The School of Salamanca was key to the development of
our understanding of the importance of human action and freedom as
basic principles of prosperity and growth, but also the moral
superiority of free trade, private property rights, and economic
freedom. Salamanca also reminds us that the moral principles of Catholic
doctrine and the teachings of the Bible are completely compatible with
the notions of free markets, individual liberty, and small government. ...
The Salamanca scholars also highlighted the importance of interest
rates, not as a measure of greed but as a measure of risk. In his
writings, Azpilcueta asserted that “the lender may licitly demand
something beyond the principal, because he loses the chance to profit
from that money in some other way.” Any loan involving capital
investment necessitates an interest rate to differentiate it from other
loans that are either less risky or less vital for society.
Interest
rates serve as a moral guideline to determine the most effective way to
use capital, making it worthwhile for lenders to take risk and lend to
those who will return it safely, quickly, and productively, thus making
the virtuous credit cycle the most effective way to get capital to work.
At the time, it was common to think that charging interest was immoral,
and that speculators, bankers, and the financial sector in general
existed only to exploit the most productive sectors of society. Scholars
from the School of Salamanca took the counterintuitive position that
charging interest played a crucial role in enhancing opportunities for
business, traders, and ultimately the growth of the most productive
sectors. ...
Gee, why was it common to think that usury was immoral and exploitative at the time?
If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.
-- Exodus 22:25
Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee.
-- Exodus 25:36
Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase.
-- Leviticus 25:37
Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:
-- Deuteronomy 23:19
Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it.
-- Deuteronomy 23:20
When thou dost lend thy brother any thing, thou shalt not go into his house to fetch his pledge.
-- Deuteronomy 24:10
Hath given forth upon usury, and hath
taken increase: shall he then live? he shall not live: he hath done all
these abominations; he shall surely die; his blood shall be upon him.
-- Ezekiel 18:13
And if ye lend to them of whom ye hope to receive, what thank have ye? for sinners also lend to sinners, to receive as much again. But love ye your enemies, and do good, and lend,
hoping for nothing again; and your reward shall be great, and ye shall
be the children of the Highest: for he is kind unto the unthankful and to the evil.
-- Luke 6:34f.
As with the usurers who crept into Catholicism at Salamanca, they crept also into the Gospels, turning Jesus himself into a usurer.
Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury.
-- Matthew 25:27
Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?
-- Luke 19:23
The Jesuits crept into Salamanca not far behind the usurers, the ground already prepared there for such casuistry.
Meanwhile a Jesus who teaches giving everything away to the poor to become a disciple (Luke 14:33) wouldn't have any money himself left over for "the exchangers" or "the bank" to increase it, let alone money for the taxman:
Notwithstanding, lest we should offend them, go thou to the sea, and cast an hook, and take up the fish that first cometh up; and when thou hast opened his mouth, thou shalt find a piece of money: that take, and give unto them for me and thee.
-- Matthew 17:27
Jesus' followers are to be as poor as their master, and utterly rely on their father in heaven:
The disciple is not above his master: but every one that is perfect shall be as his master.
-- Luke 6:40
No servant can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon.
-- Luke 16:13
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