Front Page Titles (by Subject) 4: The Canon Law Prohibition of Interest - Socialism: An Economic and Sociological Analysis
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4: The Canon Law Prohibition of Interest - Ludwig von Mises, Socialism: An Economic and Sociological Analysis 
Socialism: An Economic and Sociological Analysis, trans. J. Kahane, Foreword by F.A. Hayek (Indianapolis: Liberty Fund, 1981).
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The Canon Law Prohibition of Interest
Each epoch has found in the Gospels what it sought to find there, and has overlooked what it wished to overlook. This is best proved by reference to the preponderant importance which ecclesiastical social ethics for many centuries attached to the doctrine of usury.29 The demand made upon Christ’s disciples in the Gospels and other writings of the New Testament is something very different from the renunciation of interest on capital lent out. The canonic prohibition of interest is a product of the medieval doctrine of society and trade, and had originally nothing to do with Christianity and its teachings. Moral condemnation of usury and the prohibition of interest preceded Christianity. They were taken over from the writers and the legislators of antiquity and enlarged as the struggle between agriculturists and the rising merchants and tradesmen developed. Only then did the people try to support them with quotations from Holy Writ. The taking of interest was not opposed because Christianity required it, but rather, because the public condemned it, people tried to read into the Christian writings a condemnation of usury. For this purpose the New Testament seemed at first to be useless, and accordingly the Old Testament was drawn on. For centuries no one thought of quoting any passage from the New Testament in support of the prohibition. It was some time before the scholastic art of interpretation succeeded in reading what it sought into that much quoted passage from Luke, and so finding support in the Gospels from the suppression of usury.30 This was not until the beginning of the twelfth century. Only after the decree of Urban III is that passage quoted as proof of the prohibition.31 The construction then put on Luke’s words was, however, quite untenable. The passage is certainly not concerned with the taking of interest. It is possible that in the context of that passage Μηδὲν ὰπελπίξοντεζ may mean “do not count on the restitution of what is lent.” Or more probably: “you shall lend not only to the well-to-do, who can also lend to you at some time, but also to him from whom there is no prospect of this, to the poor.”32
The great importance people attached to this passage contrasts sharply with their disregard of other Gospel commands and prohibitions. The medieval Church was intent on carrying the order against usury to its logical conclusion, but it wilfully omitted to enforce many clear and unambiguous commands of the Gospels with a fraction of the energy devoted to stamping out this particular practice. In the very same chapter of Luke other things are ordained or forbidden in precise words. The Church has never, for example, been seriously at pains to forbid a man who has been robbed from demanding back his own, nor has it deprecated resistance to the robber, nor tried to brand an act of judgment as an unchristian act. Other injunctions of the Sermon on the Mount, such as indifference to food and drink, have similarly never been whole-heartedly enforced.33
[29. ]“The doctrine of the medieval law of trade is rooted in the canonic dogma of the barrenness of money and in the sum of corollaries which are to be understood under the name of the usury law. The history of the trade law of those times cannot be anything except the history of the rule of the doctrine of usury in legal doctrine.” Endemann, Studien in der romanisch-kanonistischen Wirtschafts-und Rechtslehre his gegen Ende des siebzehnten Jahrhunderts (Berlin, 1874-83), Vol. I, p. 2.
[30. ]Luke, VI, 35.
[31. ]C. 10. X. De usuris (III, 19). See Schaub, Der Kampf gegen den Zinswucher, ungerechten Preis und unlautern Handel im Mittelalter (Freiburg, 1905), pp. 61 ff.
[32. ]The passage is thus interpreted by Knies, Geld und Kredit, Part II (Berlin, 1876), pp. 333-5 note.
[33. ]On the latest legislation of the Church, which in c. 1543, Cod. iur. can., has come to acknowledge conditionally the legality of the taking of interest, see Zehentbauer, Das Zinsproblem nach Moral und Recht (Vienna, 1920), pp. 138 ff.