Ever wondered why the Church doesn’t condemn the stock market? Colin Donovan dives into Catholic social teaching on interest and economics. He lays out the difference between “usury” (sinful interest) and fair interest. Discover how the Church views the role of interest in capitalism and the importance of justice and charity in financial dealings. Explore papal encyclicals (like those by Pope St. John Paul II) for a deeper understanding.
Transcript:
Why isn’t it that the Catholic Church and actually Christianity in general is very fervently against interest-based economics or for example the stock market? The Bible seems to speak very clearly in condemnation against loans being given with interest and that seems to be the foundation of capitalism. So why doesn’t the Catholic Church speak out against that?
It does. In fact, if you go to ewten.com and I’m sure it’s also on catholic.com, you can look up the papal encyclicals especially of John Paul II who wrote about these issues. So there’s a lot of teaching. It’s called social teaching. In the modern era, beginning in the late 1800s with the union movement and you also had communism and capitalism battling it out or beginning to battle it out, the post began to write social encyclicals in dealing with this.
If you look at the scriptural context, you will see that, just on this particular point of interest, you will see that what was condemned was basically sinned against individuals. So the unjust keeping of the cloak of the man at the end of the day, you hold it in surety so guaranteed that he will do the work or do the service that you asked him to do and then you would hold it, just keep holding it rather than returning it or not paying his wages at the end of the day. So the consideration there are considerations of justice and charity.
So the Church doesn’t have an abstract “we’re against interest.” No. It’s the question of what is the justice and the charity of the situation. And in fact, in the early days when interest was being spoken about in the, I guess at the end of the medieval period, the Church was in fact against it. And it did so in ignorance until it understood how an individual in loaning capital out, for example, and then here we’re going to talk about the basis of capitalism, loans capital out that others can do work with their money and he deserves a just reward.
And so interest is that reward, interest we get on a savings account or interest we pay to a company for buying a product on time. The question of what is usury then is when does it get to be exorbitant and unjust? And that’s where the Church settled out in these issues when these were first being raised in the late Middle Ages. There had always been different kinds of banking and so on historically, but that really came to the fore. I believe it was in the 1500s or so and the issue of what constitutes usury, which is the sin of injustice. So not taking interest per se, but taking interest or paying interest unjustly. And this is still an issue when you look at your credit card percentages sometimes and you know that the prime rate is six or seven or eight percent and the company wants 22 or something like this, it makes you wonder is there some usury going on there and they do have excuses as to why they do it.
You get the deadbeats who don’t pay their debts and so they have to keep up their income levels and so on. But these are areas where the Church is concerned and in the social encyclicals and in other documents of the Church by the Bishops Conference here in the United States and so on you will find those concerns spoken about and discussed.
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