The scholastic view on usury and economic instability

This article argues that much of Scholastic and neo-Scholastic teaching on usury rests on practical considerations regarding redistribution and market instability. This aspect of usury is underappreciated by economists, especially those in the field of the history of economic thought. A core question usury raises regards the allocation of surplus value in a transaction. Usury is the result of a zero-sum transaction in which the terms of the agreement necessarily leave one party better off at the expense of the other. This links usury to wealth redistribution and market declines. Seen through this lens, the concept of usury is still relevant for modern monetary policy, business cycle moderation, and bubble mitigation.