histofthought1

140 Economic thought before Adam Smithprofit for labour and risk of the merchant. On usury in particular, Luthertended to revert to the drastic prohibition that the Catholic Church had longleft behind. The census contract he would ban, as he would lucrum cessans;money was sterile; there should be no increase in price for time as againstcash payments for goods, etc. All the old nonsense, which the scholastics hadspent centuries burying or transforming, was back intact. It is certainly fittingthat, as we have seen, one of Luther's great theological opponents in Germanywas his former friend, Johann Eck, a Catholic theologian and friend ofthe great Fugger banking family, who was even ahead of his time in arguingin thoroughgoing fashion in favour of usury.Yet, despite his opposition to usury, Luther advised the young ruler ofSaxony not to abolish interest or to relieve debtors of the burden of paying it.Interest is, after all, a 'common plague that all have taken upon themselves.We must put up with it, therefore, and hold debtors to it' .Some of these contradictions can be reconciled in the light of Luther'sdeeply pessimistic view of man and therefore of human institutions. In thewicked secular world, he believed, we cannot expect people or institutions toact in accordance with the Christian gospel. Therefore, in contrast to theCatholic attempt through the art of casuistry to apply moral principles tosocial and political life, Luther tended to privatize Christian morality and toleave the secular world and its rulers to operate in a pragmatic and, inpractice, an unchecked manner.5.3 The economics of Calvin and CalvinismJohn Calvin's social and economic views closely parallel Luther's, and thereis no point in repeating them here. There are only two main areas of difference:their views on usury, and on the concept of the 'calling', although thelatter difference is more marked for the later Calvinist Puritans of the seventeenthcentury.Calvin's main contribution to the usury question was in having the courageto dump the prohibition altogether. This son of an important townofficial had only contempt for the Aristotelian argument that money issterile. A child, he pointed out, knows that money is only sterile whenlocked away somewhere; but who in their right mind borrows to keepmoney idle? Merchants borrow in order to make profits on their purchases,and hence money is then fruitful. As for the Bible, Luke's famous injunctiononly orders generosity towards the poor, while Hebraic law in the OldTestament is not binding in modern society. To Calvin, then, usury isperfectly licit, provided that it is not charged in loans to the poor, whowould be hurt by such payment. Also, any legal maximum of course mustbe obeyed. And finally, Calvin maintained that no one should function as aprofessional money-lender.