Money, Time and Labour

Abstract

By now it has been pretty well established that the Flemish Jesuit Leonardus Lessius (1554-1623) was an economist of the highest grade. Joseph A. Schumpeter, perhaps the 20th century’s most important historian of economics, afforded Lessius more than ample mention in his monumental work, History of Economic Analysis. In Interest and Usury, Schumpeter’s pupil, Bernard W. Dempsey, likewise gave Lessius generous attention. The Belgian historian Raymond de Roover, however, who considered Lessius to be primarily a deserving epigone of the famous ‘Salamanca School’, did not completely share their enthusiasm, at least initially. De Roover’s somewhat lukewarm attitude was, nevertheless, drowned out by the laudatory contribution of Barry T. Gordon on the subject in his Economic Analysis Before Adam Smith. Robert Beutels brought respect to Lessius’ work in his bio-bibliographical essay published in 1987 and restored something of the honour due to Lessius which, according to Beutels, he had been unjustly denied, certainly in his own land. The image of Lessius presented by all these authors is uncommonly fresh, yet at the same time surprisingly familiar. In their works they have shown him to be a modern thinker who merits comparison with contemporary economists. His analyses give witness to his profound insight into the economy of his day and are still relevant, thought not directly applicable, for economists today. The market principle, portfolio theory, the quantity theory of money, and much more can, according to the authors we have mentioned, be found in Lessius. But does this rather trendy image of Lessius agree with the historical reality? An appropriate way to begin answering this question would be to examine his discussion on the lending of money and the taking of interest in his monumental tractate of 1605, On Justice and Law (De iustitia et iure). Did Lessius endorse or reject the traditional proscription against usury? When did he consider it permissible to claim interest? To what extent did his moral judgment depend on an economic analysis of the phenomenon of interest? Perhaps the answers to these questions will enable us to judge Lessius as both economist and ethicist, as he rightly deserves. Lessius’ elucidation of the question concerning the lending of money and the taking of interest begins in the traditional manner with a quotation from one of the Fathers of the Church, Basil the Great, who had written a sermon on the problem of usury in the 4th century C.E. and who had thereby provided an arsenal of useful and authoritative statements for future theologians to use in dealing with the problem in their own day. The quotation runs as follows: “By its nature, money is indeed fruitless. Nevertheless, through the industry of greedy individuals it surpasses all living things in productivity (2,20,1).” It is from here that terms ‘fruit’ and ‘product’, foetus or tokos, are used to refer to usurious profit or foenus. The usurer is considered an avaricious person, an avarus, and his money bears fruit like a living thing. The fruitfulness in question, however, is of a special type which Basil represents in the form of an analogy: The fruitfulness of usury is like the fruitfulness of the hare. “The hare is such that it gives birth, raises its young and conceives again all at the same time.” The hare, in fact, is an animal which suffers from superfetation. The same can be said for the money of the usurer or the avaricious person: “At one and the same moment it is lent out for usurious profit, bears fruit and is impregnated once again.”