted to enter into the determination ofvalue. The passage from Gerson dealing with the circumstances to whichthe prince must have regard in fixing a price, which we quoted above, shows quite clearly that many other factors were recognised as noless important. This appears with special clearness in the treatiseof Langenstein, whose authority on this subject was always ranked veryhigh. Bernardine of Siena is careful to point out that the expense ofproduction is only one of the factors which influence the value of anobject. [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 thelabour of production, and to the state of the market, and the othercircumstances which we have seen above the prince was bound to haveregard to in fixing a price. He also allows the price to be raised onaccount of any anxiety which the production of the goods occasionedhim, or any danger he incurred. [2]

[Footnote 1: 'Res potest plus vel minus valere tribus modis; primosecundum suam virtutem; secondo modo secundum suam caritatem; tertiomodo secundum suam placibilitatem et affectionem. .. . Primo observatquemdam naturalem ordinem utilium rerum, secundo observat quemdamcommunem cursum copiae et inopiae, tertio observat periculum etindustriam 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, whereasthe remuneration of the labour of all those who were engaged in theproduction of an article, was one of the elements to be taken intoaccount in reckoning its value, and consequently its just price, it was by no means the only element. Certain so-called Christiansocialists have endeavoured to find in the writings of the scholasticssupport for the Marxian position that all value arises from labour. [1]This endeavour is, however, destined to failure; we shall see in alater chapter that many forms of unearned income were tolerated andapproved by the scholastics; but all that is necessary here is to drawthe attention of the reader to the passages on value to which we havereferred. One of the most prominent exponents of the untenable viewthat the mediævals traced all value to labour is the Abbé Hohoff, whose argument that there was a divorce between value and just pricein the scholastic writings, is ably controverted by Rambaud, whoremarks that nobody would have been more surprised than Aquinashimself at the suggestion that he was the forerunner of Karl Marx. [2]

[Footnote 1: Even Ashley states that 'the doctrine had thus a closeresemblance to that of modern Socialists; labour it regarded both asthe sole (human) cause of wealth, and also as the only just claim tothe 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 expendedon production is rejected by many of the most prominent writers onmediæval economic theory. Roscher draws particular attention to thefact that the canonist teaching assigned the correct proportions inproduction to land, capital, and labour, in contrast to all the laterschools of economists, who have exaggerated the importance of one orthe other of these factors. [1] Even Knies, who was the first modernwriter to insist on the importance of the cost of production as anelement of value, states that the Church sought to fix the price ofgoods in accordance with the cost of production (_Herstellungskosten_)_and_ the consumption value (_Gebrauchswerte_). [2] Brants takes thesame view. 'The expenses of production are in practice the norm of thefixing of the sale price in the great majority of cases, above allin a very narrow market, where competition is limited; moreover, theycan, for reasons of public order, form the basis of a fixing thatwill protect the producer and the consumer against the disastrousconsequences of constant oscillations. The vendor can in principlebe remunerated for his trouble. It is well that he should be soremunerated; it is socially useful, and is used as a basis for fixingprice; but it cannot in any way be said that this forms the _objectivemeasure of value_, but that the work and expense are a sufficienttitle of remuneration for the fixing of the just price of the saleof a thing. Some writers have tried to conclude from this that theauthors of the Middle Ages saw in labour the measure of value. Thisconclusion is exaggerated. We may fully admit that this elemententers into the sale price; but it is in no way the general measureof value. .. . The expenses of production constitute, then, _one_ ofthe legitimate elements of just price; they are not the _measure_ ofvalue, but a factor often influencing its determination. '[3] 'Labour, 'according to Dr. Cronin, 'is one of the most important of all thedeterminants of value, for labour is the chief element in cost ofproduction, and cost of production is one of the chief elements indetermining the level at which it is useful to buy or sell. But labouris not the only determinant of value; there is, _e. G. _, the price ofthe raw materials, a price that is not wholly determined by the labourof producing those materials. '[4]

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

[Footnote 2: _Politische Oekonomie vom Standpuncte der geschichtlichenMethode_, 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 tobe the price that was in accordance with the _communis estimatio_. Of course, this did not mean that a plebiscite had to be taken beforeevery sale, but that any price that was in accordance with the generalcourse of dealing at the time and place of the sale was consideredsubstantially fair. 'A thing is worth what it can generally be soldfor--at the time of the contract; this means what it can be sold forgenerally either on that day or the preceding or following day. Onemust look to the price at which similar things are generally soldin the open market. '[1] 'We must state precisely, ' says the AbbéDesbuquois, 'the character of this common estimation; it did not meanthe universal suffrage; although it expresses the universal interest, it proceeds in practice from the evaluation of competent men, takenin the social environment where the exchange value operates. If onesupposes a sovereign tribunal of arbitration where all the rightsof all the weak and all the strong economic factors are taken intoaccount, the just price appears as the sentence or decision of thiscourt. '[2] 'For the scholastics, the common estimation meant anethical judgment of at least the most influential members ofthe community, anticipating the markets and fixing the rate ofexchange. '[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 themediæval just price was in no way different from the competitionprice of to-day which is arrived at by the higgling of the market. Dr. Cunningham is very explicit and clear on this point. 'Commonestimation is thus the exponent of the natural or normal or just priceaccording to either the mediæval or modern view; but, whereas we relyon the higgling of the market as the means of bringing out what is thecommon estimate of any object, mediæval economists believed that itwas possible to bring common estimation into operation beforehand, and by the consultation of experts to calculate out what was the justprice. If common estimation was thus organised, either by the townauthorities or guilds or parliament, it was possible to determinebeforehand what the price should be and to lay down a rule to thiseffect; in modern times we can only look back on the competitionprices 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 wasexpressed chiefly in custom, while the social estimate of to-day isin reality an unconscious resultant of the higgling of the market, andfinds its expression only in market price. '[2] The phrase 'res tantivalet quanti vendi potest, ' which is so often used to prove thatthe mediæval doctors permitted full competitive prices in the modernsense, must be understood to mean that a thing could be sold at anyfigure which was within the limits of the minimum and maximum justprice. [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 andunalterable standard, but was somewhat wide and elastic. On this allwriters are agreed. 'The just price of things, ' says Aquinas, 'is notfixed with mathematical precision, but depends on a kind of estimate, so that a slight addition or subtraction would not seem to destroythe equality of justice, '[1] Caepolla repeats this dictum, with thereservation that, when the just price is fixed by law, it must berigorously observed. [2] 'Note, ' says Gerson, 'that the equality ofcommutative justice is not exact or unchangeable, but has a good dealof latitude, within the bounds of which a greater or less price maybe given without justice being infringed;'[3] and Biel insists on thesame latitude, from which he draws the conclusion that the just priceis constantly varying from day to day and from place to place. [4]Generally it was said that there was a maximum, medium, and minimumjust price; and that any price between the maximum and minimum wasvalid, 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 beobserved in most cases, and it was at all times a safe guide tofollow. If, however, the parties either knew or had good reason tobelieve that the common estimation had fixed the price wrongly, they were not bound to follow it, but should arrive at a justprice themselves, having regard to the various considerations givenabove. [1]

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

It did not make any difference whether the price was paid immediatelyor at some future date. To increase the price in return for the givingof credit was not allowed, as it was deemed usurious--as indeed itwas. 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 toreceive anything more than the sum lent would be usury. Aquinas isquite clear on this point. 'If a man wish to sell his goods at ahigher price than that which is just, so that he may wait for thebuyer to pay, it is manifestly a case of usury; because this waitingfor the payment of the price has the character of a loan, so thatwhatever he demands beyond the just price in consideration of thisdelay, is like a price for a loan, which pertains to usury. In likemanner, if a buyer wishes to buy goods at a lower price than what isjust, for the reason that he pays for the goods before they canbe delivered, it is likewise a sin of usury; because again thisanticipated payment of money has the character of a loan, the price ofwhich is the rebate on the just price of the goods sold. On the otherhand, if a man wishes to allow a rebate on the just price in orderthat he may have his money sooner, he is not guilty of the sin ofusury. '[1] If, however, the seller, by giving credit, suffered anydamage, he was entitled to be recompensed; this, as we shall see, wasan ordinary feature of usury law. It could not be said that the pricewas raised. The price remained the same; but the seller was entitledto something further than the price by way of damages. [2] It wasby the application of this principle that a seller was justified indemanding more than the current price for an article which possessedsome individual or sentimental value for him. 'In such a case the justprice will depend not only on the thing sold, but on the loss whichthe 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 otherhand, it was strictly forbidden to raise the price on account of theindividual need of the buyer. [4]

[Footnote 1: II. Ii. 78, 2, ad. 7. See _Decret. Greg. _, v. 19, _deusuris_, 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 ofcertain classes of goods. These need not be treated in detail, as theywere merely applications of the general principle to particular cases, and whatever interest they possess is in the domain of practice ratherthan of theory. In the sale of immovable property the rule was thatthe value should be arrived at by a consideration of the annual fruitsof the property. [1] The only one of the particular contracts whichneed detain us here is that of a contract of service for wages(_locatio operarum_). Wages were considered as ruled by the lawsrelating to just price. 'That is called a wage (_merces_) which ispaid 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 fromanother person, so also to pay the wages of work and labour is an actof justice. '[2] Again, 'Remuneration of service or work . .. Can bepriced at a money value, as may be seen in the case of those who offerfor hire the labour which they exercise by work or by tongue. '[3] Bielinsists that the value of labour is subject to the same influences asthe value of any other commodity which is offered for sale, and thattherefore a just price must be observed in buying it. [4]

[Footnote 1: Caepolla, _de Cont. Sim. _, 78; Carletus, _SummaAngelica_, 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 thecorrect principle 'that labour is a commodity' into 'the labourer isa commodity'--a great difference, which is not sufficiently understoodby many present-day writers. (See Roscher, _Political Economy_, s. 160. )]

This, according to Brants, [1] is essentially a matter upon which moreenlightenment 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 regardedas the duty of employers to give such a wage as would support theworker in accordance with the requirements of his class. In thegreat majority of cases the rate of wages was fixed by somepublic--municipal or corporative--authority, but Langensteinenunciates a rule which seems to approach the statement of a generaltheory. According to him, when a man has something to sell, and hasno indication of the just price from its being fixed by any outsideauthority, he must endeavour to get such a price as will _reasonably_recompense him for any outlay he may have incurred, and will enablehim to provide for his needs, spiritual and temporal. [3] It was notuntil the sixteenth century that the fixing of the just price ofwages was submitted to scientific discussion;[4] in the fourteenthand fifteenth centuries there is little to be found bearing on thissubject except the passage of Langenstein which we have quoted, andsome strong exhortations by Antoninus of Florence to masters to paygood wages. [5] The reason for this paucity of authority upon a subjectof so much importance is that in practice the machinery providedby the guilds had the effect of preserving a substantially justremuneration to the artisan. When a man is in perfect health hedoes not bother to read medical books. In the same way, the properremuneration of labour was so universally recognised as a duty, and sosatisfactorily enforced, that it seems to have been taken for granted, and therefore passed over, by the writers of the period. One may agreewith Brants in concluding that, 'the principle of just price in saleswas applied to wages; fluctuations in wages were not allowed; the justprice, as in sales, rested on the approximate equality of the servicesrendered; and that this equality was estimated by common opinion. '[6]Of course, in the case of slave labour it could not be said that anywage was paid. The master was entitled to the services of the slave, and in return was bound to furnish him with the necessaries oflife. [7]

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

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

[Footnote 3: _De Cont. _ We have here a recognition of the principlethat the value of labour is not to be measured by anything extrinsicto itself, _e. G. _ by the value of the product, but by its own naturalfunction and end, and this function and end is the supplying of therequirements of human life. The wage must, therefore, be capable ofsupplying the same needs that the expenditure of a labourer's energyis 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 thesubject 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 justprice was negative rather than positive; in other words, that it didnot so much aim at positively fixing the price at which goods shouldbe sold, as negatively at indicating the practices in buying andselling which were unjust. 'The doctrine of just price, ' according toDr. Ryan, 'may sometimes have been associated with incorrect viewsof industrial life, but all competent authorities agree that it was afairly sound attempt to define the equities of mediæval exchanges, and that it was tolerably successful in practice. '[1] The conditionof mediæval markets was frequently such that the competition was notreally fair competition, and consequently the price arrived atby competition would be unfair either to buyer or seller. 'This, 'according to Dr. Cunningham, 'was the very thing which mediævalregulation had been intended to prevent, as any attempt to make gainout of the necessities of others, or to reap profit from unlooked-foroccurrences would have been condemned as extortion. It is by takingadvantage of such fluctuations that money is most frequently made inmodern times; but the whole scheme of commercial life in theMiddle Ages was supposed to allow of a regular profit on eachtransaction. '[2] There might be some doubt as to the positive justiceof this or that price; but there could be no doubt as to the injusticeof a price which was enhanced by the necessities of the poor, or theengrossing of a vital commodity. [3] Merely to buy up the whole supplyof a certain commodity, even if it were bought up by a 'ring' ofmerchants, provided that the commodity was resold within the limitsof the just price, was not a sin against justice, though it might bea sin against charity. [4] If the authorities granted a monopoly, theymust at the same time fix a just price. [5] A monopoly which was notprivileged by the State, and which had for its aim the raising ofthe price of goods above the just price was regarded with universalreprobation. [6] 'Whoever buys up corn, meat, and wine, ' saysTrithemius, 'in order to drive up their price and to amass money atthe cost of others is, according to the laws of the Church, no betterthan a common criminal. In a well-governed community all arbitraryraising of prices in the case of articles of food and clothing isperemptorily stopped; in times of scarcity merchants who have suppliesof such commodities can be compelled to sell them at fair prices; forin every community care should be taken that all the members should beprovided 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 thedoctrine of the just price was a deadly weapon with which to fight the'profiteer. ' The engrosser was looked upon as the natural enemy of thepoor; 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 thesubject 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 sellerwas also protected. All the authorities are unanimous that it was assinful for the buyer to give too little as for the seller to demandtoo much, and it is this aspect of the just price which appears mostfavourable in comparison with the theory of price of the classicaleconomists. In the former case prices were fixed having regard tothe wages necessary for the producer; in the latter the wages of theproducer are determined by the price at which he can sell hisgoods, exposed to the competition of machinery or foreign--possiblyslave--labour. [1] According to the _Catholic Encyclopædia_: 'To themediæval theologian the just price of an article included enoughto pay fair wages to the worker--that is, enough to enable him tomaintain the standard of living of his class. '[2] 'The difference, 'says Dr. Cunningham, 'which emerges according as we start from oneprinciple or the other comes out most distinctly with reference towages. In the Middle Ages wages were taken as a first charge; inmodern times the reward of the labourer cannot but fluctuate inconnection with fluctuations in the utility and market price of thethings. There must always be a connection between wages and prices, but in the olden times wages were the first charge, and prices on thewhole depended on them, while in modern times wages are, on the otherhand, directly affected by prices. '[3] Dr. Cunningham draws attentionto the fact that the labouring classes rejected the idea of the fixingof a just price for their services when, from a variety of causes, a situation arose when they were able to earn by open competition areward higher than what was necessary to support them accordingto their state in life. [4] Nowadays the reverse has taken place;unrestricted competition has in many cases resulted in the reductionof wages to a level below the margin of subsistence; and the generalcry of the working classes is for the compulsory fixing of minimumrates of wages which will ensure that their subsistence will not beliable to be impaired by the fluctuations of the markets. Whatthe workers of the present day look to as a desirable, but almostunattainable, ideal, was the universal practice in the ages wheneconomic 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 orobjective has recently formed the subject matter of an interestingand ably conducted discussion, provoked by certain remarks in Dr. Cunningham's _Western Civilisation_. [1] Dr. Cunningham, althoughadmiring the ethical spirit which animated the conception of the justprice, thought at the same time that the economic ideas underlying theconception were so undeveloped and unsound that the theory could notbe applied in practice at the present day. 'Their economic analysiswas very defective, and the theory of price which they put forward wasuntenable; but the ethical standpoint which they took is well worthexamination, and the practical measures which they recommended appearto have been highly beneficial in the circumstances in which they hadto deal. Their actions were not unwise; their common-sense moralitywas sound; but the economic theories by which they tried to give anintellectual justification for their rules and their practice werequite erroneous. .. . The attempt to determine an ideal price impliesthat there can and ought to be stability in relative values andstability in the measure of values--which is absurd. The mediævaldoctrine and its application rested upon another assumption which wehave outlived. Value is not a quality which inheres in an object sothat it can have the same worth for everybody; it arises from thepersonal preference and needs of different people, some of whom desirea thing more and some less, some of whom want to use it in one way andsome in another. Value is not objective--intrinsic in the object--butsubjective, varying with the desire and intentions of the possessorsor would-be possessors; and, because it is thus subjective, therecannot be a definite ideal value which every article ought to possess, and still more a just price as the measure of that ideal value. ' Inthese and similar observations to be found in the _Growth of EnglishHistory and Commerce_, Dr. Cunningham showed that he profoundlymisunderstood the doctrine of the just price; the objectivity whichhe attributed to it was not the objectivity ascribed to it by thescholastics. It was to correct this misunderstanding that FatherSlater 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 MoralTheology_, and the conclusions of which were embodied in the samewriter's work on Moral Theology, was controverted in a series ofarticles 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. Cunninghamoverlooked to some extent the importance of common estimation inarriving at the just price. He points out that, far from objects beinginvested with some immutable objective value, their value was in factdetermined by the price which the community as a whole was willing topay for them: 'As the value in exchange will be determined by what themembers of the community at the time are prepared to give, . .. It willbe determined by the social estimation of its utility for the supportof life and its scarcity. It will depend upon its capacity to satisfythe wants and desires of the people with whom commercial transactionsare possible and practicable. Father Slater then goes on categoricallyto refute Dr. Cunningham's presentation of the objectivity of price:'All that that doctrine asserts is that there should be, and thatthere is, an equivalent in social value between the commodity andits price at a certain time and in a certain place; it says nothingwhatever about the stability or permanence of prices at differenttimes and at different places. By maintaining that the just price didnot depend upon the valuation of the individual buyer or seller themediæval doctors did not dream of making it intrinsic to the object. 'In the work on Moral Theology, to which we have referred, expressionsoccur which lead one to believe that Father Slater did not see anygreat difference between the mediæval just price arrived at by commonestimation and the modern normal or market price arrived at byopen competition. Thus, in endeavouring to correct Dr. Cunningham'smisunderstanding, Father Slater seems to have gone too far in theother 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 viewson just price is well stated by Father Kelleher in the first of hisarticles on the subject: 'We must try to find out whether the justand fair price determined the rate of exchange, or whether the rateof exchange, being determined without an objective standard and merelyaccording to the play of human motives, determines what we call thejust and fair price. '[1] We have already demonstrated that the commonestimation referred to by the mediæval doctors was something quiteapart from the modern higgling in the market; and that, far frombeing merely the result of unbridled competition on both sides, itwas rather the considered judgment of the best-informed members of thecommunity. As we have seen, even Dr. Cunningham admits that therewas a fundamental difference between the common estimation ofthe scholastics and the modern competitive price. This is clearlydemonstrated by Father Kelleher, who further establishes theproposition that the modern price is purely subjective, and that nosubjective price can rest on an ethical basis. The question at issuetherefore between what we may call the subjective and objectiveschools is not whether the sale price was determined by competitionin the modern sense, but whether the common estimation of those bestqualified to form an opinion on the subject in itself determined thejust price, or whether it was merely the most reliable evidence ofwhat 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 hisarticle on price did not specifically affirm that the just pricewas objective, but he explains this omission by saying that theobjectivity of the price was so well and universally understood thatit was unnecessary expressly to restate it. Indeed, as we saw above, the teaching of Aquinas on price left a great deal to be supplied bylater writers, not because he was in any doubt about the subject, butbecause the theory was so well understood. 'Not even in St. Thomas canwe find a formal discussion of the moral obligation of observing anobjective equivalence in contracts of buying and selling. He simplytook it for granted, as, indeed, was inevitable, seeing that, up tohis time and for long after, all Catholic thought and legislationproceeded on that hypothesis. But that he actually did take it forgranted, he has given many clear indications in his article on Justicewhich leave us no room for reasonable doubt. '[1] As Father Kellehervery cogently points out, the discussion in Aquinas's article oncommerce, whether it was lawful to buy cheap and sell dear, veryclearly indicates that the author maintained the objective theory, because if the just price were simply determined by what people werewilling 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 elasticityan argument in favour of its being subjective. Father Kelleher fullyadmits that the common estimation was the general criterion of justprice, and, of course, the common estimation could not, of its verynature, be rigid and immutable. Commodities should, indeed, exchangeaccording to their objective value, but, even so, commodities couldnot carry their value stamped on their faces. Even if we assume thatthe standard of exchange was the cost of production, there would stillremain room for a certain amount of difference of opinion as to whatexactly their value would be in particular instances. Suppose that thecommodity offered for sale was a suit of clothes, in estimating itsvalue on the basis of the cost of production, opinions might differas to the precise amount of time required for making it, or as to thecost of the cloth out of which it was made. Unless recourse was to behad to an almost interminable process of calculations, nobody couldsay authoritatively what precisely the value was, and in practice thedetermination of value had perforce to be left to the ordinary humanestimate of what it was, which of its very nature was bound to admit acertain margin of fluctuation. Thus we can easily understand how, evenwith an objective standard of value, the just price might be admittedto vary within the limits of the maximum as it might be expected tobe estimated by sellers and the minimum as it would appear just tobuyers. The sort of estimation of which St. Thomas speaks is thereforenothing else than a judgment, which, being human, is liable to beslightly in excess or defect of the objective value about which it isformed. '[1] As Father Kelleher puts it on a later page, 'There is asense certainly in which, with a solitary exception in the case ofwages, it may be said with perfect truth that the common estimationdetermines the just price. That is, the common estimation is theproximate 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 ingeniousargument drawn from the doctrine of usury. As we said in the firstchapter, and as we shall prove in detail in the next section, theprohibition of usury was simply one of the applications of the theoryof equivalence in contracts--in other words, it was the determinationof 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 justprice, why was not moderate usury allowed? That the general opinion ofthe community in the Middle Ages was undoubtedly in favour of allowinga reasonable percentage on loans is shown by the constant striving ofthe Church to prevent such a practice. Nevertheless the Church didnot for a moment relax its teaching on usury in spite of the almostuniversal judgment of the people. Here, therefore, is a clear exampleof one contract in which the standard of value is clearly objective, and it is only reasonable to draw the conclusion that the samestandard which applied in contracts of the exchange of money shouldapply in contracts of the sale of other articles. 

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

[Footnote 1: _De Cont. Merc. _, ii. Xv. Nider was regarded as a veryweighty 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 theconsideration that goods do not satisfy mere subjective whims, butsupply real wants. For example, food supplies a real need of the humanbeing, as also does clothing; in the one case hunger is appeased, and in the other cold is warded off, just as drugs used in medicalpractice produce real objective effects on the person taking them. ]

The theory that the just price was objective seems to be accepted bythe majority of the best modern students of the subject. Sir WilliamAshley says: 'The fundamental difference between the mediæval andmodern point of view is. .. That with us value is something entirelysubjective; it is what each individual cares to give for a thing. WithAquinas it was entirely objective; something outside the will ofthe individual purchaser or seller; something attached to the thingitself, existing whether he liked it or not, and that he ought torecognise. '[1] Palgrave's _Dictionary of Political Economy_, followingthe authority of Knies, expresses the same opinion: 'Perhaps thecontrast between mediæval and modern ideas of value is best expressedby saying that with us value is usually something subjective, consisting of the mental determination of buyer and seller, while tothe schoolmen it was in a sense objective, something intrinsicallybound up with the commodity itself. '[2] Dr. Ryan agrees with thisview: 'The theologians of the sixteenth and seventeenth centuriesassumed that the objective price would be fair, since it wasdetermined by the social estimate. In their opinion the socialestimate would embody the requirements of objective justice as fullyas any device or institution that was practically available. For thecondition of the Middle Ages and the centuries immediately following, this reasoning was undoubtedly correct. The agencies which createdthe social estimate and determined prices--namely the civil law, theguilds, and custom--succeeded fairly in establishing a price that wasequitable to all concerned. '[3] Dr. Cleary says: 'True, the _pretiumlegale_ is regarded as being a just price, but in order that it maybe just, it supposes some objective basis--in other words, it ratherdeclares than constitutes the just price. '[4] Haney is also stronglyof opinion that the just price was objective. 'Briefly stated, thedoctrine was that every commodity had some one true value which wasobjective and absolute. '[5] The greater number of modern studentstherefore who have given most care and attention to the question areinclined to the opinion that the just price was not subjective, butobjective, 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 _DistributiveJustice_, 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 thelegitimacy of the various occupations which were concerned with buyingand selling. The principal matter which arises for considerationin this regard is the attitude of the mediæval theologians towardscommerce. Aquinas discusses the legitimacy of commerce in the samequestion in which he discusses just price, and indeed the two subjectsare closely allied, because the importance of the observance ofjustice in buying and selling grew urgent as commerce extended andadvanced. 

In order to understand the disapprobation with which commerce was onthe whole regarded in the Middle Ages, it is necessary to appreciatethe importance of the Christian teaching on the dignity of labour. Theprinciple that, far from being a degrading or humiliating occupation, as it had been regarded in Greece and Rome, manual labour was, onthe contrary, one of the most noble ways of serving God, effecteda revolution in the economic sphere analogous to that which theChristian sanctification of marriage effected in the domestic sphere. The Christian teaching on labour was grounded on the Divine preceptscontained in both the Old and New Testaments, [1] and upon the exampleof Christ, who was Himself a working man. The Gospel was preachedamongst the poor, and St. Paul continued his humble labours duringhis apostolate. [2] A life of idleness was considered something to beavoided, instead of something to be desired, as it had been in theancient civilisations. Gerson says it is against the nature of man towish to live without labour as usurers do, [3] and Langensteininveighs against usurers and all who live without work. [4] 'We readin Sebastian Brant that the idlers are the most foolish amongst fools, they are to every people like smoke to the eyes or vinegar tothe teeth. Only by labour is God truly praised and honoured; andTrithemius says "Man is born to labour as the bird to fly, and henceit is contrary to the nature of man when he thinks to live withoutwork. "'[5] The example of the monasteries, where the performanceof all sorts of manual labour was not thought inconsistent with theadministration of the sacred offices and the pursuit of the highestintellectual exercises, acted as a powerful assertion to the laityof the dignity of labour in the scheme of things. [6] The value of themonastic example in this respect cannot be too highly estimated. 'Whenwe 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 asChristian industrial colonies, and remember that they moulded societyrather by example than by precept. We are so familiar with the attacksand satires on monastic life that were current at the Reformationperiod, that it may seem almost a paradox to say that the chiefclaim of the monks to our gratitude lies in this, that they helped todiffuse a better appreciation of the duty and dignity of labour. '[7]

[Footnote 1: Gen. Iii. 19; Ps. Cxxvii. 2; 2 Thess. Iii. 10. Thelast-mentioned text is explained, in opposition to certain Socialistinterpretations which have been put on it, by Dr. Hogan in the _IrishEcclesiastical 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. Theeconomic benefit of this attitude towards labour must be obvious. Itmade the working classes take a direct pride and interest in theirwork, which was represented to be a means of sanctification. 'Labour, 'according to Dr. Cunningham, 'was said to be pregnant with a doubleadvantage--the privilege of sharing with God in His work of carryingout His purpose, and the opportunity of self-discipline and thehelping of one's fellow-men. '[1] 'Industrial work, ' says Levasseur, 'in the times of antiquity had always had, in spite of theinstitutions of certain Emperors, a degrading character, because ithad its roots in slavery; after the invasion, the grossness of thebarbarians and the levelling of towns did not help to rehabilitate it. It was the Church which, in proclaiming that Christ was the son ofa carpenter, and the Apostles were simple workmen, made known to theworld that work is honourable as well as necessary. The monks provedthis by their example, and thus helped to give to the working classesa certain consideration which ancient society had denied them. Manuallabour became a source of sanctification. '[2] The high esteem in whichlabour was held appears from the whole artistic output of the MiddleAges. 'Many of the simple artists of the time represented the saintsholding some instrument of work or engaged in some industrial pursuit;as, for instance, the Blessed Virgin spinning as she sat by the cradleof the divine Infant, and St. Joseph using a saw or carpenter's tools. "Since the Saints, " says the _Christian Monitor_, "have laboured, soshall the Christian learn that by honourable labour he can glorifyGod, do good, and save his own soul. "'[3] Work was, alongside ofprayer 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 thoughtworthy of praise. On the contrary, the necessity for mental andspiritual workers was fully appreciated, and all kinds of labourwere thought equally worthy of honour. 'Heavy labourer's work is theinevitable yoke of punishment, which, according to God's righteousverdict, has been laid upon all the sons of Adam. But many of Adam'sdescendants seek in all sorts of cunning ways to escape from the yokeand to live in idleness without labour, and at the same time to havea superfluity of useful and necessary things; some by robbery andplunder, some by usurious dealings, others by lying, deceit, and allthe countless, forms of dishonest and fraudulent gain, by which menare for ever seeking to get riches and abundance without toil. Butwhile such men are striving to throw off the yoke righteously imposedon them by God, they are heaping on their shoulders a heavy burdenof sin. Not so, however, do the reasonable sons of Adam proceed; but, recognising in sorrow that for the sins of their first father God hasrighteously ordained that only through the toil of labour shall theyobtain what is necessary to life, they take the yoke patiently onthem. .. . Some of them, like the peasants, the handicraftsmen, and thetradespeople, procure for themselves and others, in the sweat of theirbrows and by physical work, the necessary sustenance of life. Others, who labour in more honourable ways, earn the right to be maintained bythe sweat of others' brows--for instance, those who stand at the headof the commonwealth; for by their laborious exertion the former areenabled to enjoy the peace, the security, without which they could notexist. The same holds good of those who have the charge of spiritualmatters. .. . '[1] 'Because, ' says Aquinas, 'many things are necessary tohuman life, with which one man cannot provide himself, it is necessarythat different things should be done by different people; thereforesome are tillers of the soil, some are raisers of cattle, some arebuilders, and so on; and, because human life does not simply meancorporal things, but still more spiritual things, therefore itis necessary that some people should be released from the care ofattending to temporal matters. This distribution of different officesamongst 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 andnecessary, there was no difficulty felt about justifying their reward. It was always common ground that services of all kinds were entitledto be properly remunerated, and questions of difficulty only arosewhen a claim was made for payment in a transaction where the elementof service was not apparent. [1] The different occupations in which menwere engaged were therefore ranked in a well-recognised hierarchyof dignity according to the estimate to which they were held tobe entitled. The Aristotelean division of industry into _artespossessivae_ and _artes pecuniativae_ was generally followed, theformer being ranked higher than the latter. 'The industries called_possessivae_, which are immediately useful to the individual, to thefamily, and to society, producing natural wealth, are also the mostnatural as well as the most estimable. But all the others should notbe despised. The natural arts are the true economic arts, but the artswhich produce artificial riches are also estimable in so far as theyserve the true national economy; the commutation of the exchanges andthe _cambium_ being necessary to the general good, are good in so faras they are subordinate to the end of true economy. One may say thesame thing about commerce. In order, then, to estimate the value of anindustrial art, one must examine its relation to the general good. '[2]Even the _artes possessivae_ were not all considered equally worthy ofpraise, but were ranked in a curious order of professional hierarchy. Agriculture was considered the highest, next manufacture, and lastlycommerce. Roscher says that, whereas all the scholastics were agreedon the excellence of agriculture as an occupation, the best they couldsay of manufacture was _Deo non displicet_, whereas of commerce theysaid _Deo placere non potest_; and draws attention to the interestingconsequence of this, namely, that the various classes of goods thattook part in the different occupations were also ranked in a certainorder of sacredness. Immovables were thought more worthy of protectionagainst execution and distress than movables, and movables thanmoney. [3] Aquinas advises the rulers of States to encourage the _artespossessivae_, especially agriculture. [4] The fullest analysis of theorder in which the different _artes possessivae_ should be ranked isto be found in Buridan's _Commentaries on Aristotle's Politics_. Heplaces first agriculture, which comprises cattle-breeding, tillage, and hunting; secondly, manufacture, which helps to supply man'scorporal needs, such as building and architecture; thirdly, administrative occupations; and lastly, commerce. The ChristianExhortation, quoted by Janssen, [5] says, 'The farmer must in allthings be protected and encouraged, for all depend on his labour, from the monarch to the humblest of mankind, and his handiwork is inparticular 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 byNicholas Oresme is somewhat unusual. He divides professions into (1)honourable, or those which increase the actual quantity of goods inthe 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 senbillonatores. '_[1]

No occupation, therefore, which involved labour, whether manualor mental, gave any ground for difficulty with regard to itsremuneration. The business of the trader or merchant, on the otherhand, was one which called for some explanation. It is importantto understand what commerce was taken to mean. The definition whichAquinas gives was accepted by all later writers: 'A tradesman is onewhose business consists in the exchange of things. According to thephilosopher, exchange of things is twofold; one natural, as it were, and necessary, whereby one commodity is exchanged for another, ormoney taken in exchange for a commodity in order to satisfy the needsof life. Such trading, properly speaking, does not belong to traders, but rather to housekeepers or civil servants, who have to provide thehousehold or the State with the necessaries of life. The other kindof exchange is either that of money for money, or of any commodity formoney, not on account of the necessities of life, but for profit; andthis kind of trade, properly speaking, regards traders. ' It is tobe remarked in this definition, that it is essential, to constitutetrade, that the exchange or sale should be for the sake of profit, and this point is further emphasised in a later passage of the samearticle: 'Not every one that sells at a higher price than he boughtis 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, andafterwards for some reason wishes to sell, it is not a tradetransaction, 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 thething has changed with the change of place or time, or on accountof the danger he incurs in transferring the thing from one place toanother, or again in having it carried by hand. In this sense neitherbuying nor selling is unjust. '[2] The importance of this definitionis that it rules out of the discussion all cases where the goods havebeen in any way improved or rendered more valuable by the servicesof the seller. Such improvement was always reckoned as the result oflabour of one kind or another, and therefore entitled to remuneration. The essence of trade in the scholastic sense was selling the thingunchanged at a higher price than that at which it had been bought, forthe 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 utearn carius vendat etiam non mutatam suo artificio; illa mercatiodicitur proprie negotiatio' (Biel, _op. Cit. _, IV. Xv. 10. )]

The legitimacy of trade in this sense was only gradually admitted. TheFathers of the Church had with one voice condemned trade as being anoccupation fraught with danger to the soul. Tertullian argued thatthere would be no need of trade if there were no desire for gain, andthat there would be no desire for gain if man were not avaricious. Therefore avarice was the necessary basis of all trade. [1] St. Jeromethought that one man's gain in trading must always be another's loss;and that, in any event, trade was a dangerous occupation since itoffered so many temptations to fraud to the merchant. [2] St. Augustineproclaimed all trade evil because it turns men's minds away fromseeking true rest, which is only to be found in God, and this opinionwas embodied in the _Corpus Juris Canonici_. [3] This early view thatall trade was to be indiscriminately condemned could not in the natureof things survive experience, and a great step forward was takenwhen Leo the Great pronounced that trade was neither good nor bad initself, but was rendered good or bad according as it was honestly ordishonestly 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 authorityof the patristic texts, condemned it also on the Aristotelean groundthat it was a chrematistic art, and this consideration, as we haveseen 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 beginningof the thirteenth century, raised acute controversies about thelegitimacy of commerce. Probably nothing did more to broaden theteaching on this subject than the necessity of justifying trade whichbecame more and more insistent after the Crusades. [1]

[Footnote 1: On the economic influence of the Crusades the followingworks 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 derKreuzzüge_; Pigonneau, _Histoire du Commerce de la France_; List, _DieLehren der Handelspolitischen Geschichte_. ]

By the time of Aquinas the necessity of commerce had come to be fullyrealised, as appears from the passage in the _De Regimine Principum_:'There are two ways in which it is possible to increase the affluenceof any State. One, which is the more worthy way, is on account of thefertility of the country producing an abundance of all things whichare necessary for human life, the other is through the employmentof commerce, through which the necessaries of life are brought fromdifferent places. The former method can be clearly shown to be themore desirable. .. . It is more admirable that a State should possess anabundance of riches from its own soil than through commerce. For theState which needs a number of merchants to maintain its subsistenceis liable to be injured in war through a shortage of food ifcommunications are in any way impeded. Moreover, the influx ofstrangers corrupts the morals of many of the citizens. .. Whereas, if the citizens themselves devote themselves to commerce, a door isopened to many vices. For when the desire of merchants is inclinedgreatly to gain, cupidity is aroused in the hearts of manycitizens. .. . For the pursuit of a merchant is as contrary as possibleto military exertion. For merchants abstain from labours, and whilethey enjoy the good things of life, they become soft in mind and theirbodies are rendered weak and unsuitable for military exercises. .. . It therefore behoves the perfect State to make a moderate use ofcommerce. '[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 itslegitimacy: 'Trade is justly deserving of blame, because, consideredin itself, it satisfies the greed for gain, which knows no limit, andtends to infinity. Hence trading, considered in itself, has a certaindebasement attaching thereto, in so far as, by its very nature, itdoes not imply a virtuous or necessary end. Nevertheless gain, whichis the end of trading, though not implying, by its nature, anythingvirtuous or necessary, does not, in itself, connote anything sinfulor contrary to virtue; wherefore nothing prevents gain from beingdirected to some necessary or even virtuous end, and thus tradingbecomes lawful. Thus, for instance, a man may intend the moderate gainwhich 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 tradefor some public advantage--for instance, lest his country lack thenecessaries of life--and seek gain, not as an end, but as payment forhis labour. '[1] This is important in connection with what we have saidabove as to property, as it shows that the trader was quite justifiedin seeking to obtain more profits, provided that they accrued for thebenefit of the community. This justification of trade according to theend for which it was carried on, was not laid down for the first timeby Aquinas, but may be found stated in an English treatise of thetenth century entitled _The Colloquy of Archbishop Alfric_, where, when a doctor asks a merchant if he wishes to sell his goods for thesame price for which he has bought them, the merchant replies: 'I donot wish to do so, because if I do so, how would I be recompensed formy trouble? but I wish to sell them for more than I paid for them sothat 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 gainwhich did not represent payment for labour could be justifiedwas still maintained by some writers--for instance, Raymond dePennafort[1]--the teaching of St. Thomas Aquinas was generallyaccepted throughout the later Middle Ages. Canonists and theologiansaccepted without hesitation the justification of trade formulated byAquinas. [2] Henri de Gand, [3] Duns Scotus, [4] and François de Mayronis[5] unhesitatingly accepted the view of Aquinas, and incorporated itin their works. [6] 'An honourable merchant, ' says Trithemius, 'whodoes not only think of large profits, and who is guided in all hisdealings by the laws of God and man, and who gladly gives to the needyof his wealth and earnings, deserves the same esteem as any otherworker. But it is no easy matter to be always honourable in allmercantile dealings and not to become usurious. Without commerceno community can of course exist, but immoderate commerce is ratherhurtful than beneficial, because it fosters greed of gain and gold, and enervates and emasculates the nation through love of pleasureand luxury. '[7] Nider says that to buy not for use but for sale at ahigher price is called trade. Two special rules apply to this: first, that it should be useful to the State, and second, that the priceshould correspond to the diligence, prudence, and risk undertaken inthe 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 trademore liberally even than Aquinas, although they quote his dictum onthe subject as the basis of their teaching. Instead of condemning allcommerce as wrong unless it was justified by good motives, they wererather inclined to treat commerce as being in itself colourless, butcapable of becoming evil by bad motives. Carletus says: 'Commerce initself is neither bad nor illegal, but it may become bad on accountof the circumstances and the motive with which it is undertaken, thepersons who undertake it, or the manner in which it is conducted. Forinstance, commerce undertaken through avarice or a desire for sloth isbad; so also is commerce which is injurious to the republic, such asengrossing. '[1]

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

Endemann, having thoroughly studied all the fifteenth-century writerson the subject, says that commerce might be rendered unjustifiableeither by subjective or objective reasons. Subjective illegality wouldarise from the person trading--for instance, the clergy--or the motivewith which trade was undertaken; objective illegality on account ofthe object traded in, such as weapons in war-time, or the bodiesof free men. [1] Speculative trading, and what we to-day callprofiteering, were forbidden in all circumstances. [2]

[Footnote 1: _Studien_, vol. Ii. P. 18. ]

[Footnote 2: _The Ayenbite of Inwit_, a thirteenth-century confessor'smanual, 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 bearingupon general economic teaching, except in so far as it shows thatcommerce was considered an occupation dangerous to virtue. Aquinasputs it as follows: 'Clerics should abstain not only from things thatare evil in themselves, but even from those that have an appearance ofevil. This happens in trading, both because it is directed to worldlygain, which clerics should despise, and because trading is open to somany vices, since "a merchant is hardly free from sins of the lips. "[1] There is also another reason, because trading engages the mind toomuch with worldly cares, and consequently withdraws it from spiritualcares; wherefore the Apostle says:[2] "No man being a soldier to Godentangleth himself with secular business. " Nevertheless it is lawfulfor clerics to engage in the first-mentioned kind of exchange, whichis directed to supply the necessaries of life, either by buying or byselling. '[3] The rule of St. Benedict contains a strong admonition tothose who may be entrusted with the sale of any of the products of themonastery, 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 moreliberal in the course of the Middle Ages. At first all commerce wascondemned as sinful; at a later period it was said to be justifiableprovided it was influenced by good motives; while at a still laterdate the method of treatment was rather to regard it as a colourlessact in itself which might be rendered harmful by the presence of badmotives. This gradual broadening of the justification of commerce isprobably a reflection of the necessities of the age, which witnessed avery great expansion of commerce, especially of foreign trade. In theearlier centuries remuneration for undertaking risk was prohibited onthe authority of a passage in the Gregorian Decretals, but the laterwriters refused to disallow it. [1] The following passage from Dr. Cunningham's _Growth of English Industry and Commerce_ correctlyrepresents the attitude of the Church towards commerce at the endof the Middle Ages: 'The ecclesiastic who regarded the merchant asexposed to temptations in all his dealings would not condemn him assinful unless it were clear that a transaction were entered onsolely for greed, and hence it was the tendency for moralists to drawadditional distinctions, and refuse to pronounce against businesspractices where common sense did not give the benefit of thedoubt. '[2] We have seen that one motive which would justify thecarrying on of trade was the desire to support one's self and one'sfamily. Of course this motive was capable of bearing a very extendedand elastic interpretation, and would justify increased commercialprofits according as the standard of life improved. The other motivegiven by the theologians, namely, the benefit of the State, was alsoone which was capable of a very wide construction. One must rememberthat even the manual labourer was bound not to labour solely foravaricious gain, but also for the benefit of his fellow-men. 'It isnot only to chastise our bodies, ' says Basil, 'it is also by the loveof our neighbour that the labourer's life is useful so that God mayfurnish through us our weaker brethren';[3] and a fifteenth-centurybook on morality says: 'Man should labour for the honour of God. He should labour in order to gain for himself and his family thenecessaries of life and what will contribute to Christian joy, andmoreover to assist the poor and the sick by his labours. He who actingotherwise seeks only the pecuniary recompense of his work does ill, and his labours are but usury. In the words of St. Augustine, "thoushalt not commit usury with the work of thy hands, for thus wilt thoulose thy soul, "'[4] The necessity for altruism and regard for theneeds of one's neighbour as well as of one's self were thereforemotives necessary to justify labour as well as commerce; and it wouldbe wrong to conclude that the teaching of the scholastics on thenecessity for a good motive to justify trade operated to dampindividual enterprise, or to discourage those who were inclined tolaunch commercial undertakings, any more than the insistence on theneed 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 thenumerous temptations to avarice and dishonesty which it involved, itmust be carefully scrutinised and kept within due bounds. It was moredifficult to insure the observance of the just price in the case ofa sale by a merchant than in one by an artificer; and the power whichthe merchant possessed of raising the price of the necessaries of lifeon the poor by engrossing and speculation rendered him a person whoseoperations 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 modernwriters to base the mediæval justification of commerce on an analysisof all commercial gains as the payment for labour rests on a profoundmisunderstanding. As we have already pointed out, Aquinas distinctlyrules out of consideration in his treatment of commerce the casewhere the goods have been improved in value by the exertions of themerchant. When the element of labour entered into the transaction thematter was clearly beyond doubt, and the lengthy discussion devotedto the question of commerce by Aquinas and his followers shows that injustifying commercial gains they were justifying a gain resting not onthe remuneration for the labour, but on an independent title. 

§ 8. _Cambium_. 

There was one department of commerce, namely, _cambium_, ormoney-changing, which, while it did not give any difficulty in theory, involved certain difficulties in practice, owing to the fact thatit was liable to be used to disguise usurious transactions. Although_cambium_ was, strictly speaking, a special branch of commerce, it wasnevertheless usually treated in the works on usury, the reason beingthat many apparent contracts of _cambium_ were in fact veiled loans, and that it was therefore a matter of importance in discussing usuryto explain the tests by which genuine and usurious exchanges could bedistinguished. Endemann treats this subject very fully and ably;[1]but for the purpose of the present essay it is not necessary to domore 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 duringthe later Middle Ages, and, consequently, the amount of space devotedto the discussion of the theory of exchange became larger as time wenton, nevertheless there is no serious difference of opinion betweenthe writers of the thirteenth century, who treat the subject ina fragmentary way, and those of the fifteenth, who deal with itexhaustively and systematically. Aquinas does not mention _cambium_in the _Summa_, but he recognises the necessity for some system ofexchange in the _De Eegimine Principum_. [1] All the later writers whomention _cambium_ are agreed in regarding it as a species of commerceto which the ordinary rules regulating all commerce apply. Francisde Mayronis says that the art of _cambium_ is as natural as anyother kind of commerce, because of the diversity of the currenciesin different kingdoms, and approves of the campsor receiving someremuneration for his labour and trouble. [2] Nicholas de Ausmo, inhis commentary on the _Summa Pisana_, written in the beginning of thefifteenth century, says that the campsor may receive a gain fromhis transactions, provided that they are not conducted with the soleobject of making a profit, and that the gain he may receive mustbe limited by the common estimation of the place and time. This ispractically saying that _cambium_ may be carried on under the sameconditions as any other species of commerce. Biel says that _cambium_is only legitimate if the campsor has the motive of keeping up afamily or benefiting the State, and that the contract may becomeusurious if the gain is not fair and moderate. [3] The right of thecampsor 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 peculiarto _cambium_, but, as we have seen above, was common to all commerce. Endemann points out how the theologians and jurists unanimouslyinsisted that _cambium_ could not be justified except when the justprice was observed, and that, when the doctrine attained its fulldevelopment, the element of labour was but one of the constituents inthe estimation of that price. [5]

[Footnote 1: 'Cum enim extraneae monetae communicantur inpermutationibus oportet recurrere ad artem campsoriam, cum talianumismata non tantum valeant in regionibus extraneis quantum inpropriis (_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 (_cambiumminutum_), exchange of moneys of different currencies betweendifferent places, the justification for which rested on remunerationfor an imaginary transport (_cambium per litteras_), and usuriousexchange of moneys of the same currency (_cambium siccum_). Theformer two species of cambium were justifiable, whereas the last wascondemned. [1]

[Footnote 1: Laurentius de Rodulfis, _De Usuris_, pt. Iii. Nos. 1 to5. ]

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

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

[Footnote 1: 'Numisma quamvis sit mensura et instrumentum inpermutationibus; tamen per se aliquid esse potest. ' It is thisprinciple that justifies the treatment of _cambium_ in this sectionrather 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 inhistories of the Middle Ages, and particularly in discussions relatingto the attitude of the Church towards economic questions, that it isimportant that its precise foundation and extent should be carefullystudied. The usury prohibition has been the centre of so many bittercontroversies, that it has almost become part of the stock-in-trade ofthe theological mob orators. The attitude of the Church towards usuryonly takes a slightly less prominent place than its attitude towardsGalileo in the utterances of those who are anxious to convict it oferror. We have referred to this current controversy, not in order thatwe might take a part in it, but that, on the contrary, we might avoidit. It is no part of our purpose in our treatment of this subject todiscuss whether the usury prohibition was or was not suitable tothe conditions of the Middle Ages; whether it did or did not impedeindustrial enterprise and commercial expansion; or whether it was orwas not universally disregarded and evaded in real life. These areinquiries which, though full of interest, would not be in place ina discussion of theory. All we are concerned to do in the followingpages is to indicate the grounds on which the prohibition of usuryrested, the precise extent of its application, and the conceptions ofeconomic 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 inno sense peculiar to the Catholic Church in the Middle Ages, but, on the contrary, was to be found in many other religious and legalsystems--for instance, in the writings of the Greek and Romanphilosophers, amongst the Jews, and the followers of Mohammed. Weshall give a very brief account of the other prohibitions of usurybefore coming to deal with the scholastic teaching on the subject. 

We can find no trace of any legal prohibition of usury in ancientGreece. Although Solon's laws contained many provisions for the reliefof poor debtors, they did not forbid the taking of interest, nor didthey limit the rate of interest that might be taken. [1] In Rome theTwelve Tables fixed a maximum rate of interest, which was probablyten or twelve per cent, per annum, but which cannot be determinedwith certainty owing to the doubtful signification of the expression'_unciarum foenus_. ' The legal rate of interest was gradually reduceduntil 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 inoperativeowing to the facility with which it could be evaded; and consequentlythe oppression of borrowers was prevented by the enactment, or perhapsit would be more correct to say the general recognition, of a maximumrate 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 whomight therefore be expected to have regarded usury with unfavourableeyes, fixed the following maximum rates of interest--maritime loanstwelve per cent. ; loans to ordinary persons, not in business, six percent. ; loans to high personages (_illustres_) and agriculturists, fourper 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 Greekand Roman law, it was at the same time reprobated by the philosophersof both countries. Plato objects to usury because it tends to set oneclass, the poor or the borrowers, against another, the rich or thelenders; and goes so far as to make it wrong for the borrower to repayeither the principal or interest of his debt. He further considersthat the profession of the usurer is to be despised, as it is anilliberal and debasing way of making money. [1] While Plato thereforedisapproves in no ambiguous words of usury, he does not develop thephilosophical bases of his objection, but is content to condemn itrather for its probable ill effects than on account of its inherentinjustice. 

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

Aristotle condemns usury because it is the most extreme and dangerousform of chrematistic acquisition, or the art of making money forits own sake. As we have seen above, in discussing the legitimacy ofcommerce, buying cheap and selling dear was one form of chrematisticacquisition, which could only be justified by the presence of certainmotives; and usury, according to the philosopher, was a still morestriking example of the same kind of acquisition, because it consistedin making money from money, which was thus employed for a functiondifferent from that for which it had been originally invented. 'Usuryis most reasonably detested, as the increase of our fortune arisesfrom the money itself, and not by employing it for the purpose forwhich 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 likeits parents; and usury is merely money born of money; so that of allmeans of money-making it is the most contrary to nature. '[1] We neednot pause here to discuss the precise significance of Aristotle'sconceptions on this subject, as they are to us not so much ofimportance in themselves, as because they suggested a basis for thetreatment 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 unanimousin their condemnation of the practice of usury. Cicero condemns usuryas being hateful to mankind, and makes Cato say that it is on thesame level of moral obliquity as murder; and Seneca makes a point thatbecame of some importance in the Middle Ages, namely, that usury iswrongful because it involves the selling of time. [1] Plutarch developsthe argument that money is sterile, and condemns the practicesof contemporary money-lenders as unjust. [2] The teaching of thephilosophers as to the unlawfulness of usury was reflected in thepopular 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, _PoliticalEconomy_, s. 90. ]

§ 2. _Usury in the Old Testament_. 

The question of usury therefore attracted considerable attention inthe teaching and practice of pagan antiquity. It occupied an equallyimportant place in the Old Testament. In Exodus we find the firstprohibition of usury: 'If thou lend money to any of my people beingpoor, thou shalt not be to him as a creditor, neither shall ye layupon him usury. '[1] In Leviticus we read: 'And if thy brother be waxenpoor, and his hand fail with thee; then, thou must uphold him; as astranger and a sojourner shall he live with thee. Take thou no moneyof him or increase, but fear thy God that thy brother may live withthee. Thou shalt not give him thy money upon usury, nor give himvictuals 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; untoa foreigner thou mayest lend upon usury, but unto thy brother thoumayest not lend upon usury. '[3] It will be noticed that the first andsecond of these texts do not forbid usury except in the case of loansto the poor, and, if we had them alone to consider, we could concludethat loans to the rich or to business men were allowed. The last text, however, extends the prohibition to all loans to one's brother--anexpression which was of importance in Christian times, as Christianwriters 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 considerationswhich prompted these ordinances. Dr. Cleary, who has studied thematter with great care, concludes that: 'The legislator was urgedmostly by economic considerations. .. . The permission to extract usuryfrom strangers--a permission which later writers, such as Maimonides, regarded as a command--clearly favours the view that the legislatorwas guided by economic principles. It is more difficult to say whetherhe based his legislation on the principle that usury is intrinsicallyunjust--that is to say, unjust even when taken in moderation. Thereis really nothing in the texts quoted to enable us to decide. Theuniversality of the prohibition when there is question solely of Jewsgoes to show that usury as such was regarded as unjust; whilst itspermission as between Jew and Gentile favours the contradictoryhypothesis. '[1] Modern Jewish thought is inclined to hold the viewthat these prohibitions were based upon the assumption that usury wasintrinsically unjust, but that the taking of usury from the Gentileswas justified on the principle of compensation; in other words, thatJews might exact usury from those who might exact it from them. [2] Itis at least certain that usury was regarded by the writers of the OldTestament 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 betterexplained than by quoting Dr. Cleary's final conclusion on thesubject: 'It appears therefore that in the Old Testament usury wasuniversally prohibited between Israelite and Israelite, whilst itwas permitted between Israelite and Gentile. Furthermore, itseems impossible to decide what was the nature of the obligationsimposed--whether the prohibition supposed and ratified an alreadyexisting universal obligation, in charity or justice, or merelyimposed a new obligation in obedience, binding the consciences of menfor economic or political reasons. So, too, it seems impossible todecide absolutely whether the decrees were intended to possess eternalvalidity; the probabilities, however, seem to favour very strongly theview that they were intended as mere economic regulations suited tothe circumstances of the time. This does not, of course, decide theother question, whether, apart from such positive regulations, therealready existed an obligation arising from the natural law; nor wouldthe passing of the positive law into desuetude affect the existence ofthe other obligation. '[1]

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

Before we pass from the consideration of the Old Testament to that ofthe New, we may mention that the taking of interest by Mohammedans isforbidden 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 questionof usury is a verse of St. Luke, the correct reading of which is amatter of considerable difference of opinion. [1] The Revised Versionreads: 'But love your enemies, and do them good, and lend, neverdespairing (_nihil desperantes_); and your reward shall be great. ' Ifthis be the true reading of the verse, it does not touch the questionof usury at all, as it is simply an exhortation to lend withoutworrying whether the debtor fail or not. [2] The more generallyreceived reading of this verse, however, is that adopted by theVulgate, 'mutuum date, nihil inde sperantes'--'lend hoping fornothing thereby. ' If this be the correct reading, the verse raisesconsiderable difficulties of interpretation. It may simply mean, asMastrofini interprets it, that all human actions should be performed, not in the hope of obtaining any material reward, but for the love ofGod and our neighbour; or it may contain an actual precept or counselrelating to the particular subject of loans. If the latter be thecorrect interpretation, the further question arises whether therecommendation is to renounce merely the interest of a loan or theprincipal as well. We need not here engage on the details of thecontroversy thus aroused; it is sufficient to say that it is thealmost unanimous opinion of modern authorities that the verserecommends the renunciation of the principal as well as the interest;and that, if this interpretation is correct, the recommendation isnot a precept, but a counsel. [3] Aquinas thought that the verse was acounsel as to the repayment of the principal, but a precept as to thepayment of interest, and this opinion is probably correct. [4] With theexception of this verse, there is not a single passage in the Gospelswhich 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 laiddown by the Fathers and early councils of the Church; but at the sametime 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 philosophicaltreatment of the same subject by Aquinas and his followers, which isthe principal subject to be discussed in these pages. The first thingwe must remark is that the prohibition of usury was not included bythe Council of Jerusalem amongst the 'necessary things' imposed uponconverts from the Gentiles. [1] This would seem to show that the takingof usury was not regarded as unlawful by the Apostles, who were atpains expressly to forbid the commission of offences, the evil ofwhich must have appeared plainly from the natural law--for instance, fornication. The _Didache_, which was used as a book of catecheticalinstruction for catechumens, does not specifically mention usury; theforcing of the repayment of loans from the poor who are unable to payis strongly reprobated; but this is not so in the case of the rich. [2]Clement of Alexandria expressly limits his disapprobation of usury tothe case of loans between brothers, whom he defines as 'participatorsin the same word, ' _i. E. _ fellow-Christians; and in any event itis clear that he regards it as sin against charity, but not againstjustice. [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 positivelythat the taking of usury is sinful. He regards it as obviously wrongfor Christians to exact usury on their loans, and interprets thepassage of St. Luke, to which we have referred, as a precept againstlooking for even the repayment of the principal. [1] On the other hand, Cyprian, writing in the same century, although he declaims eloquentlyand vigorously against the usurious practices of the clergy, does notspecifically express the opinion that the taking of usury is wrong initself. [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 notseem to have been, as far as we can now ascertain, any definite andgeneral doctrine laid down on the subject of usury. In the year 305or 306 a very important step forward was taken, when the Council ofElvira passed a decree against usury. This decree, as given by Ivoand Gratian, seems only to have applied to usury on the part of theclergy, but as given by Mansi it affected the clergy and laity alike. 'Should any cleric be found to have taken usury, ' the latter versionruns, 'let him be degraded and excommunicated. Moreover, if any laymanshall be proved a usurer, and shall have promised, when corrected, toabstain 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, itsdecrees are important, as they provided a model for later legislation. Dr. Cleary thinks that Mansi's version of this decree is probablyincorrect, and that, therefore, the Council only forbade usury on thepart of the clergy. In any event, with this one possible and extremelydoubtful exception, there was no conciliar legislation affecting thepractice of usury on the part of the laity until the eighth century. Certain individual popes censured the taking of usury by laymen, andthe Council of Nice expressed the opinion that such a practice wascontrary to Christ's teaching, but there is nowhere to be found animperative and definite prohibition of the taking of usury except bythe 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 ofthe fourth century is well summarised by Dr. Cleary: 'Hitherto we haveencountered mere prohibitions of usury with little or no attempt toassign a reason for them other than that of positive legislation. Most of the statements of these early patristic writers, as wellas possibly all of the early Christian legislative enactments, dealsolely with the practice of usury by the clergy; still, there issufficient evidence to show that in those days it was reprobated evenfor the Christian laity, for the _Didache_ and Tertullian clearlyteach or presuppose its prohibition, while the oecumenical Councilof Nice certainly presupposed its illegality for the laity, thoughit failed to sustain its doctrinal presuppositions with correspondingecclesiastical penalties. With the exception of some very vaguestatements by Cyprian and Clement of Alexandria, we find no attempt tostate the nature of the resulting obligation--that is to say, we arenot told whether there is an obligation of obedience, of justice, orof charity. The prohibition indeed seems to be regarded as universal;and it may very well be contended that for the cases the Fathersconsider it was in fact universal--for the loans with which they areconcerned, being necessitous, should be, in accordance with Christiancharity, gratuitous--even if speculatively usurious loans in generalwere not unjust. '[1]

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

The middle of the fourth century marked the opening of a newperiod--'a period when oratorical denunciations are profuse, and whenconsequently philosophical speculation, though fairly active, isof too imaginative a character to be sufficiently definite. '[1]St. Basil's _Homilies on the Fourteenth Psalm_ contain a violentdenunciation of usury, the reasoning of which was repeated by St. Gregory of Nyssa[2] and St. Ambrose. [3] These three Fathers draw aterrible picture of the state of the poor debtor, who, harassed byhis creditors, falls deeper and deeper into despair, until he finallycommits suicide, or has to sell his children into slavery. Usury wastherefore condemned by these Fathers as a sin against charity; thepassage from St. Luke was looked on merely as a counsel in so far asit related to the repayment of the principal, but as a precept sofar as it related to usury; but the notion that usury was in its veryessence a sin against justice does not appear to have arisen. Thenatural sterility of money is referred to, but not developed; and itis suggested, though not categorically stated, that usury may be takenfrom 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 lighton the question of how usury was regarded by the early Church. St. Hilary[1] and Jerome[2] still base their objection on the ground ofits being an offence against charity; and St. Augustine, though hewould like to make restitution of usury a duty, treats the matter fromthe same point of view. [3] On the other hand, there are to be foundpatristic utterances in favour of the legality of usury, and episcopalapprobations of civil codes which permitted it. [4] The civil lawdid not attempt to suppress usury, but simply to keep it within duebounds. [5] The result of the patristic teaching therefore was on thewhole unsatisfactory and inconclusive. 'Whilst patristic opinion, 'says Dr. Cleary, 'is very pronounced in condemning usury, thecondemnation is launched against it more because of its oppressivenessthan for its intrinsic injustice. As Dr. Funk has pointed out, one canscarcely cite a single patristic opinion which can be said clearly tohold that usury is against justice, whilst there are, on the contrary, certain undercurrents of thought in many writers, and certain explicitstatements in others, which tend to show that the Fathers would nothave been prepared to deal so harshly with usurers, did usurers nottreat their debtors so cruelly. .. . Of keen philosophical analysisthere is none. .. . On the whole, we find the teachings of the Fatherscrude 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 animportant advance in the eighth and ninth centuries, although thephilosophical analysis of the subject did not develop any morefully. A capitulary canon made in 789 decreed 'that each and all areforbidden to give anything on usury'; and a capitulary of 813 statesthat 'not only should the Christian clergy not demand usury, laymenshould not. ' In 825 it was decreed that the counts were to assist thebishops in their suppression of usury; and in 850 the Synod of Ticinumbound usurers to restitution. [1] The underlying principles of theseenactments is as obscure as their meaning is plain and definite. Thereis not a single trace of the keen analysis with which Aquinas waslater to illuminate and adorn the subject. 

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

§ 4. _The Mediæval Prohibition of Usury_. 

The tenth and eleventh centuries saw no advance in the teaching onusury. The twelfth century, however, ushered in a new era. 'Beforethat century controversy had been mostly confined to theologians, andtreated theologically, with reference to God and the Bible, and onlyrarely with regard to economic considerations. After the twelfthcentury the discussion was conducted on a gradually broadeningeconomic basis--appeals to the Fathers, canonists, philosophers, the_jus divinum_, the _jus naturale_, the _jus humanum_, became the orderof the day. '[1] Before we proceed to discuss the new philosophical orscholastic treatment of usury which was inaugurated for all practicalpurposes by Aquinas, we must briefly refer to the ecclesiasticallegislation on the subject. 

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

In 1139 the second Lateran Council issued a very strong declarationagainst usurers. 'We condemn that disgraceful and detestable rapacity, condemned alike by human and divine law, by the Old and the NewTestaments, that insatiable rapacity of usurers, whom we herebycut off from all ecclesiastical consolation; and we order that noarchbishop, bishop, abbot, or cleric shall receive back usurers exceptwith the very greatest caution, but that, on the contrary, usurersare to be regarded as infamous, and shall, if they do not repent, bedeprived of Christian burial. '[1] It might be argued that this decreewas aimed against immoderate or habitual usury, and not against usuryin general, but all doubt as regards the attitude of the Church wasset at rest by a decree of the Lateran Council of 1179. This decreeruns: 'Since almost in every place the crime of usury has becomeso prevalent that many people give up all other business and becomeusurers, as if it were lawful, regarding not its prohibition in bothTestaments, we ordain that manifest usurers shall not be admitted tocommunion, nor, if they die in their sins, be admitted to Christianburial, 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. Thisrecognition of the essential injustice of usury marked a turning-pointin the history of the treatment of the subject; and Alexander III. Seems entitled to be designated the 'pioneer of its scientificstudy. '[3] Innocent III. Followed Alexander in the opinion that usurywas unjust in itself, and from his time forward there was but littlefurther 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 nocommunity, corporation, or individual should permit foreign usurers tohire houses, but that they should expel them from their territory;and the disobedient, if prelates, were to have their lands put underinterdict, and, if laymen, to be visited by their ordinary withecclesiastical censures. [1] By a further canon he ordained that thewills of usurers who did not make restitution should be invalid. [2]This brought usury definitely within the jurisdiction of theecclesiastical courts. [3] In 1311 the Council of Vienne declared allsecular legislation in favour of usury null and void, and branded asheresy the belief that usury was not sinful. [4] The precise extent andinterpretation of this decree have given rise to a considerable amountof discussion, [5] which need not detain us here, because by that timethe whole question of usury had come under the treatment of the greatscholastic writers, whose teaching is more particularly the subjectmatter 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 wasno serious discussion of usury by the theologians. William of Paris, Alexander of Hales, and Albertus Magnus simply pronounced it sinfulon account of the texts in the Old and New Testaments, which we havequoted above. [1] It was Aquinas who really put the teaching on usuryupon the new foundation, which was destined to support it for somany hundred years, and which even at the present day appeals to manysympathetic and impartial inquirers. Mr. Lecky apologises for theobscurity of his account of the argument of Aquinas, but adds that theconfusion 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 oneto conclude that the argument itself was either confused or illogical. The fact that it for centuries remained the basis of the Catholicteaching on the subject is a sufficient proof that its inherentabsurdity did not appear apparent to many students at least as giftedas Mr. Lecky. We shall quote the article of Aquinas at some length, because it was universally accepted by all the theologians of thefourteenth and fifteenth centuries, with whose opinions we areconcerned in this essay. To quote later writings is simply to repeatin 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 moneylent, ' Aquinas replies: 'To take usury for money lent is unjustin itself, because this is to sell what does not exist, and thisevidently leads to inequality, which is contrary to justice. 

'In order to make this evident, we must observe that there are certainthings the use of which consists in their consumption; thus we consumewine when we use it for drink, and we consume wheat when we use it forfood. Wherefore in such-like things the use of the thing must not bereckoned apart from the thing itself, and whoever is granted the useof the thing is granted the thing itself; and for this reason to lendthings of this kind is to transfer the ownership. Accordingly, if aman wanted to sell wine separately from the use of the wine, he wouldbe selling the same thing twice, or he would be selling what does notexist, wherefore he would evidently commit a sin of injustice. In likemanner he commits an injustice who lends wine or wheat, and asks fordouble 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 notconsist 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; forinstance, 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. Forthis 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 hehas granted its use, as happens in renting and letting a house. 

'But money, according to the philosopher, [1] was invented chiefly forthe purpose of exchange; and consequently the proper and principaluse of money is its consumption or alienation, whereby it is sunk inexchange. Hence it is by its very nature unlawful to take payment forthe use of money lent, which payment is known as usury; and, just asa man is bound to restore other ill-gotten goods, so he is bound torestore 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 contractof _mutuum_ is shown to be a sale. The distinction between thingswhich are consumed in use (_res fungibiles_), and which are notconsumed in use (_res non fungibiles_) was familiar to the civillawyers; but what they had never perceived was precisely what Aquinasperceived, namely, that the loan of a fungible thing was in fact nota loan at all, but a sale, for the simple reason that the ownershipin 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 wehave seen above, in treating of sales, the essential basis of justicein exchange was the observance of _aequalitas_ between buyer andseller--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 offungibles of the same value as those lent. If the particular fungiblesold happened to be money, the estimation of the just price was asimple matter--it was the return of an amount of money of equal value. As money happened to be the universal measure of value, this simplymeant the return of the same amount of money. Those who maintainedthat something additional might be claimed for the use of the moneylost sight of the fact that the money was incapable of being usedapart from its being consumed. [1] To ask for payment for the sale ofa thing which not only did not exist, but which was quite incapableof existence, was clearly to ask for something for nothing--whichobviously offended against the first principles of commutativejustice. 'He that is not bound to lend, ' says Aquinas in another partof the same article, 'may accept repayment for what he has done, buthe must not exact more. Now he is repaid according to equality ofjustice if he is repaid as much as he lent, wherefore, if he exactsmore for the usufruct of a thing which has no other use but theconsumption of its substance, he exacts a price of somethingnon-existent, and so his exaction is unjust. '[2] And in the nextarticle the principle that _mutuum_ is a sale appears equally clearly:'Money cannot be sold for a greater sum than the amount lent, whichhas 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 toprevent its being spent, and in this condition lent for any purpose. In this case, of course, the transaction would not be a _mutuum_, buta _locatio et conductio_, and therefore a price could be charged forthe 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 ofexchange: of goods for goods, or barter; of goods for money, or sale;and of money for money; and adds, 'In his contractibus . .. Generaliterjustitia in hoc consistit quod fiant sine fraude, et serveturaequalitas 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'sthought, however, will convince us that money is in fact sterile untillabour has been applied to it. In this sense money differs in itsessence from a cow or a tree. A cow will produce calves, or a treewill produce fruit without the application of any exertion by itsowner; but, whatever profit is derived from money, is derived from theuse to which it is put by the person who owns it. This is all thatthe scholastics meant by the sterility of money. They never thoughtof denying that money, when properly used, was capable of bringing itsemployer a profit; but they emphatically asserted that the profit wasdue to the labour, and not to the money. 

Antoninus of Florence clearly realised this: 'Money is not profitableof itself alone, nor can it multiply itself, but it may becomeprofitable through its employment by merchants';[1] and Bernardine ofSienna says: 'Money has not simply the character of money, but ithas beyond this a productive character, which we commonly callcapital. '[2] 'What is money, ' says Brants, 'if it is not a means ofexchange, of which the employment and preservation will give a profit, if he who possesses it is prudent, active, and intelligent? If thismoney is well employed, it will become a capital, and one may derivea profit from it; but this profit arises from the activity of him whouses it, and consequently this profit belongs to him--it is the fruit, the remuneration of his labour. .. . Did they (the scholastics) saythat it was impossible to draw a profit from a sum of money? No; theyadmitted fully that one might _de pecunia lucrari_; but this _lucrum_does not come from the _pecunia_, but from the application of labourto 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 ofthe loan was the return of the amount lent; if, on the contrary, theborrower 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 lentwould therefore be to make a payment to one person for the labour ofanother. [1] The exaction of usury was therefore the exploitation ofanother man's exertion. [2]

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

[Footnote 2: Neumann, when he says that 'it was sinful to recompensethe use of capital belonging to another' (_Geschichte des Wuchers inDeutschland_, p. 25), seems to miss the whole point of the discussion. The teaching of the canonists on rents and partnership shows clearlythat the owner of capital might draw a profit from another's labour, and the central point of the usury teaching was that money which hasbeen 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 caseof sales were applied to usury. The raising of the price of a loanon account of some special benefit derived from it by the borrower isprecisely analogous to raising the sale price of an object because itis of some special individual utility to the buyer. On the otherhand, as we shall see further down, any special damage suffered by thelender was a sufficient reason for exacting something over and abovethe amount lent; this was precisely the rule that applied in the caseof sales, when the seller suffered any special damage from partingwith the object sold. Thus the analogy between sales and loans wascomplete at every point. In both, equality of sacrifice was the testof justice. 

Nor could it be suggested that the delay in the repayment of the loanwas a reason for increasing the amount to be repaid, because thisreally amounted to a sale of time, which, of its nature, could not beowned. [1]

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

The scholastic teaching, then, on the subject was quite plain andunambiguous. Usury, or the payment of a price for the use of a sumlent in addition to the repayment of the sum itself, was in allcases prohibited. The fact that the payment demanded was moderate wasirrelevant; there could be no question of the reasonableness of theamount of an essentially unjust payment. [1] Nor was the payment ofusury rendered just because the loan was for a productive purpose--inother words, a commercial loan. Certain writers have maintained thatin 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 somespecial individual advantage enjoyed by the buyer (or borrower). It was quite impossible to distinguish, according to the scholasticteaching, between taking an additional payment because the lender madea profit by using the loan wisely, and taking it because the borrowerwas in great distress, and therefore derived a greater advantage fromthe loan than a person in easier circumstances. The erroneous notionthat loans for productive purposes were entitled to any specialtreatment was finally dispelled in 1745 by an encyclical of BenedictXIV. [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; DeMetz-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 thepresent day think that the prohibition of usury was the same thingas the prohibition of interest. There could not be a greater mistake. While usury was in all circumstances condemned, interest was in everycase allowed. The justification of interest rested on precisely thesame ground as the prohibition of usury, namely, the observance of theequality of commutative justice. It was unjust that a greater priceshould 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 aworse position because of his having made the loan. In other words, the consideration for the loan could not be increased because of anyspecial benefit which it conferred on the borrower, but it couldbe increased on account of any special damage suffered by thelender--precisely the same rule as we have seen applied in the caseof sales. The borrower must, in addition to the repayment of the loan, indemnify the lender for any damage he had suffered. The measure ofthe damage was the difference between the lender's condition beforethe loan was made and after it had been repaid--in other words, hewas entitled to compensation for the difference in his conditionoccasioned by the transaction--_id quod interest_. 

Before we discuss interest properly so called, we must say a wordabout 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 hadany doubt, to attach to the original contract of loan an agreementthat a penalty should be paid in case of default in the repaymentof the loan at the stipulated time. [1] The justice of the _poenaconventionalis_ was recognised by Alexander of Hales, [2] and by DunsScotus, who gives a typical form of the stipulation as follows: 'Ihave need of my money for commerce, but shall lend it to you till acertain 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 shallsuffer 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 distinguishedfrom the former by being based upon a presumed injury, whereas theinjury in _damnum emergens_ must be proved; and for the latter becausethe damage must be presumed to have occurred after the expiration ofthe loan period, whereas in _lucrum cessans_ the damage was presumedto have occurred during the currency of the loan period. The importantthing to remember is that these titles were really distinct. [4] Theessentials of a _poena conventionalis_ were, stipulation from thefirst day of the loan, presumption of damage, and attachment to aloan which was itself gratuitous. [5] The _Summa Astesana_ clearlymaintained 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 wasgenerally divided into two kinds, _damnum emergens_ and _lucrumcessans_. The former included all cases where the lender had incurredan actual loss by reason of his having made the loan; whereas thelatter included all cases where the lender, by parting with his money, had lost the opportunity of making a profit. This distinction was madeat least as early as the middle of the thirteenth century, and wasalways 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 byAquinas that it was not afterwards questioned: 'A lender may withoutsin enter an agreement with the borrower for compensation for the losshe incurs of something he ought to have, for this is not to sellthe use of money, but to avoid a loss. It may also happen that theborrower avoids a greater loss than the lender incurs, wherefore theborrower may repay the lender with what he has gained. '[2] The usualexample given to illustrate how _damnum emergens_ might arise, wasthe case of the lender being obliged, on account of the failure of theborrower, 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 _lucrumcessans_. According to some writers, the latter was the only trueinterest. Dr. Cleary quotes some thirteenth-century documents in whicha clear distinction is made between _damnum_ and _interesse_;[1] andit seems to have been the common custom in Germany at a later dateto distinguish between _interesse_ and _schaden_. [2] Although thedivision between these two titles was very indefinite, they did notmeet recognition with equal readiness; the title _damnum emergens_was universally admitted by all authorities; while that of _lucrumcessans_ was but gradually admitted, and hedged round with manylimitations. [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 _lucrumcessans_ were divided by a very narrow line, and that it was oftendifficult to distinguish between them. They suggested that theterms _interesse proximum_ and _interesse remotum_ would be moresatisfactory, 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 ina letter from Alexander III. , written in 1176, and addressed to theArchbishop of Genoa: 'You tell us that it often happens in your citythat people buy pepper and cinnamon and other wares, at the time worthnot more than five pounds, promising those from whom they receivedthem six pounds at an appointed time. Though contracts of thiskind and under such a form cannot strictly be called usurious, yet, nevertheless, the vendors incur guilt, unless they are really doubtfulwhether 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 suchcontracts. '[1] As Dr. Cleary points out, the trader is held by thisdecision to be entitled to a recompense on account of a probable lossof profit, and the decision consequently amounts to a recognition ofthe title _lucrum cessans_. [2] The title is also recognised by Scotusand 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_ isobscure. In the article on usury he expressly states that 'the lendercannot enter an agreement for compensation through the fact that hemakes no profit out of his money, because he must not sell that whichhe has not yet, and may be prevented in many ways from having. '[1] Twocomments must be made on this passage; first, that it only refers tomaking a stipulation in advance for compensation for profit lost, anddoes not condemn the actual payment of compensation;[2] second, thatthe point is made that the probability of gaining a profit on money isso problematical as to make it unsaleable. As Ashley points out, thelatter consideration was peculiarly important at the time when the_Summa_ was composed; and, when in the course of the followingtwo centuries the opportunities for reasonably safe and profitablebusiness investments increased, the great theologians conceived thatthey were following the real thought of Aquinas by giving to thisexplanation a pure _contemporanea expositio_. The argument in favourof this construction is strengthened by a reference to the article ofthe _Summa_ dealing with restitution, [3] where it is pointed out thata man may suffer in two ways--first, by being deprived of what heactually has, and, second, by being prevented from obtaining what hewas on his way to obtain. In the former case an equivalent must alwaysbe restored, but in the latter it is not necessary to make good anequivalent, 'because to have a thing virtually is less than to have itactually, and to be on the way to obtain a thing is to have itmerely virtually or potentially, and so, were he to be indemnified byreceiving the thing actually, he would be paid, not the exact valuetaken from him, but more, and this is not necessary for salvation. However, he is bound to make some compensation according to thecondition of persons and things. ' Later in the same article we aretold that 'he that has money has the profit not actually, but onlyvirtually; and it may be hindered in many ways. '[4] It seemsquite clear from these passages that Aquinas admitted the right tocompensation for a profit which the lender was hindered from making onaccount of the loan; but that, in the circumstances of the time, theprobability of making such a profit was so remote that it could notbe made the basis of pecuniary compensation. The probability of therebeing a _lucrum cessans_ was thought small, but the justice of itsreward, 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 thetitle _lucrum cessans_ was practically universally admitted by thetheologians of the fifteenth century. [1]

[Footnote 1: Ashley, _op. Cit. _, p. 99. _Lucrum cessans_ was definedby Navarrus as 'amissio facta a creditore per pecuniam sibi nonredditam' (Endemann, _Studien_, vol. Ii. P. 279). ]

Of course the burden of proving that an opportunity for profitableinvestment had been really lost was on the lender, but this onuswas sufficiently discharged if the probability of such a loss wereestablished. In the fifteenth century, with the expansion of commerce, it came to be generally recognised that such a probability could bepresumed in the case of the merchant or trader. [1] The final conditionof this development of the teaching on _lucrum cessans_ is thus statedby Ashley:[2] 'Any merchant, or indeed any person in a tradingcentre where there were opportunities of business investment (outsidemoney-lending itself) could, with a perfectly clear conscience, and without any fear of molestation, contract to receive periodicalinterest from the person to whom he lent money; _provided only_ thathe first lent it to him gratuitously, for a period that might be madevery short, so that technically the payment would not be reward forthe use, but compensation for the non-return of the money. ' At a laterperiod than that of which we are treating in the present essay theshort gratuitous period could be dispensed with, but until the end ofthe 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 bereasonable in regard to the loss of opportunity actually experienced;'Lenders, ' says Buridan, 'must not take by way of _lucrumcessans_ more than they would have actually made by commerce or inexchange';[1] and Ambrosius de Vignate explains that compensationmust 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 ofthe loan could be recovered, namely, _periculum sortis_. In one senseit was a contradiction in terms to speak of the element of risk inconnection with usury, because from its very definition usury was gainwithout risk as opposed to profit from a trading partnership, which, as we shall see presently, consisted of gain coupled with the risk ofloss. It could not be lost sight of, however, that in fact there mightbe a risk of the loan not being repaid through the insolvency of theborrower, or some other cause, and the question arose whether thelender could justly claim any compensation for the undertaking of thisrisk. 'Regarded as an extrinsic title, risk of losing the principalis connected with the contract of _mutuum_, and entitles the lender tosome compensation for running the risk of losing his capital in orderto oblige a possibly insolvent debtor. The greater the danger ofinsolvency, the greater naturally would be the charge. The contractwas indifferent to the object of the loan; it mattered not whether itwas intended for commerce or consumption; it was no less indifferentto profit on the part of the borrower; it took account simply of thelatter's ability to pay, and made its charge accordingly. It resembledconsequently the contracts made by insurance companies, wherein thereis a readiness to risk the capital sum for a certain rate of payment;the only difference was that the probabilities charged for were notso much the likelihood of having to pay, as the likelihood of notreceiving back. '[1]

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

We have referred above, when dealing with the legitimacy of commercialprofits, to the difficulty which was felt in admitting the justiceof compensation for risk, on account of the Gregorian Decretal onthe subject. The same decree gave rise to the same difficulty inconnection with the justification of a recompense for _periculumsortis_. There was a serious dispute about the actual wording of thedecree, and even those who agreed as to its wording differed as to itsinterpretation. [1] The justice of the title was, however, admitted byScotus, who said that it was lawful to stipulate for recompense whenboth the principal and surplus were in danger of being lost[2]; byCarletus;[3] and by Nider. [4] The question, however, was still hotlydisputed at the end of the fifteenth century, and was finally settledin 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 wereother grounds also, which cannot be reduced to the classification ofextrinsic titles, on which more than the amount of the loan might bejustly returned to the lender. In the first place, the lender mightjustly receive anything that the borrower chose to pay over and abovethe loan, voluntarily as a token of gratitude. 'Repayment for a favourmay be done in two ways, ' says Aquinas. 'In one way, as a debt ofjustice; and to such a debt a man may be bound by a fixed contract;and its amount is measured according to the favour received. Whereforethe borrower of money, or any such thing the use of which is itsconsumption, is not bound to repay more than he received in loan; andconsequently it is against justice if he is obliged to pay back more. In another way a man's obligation to repayment for favour receivedis based on a debt of friendship, and the nature of this debt dependsmore on the feeling with which the favour was conferred than on thequestion of the favour itself. This debt does not carry with it acivil obligation, involving a kind of necessity that would exclude thespontaneous 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 atusury under certain conditions. In such cases the lender might commitusury in receiving, but the borrower would not commit usury in payingan amount greater than the sum lent. It was necessary, however, inorder that borrowing at usury might be justified, that the borrowershould be animated by some good motive, such as the relief of his ownor another's need. The whole question was settled once and for all byAquinas: 'It is by no means lawful to induce a man to sin, yet it islawful to make use of another's sin for a good end, since even Goduses all sin for some good, since He draws some good from everyevil. .. . Accordingly it is by no means lawful to induce a man to lendunder a condition of usury; yet it is lawful to borrow for usury froma man who is ready to do so, and is a usurer by profession, providedthat the borrower have a good end in view, such as the relief of hisown or another's need. .. . He who borrows for usury does not consentto the usurer's sin, but makes use of it. Nor is it the usurer'sacceptance of usury that pleases him, but his lending, which isgood. '[1]

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

We should mention here the _montes pietatis_, which occupied aprominent place among the credit-giving agencies of the later MiddleAges, although it is difficult to say whether their methods wereexamples of or exceptions to the doctrines forbidding usury. Theseinstitutions were formed on the model of the _montes profani_, thesystem of public debt resorted to by many Italian States. Starting inthe middle of the twelfth century, [1] the Italian States hadrecourse to forced loans in order to raise reserves for extraordinarynecessities, and, in order to prevent the growth of disaffection amongthe citizens, an annual percentage on such loans was paid. A fundraised by such means was generally called a _mons_ or heap. Thepropriety of the payment of this percentage was warmly contestedduring the fourteenth and fifteenth centuries--the Dominicans andFranciscans defending it, and the Augustinians attacking it. But itsjustification was not difficult. In the first place, the loans weregenerally, if not universally, forced, and therefore the payment ofinterest on them was purely voluntary. As we have seen, Aquinas wasquite clear as to the lawfulness of such a voluntary payment. Inthe second place, the lenders were almost invariably members ofthe trading community, who were the very people in whose favour arecompense for _lucrum cessans_ would be allowed. [2] Laurentius deRodulphis argued in favour of the justice of these State loans, andcontended that the bondholders were entitled to sell their rights, butadvised good Christians to abstain from the practice of a right aboutthe justice of which theologians were in such disagreement[3]; andAntoninus of Florence, who was in general so strict on the subject ofusury, 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 anorganisation to provide credit facilities for poor borrowers, whichwas in many ways analogous to the modern co-operative credit banks. Prior to the middle of the fifteenth century, when this experimentwas initiated, there had been various attempts by the State to providecredit facilities for the poor, but these need not detain us here, asthey did not come to anything. [1] The first of the _montes pietatis_was founded at Orvieto by the Franciscans in 1462, and after thatyear they spread rapidly. [2] The _montes_, although their aim wasexclusively philanthropic, found themselves obliged to make a smallcharge to defray their working expenses, and, although one would thinkthat this could be amply justified by the title of _damnum emergens_, it provoked a violent attack by the Dominicans. The principalantagonist of the _montes pietatis_ was Thomas da Vio, who wrote aspecial treatise on the subject, in which he made the point that the_montes_ charged interest from the very beginning of the loan, whichwas 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 betterthat they should borrow at a low rate of interest from philanthropicinstitutions 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 authoritativejudgment in favour of the _montes_. This decree contains an excellentdefinition of usury as it had come to be accepted at that date: 'Usuryis when gain is sought to be acquired from the use of a thing, notfruitful in itself, without labour, expense, or risk on the part ofthe 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 usurymight be permitted by the civil authorities, although it was insistedthat acting in accordance with this permission did not absolve theconscience of the usurer. Albertus Magnus conceded that 'althoughusury is contrary to the perfection of Christian laws, it is at leastnot contrary to civil interests';[1] and Aquinas also justified thetoleration of usury by the State: 'Human laws leave certain thingsunpunished, on account of the condition of those who are imperfect, and who would be deprived of many advantages if all sins were strictlyforbidden and punishments appointed for them. Wherefore human lawhas permitted usury, not that it looks upon usury as harmonisingwith justice, but lest the advantage of many should be hindered. '[2]Although this opinion was controverted by Ægidius Romanus, [3] it wasgenerally accepted by later writers. Thus Gerson says that 'the civillaw, when it tolerates usury in some cases, must not be said to bealways contrary to the law of God or the Church. The civil legislator, acting in the manner of a wise doctor, tolerates lesser evils thatgreater ones may be avoided. It is obviously less of an evil thatslight usury should be permitted for the relief of want, than that menshould be driven by their want to rob or steal, or to sell their goodsat an unfairly low price. '[4] Buridan explains that the attitude ofthe State towards usury must never be more than one of toleration;it must not actively approve of usury, but it may tacitly refuse topunish 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 thatthe teaching of the Church on usury was a pronouncement in favour ofthe unproductivity of capital. [1] Thus Rudolf Meyer, one of themost distinguished of 'Christian socialists, ' has argued that if onerecognises the productivity of land or stock, one must also recognisethe productivity of money, and that therefore the Church, in denyingthe productivity of the latter, would be logically driven to denythe productivity of the former. [2] Anton Menger expresses the sameopinion: 'There is not the least reason for attacking from the moraland religious standpoints loans at interest and usury more than anyother form of unearned income. If one questions the legitimacy ofloans at interest, one must equally condemn as inadmissible the otherforms of profit from capital and lands, and particularly the feudalinstitutions of the Middle Ages. .. . It would have been but a logicalconsequence for the Church to have condemned all forms of unearnedrevenue. '[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 mediævalteaching. The whole discussion on usury turned on the distinctionwhich was drawn between things of which the use could be transferredwithout the ownership, and things of which the use could not be sotransferred. In the former category were placed all things whichcould be used, either by way of enjoyment or employment for productivepurposes, without being destroyed in the process; and in the latterall things of which the use or employment involved the destruction. 

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

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

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

The question that caused difficulty was whether money couldbe considered a form of capital. At the present day, when theopportunities of industrial investment are wider than they ever werebefore, the principal use to which money is put is the financing ofindustrial enterprises; but in the Middle Ages this was not the case, precisely because the opportunities of profitable investment wereso few. This is the reason why the mediæval writers did not find itnecessary to discuss in detail the rights of the owner of money whoused it for productive purposes. But of the justice of a profit beingreaped 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 profitfrom its wise employment; there was no question about the justice oftaking such a profit; and the only matter in dispute was whether thatprofit should belong to the borrower or the lender of the money. Thisdispute was decided in favour of the borrower on the ground that, according to the true nature of the contract of _mutuum_, the moneywas his property. It was, therefore, never doubted that even moneymight produce a profit for its owner. The only difference betweeninfungible goods and money was that, in the case of the former, theuse might be transferred apart from the property, whereas, in the caseof the latter, it could not be so transferred. 

The recognition of the title _lucrum cessans_ as a ground forremuneration clearly implies the recognition of the legitimacy of theowner of money deriving a profit from its use; and the slowness of thescholastics to admit this title was precisely because of the rarity ofopportunities for so employing money in the earlier Middle Ages. Thenature of capital was clearly understood; but the possibility of moneyconstituting capital arose only with the extension of commerce andthe growth of profitable investments. Those scholastics who strove toabolish or to limit the recognition of _lucrum cessans_ as a groundfor remuneration did not deny the productivity of capital, but simplythought the money had not at that time acquired the characteristics ofcapital. [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 recognisedthe legitimacy of unearned income, it would be dispelled by anunderstanding of their teaching on rents and partnership, in theformer of which they distinctly acknowledged the right to draw anunearned income from one's land, and in the latter of which theyacknowledged 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 ofreceiving a rent from a tenant in occupation of one's lands, becauseland was understood to be essentially a thing of which the use couldbe sold apart from the ownership; and it was also recognised that therecipient of such a rent might sell his right to a third party, whocould then demand the rent from the tenant. When this was admitted itwas but a small step to admit the right of the owner of land to createa rent in favour of another person in consideration for somepayment. The distinctions between a _census reservativus_, or a rentestablished when the possession of land was actually transferred to atenant, and a _census constitutivus_, or a rent created upon propertyremaining in the possession of the payer, did not become the subjectof discussion or difficulty until the sixteenth century. [1] Thelegitimacy of rent charges does not seem to have been questionedby the theologians; the best proof of this being the absence ofcontroversy about them in a period when they were undoubtedly verycommon, especially in Germany. [2] Langenstein, whose opinion onthe subject was followed by many later writers, [3] thought that thereceipt of income from rent charges was perfectly justifiable, whenthe object was to secure a provision for old age, or to provide anincome for persons engaged in the services of Church or State, butthat it was unjustifiable if it was intended to enable nobles tolive in luxurious idleness, or plebeians to desert honest toil. It isobvious that Langenstein did not regard rent charges as wrongful inthemselves, 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 chargeswere made by the Popes. A large part of the revenue of ecclesiasticalbodies consisted of rent charges, and in 1425 several persons in thediocese of Breslau refused to pay the rents they owed to their clergyon the ground that they were usurious. The question was referred toPope Martin V. , whose bull deciding the matter was generally followedby all subsequent authorities. The bull decides in favour of thelawfulness 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') anddetermined beforehand; they must be moderate, not exceeding seven orten per cent. ; and they must be capable of being repurchased at anymoment in whole or in part, by the repayment of the same sum for whichthey were originally created. On the other hand, the payer of the rentmust never be forced to repay the purchase money, even if the goods onwhich the rent was charged had perished--in other words, the contractcreating the rent charge was one of sale, and not of loan. The bullrecites that such conditions had been observed in contracts of thisnature from time immemorial. [1] A precisely similar decree was issuedby 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 uponsomething of which the use could be separated from the ownership, as otherwise it would savour of usury. [2] In the sixteenth centuryinteresting discussions arose about the possibility of creating apersonal rent charge, not secured on any specific property, but suchdiscussions did not trouble the writers of the period which we aretreating. The only instance of such a contract being considered isfound in a bull of Nicholas V. In 1452, permitting such personal rentcharges in the kingdoms of Aragon and Sicily, but this permission waspurely local, and, as the bull itself shows, was designed to meet theexigencies 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 ofthe contention that the mediæval teaching on usury was based on theunproductivity of capital, that certain writers have endeavouredto prove that the permission of partnership was but a subterfuge, consciously designed to justify evasions of the usury law. Furtherhistorical knowledge, however, has dispelled this misconception;and it is now certain that the contract of partnership was widelypractised and tolerated long before the Church attempted to insiston the observance of its usury laws in everyday commercial life. [1]However interesting an investigation into the commercial andindustrial partnerships of the Middle Ages might be, we must notattempt to pursue it here, as we have rigidly limited ourselves to aconsideration 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 disapprovalfrom the Church. This silence amounts to a justification; and we maytherefore say that, even before Aquinas devoted his attention to thesubject, the Church fully approved of an institution which providedthe 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 wishedto engage in foreign trade, but who did not wish to travel themselves, entrusted their wares to agents or representatives. The merchant wasknown as the _commendator_ or _socius stans_, and the agent as the_commendatarius_ or _tractator_. The most usual arrangement for thedivision of the profits of the adventure was that the _commendatarius_should receive one-fourth and the _commendator_ three-fourths. Ata slightly later date contracts came to be common in which the_commendatarius_ contributed a share of capital, in which case hewould receive one-fourth of the whole profit as _commendatarius_, anda proportionate share of the remainder as capitalist. This contractcame to be generally known as _collegantia_ or _societas_. Contractsof this kind, though originally chiefly employed in overseasenterprise, afterwards came to be utilised in internal trade andmanufacturing 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 havecaused the slightest difficulty to the canonists. In 1206 InnocentIII. Advised the Archbishop of Genoa that a widow's dowry should beentrusted to some merchant so that an income might be obtained bymeans of honest gain. [1] Aquinas expressly distinguishes betweenprofit made from entrusting one's money to a merchant to be employedby him in trade, and profit arising from a loan, on the ground thatin the former case the ownership of the money does not pass, and thattherefore the person who derives the profit also risks the loan. 'Hewho lends money transfers the ownership of the money to the borrower. Hence the borrower holds the money at his own risk, and is bound topay it all back: wherefore the lender must not exact more. On theother hand, he that entrusts his money to a merchant or craftsman soas to form a kind of society does not transfer the ownership of themoney to them, for it remains his, so that at his risk the merchantspeculates with it, or the craftsman uses it for his craft, andconsequently he may lawfully demand, as something belonging to him, part of the profits derived from his money. '[2] This dictum of Aquinaswas the foundation of all the later teaching on partnership, and theimportance of the element of risk was insisted on in strong terms bythe later writers. According to Baldus, 'when there is no sharingof risk there is no partnership';[3] and Paul de Castro says, 'Apartnership when the gain is shared, but not the loss, is not to bepermitted. '[4] 'The legitimacy, ' says Brants, 'of the contract of_commenda_ always rested upon the same principle; capital could not beproductive except for him who worked it himself, or who caused itto be worked on his own responsibility. This latter condition wasrealised 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, _DeUsuris_, i. 62; Biel, _Op. Cit. _, IV. Xv. 11. ]

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

Although the contract of partnership was fully recognised by thescholastics, it was not very scientifically treated, nor were thedifferent species of the contract systematically classified. The onlyclassification adopted was to divide contracts of partnership intotwo kinds--those where both parties contributed labour to a jointenterprise, and those where one party contributed labour and the otherparty money. The former gave no difficulty, because the justice of theremuneration of labour was admitted; but, while the latter was noless fully recognised, cases of it were subjected to careful scrutiny, because it was feared that usurious contracts might be concealed underthe appearance of a partnership. [1] The question which occupied thegreatest space in the treatises on the subject was the share in whichthe profits should be divided between the parties. The only rule whichcould be laid down, in the absence of an express contract, was thatthe parties should be remunerated in proportion to the services whichthey contributed--a rule the application of which must have beenattended with enormous difficulties. Laurentius de Rodulphis insiststhat equality must be observed;[2] and Angelus de Periglis de Perusio, the first monographist on the subject, does not throw much more lighton the question. The rule as stated by this last writer is that in thefirst place the person contributing money must be repaid a sum equalto what he put in, and the person contributing labour must be paida sum equal to the value of his labour, and that whatever surplusremains must be divided between the two parties equally. [3] Thequestion of the shares in which the profits should be distributed wasnot one, however, that frequently arose in practice, because it wasthe almost universal custom for the partners to make this a term oftheir original contract. Within fairly wide limits it was possibleto arrange for the division of the profits in unequal shares--saytwo-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 andbear only one-third of the loss; but it might be contracted that, whenthe loss was deducted from the gain, one party might have two-thirdsof the balance, and the other one-third. [4] In no case, of course, could the party contributing the money stipulate that his principalshould in all cases be returned, because that was a _mutuum_. Theparty contributing the labour might validly contract that he shouldbe paid for his labour in any case, but, if this was so, the contractceased to be a _societas_ and became a _locatio operarum_, or ordinarycontract of work for wages. In all cases, common participation in thegains and losses of the enterprise was an essential feature of thecontract 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 referenceto the _trinus contractus_, which caused much discussion and greatdifficulty. As we have seen, a contract of partnership was good solong as the person contributing money did not contract that he shouldreceive his original money back in all circumstances. A contract ofinsurance was equally justifiable. There was no doubt that A mightenter into partnership with B; he could further insure himself with Cagainst the loss of his capital, and with D against damage causedby fluctuations in the rate of profits. Why, then, should he notsimultaneously enter into all three contracts with B? If he did so, hewas still B's partner, but at the same time he was protected againstthe loss of his principal and a fair return upon it--in other words, he was a partner, protected against the risks of the enterprise. Thelegitimacy of such a contract--the _trinus contractus_, as it wascalled--was maintained by Carletus in the _Summa Angelica_, which waspublished about 1476, and by Biel. [1] Early in the sixteenth centuryEck, a young professor at Ingolstadt, brought the question of thelegitimacy of this contract before the University of Bologna, but noformal decision was pronounced, and, had it not been for the reactionfollowing the Reformation, the _trinus contractus_ would probably havegained general acceptance. As it was, it was condemned by a provincialsynod at Milan in 1565, and by Sixtus V. In 1585. [2]

[Footnote 1: _Op. Cit. _, IV. Xv. 11. Lecky attributed the invention ofthe _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 aloan made to the owner--or in some cases the master--of a ship, onthe security of the ship, to be repaid with interest upon the safeconclusion of a voyage. This contract could not be considered apartnership, inasmuch as the property in the money passed to theborrower; but it probably escaped condemnation as usurious on theground that the lender shared in the risk of the enterprise. Thepayment of some additional sum over and above the money lent mightthus be justified on the ground of _periculum sortis_. The contract, moreover, was really one of insurance for the shipowner, and contractsof insurance were clearly legitimate. In any event the legitimacy ofloans 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 doctrineon usury will dispel the idea that the doctrine was founded upon theinjustice of unearned income. Far from the receipt of an unearnedincome from money or other capital being in all cases condemned, itwas unanimously recognised, provided that the income accrued to theowner of the capital, and not to somebody else, and that the rateof remuneration was just. The teaching on partnership rested on thefundamental assumption that a man might trade with his money, eitherby using it himself, or by allowing other people to use it on hisbehalf. In the latter case, the person making use of the money mightbe either assured of being paid a fixed remuneration for his services, in which case the contract was one of _locatio operarum_, or he mightbe willing to let his remuneration depend upon the result of theenterprise, in which case the contract was one of _societas_. Ineither case the right of the owner of the money to reap a profit fromthe operation was unquestioned, provided only that he was willing toshare the risks of loss. But if, instead of making use of his moneyfor trading either by his own exertions or by those of his partneror agent, he chose to sell his money, he was not permitted to receivemore for it than its just price--which was, in fact, the repayment ofthe same amount. This was what happened in the case of a _mutuum_. Inthat case the ownership of the money was transferred to the borrower, who was perfectly at liberty to trade with it, if he so desired, andto reap whatever gain that trade produced. The prohibition of usury, far from being proof of the injustice of an income from capital, isproof of quite the contrary, because it was designed to insure thatthe income from capital should belong to the owner of that capital andto no other person. [1] Although, therefore, no price could be paid fora loan, the lender must be prevented from suffering any damage frommaking the loan, and he might make good his loss by virtue of theimplied collateral contract of indemnity, which we discussed abovewhen treating of extrinsic titles. If the lender, through making theloan, had been prevented from making a profit in trade, he might beindemnified for that loss. All through the discussions on usury wefind express recognition of the justice of the owner of money derivingan income from its employment; all that the teaching of usury was atpains to define was who the person was to whom money, which was thesubject matter of a _mutuum_, belonged. It is quite impossible tocomprehend how modern writers can see in the usury teaching of thescholastics a fatal discouragement to the enterprise of traders andcapitalists; and it is equally impossible to understand howsocialists can find in that doctrine any suggestion of support for theproposition 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 branchof economics about which such profound ignorance ruled in the earlierMiddle Ages as that of money. As we stated above, even as late asthe twelfth century, the theologians were quite content to quote theill-founded and erroneous opinions of Isidore of Seville as finalon the subject. It will be remembered that we also remarked thatthe question of money was the first economic question to receivesystematic scientific treatment from the writers of the later MiddleAges. This remarkable development of opinion on this subject ispractically 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 modernsense. 'The scholastics, ' says Roscher, 'extended their inquiries fromthe economic point of view further than one is generally disposed tobelieve; although it is true that they often did so under a singularform. .. . We can, however, single out Oresme as the greatest scholasticeconomist for two reasons: on account of the exactitude and clarityof his ideas, and because he succeeded in freeing himself from thepseudo-theological systematisation of things in general, and from thepseudo-philosophical deduction in details. '[1]

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

Even in the thirteenth century natural economy had not beenreplaced to any large extent by money economy. The great majorityof transactions between man and man were carried on without theintervention of money payments; and the amount of coin in circulationwas consequently small. [1] The question of currency was not thereforeone to engage the serious attention of the writers of the time. Aquinas does not deal with money in the _Summa_, exceptincidentally, and his references to the subject in the _De RegiminePrincipum_--which occur in the chapters of that work of whichthe authorship is disputed--simply go to the length of approvingAristotle's opinions on money, and advising the prince to exercisemoderation in the exercise of his power of coining _sive in mutandosive 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 thesovereign in connection with the currency only arose when it becamenecessary for the public to protest against abuses. Philip the Fair ofFrance made it part of his policy to increase the revenue by tamperingwith the coinage, a policy which was continued by his successors, until it became an intolerable grievance to his subjects. In vain didthe Pope thunder against Philip;[1] in vain did the greatest poet ofthe 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 thefourteenth century. During the year 1348 there were no less thaneleven variations in the value of money in France; in 1349 there werenine, in 1351 eighteen, in 1353 thirteen, and in 1355 eighteen again. In the course of a single year the value of the silver mark sprangfrom four to seventeen livres, and fell back again to four. [1] Thepractice of fixing the price of many necessary commodities must haveaggravated 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 scholarson the money question. 'Under the stress of facts and of necessity, 'says Brants, 'thinkers applied their minds to the details of thetheory of money, which was the department of economics which, thanksto 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 lightin the fourteenth century upon this weighty question; but we knowenough to affirm that the monetary doctrine was very developed andvery far-seeing. '[1] Buridan analysed the different functions andutilities of money, and explained the different ways in which itsvalue might be changed. [2] He did not, however, proceed to discuss themuch more important question as to when the sovereign was entitledto make these alterations. This was reserved for Nicholas Oresme, whopublished his famous treatise about the year 1373. The merits of thiswork have excited the unanimous admiration of all who have studied it. Roscher says that it contains 'a theory of money, elaborated in thefourteenth century, which remains perfectly correct to-day, under thetest of the principles applied in the nineteenth century, and thatwith a brevity, a precision, a clarity, and a simplicity of languagewhich is a striking proof of the superior genius of its author. '[3]According to Brants, 'the treatise of Oresme is one of the first tobe devoted _ex professo_ to an economic subject, and it expresses manyideas which are very just, more just than those which held the fieldfor a long period after him, under the name of mercantilism, and morejust than those which allowed of the reduction of money as if it werenothing more than a counter of exchange. '[4] 'Oresme's treatise onmoney, ' says Macleod, 'may be justly said to stand at the head ofmodern economic literature. This treatise laid the foundations ofmonetary science, which are now accepted by all sound economists. '[5]'Oresme's completely secular and naturalistic method of treating oneof the most important problems of political economy, ' says Espinas, 'is a signal of the approaching end of the Middle Ages and the dawn ofthe Renaissance. '[6] Dr. Cunningham adds his tribute of praise: 'Theconceptions of national wealth and national power were ruling ideas ineconomic matters for several centuries, and Oresme appears to be theearliest of the economic writers by whom they were explicitly adoptedas the very basis of his argument. .. . A large number of pointsof economic doctrine in regard to coinage are discussed with muchjudgment and clearness. '[7] Endemann alone is[8] inclined to quarrelwith the pre-eminence of Oresme; but on this question, he is in aminority 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 tothe first chapter of this treatise, is whether the sovereign has theright to alter the value of the money in circulation at his pleasure, and for his own benefit. He begins the discussion by going over thesame ground as Aristotle in demonstrating the origin and utility ofmoney, and then proceeds to discuss the most suitable materialswhich can be made to serve as money. He decides in favour of gold andsilver, and shows himself an unquestioning bimetallist. He furtheradmits the necessity of some token money of small denominations, to becomposed of the baser metals. Having drawn attention to the transitionfrom the circulation of money, the value of which is recognisedsolely by weight, to the circulation of that which is accepted for itsimprint or superscription, the author insists that the production ofsuch an imprinted coinage is essentially a matter for the sovereignauthority in the State. Oresme now comes to the central point of histhesis. Although, he says, the prince has undoubtedly the power tomanufacture and control the coinage, he is by no means the owner of itafter it has passed into circulation, because money is a thing whichin its essence was invented and introduced in the interests of societyas a whole. 

Oresme then proceeds to apply this central principle to the solutionof 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 ofabsolute necessity, and in the presence of an uncontroverted generalutility. He bases his opposition to unnecessary monetary variation onthe perfectly sound ground that such variation is productive of losseither to those who are bound to make or bound to receive fixed sumsin payment of obligations. The author then goes on to analyse thevarious kinds of variation, which he says are five--_figurae_, _proportionis_, _appellationis_, _ponderis_, and _materiae_. Changesof form (_figurae_) are only justified when it is found that theexisting form is liable to increase the damage which the coins sufferfrom the wear and tear of usage, or when the existing currency hasbeen degraded by widespread illegal coining; changes _proportionis_are only allowable when the relative value of the different metalsconstituting the coinage have themselves changed; simple changes ofname (_appellationis_), such as calling a mark a pound, are neverallowed. Changes of the weight of the coins (_ponderis_) arepronounced by Oresme to be just as gross a fraud as the arbitraryalteration of the weights or measures by which corn or wine are sold;and changes of matter (_materiae_) are only to be tolerated when thesupply of the old metal has become insufficient. The debasement of thecoinage by the introduction of a cheaper alloy is condemned. 

In conclusion, Oresme insists that no alteration of any of the abovekinds can be justified at the mere injunction of the prince; it mustbe accomplished _per ipsam communitatem_. The prince exercisesthe functions of the community in the matter of coinage not as_principalis actor_, but as _ordinationis publicae executor_. It ispointed out that arbitrary changes in the value of money are reallyequivalent to a particularly noxious form of taxation; that theyseriously disorganise commerce and impoverish many merchants; andthat the bad coinage drives the good out of circulation. This lastobservation is of special interest in a fourteenth-century writer, as it shows that Gresham's Law, which is usually credited to asixteenth-century English economist, was perfectly well understood inthe Middle Ages. [1]

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

This brief account of the ground which Oresme covered, and theconclusions at which he arrived, will enable us to appreciate hisimportance. Although his clear elucidation of the principles whichgovern the questions of money was not powerful enough to check thefinancial abuses of the sovereigns of the later Middle Ages, theyexercised a profound influence on the thought of the period, and wereaccepted by all the theologians of the fifteenth century. [2]

[Footnote 2: Biel, _op. Cit. _, IV. Xv. 11; _De Monetarum Potestate etUtilitate_, referred to in Jourdain, _op. Cit. _, p. 34. ]

CHAPTER IV

CONCLUSION

We have now passed in review the principal economic doctrines of themediæval schoolmen. We do not propose to attempt here any detailedcriticism of the merits or demerits of the system which we have butbriefly sketched. All that we have attempted to do is to present thedoctrines in such a way that the reader may be in a position to passjudgment on them. There is one aspect of the subject, however, towhich we may be allowed to direct attention before concluding thisessay. It is the fashion of many modern writers, especially thosehostile to the Catholic Church, to represent the Middle Ages as aperiod when all scientific advance and economic progress were impeded, if not entirely prevented, by the action of the Church. It would beout of place to inquire into the advances which civilisation achievedin the Middle Ages, as this would lead us into an examination of thewhole history of the period; but we think it well to inquire brieflyhow far the teaching of the Church on economic matters was calculatedto interfere with material progress. This is the lowest standardby which we can judge the mediæval economic teaching, which wasessentially aimed at the moral and spiritual elevation of mankind; butit is a standard which it is worth while to apply, as it is thatby which the doctrines of the scholastics have been most generallycondemned by modern critics. To test the mediæval economic doctrineby this, the lowest standard, it may be said that it made for theestablishment and development of a rich and prosperous community. Wemay summarise the aim of the mediæval teaching by saying that, in thematerial sphere, it aimed at extended production, wise consumption, and just distribution, which are the chief ends of all economicactivity. 

It aimed at extended production through its insistence on theimportance and dignity of manual labour. [1] As we showed above, one ofthe principal achievements of Christianity in the social sphere wasto elevate labour from a degrading to an honourable occupation. Theexample of Christ Himself and the Apostles must have made a deepimpression on the early Christians; but no less important was theliving example to be seen in the monasteries. The part played by thegreat religious orders in the propagation of this dignified conceptioncannot be exaggerated. St. Anthony had advised his imitators to busythemselves with meditation, prayer, and the labour of their hands, andhad promised that the fear of God would reside in those who labouredat corporal works; and similar exhortations were to be found in therules of Saints Macarius, Pachomius, and Basil. [2] St. Augustine andSt. Jerome recommended that all religious should work for somehours each day with their hands, and a regulation to this effect wasembodied in the Rule of St. Benedict. [3] The example of educatedand holy men voluntarily taking upon themselves the most menial andtedious employments must have acted as an inspiration to the laity. The mere economic value of the monastic institutions themselves musthave been very great; agriculture was improved owing to the assiduityand experiments of the monks;[4] the monasteries were the nurseriesof all industrial and artistic progress;[5] and the example ofcommunities which consumed but a small proportion of what theyproduced was a striking example to the world of the wisdom and virtueof saving. [6] Not the least of the services which Christian teachingrendered in the domain of production was its insistence upon thedominical repose. [7]

[Footnote 1: See Sabatier, _L'Eglise et le Travail manuel_, andAntoine, _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, _HenryVIII. And the English Monasteries_, vol. Ii. P. 495. ]

[Footnote 7: _Dublin Review_, vol. Xxxiii. P. 305. See Goyau, _Autourdu Catholicisme sociale_, vol. Ii. Pp. 93 _et seq. _]

The importance which the scholastics attached to an extended andwidespread production is evidenced by their attitude towards thegrowth of the population. The fear of over-population does notappear to have occurred to the writers of the Middle Ages;[1] onthe contrary, a rapidly increasing population was considered a greatblessing for a country. [2] This attitude towards the question ofpopulation did not arise merely from the fact that Europe was verysparsely populated in the Middle Ages, as modern research has provedthat the density of population was much greater than is generallysupposed. [3]

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

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

[Footnote 3: Dureau de la Malle, 'Mémoire sur la Population de laFrance au xiv^e Siècle, ' _Mémoires de l'Académie des Inscriptions etBelles-Lettres_, vol. Xiv. P. 36. ]

The mediæval attitude towards population was founded upon the sanctityof marriage and the respect for human life. The utterances of Aquinason the subject of matrimony show his keen appreciation of the naturalsocial utility of marriage from the point of view of increasing thepopulation of the world, and of securing that the new generationshall be brought up as good and valuable citizens. [1] While voluntaryvirginity is recommended as a virtue, it is nevertheless distinctlyrecognised that the precept of virginity is one which by its verynature can be practised by only a small proportion of the human race, and that it should only be practised by those who seek by detachmentfrom earthly pleasures to regard divine things. [2] Aquinas furthersays that large families help to increase the power of the State, anddeserve well of the commonwealth, [3] and quotes with approbation theBiblical injunction to 'increase and multiply. '[4] Ægidius Romanusdemonstrates at length the advantages of large families in theinterests 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 thereformation of family life, which was one of the greatest achievementsof Christianity in the social sphere. In the early days of the Churchthe institution of the family had been reconstituted by moderating theharshness of the Roman domestic rule (_patria potestas_), by raisingthe moral and social position of women, and by reforming the system oftestamentary and intestate successions; and the great importance whichthe early Church attached to the family as the basic unit of sociallife remained unaltered throughout the Middle Ages. [5]

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

The Middle Ages were therefore a period when the production of wealthwas looked upon as a salutary and honourable vocation. The wonderfulartistic monuments of that era, which have survived the interveningcenturies of decay and vandalism, are a striking testimony tothe perfection of production in a civilisation in which work wasconsidered to be but a form of prayer, and the manufacturer wasprompted to be, not a drudge, but an artist. 

In the Middle Ages, however, as we have said before, man did not existfor the sake of production, but production for the sake of man; andwise consumption was regarded as at least as important as extendedproduction. The high estimation in which wealth was held resulted inthe elaboration of a highly developed code of regulation as to themanner in which it should be enjoyed. We do not wish to wearythe reader with a repetition of that which we have already fullydiscussed; it is enough to call attention to the fact that the goldenmean of conduct was the observance of liberality, as distinguished, on the one hand, from avarice, or a too high estimation of materialgoods, and, on the other hand, from prodigality, or an undue disregardfor their value. Social virtue consisted in attaching to wealth itsproper value. 

Far more important than its teaching either on production orconsumption 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 themediævals appears in most marked contrast to the teaching of thepresent day, and it is therefore in this department that the study ofits doctrines is most valuable. As we said above, the modern world hasbecome convinced by bitter experience of the impracticability of mereselfishness as the governing factor in distribution; and the economicthought of the time is concentrated upon devising some new systemof society which shall be ruled by justice. On the one hand, we seesocialists of various schools attempting to construct a Utopiain which each man shall be rewarded, not in accordance with hisopportunities of growing rich at the expense of his fellow-man, butaccording to the services he performs; while, on the other hand, we find the Christian economists striving to induce a harassed andbewildered world to revert to an older and nobler social ethic. 

It is no part of our present purpose to estimate the relative meritsof these two solutions for our admittedly diseased society. Nor is itour purpose to attempt to demonstrate how far the system of economicteaching which we have sketched in the foregoing pages is applicableat the present day. We must, however, in this connection drawattention to one important consideration, namely, that the mediævaleconomic teaching was expressly designed to influence the onlyconstant element in human society at every stage of economicdevelopment. Methods of production may improve, hand may give place tomachine industry, and mechanical inventions may revolutionise all ourconceptions of transport and communication; but there is one elementin economic activity that remains a fixed and immutable factorthroughout the ages, and that element is man. The desires and theconscience of man remain the same, whatever the mechanical environmentwith which he is encompassed. One reason which suggests the view thatthe mediæval teaching is still perfectly applicable to economic lifeis that it was designed to operate upon the only factor of economicactivity that has not changed since the Middle Ages--namely, thedesires and conscience of man. 

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

As we said above, it is no part of our intention to estimate therelative merits of the solutions of our social evils proposed bysocialists and by Catholic economists. One thing, however, we feelbound to emphasise, and that is that these two solutions are notidentical. It is a favourite device of socialists, especially inCatholic countries, to contend that their programme is nothing morethan a restatement of the economic ideals of the Catholic Church asexhibited in the writings of the mediæval scholastics. We hope thatthe foregoing pages are sufficient to demonstrate the incorrectness ofthis assertion. Three main principles appear more or less clearly inall modern socialistic thought: first, that private ownership of themeans of production is unjustifiable; second, that all value comesfrom labour; and, third, that all unearned income is unjust. Thesethree great principles may or may not be sound; but it is quitecertain that not one of them was held by the mediæval theologians. In the section on property we have shown that Aquinas, following theFathers and the tradition of the early Church, was an uncompromisingadvocate of private property, and that he drew no distinction betweenthe means of production and any other kind of wealth; in the sectionon just price we have shown that labour was regarded by themediævals as but a single one of the elements which entered into thedetermination of value; and in the section on usury we have shown thatmany forms of unearned income were not only tolerated, but approved bythe scholastics. 

We do not lose sight of the fact that socialism is not a mere economicsystem, but a philosophy, and that it is founded on a philosophicalbasis which conflicts with the very foundations of Christianity. We are only concerned with it here in its character of an economicsystem, and all we have attempted to show is that, as an economicsystem, it finds no support in the teaching of the scholastic writers. We do not pretend to suggest which of these two systems is more likelyto bring salvation to the modern world; we simply wish to emphasisethat they are two systems, and not one. One's inability to distinguishbetween Christ and Barabbas should not lead one to conclude that theyare 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 Christianeconomic 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 adoptedby 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 civilisationsto, 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 commensuratein 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 byAquinas, 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 byscholastics, 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 fifteenthcenturies, 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 towardsfixing, 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.