Theological Economics of Medieval Usury Theory

From Joan Lockwood O’Donovan, Bonds of Imperfection.

medieval economics: A Christo-centric ethic of perfection that drew heavily upon the Stoic-Platonist tradition.  

• drew upon the Patristic vision of polarity of opposing loves of spiritual and earthly riches, “viewed avarice as the root of all evil,” property right as morally tainted (Lockwood O’Donovan, 99).  
• Not fully Aristotelian, though.  The Patristic vision viewed community primarily in terms of a common participation in invisible goods and a charitable sharing of divisible goods by its members.  

Canonical Development of the Usury Prohibition

The church recognized two intrinsic titles to interest (indemnity) on loans in the case of delayed repayment:  the title of damages sustained and that of profit foregone.  Further, contracts are distinguished from loans.

• The locatio: a rental contract on a piece of property
• The societas: partnership where profit and risk were shared
• The Census:  sale or purchase for life of a rent-charge (the return varied on the productivity)

The church in fact gave moral license to limited opportunities for investment and credit that favored the welfare of the poor but did not serve an expanding commercial economy (101-102).  However, as contracts became more complex over time, it was really hard to not engage in some form of usury.  

The Earlier Medieval Treatments of Usury

God’s original will for human community:  

• its members make common use of the goods of creation to relieve material want (104).  
• air, sun, rain, sea, seasons (divinely created as koinonia, unable to be monopolized; cf. modern American government attacking those who store rainwater for their gardens)
• Gratian argues this did not mean private ownership and amassing wealth.  It’s hard to see how this squares with Proverbs injunction that a godly man leaves an inheritance.  And if the wealth is to be distributed by the church, it’s hard to see how the church can make any claim to poverty and non-possessorship.

The usurer sells time:  time originally belongs to God, and secondarily belongs to all creatures.  Thus, to sell time is to injure all.  Further, time is a koinon, indivisibly shared by all creatures.  

Roman contract of loan (mutuum):  a fungible good is transferred from owner to borrower. Ownership is transferred because the borrower is not expected to repay the exact same item.  The borrower assumes the risk of loss and is bound to repay it.  Thefore, Lockwood O’Donovan argues, “The medieval theologians and canonists could argue, in the first place, that the usurer charges the debtor for what the debtor already owns” (107).

The Thomistic Treatment of Usury

Commutative justice (ST 2a2ae. 78)

Usury sins against justice in the exchange, a violation against equality in the exchange

Thomas does presuppose property right

• sterility of money theory
• Money is a means of measuring equivalence in an exchange.  It can only establish equivalence if it is formally equal to the thing itself in exchange (
• the usurer inflicts on the needy borrower a moral violence of making him repay more than he was lent.
• Thomas also argues that human industry, not money is the cause of profit.
• to charge separately for a thing

Luther’s restatement of the medieval inheritance

law of natural equity: we do not seek our profit in our neighbor’s loss.

Medieval Non-Proprietary Community

Outline from Bonds of Imperfection eds O'Donovan and O'Donovan (Eerdmans).

The Proprietary Subject and the Crisis of Liberal Rights

Key point:  The possession of rights is always proprietorship; all natural rights (for the West) originate in property rights (Joan Lockwood O'Donovan, 75).   This originated with Pope John XXIII (1329 AD).  He saw man as created with full lordship and ownership as possession (dominum).  His point was to discredit Fransiscan theologians who insisted on radical poverty.

This is the rights culture that would spring full-bloom in the modern world.  The problem it created was how to have community if the above take on rights is true.

Patristic Foundations of Non-Proprietary Community

• The fathers thought men should share as an imitation of God's sharing his goodness with us.

Augustine's Achievement

Augustine distinguished between two objective rights:  (a) divine right, by which all things belong to the righteous, and (b) human right, in which is the jurisdiction of earthly kings (79, quoting Epistle 93).

• Justice for Augustine is a rightly-ordered love seen in the body politic, which would mean men loving the highest and truest good, God, for God's sake.
• Therefore, the bonum commune is a sharing in a rightly-ordered love (City of God, BK 19.21).
• Because this sharing is spiritual, it is common and inclusive.  Thus we have a republic in the truest sense of the word:  res publica, public things.
• Conversely, a disordered love in the soul is the privatization of the good.
• Therefore, a disordered love will see the destruction of community.

O'Donovan comments,

It is the regulated interaction of private spheres of degenerate freedom, secured by the protection of property and enhanced by the provision of material benefits at the hands of unscrupulous tyrants (80).

Fransiscan Poverty: The Evangelical Theology of Non-Possession

• Renouncing property right means that the viator is not a self-possessor, but rather is possessed by Christ and receives his powers (85).  

Wyclif's Ecclesiological Revolution

Irony: Wyclif's reform program actually owed a great deal to Pope John XXIII's reflections.  

• Non-proprietary posession belonged not only to Adam's original state, but all the way forward to the episcopolate today: this should be seen in the church militant (88).  
• Divine lordship (dominum):  per Wyclif's predecessor, Fitzralph, God is the primary possessor and enjoyer of creation.  Therefore, his giving of creation to Adam is a communication and sharing of himself, rather than a transfer of Lordship (89).  
• For the church, for Wyclif, this is God's gift of himself as the love of Christ and the fellowship of the Holy Spirit (2 Corinthians 13).  
• Therefore, all of the "justified," who coexist with Christ's love, share (communicant) in this lordship directly from Christ.
• Therefore, just dominion involves rightly-ordered love towards these communicable goods, which in turn depends on true knowledge of them available in Christ.

Notae Bene

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Some notes on late nominalist theology

Yeah, it's a sexy title. I am almost finished with Heiko Oberman's The Harvest of Medieval Theology. Magnificent doesn't even begin to describe it. In politics and American culture if you call someone a "racist" you have effectively won the debate and destroyed his or her career. In theology if you call someone a nominalist it has the same effect.


Oberman's thesis is to say "not so fast" to that project. Not all nominalisms are alike, and you can't simply tag the Reformation with nominalism.

Narrowly speaking, this is a work on the theology of Gabriel Biel. As it is, one must be careful extrapolating Biel’s thought onto the canvas of late medieval theology. On the other hand, Oberman conclusively argues that Biel’s nominalism is not the stark break from an earlier Pristine Thomism that one often thinks.

Biel’s theology can be structured around a dialectic: ordained power and absolute power.

The potentia ordinata and absoluta should not be seen as two different ways of divine acting, since all of God's works ad extra are united (Oberman 37). God does things according to the laws he has established, potentia ordinata. However, he can do everything that does not imply a contradiction, potentia absoluta.

de potentia ordinata: necessity of the consequence; relates to the contingent order. Since this is not a logical absolute, this means humans cannot predict what predestination per the contingent order will do, since it is contingent (this is a huge point in later Reformed Scholastics).

de potentia absoluta: this does not mean that God can do anything he wants. It means he can do anything that doesn't imply a logical contradiction. This distinction allowed scholastics to speak of miracles in the created order without the later Humean charge of a violation of natural law.

These categories allow Oberman to move from prolegomena (natural knowledge of God) to epistemology proper to man’s created state to justification and beyond. What makes this book so exciting is that everything is interconnected.

Facere quod in se est, Deus non denegat gratiam

Do what is in you--this line summarizes Biel’s thought. It forces him to rework sacramental theology, justification, anthropology and even Mariology around it. And Biel knows all of this. Per creation and the Fall, original sin is simply an “outgrowth of natural difficulties” already present (129). Grace, therefore, “means the infusion by which man is made a friend of God and acceptable for final beatification” (136). This leads Oberman to conclude: “grace is not the root but the fruit of the preparatory good work” (141).  (Incidentally, this is identical to Eastern Orthodox soteriology).

Biel’s conclusions are not surprising. If his maxim holds, then whenever he comes across something that seems to imply divine power “closing the gap,” so to speak, then it needs to be refocused.

Habitus and Justification
The pre-act of Justification: “the dignitas of an act is its bonitas with respect to its heavenly reward...The habit of grace is the necessary bridge between bonitas and dignitas which gives the viator a de condigno claim on his eternal salvation” (161). And consistent with Biel’s de potentia ordinata God must grant the reward to once the conditions have been met (168).

habitus: disposition necessary before man is beatified. Parenthetically, Oberman notes Biel’s concern over a problem--another area where Biel paints himself into a corner: how can one talk about free will if one has a habit of grace? Aren’t people enslaved to their habits, whether good or bad?

Three stages of Justification

Acquire the habit of grace. “The sinner can reach the demarcation line” between the state of sin and the state of grace; he does what he is able to do (175).

meritum de congruo: semi-merit that is a spontaneous act and worthy of its reward. This creates an initial problem, since no human act is worthy of heaven. That’s okay, though, if we remember the above dialectic (absoluta/ordinata). God has committed himself de potentia ordinata to reward meritum de congruo.

Are There Reformed Antecedents?

It is commonly charged that the Reformation nominalized the pristine beauty of earlier theology. But can we really say that Reformed theology is nominalistic? Not really, or not without heavy argumentation. Oberman notes concerning justification, “Biel explicitly rejects the position which later was to be characterized as Protestant” (183).

Inventing the Middle Ages

Norman Cantor (1991) takes the various approaches to medieval historiography and uses them to illustrate scholarship in general, and from there draws a number of interesting conclusions about modern politics, religion, and social life (Cantor, 410-414). Cantor got in trouble for writing this work. While 80% of this work is brilliant scholarship, the other 20% make the tabloids look like peer-reviewed journals! The subtitle of the book should read "Professor Guilty of Sex Scandal: Cantor Tells All!" Then again, that is also why the book is so highly entertaining. After reading this book one may legitimately talk trash about various historians. Just kidding...sort of.

The study of the middle ages in the twentieth century was a microcosm of the larger battle for Western civilization. We see the Hegelian dialectic at work in which the culturally conservative U.S. Government was funding radical left-wing schools in France whose only merit was they were not politically active Communists. We see conservative reactions in the Formalist school, yet even this school merely asserted cultural conservatism--it never defined it at its roots.

Cantor discusses the various approaches to medieval historiography: functionalism, fantasy, the proto-Nazi approach, the French Jewish annales school, and the American school (with a few others).

This review will simply highlight his take on CS Lewis and JRR Tolkien, arguably the two most popular writers in the English language in the twentieth century. Secondary attention is given to the American School.

The Oxford Fantasists

This is probably the most famous part of the book. Cantor discusses the two most beloved writers of the English language in the twentieth century: Clive Staples Lewis and J. R. R. Tolkien. Their project is simple: draw upon the glories of medieval culture to rebuilt the shattered England from the ashes of WWII. While they accomplished no such goal, few can deny the staggering impact they have had on readers across the world.

It is at this point in the narrative that scholarly conservatives (and evangelicals in particular) will cry "shenanigans!" Cantor suggests Lewis was sexually repressed and was unable to consummate his marriage for several months, only to have his wife forcibly seduce him (211). The first problem with this statement is the obvious one: evidence? None. The suspected culprit is nearby, however. One suspects Cantor is relying upon the speculations of Ian Wilson, who bore no love for Lewis. Yet, does not Cantor also admit that Wilson failed in the basics of scholarly research and the demonstration of evidence (Cantor, 430)? Why should we take Wilson seriously?

The American School

The American school is the ideological brainchild of Woodrow Wilson. Its particular historical methods are not that important. On the other hand, Woodrow Wilson's worldview has dominated American politics (and by extension, literally the rest of the world) for 90 years. Not surprisingly, we see the American medieval history school as a justification for post-Christian Western politics.

The actual historical arguments by representatives Strayer and others are not that interesting, except for this: it is a specific justification of the Norman invasion of England, and the replacing of Saxon culture with a specifically Norman and Papal culture (269).  And I say this as a personal descendant of William the Conqueror. Such a task also involves a rewriting of the "other" culture's history. Interestingly, Strayer was also a CIA asset (262). One cannot help but speculate on the connections between Wilsonian progressivism, Norman and Frankish historiography, and the CIA: all of which contribute to the relativising of traditional communities around the world (at least today).

Conclusion:

The book is outrageous because of its daring. Part of it is brilliant historiography, the rest of it is scandalous tabloid. Let's be honest: few can deny the book's entertaining value. Fewer still can deny its scholarly arguments. Indeed, we followed his arguments because he tied them in with the moral peccadilloes of most of his comrades. Granted, I think he overdid it, nor do I ascribe the same normative and omnipotent value to psychoanalysis, especially the sexual aspects.

On the other hand, this book is a must read in terms of historiography. It should be mandated in all freshman history and liberal arts classes. It is interdisciplinary in character and demonstrates the best ways to integrate various fields.