But it isn’t an injustice rooted in property: it is an injustice rooted in charity

But it isn’t an injustice rooted in property: it is an injustice rooted in charity

Whether legal action is or is not warranted in such a case was controversial. The Dominicans thought not and accused the Franciscans of usury, even for attempting to recover the principal in the case of borrowers who could repay but refused, because they sometimes recovered more than just the principal from grateful borrowers. The Pope intervened on the side of the Franciscans with respect to the non-recourse Mountains of Piety, but this obviously does not resolve what kinds of extrinsic titles and licit legal actions might apply in the case of mutuum loans.

One of the most controversial of the proposed “extrinsic titles” was lucrum cessans, which some interpret as a blanket license to recover opportunity costs (even though opportunity costs are not ontologically real: see Question 15) from mutuum loans

The Dominicans were arguing for their interpretation of Aquinas’ view on the involvement of the civil law; but note that all parties nevertheless agreed about the fundamentally different nature of the inherently gratuitous mutuum loan and the licit-for-profit societas or non recourse investment. A licit mutuum loan does not involve the purchase of a property interest by an investor; it is only ever morally licit as a gratuitous act of friendship. Here is Aquinas:

Repayment for a favor may be made in two ways. On one way, as a debt of justice; and to such a debt a man ount is measured according to the favor received. Wherefore the borrower of money or any such thing the use of which is its consumption [that is, anything which must be returned in kind as opposed to in particular: see Question 35 – Ed.] is not bound to repay more than he received in loan: and consequently it is against justice if he be obliged to pay back more. On another way a man’s obligation to repayment for favor received is based on a debt of friendship, and the nature of this debt depends more on the feeling with which the favor was conferred than on the greatness of the favor itself. This debt does not carry with it a civil obligation, involving a kind of necessity that would exclude the spontaneous nature of such a repayment.

In practice a duly grateful borrower who has become prosperous through the help of charitable loans himself would become a patron of those same efforts which helped him out of poverty pawn shops in Vermont. But this “debt” of gratitude is not a property debt, and by its nature cannot be captured in a fixed rate of interest or other specific monetary amount. The very act of attempting to convert a debt of gratitude or friendship – above and beyond simply what was actually borrowed – into some definite charge of a specific amount of money, puts the lie to attempts to disclaim usury.

If he is ungrateful and stingy and refuses to pay the loan back, even though he has the means to do so, he has committed an injustice

Gratitude or friendship can be truly owed; but gratitude or friendship which can be bought and sold for a specific price is not true gratitude or friendship.

My own understanding of extrinsic titles is that if they involve an entitlement which would not arise anyway without being included in the contract, they cannot be extrinsic to the contract. Certainly titles which arise from theft, fraud, and negligence could arise independent of the contract. But if a particular title has to be included in the contract in order for it to be a legitimate title, it is by definition not an extrinsic title.

No. But although the Magisterium has approved the concept of extrinsic titles generally speaking for some kinds of “loans” to the poor (basically to defend the Franciscans, in their work helping the poor, from the charge of usury), there is no Magisterial proclamation giving a detailed account of which “extrinsic titles” are and are not valid and when they apply.

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