In Catholic social teaching, the use of goods such as money, financial funds, and the created world is governed by the notion that such goods are intended for the use by and for all people. Private property is justifiable given the universal destination of material goods because, as St.
Thomas Aquinas himself noted, people take better care of their own property than they do of goods held in common. Furthermore, Thomas argued, common ownership leads to confusion, and private property is more conducive to peace. These arguments for private property are instrumental in the sense that they argue that private property works better, not that it is morally preferred on its own.
The combination of this universal destination of material goods and private property naturally leads to the inference that people should share what they have with less-fortunate people. The argument founders here for me.
For God and Profit: How Banking and Finance Can Serve the Common Good by Samuel Gregg
It implies only that we should give away what is useless or worse than useless to us. No one has to be admonished to do that, and it is safe to say that little would be shared with the poor. This definition is not helpful, nor is it helpful to say that surplus wealth is wealth above what is necessary for genuine needs and beneficial goods for ourselves and those who depend on us. This clarification provides an answer to how much of our wealth to give away: give away some. Wealth invested also promotes human flourishing, sometimes more than wealth given away.
Gregg then argues that finance contributes to human flourishing. For most economists, this is obvious. For many other people, it is far from obvious.
How Medieval Monks Changed the Face of Banking | American Banker
Many more people know who Bernie Madoff is than know who Jack Bogle is. Yet the same Bernardine also invested time in explaining why it was legitimate for creditors to charge interest on loans to compensate themselves for relinquishing the opportunity to invest their money elsewhere. In such circumstances, he believed the lender had a right to be compensated for what amounted to foregone profits. He wrote: "What in the firm purpose of its owner is ordained to some probable profit has not only the character of mere money or a mere thing, but also beyond this, a certain seminal character of something profitable, which we commonly call capital.
Reaction Reviews: For God and Profit
This title, known as lucrum cessans profits given up or what we today might call the opportunity cost of liquid funds reflected the insight that money was not always sterile and could become productive: money could turn into capital. Franciscans didn't limit themselves to writing about such issues. From the 14th century onward, they sought to help the needy gain access to credit in the form of loan companies.
The first of these lending institutions — more popularly known as montes pietatis — were established by Franciscans and initially funded by donations from wealthy Christians. The montes pietatis lent money to relatively poor people who were unable to access loans from established moneylenders. Borrowers would provide the montes with small items of value as a form of security for the loan's repayment.
One of their strongest boosters, another Franciscan, Bernardine of Feltre , insisted that some interest-charging by such institutions was essential if they were to become self-sustaining. Eventually, this became the norm for all Franciscan-established montes. Not surprisingly, they were also eventually accused of engaging in usury. The montes and their interest-charging practices were, however, vindicated, first by Pope Paul II in when he approved the original montes in Perugia, and then by Pope Leo X in when he issued the papal bull "Inter multiplicis" also affirming that montes were not engaged in usury.
One of the earliest, the Monte dei Paschi di Siena, was founded in and still exists today.
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It is Italy's third-largest bank and employs thousands of people around the world. So even if politicians do not do god, clerics do economics. Questions are asked whether capitalism and Christianity are in sync. About time, too. Having Pell for a patron is a hint the author does not shy from grasping nettles. Samuel Gregg heads up research at the Acton Institute , a Michigan-based think tank named after the Victorian Liberal and Catholic, Lord Acton, and its agenda is to spearhead dialogue on issues that straddle church and commerce.
The book comes in two halves. The first sets out what Christianity in the Middle Ages had to say about business. That period is instructive because it was a time when whatever the church said about anything shaped the way society looked at things. In the second half of the book Gregg sets out a Christian stance for resolving a host of topical financial issues.
The medieval historical background matters because of misconceptions that need clearing up. Some hold Christianity imposed restrictions on banking which stifled entrepreneurship, and worse, the church blocked economic innovation by encouraging the faithful to strive for happiness in the next world rather than in this one.
Both claims, for Gregg, are urban myths. True, the church banned usury, and indeed, it took time for the realization to emerge that charging interest is not always tantamount to usury.