The Aristotelian Analysis of Usury (review)

Odd Langholm. The Aristotelian Analysis of Usury. 1984. Pp.153. $~9.oo BOOK REVIEWS 139 Bergen: Universitetsforlaget AS, Some three decades ago John T. Noonan published The ScholasticAnalysis of Usury, the classic study of mediaeval economics. In many ways the present work should be considered as an update of it. The updating is made possible by new materials that have come to light--short mediaeval economic treatises by relatively obscure fourteenth-century theologians---Peter Olivi, Gerald Odonis, both Franciscans, and Gerard of Siena, an Augustinian. Langholm's careful study of the materials proceeds along five themes selected from scholastic moral theology----contract, teleology of money, law, human industria, and duress. The upshot is that we have a fresh account of the economic thought of the Middle Ages. We are now in a position to push back its creative period at least by half a century. The received opinion, established by the late Raymond De Roover, that Bernardino of Siena and Archbishop Antonino of Florence were "the two great economic thinkers of the Middle Ages" would now have to be revised in favor of the three mentioned above. Langholm demonstrates how indebted Bernardino and Antonino were to their more creative predecessors. Apart from its historical value, the book under review is also valuable for its contribution to the study of economic thought of the Middle Ages. Those intimidated by Noonan may find in Langholm, not a substitute, but a very reliable introduction. How did the mediaevals look upon economic activity? What kind of science did they think economics was? Economic activity--buying and selling, lending and borrowing money--were for them essentially 'human acts', and therefore not to be treated solely as acts justified by market behavior. Economic activity pertained to the sphere of 'action', not just 'behavior'. Accordingly, economics was essentially a moral science, and not an autonomous behavioral science. As Langholm points out, the scholastics did not have an instrumental conception of the economic variables. The focus of their attention was "man qua generalized individual," not "man en masse"(148). Hence, on the one hand, the supreme importance of the nature of money, and on the other, ofjustice and the notion of the just price in the loaning of it. As for the nature of money, mediaeval thought was fixated on two notions derived from Aristotle's Politics: the sterility of money and its essence as medium of exchange. As Langholm points out, scholastic thought did not have an abstract notion of money: money was a "concrete substance," coins, for use in exchange. It was not of the nature of money to breed money. They could not operationalize the possibility that in a loan what was transferred was not the thing itself, but only the ius, Accordingly, rules governing a money-loan were substantially not different from rules governing exchange of any other commodity. In each type of transaction the rules of '~just price" had to be observed. Money was a sterile entity which was consumed in its use: in a loan both the ownership and use were transferred. Therefore to charge interest on the use was to charge the same thing twice, which was against all principles ofjustice. Usury therefore was unjust. As for meeting the requirements of justice, there were also the questions of voluntariness and duress. Here Aristotle's Ethics was the source of enlightenment. For the mediaevals, a loan of money could only have been caused by some necessity: analyti- 140 JOURNAL OF THE HISTORY OF PHILOSOPHY 26:1 JANUARY 1988 cally they could not have thought of a loan as a means of productive investment. Prohibitions against usury made good sense so long as the economy was static and did not produce any surplus wealth, and money itself was conceived of as a means of facilitating exchange of goods. The question of the nature and justification of interest, as Langholm reminds us, is by no means a settled issue even in the ideologically and religiously divided contemporary world. "It is only when we ourselves possess a consistent theory of interest," writes Langholm wisely, "that we can blame another age for the lack of it." (150). There is only one criticism that I would make...