Joseph Cardinal Höffner CHRISTIAN SOCIAL ... - Ordo Socialis

times the unit value, so that an increment of assets often results for the owners of favorably
located building plots that is felt to be outrageously high. Since land, capital expenditure, and
work always produce the yield together, the conceptual analysis of the three profit factors is
indeed possible, but not the numerical calculation of each one’s share in producing the profit,
so that the demand of many land reformers for a ‘total abolition’ of ground rent is not feasible.
But even apart from this, a public right to the total abolition of ground rent cannot be substantiated,
since a ground rent that is not forced up by land speculation, land monopoly, or a
lack of land laws exercises an economically important function. That does not exclude the fact
that ground rent can be a suitable tax object for those to whom it in fact accrues. Incidentally,
it is the task of the legislator to forbid by suitable measures a usurious price formation in
building markets.
§ 2 Interest
l. Interest is the price paid for the saving that is urgently necessary in the dynamic economy of
the industrial age, which is based on investment and productivity increase. In the United
States, Richard M. McKeon, S.J. has even advanced the thesis that, as recipients of middle
wage and salary incomes , sixty percent of the American employed are in a position to save
by investment and that there is consequently a moral „obligation to buy industrial stock.“
Since, as an incentive to saving, interest fulfils an economically important function, it is morally
unobjectionable (Cf. Can. l543 CJC). Today, interest has disappeared in many lands as a
result of the depreciation of money (inflation). What is paid as so-called ‘interest’ by the
banks is, economically speaking, not interest at all, but, with an annual depreciation of money
of seven per cent and more, an often only partial compensation for the loss of buying power.
The whole affair is an expropriation of the saver to the advantage of the owner of material
goods (entrepreneurs, home and land owners, etc.) and of the state (tax progression). 68 The
inflation of recent years is a crisis phenomenon of late capitalism.
2. Since in the pre-industrial age there was not always and everywhere the possibility of investing
money in an economically fruitful way, but many loans were purely for emergencies
and immediate consumption, starting from the Synod of Aachen of Charlemagne of March
23, 789, the laws forbade the charging of interest on the basis of a mere loan contract. Interest
income was considered justified only when the capital investment could be proved, for instance,
in the form of a partnership contract or of an annuity purchase. Medieval ethics attempted
to analyze these connections and deduced moral requirements from them in a highly
differentiated manner. For example, Antonius of Florence († l459) teaches that, for the merchant,
money possesses the „character of capital“ (rationem capitalis); prices are therefore
lower with cash payments than with credit transactions because merchants like „immediately
to reinvest“ cash (cito reinvestirent) by manufacturing textiles several times a year. In these
cases, theologians accepted interest as justified. 69
3. Whereas the economics of the nineteenth centuries fully mistook the medieval teaching on
interest, leading political economists, especially in England and the United States, point with
emphasis to the „honest, intellectual effort“ of the scholastic economic ethicists to distinguish
between merely lending money and the yield of active investments, i.e., „to keep separate
what the classical theory has inextricably confused.“ „I was brought up to believe that the
attitude of the Medieval Church to the rate of interest was inherently absurd,“ but now it
seems to be clear „that the disquisitions of the schoolmen were directed towards the elucida-
68 Cf. Emil Küng, Inflation als soziales Unrecht, Kirche und Gesellschaft, vol. 3, (Mönchengladbach: Katholische-Sozial-wissenschaftliche
Zentralstelle, 1973).
69 IIa Pars totius Summae Maioris, Tit. I c. 7, 15, and IIIa Pars, tit. 8.
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