When confronted by a papal decision they don’t accept—teachings against contraception or the ordination of women, for example—some Catholics say, "The Church teaches that now, but it will change its stance, just like it did with usury." But the Catholic Church’s treatment of lending at interest must be situated in its broader context to be properly understood and to address this objection.
Jesus said, "It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God" (Luke 18:25). In the thirteenth century, Thomas Aquinas made the same point in a less poetic fashion when he argued that the perfect happiness we all seek cannot be found in wealth, because money is only a means to acquiring other things, it cannot satisfy all human desire, and it is easily lost. Money, though a good, is not the greatest good, and the pursuit of money must always be subordinate to the good of the human family and the greater glory of God.
Blameworthy by Divine and Human Laws
Usury is condemned by Fathers of the Church—including St. Ambrose, St. Jerome, St. Augustine, and Pope St. Leo the Great—characteristically in the context of taking advantage of the poor. Usury was also condemned at the Council of Elvira, the Council of Arles, and the First Council of Nicea, all in the fourth century. The Second Lateran Council declared in 1139:
We condemn that practice accounted despicable and blameworthy by divine and human laws, denounced by Scripture in the Old and New Testaments, namely, the ferocious greed of usurers; and we sever them from every comfort of the Church, forbidding any archbishop or bishop, or an abbot of any order whatever or anyone in clerical orders, to dare to receive usurers, unless they do so with extreme caution; but let them be held infamous throughout their whole lives and, unless they repent, be deprived of a Christian burial.
Popes Alexander III, Gregory IX, Urban III, Innocent III, and Clement V reiterated these condemnations. The teaching on usury was not seen only as a matter only of revelation but also reason. Commenting on Aristotle’s Politics, Aquinas wrote in the Summa Theologiae that "the Philosopher [Aristotle], led by natural reason, says that ‘to make money by usury is exceedingly unnatural.’" Thomas then offered what came to be the standard argument against usury: It contradicts justice, and it is therefore incompatible with the happiness of the virtuous person in this life and with the rectitude of will required to enjoy perfect happiness in the life to come:
To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality, which is contrary to justice. In order to make this evident, we must observe that there are certain things the use of which consists in their consumption: Thus we consume wine when we use it for drink and we consume wheat when we use it for food. Wherefore in such like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing is granted the thing itself and for this reason, to lend things of this kind is to transfer the ownership. Accordingly if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice. In like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz. one, the return of the thing in equal measure, the other, the price of the use, which is called usury. (ST II-II.78.1)
Money, in the medieval model assumed by Thomas, is a thing consumed in its use, like a meal. Therefore, to charge a person interest on a loan is to demand payment (principal) for selling the money and another payment (interest) for renting the money. John Finnis puts it this way:
To make any further charge in respect of the loan of money is unjust, and the name for this sort of charge—this sort of wrong—is usury. (Aquinas, Oxford University Press, 205–6)
Justice in exchange consists in an equality between what is given on both sides of the exchange. If someone lends amount y, then in justice the borrower must repay amount y. To demand interest in addition to principle is to be unjust.
Today, things look very different. Catholic schools invest their money to get a return, lending at interest is virtually universally accepted, and no contemporary theologian or pope objects. In fact, in The Scholastic Analysis of Usury, John Noonan writes:
By 1750, then, the scholastic theory and the countertheory . . . agree in approving the common practice [of demanding interest on loans]. (The Scholastic Analysis of Usury, Harvard University Press, 377)
A Development of Doctrine
There has certainly been a change from the time of Thomas until today, but there is some dispute about how to characterize this change. Did the Church reverse itself and repudiate its prior teaching? Or was this change a development of doctrine?
To answer this question, let us return to Thomas. He did not think it was right to sell and rent the very same thing, but he did not hold that in all cases a person extending a loan must accept as repayment the exact loan amount. The lender may also require monies as insurance against loss of the principle. Thomas did not think that, had the loan been returned on time, it justified charging interest. He said:
The lender cannot enter an agreement for compensation through the fact that he makes no profit out of his money: because he must not sell that which he has not yet and may be prevented in many ways from having. (ST II-II.78.2 ad 1)
This condemnation rests on circumstances that may, and did, change. In some market situations—apparently the ones prevalent in the thirteenth century—the likelihood of growing money through investment was seen as greatly uncertain. But in contemporary market situations, investment growth is virtually assured. As secure ways of investing money developed, the lender did lose profit on money unless interest was charged.
To take a different example, in the Middle Ages removing a man’s heart was the same as killing him, but today a heart may be removed in surgery to restore life. Intentionally killing an innocent person is always wrong, but the specific actions that count as intentional killing change and depend in part upon the development of technology.
As Noonan makes clear:
As far as dogma in the technical Catholic sense is concerned, there is only one dogma at stake. Dogma is not to be loosely used as synonymous with every papal rule or theological verdict. Dogma is a defined, revealed doctrine taught by the Church at all times and places. Nothing here meets the test of dogma except this assertion: that usury, the act of taking profit on a loan without a just title, is sinful. . . . This dogmatic teaching remains unchanged. What is a just title, what is technically to be treated as a loan, are matters of debate, positive law, and changing evolution. The development of these points is great. But the pure and narrow dogma is the same today as in 1200. (Noonan, 399–400)
In other words, Catholic teaching still holds that usury is morally impermissible, but it does not follow from this (and the Church never did teach) that any charge above principle on a loan is always wrong. The Catechism of the Catholic Church reiterates the condemnation of usurious actions:
The acceptance by human society of murderous famines, without efforts to remedy them, is a scandalous injustice and a grave offense. Those whose usurious and avaricious dealings lead to the hunger and death of their brethren in the human family indirectly commit homicide, which is imputable to them. (CCC 2269)
The teaching on usury is not a simple reversal and rejection of what was taught before but rather a development of the same principles used by Thomas applied to radically new circumstances.