Bus 1050 1st Edition Lecture 21 Outline of Last LectureI. Maimonides, from The Code of MaimonidesII.Aquinas, Of the Sin of Usury from The Summa TheologicaA. First Article Outline of Current Lecture II. Aquinas, Of the Sin of Usury from The Summa TheologicaA. Second Article B. Third Article C. Fourth Article III.Francis Bacon, of Usury from The EssaysA. Advantages B. DisadvantagesCurrent LectureAquinas (Second Article): Whether it is lawful to ask for any other kind of consideration for money lent?For example, I can’t loan you money and say not only do you have to pay me back the principal but you also have to pay me interest because it goes against the first article. But what if one says I’ll loan you the money and you’ll pay me back the principal eventually and you’ll mow my lawn and shovel my driveway? This is not allowed because these activities may be measured in money so it’s the same as usury, so it’s prohibited. In other words, as long as it can’t be measured in money then it’s okay to ask for that when you loan someone money because it’s not usury.In objection 7, It happens sometimes that a man raises the price of goods in the guise of loan or buys another’s goods at a low figure… If you pay me early I’ll give you a discount, if you pay me late you’ll pay me more… But Aquinas says that this is not ok. There is an idea that there is some identifiable value of things, and although it’s not precise, it’s a reasonable amount. These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.If I give someone an extension of time to pay and in exchange I charge him or her interest, it’s implied usury and is not allowed! The same things apply if one allows someone to pay something early at a cheaper price because the buyer, in a way, is taking usury from the person they bought the something from. The most common arrangement between buyers and sellers, when the buyer is buying on creditis 2 %/10, net 30. If the buyer pays within the first ten days they get a 2% discount, but if you pay after the 10-day mark then you pay the original price and must pay within 30 days. The longer you wait to pay the higher the cost will be and vice versa. This is charging for the use of money and would be considered applied usury. In Aquinas’s mind, one would imagine that Aquinas would consider this unjust, but he says no. Aquinas is, what appears to be, making an exception to the condition here because it was common practice for this kind of 2%/10, net 30 to take place. It’s this idea that we always make exceptions for things that don’t always fit the norm because people have been doing it for centuries, even if it violates the norm, the common rule.Third ArticleThis uses the same logic as in the First Article but the consideration applies to “profit” earned off of usury received. If the usury was paid in the form of a thing whose use is its consumption, the lender may keep the profits because the assumption is that it was the lender’s effort, which earned the profits. It depends on the form that the usury took. If the usury is paid in a form of something whose use is it’s consumption or it’s use is not its consumption. There is the 1 million dollar loan example with 100,000 of usury money. But because it was my effort that generated the profit (consulting business) I don’t have to give you the profits generated from the business started by the usury money. But if the usury is paid in the form of something whose use is its consumption, any profits earned, the lender gets the keep. On the other hand, if its use is not its consumption, then one must pay back the usury along with the profits made from the usury money. Fourth Article: Whether it is lawful to borrow money under a condition of usury?Jewish and Catholic doctrines are brought together. According to Jewish doctrine, it’s not lawful to lend money and charge interest to one’s brother. Aquinas’s view is that we need to have lending and borrowing because we don’t live in a world where everyone has the same amount of money. Aquinas says that if you’re reading and willingto lend with interest and borrowing is a necessity, then the only person sinning is the lender. How can the borrower be sinning if he/she is the one being bitten. But it is not lawful to induce others to sin. But it’s lawful to make use of a sin to a good end, assuming that the lender is already willing to sin. This differs from Maimonides because he believes that if one lends with usury then it’s unlawfuland if someone asks for a loan from someone who is willing to charge interest, even if they’re not supposed to, then it’s not a sin. Bankers lend for interest for a living. These men are “ready and willing to sin”. Jews were ready and willing to charge interest on loan to Catholics because that’s what their religion taught. If Catholics wanted a loan they’d go to Jews.You only borrow under a condition of usury if the usury will be used for virtuous purposes. There must be virtuous reason for your borrowing money. Francis Bacon (The Transitional View) Francis Bacon disliked usury because money works on Sundays even if religious folk don’t work on Sundays. And it’s unnatural to have money make money because it’s unnatural. Men and women are hard at heart because they won’t lend freely. There are disadvantages and advantages of usury.The second disadvantage is that it makes poorer merchants because there is not as much to reinvest. The fourth disadvantage is that, the wealthy give out loans and as a result they get wealthier. In other words, this exaggerates the inequality in the distribution of wealth.The advantage of usury is that it allows lending and borrowing to continue. It keeps the wealth circulating.Two things must be reconciled: 1) that the tooth of usury must be grinded so that it doesn’t bitetoo much and 2) a lower rate for the general public and a higher rate for the