Turning it up to eleven

The Church teaches a set of criteria all of which must be satisfied in order for a decision to go to war to be just. I take it that the fact that all of them must be satisfied means that all of them must be satisfied, not that if several of them are turned up to eleven we can discount the remaining ones to irrelevance.

One way we can turn all the other criteria up to eleven to test the idea is through casuistry. I propose that the hypothetical of MAD, if we fine tune it a little, makes a reasonable gedankenexperiment.

Suppose that two armies are based on entirely different planets, planet Hatfield and planet McCoy. Planet Hatfield has only an army on it: all of the noncombatant civilians in the universe are on planet McCoy, so there are literally no innocents to protect from the Hatfields except the McCoys.

The Hatfields launch a planet-busting attack on the McCoys which cannot be stopped. (It doesn't matter why: presume for the sake of argument that it is an unjust attack).

The only thing the McCoys are capable of doing is to launch weapons to kill some or all of the Hatfields without saving themselves. In other words, there is no serious prospect of success in the McCoys defending themselves through the use of arms. Presume certainty about the scenario, etc: that is, all of the other criteria for a just war are met.

Is it morally licit for the McCoys to launch an attack on the Hatfields?

As frustrating[*] as the answer may be, I think it is that no, it isn't morally licit: each of the criteria in the just war doctrine must be independently satisfied, even when all the other criteria are turned up to eleven.

[*] I think part of the reason we find it frustrating - and I do mean "we" - is that we often find ourselves reluctant to leave ultimate justice to God.

Might makes right

One of the more difficult elements of the just war doctrine is the requirement that the country defending itself must actually have the power to defend itself in order for the decision to wage war to be just.

The Catechism of the Catholic Church:

2309 The strict conditions for legitimate defense by military force require rigorous consideration. The gravity of such a decision makes it subject to rigorous conditions of moral legitimacy. At one and the same time:

- the damage inflicted by the aggressor on the nation or community of nations must be lasting, grave, and certain;

- all other means of putting an end to it must have been shown to be impractical or ineffective;

- there must be serious prospects of success;

- the use of arms must not produce evils and disorders graver than the evil to be eliminated. The power of modern means of destruction weighs very heavily in evaluating this condition.

These are the traditional elements enumerated in what is called the "just war" doctrine.

The evaluation of these conditions for moral legitimacy belongs to the prudential judgment of those who have responsibility for the common good.

(Emphasis mine).

Of course this means "might makes right" only as a necessary condition for a just war, not a sufficient condition. All of the other conditions must also be satisfied. But it is perhaps important to make it explicit that, contrary to modern egalitarian and democratic sensibilities, one of the requirements for justified remote material cooperation with evil is that the person doing it must be powerful enough to actually achieve the intended good end.

Put differently, we can't justify our acts of remote material cooperation with evil by appealing to outcomes we are powerless to bring about.

Circumstantial Causes

There is a ridiculous objection which often comes up when discussing voting or other sorites-building contests like the rocket race in the last post.

The objection goes something like this:

If we accept that our own personal act of voting has negligible influence over the outcome of the contest it must follow that the outcome of the contest has no cause, since everyone's individual vote has negligible influence over the outcome. Obviously the outcome has a cause; therefore our individual vote has non-negligible influence over the outcome.

A moment's reflection reveals the silliness of this objection.

The outcome of the contest is caused by all of the votes taken together. These votes are separated into two categories. All but one of the votes are votes cast by other people, not you. Therefore they form part of the circumstances of your vote. The remaining vote is, of course, your vote itself.

The outcome of the contest is determined by your action in combination with the circumstances of your action. The influence of your action on that outcome is literally negligible compared to the influence of the circumstances: the outcome is going to be the same whether or not you even exist, let alone whether or not you vote in a certain way.

Therefore it is simultaneously true that the outcome is caused by all the votes taken in aggregate, and that your vote's influence on the outcome is literally negligible.

To the moon, Alice!

Suppose there is a big rocket race. Several teams compete to win, but only two of those teams are actually viable as winners. It takes about a million pounds of rocket fuel to win, and only those two teams have a practical hope of getting that much fuel.

The way teams get rocket fuel is by soliciting it from individuals. Every individual in the country gets one-tenth of an ounce of rocket fuel - and only one tenth of an ounce. We each get to decide which team gets our tenth-ounce of fuel.

Can I meaningfully influence the outcome of the race with my tenth-ounce of fuel? No.

Does the process of choosing who gets my tenth-ounce of fuel have meaningful effects on me, and on those people who I interact with in doing the choosing? Absolutely.

With that background, if giving my fuel to a team involves remote material cooperation with evil, which effects are most important for me to consider when evaluating whether or not I have a proportionate reason: effects which flow from the outcome of the race, or effects which flow from my own act of giving fuel to a team?

More funding for abortion is just the status quo

And hey, given that it is the status quo it is fine and dandy to formally support the law that does it, as long as you support that law for other reasons, right?

I checked into what my own bishop is teaching about the matter, and was referred to this:

Nevertheless, for whatever good this law achieves or intends, we as Catholic bishops have opposed its passage because there is compelling evidence that it would expand the role of the federal government in funding and facilitating abortion and plans that cover abortion. The statute appropriates billions of dollars in new funding without explicitly prohibiting the use of these funds for abortion, and it provides federal subsidies for health plans covering elective abortions. Its failure to preserve the legal status quo that has regulated the government’s relation to abortion, as did the original bill adopted by the House of Representatives last November, could undermine what has been the law of our land for decades and threatens the consensus of the majority of Americans: that federal funds not be used for abortions or plans that cover abortions. Stranger still, the statute forces all those who choose federally subsidized plans that cover abortion to pay for other peoples’ abortions with their own funds. If this new law is intended to prevent people from being complicit in the abortions of others, it is at war with itself.

Nothing but Net

Apparently the argument is in the ether that it is OK to support legislation which permits or even funds abortion, as long as that legislation will result in a net reduction in the number of abortions.

That is a load of poppycock.

Lets assume for the sake of argument that there is a law up for consideration. This law bans all abortions for white people, but it permits other abortions already permitted under the law and adds in that killing, say, Haitians up to age six is now permitted.

Lets suppose that on a net basis this law will in fact reduce the net number of legal murders, even though it permits murders which were not permitted under the previous law.

According to arguments in some quarters it should be OK to support this new law, since on a net basis it reduces the number of legal murders. This illusion arises because some folks are interpreting Evangelium Vitae's language - more restrictive - to mean a net decrease in some aggregate number. But this is obviously not what it means. More restrictive means more restrictive; it doesn't mean using some net actuarial argument to grant permission to murder, or for that matter to fund the murder of, human beings whose murders are not federally funded under current law.

It is always wrong without exception to support removing the legal protection of the life of one single innocent in the law. That includes even the small legal protection of not having her murder funded by the government.

A veracity heuristic

When Planned Parenthood and pro-life groups unanimously agree on something, it is probably true.

Planned Parenthood caught in the Girl Scout cookie jar, again

I guess the idea is that this delightful brochure might be helpful if a little girl gets Lemonaids.

On yesterday's Big Healthabaloo

Does anyone really care what I think about it? Why?

What I think is basically this:

Well, that is a relief. For a while there it was starting to look like "pro-life Democratic congressman" might not actually be an oxymoron. I was skeptical, but ready to be convinced by concrete action. Fortunately we can all go back to the world we know now, where Democratic Party overtures to pro-lifers are universally the candy-laced-with-cyanide we've come to know and love.

The Usual Suspects spent a long time trying to convince us that no babies would be murdered at taxpayer expense. Now they are hard at work convincing themselves of it. Wait 'till you see the actual roster at the Pearlies, boys! Congratulations, you won again! I can't wait to see Vox Nova and dotCommonweal become the very model of a modern anti-abortion activist blog, now that their other "pro life" goals have been achieved. What could possibly be a higher priority to genuine pro-lifers now than full-on hard-charging anti-abortion activism?

My breath is bated.

Oh, and it looks like the Massachusettes Gop Centerfold didn't save the day after all.

That's what I think. FWIW.

How many divisions does the Pope have?

Recent events have left me reflecting on the fact that Catholics in general seem to have politics which pretty closely mirror the population at large, with all the requisite divisions that implies. The cynic in me is inclined to interpret this as meaning that most Catholics are bad Catholics.

[F]or years we've been playing a series of sudden-death overtimes against disaster. According to the rules, our losses are enduring but our wins are only temporary because they're just followed by another sudden-death overtime.

[...]

The obvious way to restore Western Civ as a standard that makes sense would be to restore the principle that formed it and made it something worthy of our loyalty. Since the West grew up as Catholic Christendom, to all appearances that principle is Catholic Christianity.

That's an awkward thing to say. After all, a religion can't be adopted for political reasons. If it is it's not religion, it's ideology, and it's not believed, it's just play-acting. Ideological play-acting leads to either cynicism and corruption or fanaticism and tyranny, depending on how much effort people put into making it all seem real. It's not the way to go.

We all have some sort of belief about what the world at bottom is really like. Since God by definition is the Most Real Being, that belief is our religion. As such, it determines what we make of the people, situations, and issues that make our world. Similarly, what we make of people, situations, and issues shows what we think about the world, and therefore what our religion is. To say religion is basic to politics is to say that our politics is an expression of our religion.

[...]

A lot of the problem I think is an understanding of religion that trivializes it. Trivial religion is not religion though. Christianity is not the current view of things plus Jesus added in as a cosmic nice guy to make us all feel good. It involves a basically different understanding of what's real.

Who am I kidding? Just go read the whole thing.

One of many great ironies of modernity, from my point of view, given deep modern attachment to the idea of separation of Church and State, is that by turning politics into this vast mass-market participatory ritual we've made separation of religion and politics impossible. If the State is constituted by the free and equal choices of the democratic masses, each person is part of the State; a call for separation of Church and State is a call to separate the Church from every person.

So far the process seems to be proceeding on schedule.

As individuals our politics does say basic, fundamental things about us as persons. No basic, fundamental thing about us as persons is untouched by our religion. In past times it may have been possible for the peasants to live apolitically: a genuine separation of Church and State, at least for some folks. Today, to choose not to decide is still a choice - sometimes, I would argue, the best choice.

That is why Catholics with different politics will always see each other not only as political enemies, but as disloyal Catholics. We can't make the truth not matter. The only way to heal divisions is to remove those divisions. Removing divisions requires people to admit they are wrong, or at least to cop to what is horribly wrong in their own coalitions; and most people would rather minimize and paper over, or at least avoid talking about, or at very best give perfunctory lip service to opposing, what is despicably vicious and wicked in their own compromises. Thus the always growing popularity of the tu quoque.

Fiat Bux

Folks are constantly suggesting to me, when the subject of usury comes up, that a big part of the problem is fiat currency as opposed to currency backed by gold or some other commodity.

The more we discuss the matter the more convinced I become that they are wrong.

Money is nothing in itself: it is just a medium of exchange which makes it easier for parties to trade than actually trading a camel for a tent. As such it provides a tremendous social good, without which we would live in the stone age. It is perfectly reasonable and good, then, that money is an economic exchange medium provided by and guaranteed by the government.

Commodity-backed currency, though, is actually a wee bit more than just a medium of exchange. Gold, after all, has value in itself, since it is a useful commodity. Fiat currency has no value in itself. Because of this, fiat currency is a more honest medium of exchange than commodity-backed currencies which distort transactions somewhat through the introduction of the commodity itself into the picture. An ideal, transparent, honest transaction of camels for tents just involves the camels and tents; not camels, tents, and gold.

Fractional reserve banking is an entirely distinct matter from fiat currency versus commodity-backed currency. In fractional reserve banking, the bank keeps some amount of money at the Federal Reserve. That bank is then permitted to loan out up to N times that amount of money to borrowers: we'll call this quantity of money L.

Not everyone needs their cash all at once, and folks are constantly making payments on outstanding loans, so the bank really only has to have L/N extra dollars on hand in order to cash checks drawn on L dollars worth of loans, on average. Figuring out the L/N relationship between these numbers - basically how much cash the bank has to keep on hand as a cushion in its cash flow - is the "fractional reserve" part in fractional reserve lending. (N.b.: the goal here is apprehension (and alliteration), not perfect pedantic pecuniary precision).

So far no usury, and as discussed above fiat currency is actually a better, more honest and transparent, medium for these transactions.

But now we throw in the usury angle, as discussed in previous posts, by distinguishing between asset-recourse loans and person-recourse loans.

When the bank makes an asset-recourse loan, it only has recourse to a real asset in order to recover principal. In essence the bank "owns" a share of the asset and the borrower pays interest for use of the bank's share of the asset, over time also buying out the bank's ownership share. It's all good: nobody has created money out of nothing or cheated anyone.

Notice that this is true even if the money is spent on something other than the asset to which the bank has resort: the owner in essence sells a share in the asset to the bank, and uses the proceeds for something else. Everything is still all good.

But when the bank makes a person-recourse loan, it has recourse to the person for the principal no matter what is done with the money. If the person spends the money on wine, women, and song, that money really came from nowhere. There is no real asset involved backing that money; just the person's putative future ability to raise money to pay off the loan.

So the problem with fractional reserve banking as presently practiced isn't fiat currency, and it isn't that loans are made which exceed the amount of cash held in reserve. Neither of those is in itself the least bit dishonest or unfair.

The problem with fractional reserve banking as presently practiced is that some of the loans made in fractional reserve banking are usurious loans, because they involve recourse to persons, rather than assets, for principal. As usurious loans they steal from others, robbing buying power away from the currency itself, doing injury to the borrower and swiping an increment of buying power here and an increment there from the non-usurious transactions taking place at the same time, for the benefit of lenders.

Or at least that is my current provisional theory.

It's an ad hominem because the guy saying it is a bad person

An archetypical exchange:

Socrates:

Bob's argument is consequentialist.

Hipparchus:

Bob is not a consequentialist in a sense that involves dissent from the Magisterium. According to Veritatis Splendour, a consequentialist

den[ies] the existence of negative moral norms regarding specific kinds of behaviour, norms which are valid without exception.

and

holds that it is impossible to qualify as morally evil according to its species — its "object" — the deliberate choice of certain kinds of behaviour or specific acts, apart from a consideration of the intention for which the choice is made or the totality of the foreseeable consequences of that act for all persons concerned.

Bob does not deny and hold, respectively. In fact he insists that cutting your toenails on alternate tuesdays is always wrong without exception, apart from a consideration of the intention for which the choice was made or the consequences of the act. Therefore, by counterexample, Bob is not a consequentialist.

There are at least two obvious problems with Hipparchus' argument.

The first is that he shifts focus from Bob's argument to Bob the person.

The second is that the argument divorces Veritatis Splendour from the actual content of the moral law: from the actual negative moral norms, the natural law and the teaching of the Church on specific kinds of concrete actions which are always, without exception, morally wrong to choose.

An argument is consequentialist when it contends that a particular kind of intrinsically immoral act - an act, like rape or torture, taught to be intrinsically immoral by the Magisterium of the Church - cannot be qualified as morally evil apart from the intention for which the choice was made or the consequences of the act. Furthermore, a consequentialist argument of this sort is in fact in conflict with the Magisterium of the Church.

Oh, and since everyone always insists on personalizing things in the blogosphere, a person who advances consequentialist arguments is a consequentialist, and in a way which materially involves dissent from the Magisterium. Whether it is politic to say so or not is one thing, of course; but it is certainly true.

If you don't tell me what I want to know, I'll make you read the whole thing over again

I've done some pretty recent updates to my waterboarding series, if you haven't checked it since it was first posted. The number of distinct arguments documented is up to 34, and the spellbook for concocting atrocious arguments now includes ingredients such as the mutilated analogy and the argument from dishonor. As always, let me know if you have any feedback, and feel free to use this as a resource in the unfortunately ongoing debate over torture.

Smoking and Porn

It occurs to me, in the context of the previous post, that we can pray for the intercession of St. George Preca on behalf of Catholics who treat smoking as if it were a grave moral wrong, and porn as if it weren't:

As a seminarian, he used to go to the Grand Harbour, board the foreign ships there, and introduce himself to Greek, English and French sailors by offering them a cigarette. His lively intelligence and exquisite humour entertained the men who had been so long away from land and soon the young cleric would lead his audience to spiritual matters. Many a sailor must have been impressed by this gentle man who sought so willingly the good of his neighbour.

The cigarette ruse was to be used again and again.

Most Catholics are probably not aware that a recently canonized saint used cigarettes to bring men to Christ. Try that with porn and you will wait a long, long time for sainthood.

Welcome to the Hotel Gomorrahpornia

My friend Austin Ruse recently published a column on hotels as a major distribution channel for the pornography industry. As seedy and disgusting as the business is, I've been aware of it for quite a long time now. Investing in hotels is like investing in pharmacies: there may be morally unproblemmatic ones out there, but they are very, very few and very, very far between.

What I didn't know until I read the column though was this:

While it is shocking that seemingly good American companies make money on hard-core pornography, even sadder is the Catholic dimension to this sordid business. The largest investor of Catholic money in the world is Christian Brothers Investment Services. It handles the funds of 1,000 Catholic institutions including dioceses, religious orders, and even Catholic organizations like the Catholic League for Civil and Religious Rights.

The Christian Brothers have an investment policy on pornography. They do not invest in companies “whose primary line of business is products or services aimed exclusively at inducing sexual excitement or a prurient interest in sex.” This means that they have no problem investing in companies whose secondary or tertiary line of business is hard-core porn. The Christian Brothers are not so nuanced on tobacco investing or investing in “militarism and violence.” Putting money into such companies is ruled out by the Christian Brothers.

So tobacco is ruled completely out of school, military supplies are utterly off limits, but porn is just fine and dandy as long it is only part of a company's portfolio rather than its primary business.

Thomasis said the Christian Brothers remain in such companies in order to change them from within. When the interviewer pointed out that over the previous years the Christian Brothers had offered not a single stockholder resolution on porn – though they had offered dozens of others on such topics as tobacco, the environment, and arms’ sales – Thomasis said his conscience was clear and ended the interview.

"Change them from within".

I'm not even going to go there.

Usury and the Language Barrier

We've seen that the terminology used by the Church and St. Thomas Aquinas in discussing usury does not fit very well into our modern way of thinking, perhaps unsurprisingly. My overall thesis, then, is that Hilaire Belloc's brief catechesis on the subject -- that it is usury to make profits on unproductive loans - represents a credible attempt to correct that linguistic impedance mismatch. Belloc may be wrong in part or entire: as a complete non-expert myself I am hardly in a position to pronounce a definitive judgment. But he does seem to be one of the last major Western intellectual figures to take the Church seriously on the subject and attempt to understand the modern condition in light of that teaching.

These are just some of my thoughts on the matter, and shouldn't be taken as anything more than that. As always, if this is important to you do your own diligence.

Let me try to summarize some of the things we know.

• We know from Aquinas that the sin of usury consists at bottom in selling what does not exist.
• We further know from Aquinas that this 'nonexistence' often arises from the fact that the use of a thing cannot be separated from the thing itself. Thus it is wrong in that kind of case, a case of consumption rather than investment broadly construed, to charge money for use over and above the thing itself.
• We know from the encyclical Vix Pervenit that there are transactions which do not fall strictly under the rubric "usury" but which nevertheless are sinful for the same kinds of reasons. (This brings to mind credit default swaps as a "circulating Ponzi scheme," and Ponzi-genus schemes generally).
• We know that to the medievals, the term "loan" referred to a borrower taking complete possession of a sum of money and agreeing to return that sum in the future: that a "loan" to the medievals was what we today might refer to as a full-recourse loan. A better term might be a person-recourse loan, since the lender has full recourse to the person in order to recover his principal.
• We know that financial partnerships where capital is invested in that partnership, and where loss of principal in the assets purchased did not entail an obligation on the part of the "borrower" to come up with the principal, were regarded as perfectly licit by the medievals. (That doesn't mean that partners were incapable of cheating each other in all sorts of ways, of course: just that such partnerships were not intrinsically immoral in themselves. More on this later). Certain of these kinds of arrangements we might call non-recourse loans. The term is somewhat deceptive, since the lender does have recourse to the assets purchased under the partnership, in order to recover his principal. He just doesn't have recourse to the person of the borrower. So I'll call these kinds of loans asset-recourse partnerships, lumping them in with similar arrangements like stock ownership.
• We know that in the case of person-recourse loans the medievals did come up with some reasons why the borrower might have to pay back more than just the principal. A number of titles were proposed, to varying degrees of controversy, to deal with the fact that lending can sometimes harm the lender: therefore the borrower might be licitly required to make restitution not only for the principal but also for any actual harm to the lender. The Franciscans even ran lending operations for the poor which charged for some of these expenses, as a way of protecting the poor from usurers. But these kinds of titles were carefully constructed to remove all profit motive from person-recourse lending at interest: the mere fact that it might be financially attractive to make a specific loan is a pretty sure sign that these titles, certainly the uncontroversial ones, are being violated. If you lend money to a friend on this basis because he is your friend and he needs a hand, and he pays enough to make sure you don't actually lose money on the deal, that is fine. But if a bank is lending money on this basis because it has profit motive to do so, the mere fact of that profit motive means these titles are almost certainly violated.
• We know that according to Aquinas at least, while it is always wrong to lend at usury it is not always wrong to borrow from a professional usurer when the need arises.

So what sorts of things are going on in our economy? That is a big question I can't hope to answer, but I can touch on a few points.

In what we call "non-recourse" states, a mortgage is secured by the home and only the home. That the home provides a person with a base of operations from which he can live and practice his trade is manifest. That the medievals allowed simply renting a property to live in is also clear. So it seems to me that what we call a non-recourse mortgage is straightforwardly an asset-recourse partnership in my newly invented terminology, and there isn't anything inherently usurious about them. (Though again, more later).

When a bank lends money to a corporation, in most cases that loan is not secured by a person; it is secured by the assets of the corporation. This also seems to be straightforwardly an asset-recourse partnership.

It seems to me that credit card lending is just straightforward person-recourse lending at interest, and therefore almost certainly usury. (Interestingly, the grace period which obtains with many credit cards might be thought to cast some doubt on this if the notion that the company wants everyone to pay within the grace period were tenable. Perhaps American Express's annual-fees-not-interest approach escapes opprobrium here).

Car loans as usually constituted are probably usury: the equity is underwater as soon as you drive off the lot and recourse for principal and interest is to the person.

Many loans to small businesses involve personal guarantees: the bank specifically refuses to secure the loan by the assets of the corporation itself, and requires more security. Sometimes the security is equity the person already has in his home, and recourse is limited to such things. While this is a somewhat ambiguous case, I'm inclined to think that limited-recourse personal guarantees do not in themselves make a loan usurious. Full-recourse personal guarantees on a business loan would probably make it usury.

The full-recourse mortgage is formally a person-recourse loan: that is, the terms of the loan involve charging interest and principal to a person. So as a formal matter it would probably be usury. On the other hand, the loan is collateralized by the house itself; and usually it is only in strange circumstances fueled by derivative speculations and such that lenders are crazy enough to demand too small of a down payment and get into an "upside down" situation. So the situation with mortgages is usually not materially usurious, even though the terms of the contracts themselves might be formally usurious. (That doesn't excuse them; it just seems to be a distinction worth pointing out).

One thing that is as clear as mud is the question of asset-recourse cases where the use of the funds is entirely separated from the collateral. The non-recourse home equity loan for a vacation (if there is such a thing -- I have no idea, but it is possible in principle) is a case in point; and it is important in looking at that case to distinguish between intemperance and usury. Usury would be an objective moral wrong on the part of the lender; intemperance on the part of the borrower. Two wrongs don't make a right of course, but a modest vacation can really refresh a man to get back to work and it isn't manifestly usury to fund it at interest.

Finally, even in the case of asset-recourse partnerships it does not follow from any of this that any excuse will do to walk away and screw the bank in a "strategic default". In fact, even in the case of genuinely usurious loans it isn't obvious that the promise to pay is trumped by the fact of formally usurious terms or materially usurious conditions. Those are broader subjects and I don't think jumping to conclusions on them is warranted based on the present discussion. We also haven't so much as touched on the fair distribution of profits in a partnership, expected behavior of partners, loyalty, and other related subjects.

One additional thought that didn't have a particular place above: person-recourse default didn't have the same consequences in medieval times as it does now. Debtor's prison and bankruptcy are nontrivially different, though both have at times driven people to suicide, and neither should be trivialized. In any event, it isn't clear how this appeal to consequences could change the intrinsic nature of usury; but I thought it worth a mention.

There are more things in Heaven and Earth than are dreamt of in our philosophy, so this discussion can only touch briefly on matters. Belloc didn't explain how he arrived at his understanding in his brief essays; he merely told us what it was, assured us that it was founded in the Tradition, and said that whatever the case the modern world was foolish for abandoning the ancient wisdom on usury wholesale. I think that much is true.

The Dumb Ox on non-recourse productive investments

He who lends money transfers the ownership of the money to the borrower. Hence the borrower holds the money at his own risk and is bound to pay it all back: wherefore the lender must not exact more. On the other hand he that entrusts his money to a merchant or craftsman so as to form a kind of society, does not transfer the ownership of his money to them, for it remains his, so that at his risk the merchant speculates with it, or the craftsman uses it for his craft, and consequently he may lawfully demand as something belonging to him, part of the profits derived from his money.

Fisk Pervenit

The papal encyclical Vix Pervenit promulgated by Pope Benedict XIV on November 1, 1745 is the Magisterium's most recent and most authoritative official teaching on the subject of usury. While it is true that this encyclical was addressed initially to the Italian bishops, according to the Catholic Encyclopedia article on usury it was applied to the whole Church by the Holy Office on July 29, 1863. That same article points out that the Magisterium has made no doctrinal statements allowing lending at interest; but at the level of practice the Church does allow some lending at interest.

Some folks have made the assertion that Hilaire Belloc's account of usury as charging interest on loans for the purpose of consumption is a fringe opinion with no connection to the Magisterium and the Tradition. That dismissal is easily dealt with by referring to the greatest Doctor of the Church, St. Thomas Aquinas, on the subject of usury. As we've seen, Aquinas' understanding of usury is precisely that it is the injustice in charging an ongoing "rent" for something which is consumed rather than used without being consumed. So while Belloc's understanding may well be wrong, the notion that his is a fringe opinion with no connection to the Tradition is risible.

Note that, given an understanding of money as a thing which can either be used productively or consumed, usury can take one or both of two forms. It can take the form of charging any interest at all on a loan for consumption (Aquinas viewed all uses of money to be inherently consumption). Alternatively, it can take the form of charging more interest than is warranted in justice even in the case of a productive loan, since the borrower isn't receiving "that much use" of the money. In its essence, then, usury is like charging someone ongoing rent on a house which burned to the ground, or charging more rent than justice allows for the house in which one lives. (Restitution for the house itself - the principal of the loan, as it were - is a different subject).

Still, that leaves some work to be done in understanding Vix Pervenit. Since it is a short encyclical, I thought it might be useful to just publish the whole thing with my own very brief commentary and observations. My comments are not intended to settle the matter in some final and penultimate way: they are merely a proposal for one reasonable way to make sense rather than nonsense of the teaching. We moderns have a tendency to ignore prohibitions of usury as a strange artifact of those wacky medievals who didn't understand economics. I'm not trying to convince you of my particular theory here: I'm just trying to provide an example of what it would look like to take the Church's timeless wisdom on usury seriously, appealing specifically to the Magisterium and Doctors of the Church for that wisdom, rather rather than dismissing it without thought or at best by setting non-Magisterial sources against Aquinas and the Magisterium. My "I'm just some guy" qualifications for pontificating on the subject should remain in the forefront of your mind as you read this.

Here it is:

ON USURY AND OTHER DISHONEST PROFIT

Vix Pervenit

Encyclical of Pope Benedict XIV promulgated on November 1, 1745.

To the Venerable Brothers, Patriarchs, Archbishops, Bishops and Ordinary Clergy of Italy.

Venerable Brothers, Greetings and Apostolic Benediction.

Hardly had the new controversy (namely, whether certain contracts should be held valid) come to our attention, when several opinions began spreading in Italy that hardly seemed to agree with sound doctrine; We decided that We must remedy this. If We did not do so immediately, such an evil might acquire new force by delay and silence. If we neglected our duty, it might even spread further, shaking those cities of Italy so far not affected.

Therefore We decided to consult with a number of the Cardinals of the Holy Roman Church, who are renowned for their knowledge and competence in theology and canon law. We also called upon many from the regular clergy who were outstanding in both the faculty of theology and that of canon law. We chose some monks, some mendicants, and finally some from the regular clergy. As presiding officer, We appointed one with degrees in both canon and civil law, who had lengthy court experience. We chose the past July 4 for the meeting at which We explained the nature of the whole business. We learned that all had known and considered it already.

2. We then ordered them to consider carefully all aspects of the matter, meanwhile searching for a solution; after this consideration, they were to write out their conclusions. We did not ask them to pass judgment on the contract which gave rise to the controversy since the many documents they would need were not available. Rather We asked that they establish a fixed teaching on usury, since the opinions recently spread abroad seemed to contradict the Church's doctrine. All complied with these orders. They gave their opinions publicly in two convocations, the first of which was held in our presence last July 18, the other last August 1; then they submitted their opinions in writing to the secretary of the convocation.

3. Indeed they proved to be of one mind in their opinions.

I. The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.

II. One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one's fortune, to purchase new estates, or to engage in business transactions. [So the fact that the gain is small, the borrower is rich, or the loan is productive cannot in itself excuse from the charge of usury.] The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.

III. By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract. [So it isn't interest per se that is a problem. The problem is in demanding interest for nothing but the lending of money. The liciety of receiving interest depends on the use to which the money is put.] Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made.

IV. There are many different contracts of this kind. In these contracts, if equality is not maintained, whatever is received over and above what is fair is a real injustice. Even though it may not fall under the precise rubric of usury (since all reciprocity, both open and hidden, is absent), restitution is obligated. [So this prohibition against demanding payment for what does not exist doesn't apply only to loans. It also applies to things like, say derivatives or credit default swaps or insurance policies, even though the label "usury" might not technically apply in such cases]. Thus if everything is done correctly and weighed in the scales of justice, these same legitimate contracts suffice to provide a standard and a principle for engaging in commerce and fruitful business for the common good. Christian minds should not think that gainful commerce can flourish by usuries or other similar injustices. On the contrary We learn from divine Revelation that justice raises up nations; sin, however, makes nations miserable.

V. But you must diligently consider this, that some will falsely and rashly persuade themselves-and such people can be found anywhere-that together with loan contracts there are other legitimate titles or, excepting loan contracts, they might convince themselves that other just contracts exist, for which it is permissible to receive a moderate amount of interest. Should any one think like this, he will oppose not only the judgment of the Catholic Church on usury, but also common human sense and natural reason. Everyone knows that man is obliged in many instances to help his fellows with a simple, plain loan. Christ Himself teaches this: "Do not refuse to lend to him who asks you." In many circumstances, no other true and just contract may be possible except for a loan. Whoever therefore wishes to follow his conscience must first diligently inquire if, along with the loan, another category exists by means of which the gain he seeks may be lawfully attained. [Note that the Pope here says that we must not dismiss this as a matter of small import: diligent inquiry is required into whether any title to interest is truly just in the particular case. Some real gain must be lawfully obtained.]

4. This is how the Cardinals and theologians and the men most conversant with the canons, whose advice We had asked for in this most serious business, explained their opinions. Also We devoted our private study to this matter before the congregations were convened, while they were in session, and again after they had been held; for We read the opinions of these outstanding men most diligently. Because of this, We approve and confirm whatever is contained in the opinions above, since the professors of Canon Law and Theology, scriptural evidence, the decrees of previous popes, and the authority of Church councils and the Fathers all seem to enjoin it. Besides, We certainly know the authors who hold the opposite opinions and also those who either support and defend those authors or at least who seem to give them consideration. We are also aware that the theologians of regions neighboring those in which the controversy had its origin undertook the defense of the truth with wisdom and seriousness.

5. Therefore We address these encyclical letters to all Italian Archbishops, Bishops, and priests to make all of you aware of these matters. Whenever Synods are held or sermons preached or instructions on sacred doctrine given, the above opinions must be adhered to strictly. Take great care that no one in your dioceses dares to write or preach the contrary; however if any one should refuse to obey, he should be subjected to the penalties imposed by the sacred canons on those who violate Apostolic mandates.

6. Concerning the specific contract which caused these new controversies, We decide nothing for the present; We also shall not decide now about the other contracts in which the theologians and canonists lack agreement. Rekindle your zeal for piety and your conscientiousness so that you may execute what We have given.

7. First of all, show your people with persuasive words that the sin and vice of usury is most emphatically condemned in the Sacred Scriptures; that it assumes various forms and appearances in order that the faithful, restored to liberty and grace by the blood of Christ, may again be driven headlong into ruin. Therefore, if they desire to invest their money, let them exercise diligent care lest they be snatched by cupidity, the source of all evil; to this end, let them be guided by those who excel in doctrine and the glory of virtue. [This is a serious matter, requiring serious diligence.]

8. In the second place, some trust in their own strength and knowledge to such an extent that they do not hesitate to give answers to those questions which demand considerable knowledge of sacred theology and of the canons. But it is essential for these people, also, to avoid extremes, which are always evil. For instance, there are some who judge these matters with such severity that they hold any profit derived from money to be illegal and usurious [investment for profit is not a moral wrong]; in contrast to them, there are some so indulgent and so remiss that they hold any gain whatsoever to be free of usury [it depends on the use to which the money is put]. Let them not adhere too much to their private opinions. Before they give their answer, let them consult a number of eminent writers; then let them accept those views which they understand to be confirmed by knowledge and authority. And if a dispute should arise, when some contract is discussed, let no insults be hurled at those who hold the contrary opinion; nor let it be asserted that it must be severely censured, particularly if it does not lack the support of reason and of men of reputation. Indeed clamorous outcries and accusations break the chain of Christian love and give offense and scandal to the people.

9. In the third place, those who desire to keep themselves free and untouched by the contamination of usury and to give their money to another in such a manner that they may receive only legitimate gain should be admonished to make a contract beforehand. [Great advice.] In the contract they should explain the conditions and what gain they expect from their money. This will not only greatly help to avoid concern and anxiety, but will also confirm the contract in the realm of public business. This approach also closes the door on controversies-which have arisen more than once-since it clarifies whether the money, which has been loaned without apparent interest, may actually contain concealed usury.

10. In the fourth place We exhort you not to listen to those who say that today the issue of usury is present in name only, since gain is almost always obtained from money given to another. How false is this opinion and how far removed from the truth! [The fact that the practice is ubiquitous doesn't excuse us as Christians from doing diligence on our own acts.] We can easily understand this if we consider that the nature of one contract differs from the nature of another. By the same token, the things which result from these contracts will differ in accordance with the varying nature of the contracts. [So again, whether charging interest is just or not depends on the particulars, including the specific use of the money.] Truly an obvious difference exists between gain which arises from money legally, and therefore can be upheld in the courts of both civil and canon law, and gain which is illicitly obtained, and must therefore be returned according to the judgments of both courts. Thus, it is clearly invalid to suggest, on the grounds that some gain is usually received from money lent out, that the issue of usury is irrelevant in our times.

11. These are the chief things We wanted to say to you. We hope that you may command your faithful to observe what these letters prescribe; and that you may undertake effective remedies if disturbances should be stirred up among your people because of this new controversy over usury or if the simplicity and purity of doctrine should become corrupted in Italy. Finally, to you and to the flock committed to your care, We impart the Apostolic Benediction.

Given in Rome at St. Mary Major [a really beautiful church], November 1, 1745, the sixth year of Our Pontificate.

Usury, or Burning Down the House

Usury, St. Thomas Aquinas tells us, consists in selling what doesn't exist. He uses the example of wine: to sell the use of the wine separately from the wine itself would be illicit, since the wine itself cannot be separated from its use.

St. Thomas contrasts this with a house. A house is something which can be "rented out": that is, its use can be separated from the thing itself. Wine cannot be rented; it can only be consumed.

Now, St. Thomas had a certain understanding of the nature of money. He was under the impression that it was impossible to "rent" money: that the use of money could not be separated from the money itself. History has born out that this is not true of money though: that like a house, money can sometimes be put to use and then returned. In such a case, paying for the privilege of the use of money is not usury.

Let us note, however, that there is more than one kind of thing one can do with a house. It is true that it is possible to use a house without consuming it, by living in it and keeping it maintained. It is equally possible, however, to consume a house: to burn it down for entertainment, for example. And inasmuch as the use of a house consists in its consumption, its use cannot be separated from the thing itself.

The same, naturally, is true of money. When its use consists in its consumption, charging interest for a loan of money is requiring payment for what does not exist, and therefore, following St. Thomas, is contrary to justice.

How about some non-usurious loans?

For whatever reason there seems to be a "conventional wisdom" of sorts that non-recourse loans are bad. In a number of states, for example, a borrower can simply walk away from his house at any time and for any reason. The lender, who is paid a negotiated down-payment, has no recourse to any asset other than the house itself. Everyone goes into the transaction understanding this, of course.

The term "nonrecourse" is a bit deceptive. The lender has recourse to the collateral - in this case the house - and nothing more. So perhaps "finite recourse" or something would be a better term.

Why this arrangement should be considered a bad thing though is something of a mystery to me. All other things equal a non-recourse lender is going to want a larger down payment, because if the home depreciates in value the borrower loses all of his money before the lender loses any of his. I think this is a good thing: it encourages loans where people can actually, you know, afford the house they are buying. It discourages shenanigans designed to make a house appear affordable when it isn't. And the interest charged isn't charged to an otherwise unwilling borrower in return for nothing: it is substantively in the borrower's own best interests to continue making payments as long as the house remains worth more than the value of his downpayment plus the outstanding loan balance.

A nonrecourse loan is a mutual investment in an asset or assets by two parties. A full-recourse loan is just usury, as far as I can tell, whatever the interest rate.

There have been plenty of horribly dysfunctional and usurious things connected to mortgage lending in the past few decades. But I'm not convinced that nonrecourse lending is one of them.

Seamless Arithmetic

There has been a lot of discussion over the years about how difficult it supposedly is to make the encyclical Evangelium Vitae cohere with the Tradition when it comes to the death penalty. See this recent discussion at Disputations, for example.

I don't think it is all that difficult. Furthermore, I don't think anti-abortion Catholics should be too quick to assert that it is difficult. While it is true that the Magisterium and Tradition are very clear on the grave immorality of abortion, the fact that all Catholics (including the ones at Vox Nova and Commonweal) have a grave duty to protest the legal right to abortion rests almost entirely on Evangelium Vitae, as far as I know. The garment may be somewhat more seamless than those on the Right are temperamentally inclined to concede, though that by no means makes it degenerate into the spandex whore's costume proposed by the Left.

Anyway, I've cooked up an analogy which has the properties of transitivity and aggregation which appear to be assumed in some of the discourse on the death penalty. Here it is:

Suppose for the sake of argument that we can measure the proportionality of various criminal punishments (proportionality specifically in Thomistic terms of the extent to which the punishment opposes the will of the punished) in justice-units (JU).

Let's further stipulate that the death penalty provides 95 JU in the case of a double-murderer, and that life imprisonment only provides 60 JU. Any punishment shy of 100 is just in itself, that is, the criminal deserves it. So there is nothing intrinsically wrong in carrying out the death penalty as long as we don't exceed 100, that is, as long as our punishment doesn't exceed what the criminal deserves. Once we exceed 100 the points count against us, not for us.

Furthermore, let's suppose that it is a primary duty of the state, one among many, to (without punishing anyone more than he deserves) maximize average JU-per-crime as a factor in the common good.

Then along comes Evangelium Vitae. In it Pope John Paul II teaches, in addition to teaching that Catholics have a grave duty to protest the legal "right" to abortion, that while maximizing JU is indeed a duty of the state it is not the only duty of the state. Just punishment is not a goal of the state taken in itself, divorced from consideration of the common good more generally. The common good is more than merely meting out punishments which are deserved, full stop. This is consistent with the Tradition: St. Thomas Aquinas teaches that meting out the death penalty is only justified by reference to the common good, not as a thing in itself. Ultimate justice is for God, not the state. The state has responsibility for criminal justice - and therefore authority for carrying it out - only inasmuch as the state is steward of the common good.

In terms of the arithmetic analogy there is, say, some common good function CG in which the JU term is significant but is not the only term. The JU term is not valuable in itself from our standpoint as stewards of the common good, but rather is only valuable (and maximizing it is only justified) insofar as it doing so adds to the common good.

Suppose further that while the death penalty does have a positive effect on the JU term specifically, it also has negative effects on other terms. Systemically carrying out the death penalty is a mixed bag: properly done it does maximize JU, but it also necessarily subtracts from other important goods.

Therefore the state does not have a simplistic duty to maximize JU in itself, and cannot justify its actions based strictly on maximizing JU alone. The state has a duty to maximize CG, not JU, since JU is merely one factor in CG and its maximization is only justified to the extent doing so positively influences CG. In short, "he is getting what he deserves" is a necessary but not sufficient condition which must obtain in order for the state to have legitimate authority to carry out the death penalty. As in the case of a just war, other criteria in addition must be met.

Suppose, then, that carrying out the death penalty within the criteria of Evangelium Vitae does in fact have a net positive effect on CG. Applying it outside of the criteria of Evangelium Vitae has a net negative effect on CG.

Where is the incoherence?

It is one thing to question Evangelium Vitae piecemeal or in whole cloth on other grounds. But questioning it on the basis that it cannot be understood as coherent with the Tradition and prior Magisterium is I think clearly unfounded.

Waterboarding immigrants

This struck my funny bone:

"[Neoconservatives] would rather waterboard a Muslim until he confesses to being a gay pink unicorn from the planet Mars than tell him he and his kind are not really welcome to stay permanently in the US." - Mike T in the comments at What's Wrong with the World