Scholastics understood the power of supply and demand, and argued that the just price was the market price

From the 1100s to the 1500s, clergymen known as the Scholastics debated whether lending was truly sinful.

The Scholastics were the intellectuals of their day. They studied Roman law, Greek philosophy and Arab science at universities in Paris, Cologne, Vienna and others throughout Europe, and included luminaries such as Thomas Aquinas. They wrote and thought with the nit-picking particularity of lawyers. But despite the dry tone, the Scholastics could sound surprisingly like modern economists.

Unlike previous generations of thinkers, who believed that prices should reflect the cost of production, many Scholastics understood the power of supply and demand, and argued that the just price was the market price. In one treatise, the prominent Italian Scholastic cardinal Thomas Cajetan analysed the ethics of how bankers hid interest payments in inflated exchange rates. It was equivalent to a cardinal in 2006 writing knowledgeably about credit-default swaps.



彼らの先行世代がモノの価格は生産原価を反映すべきだという考えだったのに対し、スコラ神学者は需給の法則を理解し、市場価格こそ公正な価格であると反論した。イタリアの有名な枢機卿トマソ・デ・ヴィオ(Thomas Cajetan、カエタヌスとも)のある論文では、金融業者が水増し価格を通じて金利の存在を隠す仕組みの是非を論じている。たとえていえば、2006年の牧師が内実を百も承知でクレジット・デフォルト・スワップの是非を論ずる芸当だ。


Scholastics also recognised the value of taking business risks. Many of them sanctioned commercial loans to be repaid with a portion of profits. As long as the return was not guaranteed, because the venture could fail or collateral was unavailable, lenders deserved to keep the interest, they said.

Some clergymen also realised that people who lent money were unable to use it on other profitable ventures. This is a very modern justification for permitting interest: opportunity cost. The price of borrowing money reflects the missed opportunity to invest it profitably elsewhere.




The Scholastics took finance seriously, but they always viewed it as connected to the domains of justice and natural law. Aquinas was not interested in narrow questions of maximising utility or channelling individual self-interest, as a modern economist might be; he and his peers wanted to know the just way to distribute wealth and how one could ensure economic exchanges were fair.

In Summa Theologica (1265-74), for example, Aquinas argued that money’s ‘natural end’ or purpose was exchange. Using money to make money, rather than to facilitate the exchange of goods and services, therefore violated natural law. It was akin to selling wine or wheat separately from the right to consume these products ― that is, like selling the same thing twice.

‘To take usury for the lending of money is in itself unjust, because it is a case of selling what is non-existent; and that is manifestly the setting up of an inequality contrary to justice,’ wrote Aquinas.




トマス・アクィナス(Thomas Aquinas)



The thinking of the Scholastics and other religious leaders was not all admirable. Some clergy refused to budge from the literal words of the Bible, and others appealed to anti-Semitism to denounce usury. But their conversation represented an informed and influential debate ― at the highest levels of academia and religion ― about the entanglement of ethics, debt, inflation, high finance and monopolies.

Where is that sort of thing today?




The Scholastics never resolved their disputes. Instead, they were replaced by new authorities on ethics and finance.

It wasn’t until the rise of neoclassical economics in the 20th century that economics became the supposedly scientific study of self-interest and individual incentives ― a domain in which economists do not pass judgment on actors in the market, any more than biologists would judge the ‘morality’ of bees, or engineers the ‘ethics’ of an aqueduct.



Of course, people today do discuss the ethics of finance. We debate whether bankers deserve lucrative bonuses; we worry about the moral hazard of bank bailouts; we condemn bankers who sell financial instruments that they know will fail.

But since so much of the language of economics is amoral, and built on the assumption that everyone acts in their narrow self-interest, demanding just outcomes from finance feels like expecting fair results from war. We’ve lost the instinct that finance and debt are moral affairs all the way down, which is something that the Scholastics understood.




The public criticises bankers for their ethical failings, but the bankers too have been failed by our ethical authorities

So what would the Scholastics make of modern finance? Would they admire how efficiently a family’s savings can find productive uses? Or would they decry how developing countries pay more to borrow than rich ones? Would they marvel at our banks’ international reach? Or would they condemn how poor people pay for banking services such as checking accounts that rich people get for free?


It shouldn’t be so strange for a big bank to hire a theologian such as Miller; what should be strange is that we find it strange. It’s our modern talk of unfettered free markets and shareholder value that’s the anomaly. When Miller talks to bankers and executives, they often tell him that they feel as if what they learn in church or synagogue has no place at work. Even he was embarrassed about using the word ‘calling’ when he told his former co-workers that he was leaving for the seminary.



But neither secular nor religious authorities offer much guidance to bankers trying to link what they do to some kind of ethical tradition. In seminaries and divinity schools there’s a total lack of attention to the economy and the marketplace, Miller says. ‘Clergy may be quick to throw stones at the latest corporate excess on the front pages,’ he told me, ‘but there is not much constructive work.’ The public criticises bankers for their ethical failings, but the bankers themselves have also been failed by our ethical authorities.



Anyone interested in reclaiming ethics’ place in the world of finance, however, can build on a several-thousand-year-old foundation. ‘Aristotle, Kant, Bentham ― are they dead people who have nothing of interest to offer?’ Miller muses. ‘Or were they on to something? Our economy would be unrecognisable to them. But the questions are still relevant.’