Before discussing Aquinas’ argument against usury, a brief recapitulation. My main thesis is that the scholastic complaint against ‘usury’ was unreasonable, and at best uninformed. This requires understanding what they did mean by ‘usury’, on which Aquinas’ argument in the previous post is very clear. Aquinas did not mean that usury was a form of unreasonable charge against a loan, such as administration costs, or simply very high charges over and above a ‘natural’ interest rate. He was not talking about any form of overcharging. He was talking about any form of charge for the use of money itself. Charging for the use of money is to sell the use of a thing whose use consists in its consumption, and is therefore like selling the same thing twice. It is rather like selling wine separately from the use of wine. It is a form of fraud, and is therefore wrong, he argues.
His argument rests on a mistake. Clearly the use of money is like the use of wine. We consume money by spending it. As Aristotle says “the proper and principal use of money is its consumption or alienation whereby it is sunk in exchange". Money is not like a house, which you can live in, nor a car, which you can drive. Its use consists in destroying it.
But the charge for a loan (meaning the ‘risk free charge’) is not a charge for the use. Rather, it is the difference between the value now of a sum of money to be used in the future, and its value then. Giving £95 to you now, in return of a payment of £100 in a year’s time is simply my purchasing something from you, namely the future £100. The £95 is a payment, not a loan. The loan is the two things together: the present payment, and the contract for a future payment. And the ‘charge’ of £5 is not a charge for the use of the £95, but rather the difference between the future value of the future £100, and its present value, which is exactly £95. Thus it is not a charge for use, and thus we are not selling the same thing twice. Rather, the borrower is selling something to me (the future £100) and I am purchasing it from him at its present value (which is £95). One sale, one purchase, which is how things should be.