The Views of Early Religious Leaders

The Views of Early Religious Leaders and Philosophers About Money

Money, Credit, and Banking

A great deal of confusion has surrounded the discussion of money in all ages. For one thing philosophers and religious leaders frequently raised serious moral questions about money, and consequently anyone who showed more than a disdainful interest in it was thought to follow an unprincipled existence on a base level. For another, since money was such an important part of economic activity, economists and financiers often advocated un­orthodox plans for the control of money which left existing theories in a state of collapse. Until these plans for monetary control were proved wrong or economic theory changed to agree with the schemes, an understanding of the role of money in economic life was impossible. It is no exaggeration to say that such confusion on the subject of money has been more or less usual throughout history. This chapter will describe the development of the theory of money, from the viewpoint of the great economists. Let us con­sider first, however, some of the religious and philosophic atti­tudes toward money.

The moral relationships associated with money have, naturally, been paramount in all religious teachings. The Mosaic code forbade the lending of money, or any other article, at interest. Exceptions to the law were made when the borrower was either poor or a foreigner. In the case of the Hebrews, however, all debts were supposed to be cancelled every seventh year. The idea of the seventh year was derived from the traditional story of Jehovah's fashioning the world, when for six days he labored, and then rested on the seventh. Obviously, when trade increased, this restriction was greatly modified through the wording of con­tracts or completely ignored by those to whom religious observ­ances meant little. Along with the prohibitions against lending at interest, commerce and trade were never as highly regarded as agriculture. Throughout Hebrew literature the tiller of the soil and the herder of sheep were symbols of uprightness and stability. Wealth gained by trade was considered tainted and unstable; indeed, trade was usually left to foreigners.

These or similar teachings are found in the holy books of all faiths. Usually ascribed to a deity or an anonymous prophet, they sooner or later find their way into the writings of famous phil­osophers or ecclesiastics. The objections to commerce and trade expressed in the early religious documents were restated by Plato and then by Xenophon. Plato believed that certain occupations degraded the individuals who followed them. The manual skills and commerce and trade were so classified. Tradesmen were per­mitted in the city only as a necessary evil, and any citizen who degraded himself as a shopkeeper would be imprisoned. Such occupations were only for foreigners.

Xenophon also expressed the general distaste for commercial undertakings but elaborated in more detail his veneration of agriculture. No respectable citizen would engage in any other oc­cupation than tilling the soil. So important did agriculture bulk in Xenophon's appraisal of economic life that he devoted the major part of his economic writings to it. In Xenophon's analysis of the function of silver as money, we have a preview of some of the less logical ideas which have from time to time marked the history of economic thought. Although the value of other com­modities diminished as the supply increased, not so with silver. The more mines which were discovered and the more intensively they were worked, the greater the desire on the part of citizens to possess silver. He hinted that the use of silver as the means of hiring soldiers for war gave it an extraordinary value that in­creased quantity could not undermine. Hundreds of years later these very same ideas became the grounds for heated controversy. Aristotle's conception of money has already been described above. When trade and commerce expanded, money became in­dispensable as a medium of exchange and a standard of value both for the present and future. However, it was wrong, Aristotle believed, to lend money at interest. Since money could not re­produce itself, the exacting of more than was given was unjust. Others of Aristotle's ideas on money were more modern. He realized first that money was a commodity. As such it was sub­ject to the same fluctuations in value as all commodities, although it was his conviction that the value of money was more constant. He pointed out that money had no natural value but only value created by law. Money carried an inherent danger according to Aristotle, for its very possession led to speculation, by which he meant the practice of trade not for purposes of securing needed articles for use but for purposes of amassing an abundance of the precious metals for their own sake.

In Thomas Aquinas we can recognize the influence of the es­sential teachings both of early religion and the Greek phil­osophers. The admonition of the founder of the Christian religion to the effect that a love of money was the root of all evil very clearly restricted the thinking of Aquinas, as did the principles laid down by the Mosaic law. Money and trade were perhaps necessary, but they were both spiritually dangerous since they led to the search for wealth for its own sake. Following Aristotle, Aquinas believed that money was barren and could not repro­duce itself; hence to require interest was taking from another what one had not earned. Allowance was made, however, for some compensation for loans in exceptional cases. Prices were the money expressions of fair value, or as Aquinas interpreted it, the value of a man's labor according to his station in life.