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Economics of Morality



An integrated system of economic theory and policy allowed for the free market price of land to cyclically go down to zero and facilitated the restitution of the land to the original possessor on the year of the Jubilee. A similar dynamics allowed for the cancellation of monetary debts every seven years. These are the primary characteristics of the economics of Moses. The economics of Jesus is a restatement of the economics of Moses. Their purpose was the avoidance of hoarding. To generalize, the primary tool used in both doctrines was the application of economic justice and therefore of morality in daily economic relationships among human beings.
Economics of Morality
Economics of Moses, Economics of Jesus
Carmine Gorga, PhD*
Society of Catholic Social Scientists Annual Meeting
October 25, 2014
Mount St. Mary’s University
* President, The Somist Institute
87 Middle Street, Gloucester, MA 01930
978-283-5926 Fax and Voice: 978-283-4936
An integrated system of economic theory and policy allowed for the free market price of
land to cyclically go down to zero and facilitated the restitution of the land to the original
possessor on the year of the Jubilee. A similar dynamics allowed for the cancellation of
monetary debts every seven years. These are the primary characteristics of the economics
of Moses. The economics of Jesus is a restatement of the economics of Moses. Their
purpose was the avoidance of hoarding. To generalize, the primary tool used in both
doctrines was the application of economic justice and therefore of morality in daily
economic relationships among human beings.
Keywords: Economic theory, policy, morality, jubilee, hoarding.
Common wisdom assumes that economics is a positive science which eschews all
values such as those embedded in a system of morality. Conversely, there are many who
argue that even a positive science such as economics cannot avoid values: Values are
embedded in economics as in many other sciences (see, e.g. Caplin and Schotter 2008).
At the other end of the spectrum of ideas, the practical end, there is a burgeoning
literature that goes under the banner of The Economics of Religion. The field is so
vigorous today as to have gained its own JEL code, Z12, and to have formed its own
professional organization, the Association for the Study of Religion, Economics, and
Culture (ASREC). This literature mostly studies religion as if it were a commodity and
the church as if it were a business firm (see, e.g. Iannaccone 1998; McCleary 2011).
Fascinating as these investigations are, this paper stays away from their approach.
The abstract discussion is too abstract: values are everywhere; the practical discussion is
too practical: money is everywhere. In between, there are the traditional lines of analysis,
which find in the Bible the original source of relationships between religion and
economics and range from the very broad—religion affects everything—to the very
specific, especially how to conduct business. They include the old quest concerning the
effects of Protestantism on economic growth (Weber 1930; Fanfani 2003) and focus on
the search for the roots of what today is called business ethics. This literature is well
represented in the Talmudic branch (see, e.g. Mangeloja 2004), the Protestant branch
(see, e.g. North 1973; Rushdoony 1984), and the Catholic branch of religion (see
especially authors who treat the entry “social justice”). Each branch has naturally tended
to interpret Biblical texts for its own specific purposes, from the homiletic to the political
and ideological. Invaluable insights can also be gathered from the growing economics
literature on Islamic (e.g. Kuran 1995), Buddhist (e.g. Zsolnai 2009), and Hindu (Bokare
1993) tradition.
Biblical and other religious texts mostly remain sources of inspiration as legal,
moral, and spiritual authority.
This paper is a historical examination of a question that can be formulated in these
terms: Has there ever been a set of intellectual and practical economic structures that
allow for moral relationships to be commonly and comprehensively practiced among
human beings? Morality is concisely considered as respect for one’s own and other
people’s dignity as human beings; for a comprehensive definition of morality, see Gorga
2012. The reader can substitute integrity for dignity and should obtain the same results.
The discussion can also be reduced to an inquiry concerning the application of fairness in
all economic relations between human beings.
Using Concordian economics (Gorga 2002), in 2006 the writer cast a look
backward in history and, to his continuing amazement, discovered the existence of a
unique, self-enclosed, comprehensive body of doctrines that, as reported in Gorga (2010),
can be classified as the economics of Moses and the economics of Jesus. To appreciate
the inner coherence of these two doctrines, it is necessary to treat them separately. Hence,
Part I attempts to reconstruct the economics of Moses; Part II the economics of Jesus.
Part III touches lightly upon a host of questions raised by this work, and offers only
meager answers. To give an indication of the magnitude of the task ahead, it might be
pointed out that what needs to be fully evaluated is how much light this discovery sheds
on about four thousand years of economic literature and practice.
To emphasize one set of issues, the writer approaches the relevant Biblical texts
as if they were strictly economics texts. If the reader can read these texts in the same light
as if they had been written, let us say, by Samuelson and Solow, the forbidding aura of
the authors and quite possibly the preconceived biases against them, the rich theological
implications, and deep complexities of Biblical exegesis are questions that—at least
temporarily—can be set aside and reserved for examination once the economic import of
those texts is fully evaluated.
We shall see that both sets of doctrines contain the whole world of economics,
because—rather than starting from the economics of the household, as the Greeks did—
they both address the whole of the economic process, which, as established by Classical
economists, contains the study of production, distribution, and consumption of wealth. Of
course, both Moses and Jesus explain theory and policy in accordance with the exigencies
of their own historic moment. Hence, what changes is not the substance of their discourse
but the literary expression and the response to immediate needs.
The paper attempts to demonstrate that both systems of thought represent not only
an integration of economic theory, policy, and practice, but especially an integration of
economics and morality. Hence, the central interest of this paper is to show that the two
doctrines together form an integrated system of thought that might be called the
economics of morality. We shall see that this system of thought yields rules that are
applied freely and are just. Economic morality is defined as the application of economic
justice. This is a topic that has its own vast literature (see, Gorga 2007), whose theoretical
implications are cut short here by the observation that economic relationships are mutual
relationships, thus one can objectively measure the value of what one gives and what one
receives; one can objectively measure economic justice.
PART I — The Economics of Moses
The economics of Moses is contained in two fundamental doctrines: Observe
Jubilee (including Sabbath and Sabbatical year) and Do Not Steal. The first is enunciated
in Ex 20:8-11; 34:21; Lev 23:3; 25:2-16, 23-28; Num 33:53-54; 34; and Deut 5:12-15;
15:1; the second in Ex 20:15 and Deut 5:19.
1. Observe Jubilee
What is the doctrine of the Jubilee? There are many facets to this doctrine which
lie outside the scope of this paper (cf. Harris 1996; Trocmé 1973). Our focus is on its
economic content. This is an economic doctrine and practice of subtle complexity. There
are three aspects to it: They concern land, money, and products-things-time.
Jubilee Concerning Land
Economists might want to study the medium term injunction of the Jubilee,
liberally extended to cover the Sabbatical and everyday practices. This is the injunction to
leave the land fallow every seven years—namely, to let it organically rest so that it will
recover its powers naturally, rather than force feeding it with chemicals. (Because of the
savings involved in any reduction of chemicals and smaller external costs of clearing the
effects of chemicals from the waters downstream and eventually the water table,
economists may wish to give this practice more than a fleeting glance. The appetite for
the economics of pesticides might be wetted by the knowledge that pesticides—while
harming human health and the ozone layer—are used, not to enhance the productivity of
the land, as to eliminate blemishes from the produce’s appearance.)
Our main concern is with the long term economic—and, necessarily, legal and
moral—aspects of the Jubilee in relation to the land. By the end of the 49th year, the
doctrine calls for the return of the land to the original possessor. Hence, on the 50th year
—the Jubilee year—the slate is clean. Just as with the U.S. Homestead Act of 1862 or in
the Amish community and Bali today, the original possessor acquires land at no cost
(Num 33:53-54; 34), a gift from inheritance. The responsibility is to till the land.
The purely economic aspects of the Jubilee are revealed by the practice of
purchase and sale of land during the forty-nine years preceding the Jubilee; by the
existence of price; and by the existence of market. These three aspects are coordinated to
such an extent that, with passage of time, the price of the land—astonishingly—goes
progressively down to zero the closer one gets to the year of the Jubilee (see Lev 25:13-
16; 27:16-24). How is that accomplished?
The three long term economic aspects of the Jubilee concerning the land bear
deep examination. And they can be better understood by indirection. Purchase and sale of
land could have been prohibited; and there would have been no market, and thus no price.
The price mechanism of the Jubilee calls for close attention. Since the price of land
decreases with the passage of time, the arrangement reveals that there was the
observation of an inner coordination of events in the application of the Jubilee: first,
everyone obeyed the mechanism; since there is no evidence of compulsion, everyone
obeyed it voluntarily; and since the price of the land decreased over time, it was clearly
responding to a framework of economic analysis. What was this framework? The process
of price determination becomes reproducible and decipherable as one looks at the
economic, the legal, and the moral context into which the purchase and sale of land was
taking place.
The Economic Context. To see the various relationships involved in the institution
of the Jubilee, it is useful to reproduce an analytic framework, which is here represented
in a mathematical, logical, and a geometric format. We will observe this framework first
in broad general terms and then we will fill in some of the specifics.
The framework constitutes an application of the principle of equivalence, which
mathematically is represented as A ≡ B ≡ C. To emphasize the reciprocal set of relations
among the terms, the principle can also be represented as A ↔ B ↔ C. As emphasized by
both mathematicians and logicians, the principle of equivalence yields nine sets of proofs
because each term has to be reflexive (identical to itself throughout the discussion),
symmetric (one term can be replaced by another and, while observing the same reality
from a different point of view, yield a congruent set of conclusions) and transitive (the
conversation has to be extended to a third term because, as e.g. Allen 1970, p. 748,
pointed out, the relation of equivalence is of broader application than the relation of
equality). Geometrically, one can represent the principle of equivalence in the following
Figure 1. A Geometric Representation of the Principle of Equivalence
Or this format:
Figure 2. The Interchangeability of Terms in the Principle of Equivalence
Figure 2 indicates that the relation of equivalence presents us with a construct that
is organic, rather than linear. The terms A, B, and C are complete entities in themselves,
and they do not stand alone, but are put in relation with each other. One can therefore
enter the discussion at any point and will—or should—obtain the same set of results.
Let us now be specific. In order to understand the inner organic validity of the
Jubilee, we have to be concerned with three entities all at once: namely, land, product,
and money—or more precisely still, the value (Price times Quantity) of land, value of
product, and value of money. In this fashion:
Figure 3. A Framework of Economic Analysis
PxQ of Land
PxQ of Money
PxQ of Product
The process of price determination for the land established an equivalence—in
conditions of equilibrium, a constant one to one relation—among three elements: price
times quantity of land, price times quantity of product, and price times quantity of
money. This process was dynamic. With the exception of the quantity of land—each
specific plot of land and presumably its fertility—all the other factors were changing over
time. Over time the price of the land went down, because—clearly—the cumulative
quantity of fruit that the owner would derive from the purchased plot of land went
progressively down to zero as the end of the 49th year approached. The economic basis of
the sliding scale for calculating the price of the land at any given moment is evident:
there was less fruit to be gathered as time progressed. Yet, what is not evident is that the
economic system relied on two hidden independent relationships: the price of the product
and the value (quantity times price) of money in their relation to the quantity of money,
Figure 4. The Monetary Mechanism
The unit price of the fruit of the land had to remain constant over time; and the
value of money also had to remain constant over time—otherwise, it would have been
impossible to determine the price of a plot of land at any point in time. To wit, if the price
of the fruit were to increase over time, then the price of the land could either remain
Quantity of Money
Price of Money
Price of Product
constant—rather than decrease—or even increase over time. Ditto for any variation in the
value of money.
We shall investigate the issue of the value of money after analyzing the legal and
moral context in which the Jubilee was carried out. Here it might be worth to remain a
little longer on the issue of the constancy of the price of the fruit of the land. Assume zero
initial capital expenditure (the land was gifted, not purchased), constant labor costs, and
no technological innovation over time (technological improvements used to move at
glacial pace), the cost of the product ought to remain constant. (Indeed, with
technological innovation, as current market trends in computers demonstrate, in a
regimen of near perfect competition the price of a product will decrease).
The Legal Context. The legal operative word is stewardship. As distinguished
from “things” that we create and on which we have legitimate property rights, the land
belongs neither to its possessor, nor to the government. The owner of the land is Yahweh.
“The land is mine,” says Yahweh (Lev 25:23). It is Yahweh who gives the land to each
family of the tribes of Israel—except the Levi (Num 18:20) who were expected to live on
part of the tithe (Num 18:24-30; cf. Kelly 2004). If one possessor encounters troubled
economic waters, one can sell the fruit of the land. But the owner of the land remains
Yahweh. And the price of the land goes down because at the Jubilee year the land goes
back to the original possessor. Thus, the decreasing price makes it possible for the buyer
to receive a compensation equivalent to the value of product that might be obtained until
the 49th year of the Jubilee cycle. And, incidentally, it is worth noticing that it becomes
less traumatic and more palatable to transfer back to the original possessor a plot of land
whose residual market value goes down to zero—instead of remaining constant or
increasing—as the Jubilee year approaches. (Urban houses are treated like consumer
goods. They are not returned to the original owner, specifies Myron S. Geller, unless
The Moral Context. In Israel there was a moral obligation to return the land to the
original possessor at the Jubilee year. Why this command? Why the acceptance of this
command by the people—at least in the beginning? The reason is clear. The person
without access to land and natural resources is not a free man or woman. This person has
lost the most fundamental of God’s gifts to man; he has lost his freedom. The loop is
closed, the inner mechanism of the economics of Moses becomes clear as soon as it is
realized—as modern economic theory from Adam Smith onward has made clear—that
freedom is an essential component of economic growth. No freedom, no wealth.
Take away economic freedom from your neighbor and both you and your
neighbor become poorer. Your nation becomes poorer. Thus the practice of the Jubilee
concerning land does not only have internal legal and moral integrity, it makes
unexceptionable and irreproachable economic sense. [Especially in olden days, access to
land was an essential component of economic freedom. Concentration of the land in a
few hands restricts the economic freedom existing in a nation. The injunction of the
Jubilee concerning land is an essential tool of an economic policy that wants to prevent
hoarding and to preserve economic freedom for the nation as a whole.]
Let us now observe the inner mechanism of the Jubilee concerning money.
Similarities and differences with the theory and practice of the Jubilee concerning land
are quite instructive. Naturally, one reinforces the other.
Jubilee Concerning Money
The second plank of the Jubilee is the injunction that during the seventh year all
personal debts among the Hebrews (only) are to be extinguished. This injunction—if ever
practiced, especially outside of kinship, specifies Myron Geller—can be understood when
it is inserted into a monetary framework that is dominated by these three fundamental
propositions: Gold, or an equivalent commodity, is money. Debt is not money. Interest
rate is zero or very near zero. To analyze these propositions, let us reconstruct the
monetary framework which led the Israelites to their unique injunction. Three elements
are in proportional relationship:
Figure 5. A Monetary Framework
In the beginning the supply of gold, being a global commodity, increased—
though in spurts—at a near constant rate with the increase of the population. Hence, since
its per capita utility was rather constant, the price of money was stable. The interest rate
was zero (Deut 23:19-20; Lev 25:36-37) because the gold nugget or coin that was
returned was the same as—or an equivalent to—the one borrowed; in this case the value
implicit in the use of the nugget was a definite gift from the lender to the borrower. (In
the beginning, unless other arrangements were instituted, in order to avoid paying or
receiving a 100% interest rate in addition to the return of the capital, one would have had
to break apart the nugget or the coin—a difficulty that was eventually obviated by issuing
Price of Money
Quantity of Money
Quantity of Interest
coins of smaller and smaller denominations. And if in time a reasonable interest rate was
charged, one still remained within the bounds of the economics of the Jubilee.) In the
beginning, money as debt did not exist. The relation between debtor and creditor
remained personal and static. One did not buy or sell debt. Who would want to buy an
“asset”—debt—that bears low or no interest and whose value becomes zero when the
Jubilee year comes due?
But why did the value of debt become zero when the seventh year arrived? The
practical reason is that the borrower had almost certainly spent the nugget or the coin
borrowed and was now penniless: Personal peonage did exist, but was subject to the same
rules as those concerning monetary debt (see Lev 25:39-55). The cancellation of debt and
the redemption from peonage renders men free again—and free human beings produce
more than slaves and peons. The theoretical reason is that the cancellation of debt on the
seventh year was the capstone that held an extremely delicate set of checks and balances
together: The interest rate was null or very low and certainly there was no such construct
as compound interest; debt had no value of its own; indeed, gold used as cash had—
literally—a carrying cost and was not much subject to inflation or deflation. These
relationships persisted as long as the Jubilee and Sabbatical were practiced.
Figure 5 helps us understand these relationships in mathematical terms: all three
terms have a value of zero, a perfect instantaneous equilibrium that was reached on the
year of the Jubilee. True, Figure 5 relates only values and relationships among individual
private citizen; hence, it represents microeconomic events par excellence. The
macroeconomic relations must be disposed of very briefly in this context: first, the wealth
of nations is an abstraction; second, money acquires value only at the moment of
exchange—without an exchange, the value of money is zero.
Apart from the internal coherence of the system, where is the fundamental
justification for the cancellation of debts during the seventh year? The case of land is
clear. Yahweh creates the land; therefore, Yahweh remains its owner in perpetuity. But
who creates money? Unless other textual evidence is brought forward, there is only one
expression that clarifies the issue. The expression comes from Lk 20:24-25, in which
Jesus, upon being shown a denarius, asked: “Whose portrait and inscription are on it?”
“Caesar's," they replied. He said to them, "Then give to Caesar what is Caesar's.” This is
who Jesus understood to be the intermediate owner of money: Caesar; the government.
But wait. Who is the King in the Jewish tradition? What is the government? The
King is anointed by Yahweh. The King and the government are representatives of
Yahweh. The money, then, is as much a good that comes from Yahweh as the land. (And
this, incidentally, is the foundational reason for the institution of the tithe [see Gn 14:20;
Lev 27:30; and Deut 14:22]. The tithe is similar to the first fruit that in Greece or Rome
and other ancient societies, and in Bali today, is given to the gods).
Thus the Jubilee/Sabbatical concerning money, the remission of all debts every
seventh year, makes as much sense as the restitution of the land to the original possessor.
This injunction of the Jubilee concerning money possesses just as much internal logic, as
well as legal and moral integrity, as the Jubilee concerning land. The unexceptionable
and irreproachable economic sense of the Jubilee concerning the land is redoubled when
it assumes the form of the cancellation of debts—the cancellation of the duty to restitute
wealth that is no longer there. Yet, to make the issues more deeply understood, perhaps
one must ask: what is money?
Money. There is no definition of money in economic theory. And there can be
none. In economic theory, there is only an explanation of the functions of money: a store
of value, a means of exchange, and a tool of accounting. These, to emphasize the point,
are the functions of money. For a definition of money, one must go to the law. One can
then say with certainty what money is: Money is a contract. Money is a contract between
the holder of the coin—or the note—and society. It is society as a whole that gives value
to the money. It is the sweat and tears of all the people that give value to money. The
King, or the government, as representative of society as a whole, only vouches for its
mint condition and guarantees the value of money.
Both money and land are common goods, because they are both given value by
the sweat and tears of all the people in the land. A rock in Arizona is nearly worthless; a
rock of the same size in Manhattan is worth gazillions. To repeat, the Jubilee does not
only have internal logical, legal, and moral integrity, it makes unexceptionable and
irreproachable economic sense. The practice of cancellation of debt every seventh year
was an acceptance of reality and an institution of peace: one cannot spill blood from a
stone. The alternative is to enslave debtors. Yet, debtors produce nothing if incarcerated
—indeed, they cost money for sustenance—and slaves produce less than free men.
Hence, society as a whole, just as in the case of the land, is worse off through the
pursuance of sleek economic practices. These practices are generally tolerated because
the cost of the sustenance of the debtor in jail is borne, not by the creditor, but by society.
This analysis is confirmed by a view of the monetary system as a whole. The
monetary system has to integrate three elements: (1) a coin or a bill is to be made
equivalent to (2) a unit of currency—e.g. one dollar bill; and both have to be made
equivalent to (3) some amount of real wealth. This third element is shattered into a large
number of items. The functionality of the system is ultimately determined by the
(culturally always changing) exchange values among these sets: one ounce of gold for
one bushel of apples, and one bushel of apples for a carved walking stick, which at that
one point in time must in turn be able to buy an ounce of gold. In a free economy, these
exchange values are determined by the laws of supply and demand. Yet, this conclusion
is much too hurried, because these exchange values are first determined by the number
and the value of bills and coins in circulation. In other words, two thirds of monetary
analysis consists of the determination of who issues the currency, conditions of issuance,
and amount of currency in circulation. If the amount of currency determines the nominal
value of the currency, then the essence of monetary policy consists of the determination
of elements (1) and (2) above, namely who issues the currency and to whom is it issued
—and, more specifically, the conditions under which the currency is created. To confine
one’s observation to the third element of the monetary process is not wrong; it is an
incomplete action. It is condemning oneself to a partial view of the process: It is as if,
while diligently studying all twirls, all twists and turns, of the cat, one lost track of the
cat. Worse. This is not simply a theoretical conclusion. To study only the third element of
the monetary process, it is not simply to abandon monetary policy to the blind forces of
the market. This enclosure of vision inexorably leads to the abandonment of monetary
policy either to the bankers or the politicians.
In a duly constituted society it is not the creditor who creates the currency or its
value, but the monetary authority in the context of the market. The monetary authority is
thus fully entitled to cancel uncollectible debts. Hence, the monetary aspects of the
Jubilee are in full accord with a complete understanding of the monetary system as a
whole. Money is fiat money. Money is a common good. It should not be made into a
means of control over people.
Jubilee Concerning Products-Things-Time
One meaning of Jubilee is not just restitution, but gift. There are many sides to
these injunctions: one is economic, the others are legal, social, moral, and religious; today
we might add one more dimension: psychological. The Israelites are enjoined to offer
gifts to the passerby, the sojourner, and the poor. A list of injunctions runs as follows: at
all times, leave the corn stalk at the edge of the field untouched; leave the fruit on the
lower branches of the tree untouched; leave whatever stock of grain falls from your cart
so that any passerby can avail himself of this bounty—no questions asked. This proviso is
all important. Its importance is made manifest not so much by the intrusive questioning
of the “welfare state” of today as by the extraordinary delicacy of moral sentiments
epitomized by Maimonides, the Jewish sage of the XII century Spain in which the three
monotheistic religions working together, not without shortcomings, created a splendid
civilization. The practice of charity—the tzedakah—is codified in Maimonides’ “golden
ladder,” in which (as in the Islamic practice of zakāh) ultimately the line between
morality and economics is overstepped and the wisdom to endow people with a business
of their own is established. Why, one might ask? Because Maimonides and traditional
Islamic jurists can be said to have discovered that competition is the soul of economic
The practical effects of these injunctions are multifaceted. Each injunction orders
a transfer of wealth from a producer to a consumer—without any compensation, because,
presumably, the passerby who avails himself of that bounty has no means to compensate
the producer. The economic effect of this aspect of the Jubilee is straightforward.
Consumption, as Adam Smith well knew, is “the sole end and purpose” of business:
consumption completes the economic process. A penny is earned when a good is sold. If
you cannot sell a product, first reduce its price—or make more money available to the
consumer, as Henry Ford well knew—and then give it away This economic aspect of the
Jubilee, liberally extended to cover the Sabbatical and everyday practices, should be most
evident today. What board of directors will order an expansion of business when
merchandise is stuck on the shelves?
The social/religious/moral/psychological effect of this aspect of the Jubilee
resides in the meaning of Jubilee as freedom: freedom from attachment to products,
attachment to things—which we create and on which we have proper property rights. To
reemphasize, freedom from attachment to money. And to the list of attachments, today,
one must add time. We are so attached to our freedom to do whatever we please with our
time that we neglect to offer it, at least every seventh day, to our families and our
communities—and ultimately to ourselves and preferably to God. How can the wisdom
of the practice of the Sabbath have slid from our hands so irresponsibly? The guess is that
we have not considered the many implications of free time. Perhaps it will help us to
understand, if we decipher Pharaoh’s message contained in Ex 5:9 along such explicit
lines as: “Let us so overwork the people that they will be incapable of listening to words
of truth.” Perhaps it will help us to understand the need to abstain from work on the
Sabbath day, if we consider the relationships between free time and all the work that
needs to be done in order to insure one’s economic freedom: One needs to insure the
health of one’s own physical body; one needs to insure the health of the political body of
the nation. One needs to think. One needs to have the time to get out of one’s own limited
shell. And of course the core of the Jewish message is that Yahweh grants us freedom to
worship him without fear all the days of our life—a freedom that clearly extends to the
choice not to worship him.
Only a saint could have understood the deepest possible aspects of the detachment
from products, things, money, and even time. Saint Catherine of Siena says (1980, p.
322): “(Those who are detached from things) do not fear the bitterness of death.” The
right relation with things, money, and time grants the greatest freedom of all: freedom
from fear of dying—a fear experienced a thousand times by many a person who is
abnormally attached to things. If in doubt, Google “hoarding” and be amazed at the
2. Do Not Steal
Seen in the total complexity of the economic aspects of the Jubilee, the second
doctrine of the economics of Moses—a well-known doctrine—ought to acquire its
original full force: Do Not Steal. Do not steal money and do not steal land, it is clear,
because they do not belong to you, or even to their possessors. They are common goods.
Ultimately they both belong to Yahweh. If you steal land or money, you offend Yahweh
The injunction against stealing extends to consumer goods as well. And here the
legal and moral foundation of the injunction is as strong as it can possibly be. In a
primitive society, there is no mystery as to the origin of consumer goods. They issue
directly from the sweat and tears of people. Hence, these goods belong to those who have
created them. More. In a primitive society in which consumer goods are not only few but
essential to life, stealing them is tantamount to killing other people.
Does one dare ask the quintessential moral-practical question: Is it all any
different today? Are there not people starving—even starving to death—today?
This, of course, is a paper devoted to economics. Where is the economic rationale
for the injunction against stealing? The forms of stealing are legion; and so are the costs
of stealing. Unjustly dispossessed people are less productive than people who are secure
in their possessions. Indeed, stealing is the ultimate form of corruption. Economics is just
beginning to appreciate the costs of corruption in the business world—both within
developed and developing countries. Would any financial crisis be as severe, if there
were no corruption in high places? The morality of not-stealing is quickly stated: When
you steal, you steal from yourself the opportunity of producing the thing yourself.
PART II — The Economics of Jesus
The economics of Jesus is a restatement of the economics of Moses and is
contained in three fundamental doctrines. Two complementary doctrines are derived from
the Parable of the Talents in Mt 25:14-30: The first doctrine states, Invest Your Talents;
the second states, Do Not Hoard Your Talents. The third is enunciated in Mt 22:21: Give
to Caesar What Is Caesar’s.
1. Invest Your Talents
The word “investment” had not been invented yet, but the practice was there from
time immemorial—if not from the first appearance of men and women on earth. And so
was the intellectual understanding that this practice revolves around three factors of
production: land, capital, and labor. We have observed how Israel intellectually handled
both money and land from Moses to Jesus. Why is labor not an essential component of
the economics of Moses?
In the beginning there was work, but no “labor.” Every member of the tribes of
Israel received a plot of land for his own use, except the Levi who were to live on 1/10 of
the tithe. Therefore, everyone was an owner, not a worker or a laborer—and the
practice of the Jubilee tended to reinforce this status. Hence, there was economic freedom
in the land. There were no poor (Deut 15:4), or very few poor people. From Moses to the
time of Jesus, investing was such a normal outcome of economic freedom that Moses did
not have to speak of investing at all.
By the time of Jesus, evidently much economic freedom had already been eroded.
The Jubilee was no longer practiced. Indeed, with the Roman conquest the Mosaic mantel
of stewardship over land and money was captured by the Roman institution of private
property. Acquisition was in the saddle. Most people lost possession of their land and
debts impoverished them even faster. Some people became laborers. Jesus has a forceful
account of the condition of labor. Mt 20:8-15 gives this parable of the workers in the
vineyard who at the end of the day
…lined up to receive their pay. The ones hired last were paid first. Having
worked but an hour, they didn't expect much. To their surprise and delight,
however, they each received a full denarius. When the workers who were
hired first saw this, they—forgetting their bargain—became happily
expectant. If that was what the employer was paying to those who had
worked but a single hour, then how much more would they have coming!
So they thought. When they received their own pay, however, it was but
one denarius, like the others. Their fallen expectation turned to bitterness,
and they confronted the employer, saying: "These last have wrought but one
hour, yet thou hast made them equal to us, who have bourne the burden and
the heat of the entire day.” The employer, however, was not impressed. To
one of them, he replied: "Friend, I am not being unfair to you. Didn't you
agree to work for a denarius? Take your pay and go. I want to give this man
who was hired last the same as I gave you. Don't I have the right to do what
I want with my own money? Or are you envious because I am generous?"
As all parables, this too has received a myriad of interpretations. The present
context suggests this meaning. This is what Jesus seems to say: "Yahweh gave you
possession of the land; Moses gave you the Jubilee to correct your possible economic
mistakes. If you tolerate a system in which there is no Jubilee or any of its equivalents,
you have no economic freedom. You have a system of masters and slaves. And, legally as
well as theologically, you cannot tell the master what to do. You can cry to high haven,
but not even God is going to listen to you. Either you regain your God-given economic
freedom, whereby you yourself (in concord with other co-owners if you have any) have
the right to reward your endeavors in accordance with what you think is just, or you
simply have to accept what the master decides to give you—no matter how arbitrary; no
matter how unjust; no matter, even, how generous that reward is."
Jesus thus emphasizes what Moses implied and what (almost) every Classical
economist was later to emphasize: Take proper care of (the ownership of) land, capital,
and labor and economic growth will result as a normal outcome of economic freedom.
Economic Growth as a Normal Outcome of Economic Freedom
A pause is in order. Is not morality supposed to constrain economic freedom? Is
there not supposed to be a conflict between morality and economics? Jesus did not seem
to be aware of it; and, indeed, this conflict is not a postulate of modern economics; the
moral consequences of economics are immaterial to economists. Therefore, the
separation of morality from economics that is very dear to ideologues can be considered
as a transient phenomenon, a transient aberration that time will allow us to forget.
Certainly this is a topic that requires intense examination. Here we can only distil the
extended analysis into the following proposition: Human beings are free—not to choose
between Gucci and Pucci—but between good and evil. Jesus was very specific as to what
he meant by morality. He did not fall into the trap of determining for others what is good
or evil. Jesus did not make this severe strategic error. As outstanding proofs, he did not
suggest any external restriction on economic activity or any forcible transfer of wealth
from one group of people to another. Hence, he would concur that economic activity
must be free and he would add that morality cannot be imposed—or slapped on—from
the outside, because then morality becomes empty of content. Either morality is within
each and every decision that one takes or it is not there at all. Thus Jesus made it very
clear that he wanted morality to be applied ever creatively. He wanted moral rules to be
forever internalized. And easily memorized. He reduced the whole of morality in
economics to two economic doctrines: Do not Hoard; Give to Caesar What Is Caesar's.
2. Do Not Hoard
The freedom to choose between Gucci and Pucci is not an economic decision. It is
an esthetic decision. The economic decision is whether to spend one’s income and wealth
on consumer and capital goods or to hoard it. Analysis shows that this choice is more
than a simple economic decision; it is an intrinsically moral decision with clearly
identifiable economic consequences. Jesus was extraordinarily firm about this choice,
which—since reasonable people are assumed to buy consumer goods only as they need
them and moral people are supposed to know how to choose between buying another
Gucci bag or giving the money to the neighbor who is starving—he characteristically
reduced it to the choice between investing and hoarding. In the Parable of the Talents as
written in Mt 25:14-30, Jesus so forcefully applauded using wealth creatively that all the
wealth was donated to those who had doubled it—and they were enthusiastically
entrusted with the administration of much more wealth. Clearly, Jesus so applauded
investing because moral people are supposed to know the difference between producing a
Gucci bag or a loaf of bread. By the same token, Jesus so strongly condemned hoarding
as to take the one talent away from the person who, for fear of losing it, planted it
underground where it could do no good for anyone. Much more. This person was ordered
to be cast into hell, literally “the outer darkness; (w)here men will weep and gnash their
teeth.” No appeal. No mercy. Totally uncharacteristically.
As expressed in the Jewish Law, the injunction against hoarding is presented as a
list of positive activities, which in a decreasing order of importance can be enumerated as
follows: return the land to the original possessor every fifty years; cancel all existing
debts every seven years; let the land lie fallow every seven years; reserve the Sabbath, the
seventh day of the week, for God and community, for family, and for yourself; leave the
corn stalk at the hedge of the field untouched; leave the fruit on the lower branches of the
tree untouched; leave whatever stock of grain falls from your cart so that any passerby
can avail himself of this bounty—no questions asked, no compensation required.
Jesus synthesized the list of positive actions prescribed by the Mosaic law and the
Jewish prophets into a negative injunction: Do not hoard. Thus he generalized and
extended the original formulation of this injunction, by including in it all forms of
hoarding. This formulation has a set of explicatory characteristics of its own. In it, the
economic—as distinguished from the theocratic and moral—aspects of the Jubilee
become exceedingly transparent. The fundamental reason why at the appointed years the
land had to be returned to the original tiller and debts had to be cancelled was to prevent
hoarding: the inordinate accumulation of wealth in the hands of the few—and the
consequent deprivation for the many of the means of sustenance. With the amount of
wealth being finite at any particular moment, when the few have too much, the many
have too little. (Technically, wealth hoarded is only wealth that is used neither as a
consumer good nor as a capital good. The land ordered back to the original possessor
might not have all been hoarded. Yet, most of it was—as the existence of much unused
land indicated.)
Jesus was very clear as to this relationship. For him cause and effect was so
immediate that he emphasized in no uncertain terms the destination of the wealth not to
be hoarded: It ought to be given to the poor. He felt so strongly about the issue that he
personalized it. He said in Mt 25:40: “whatever you did for one of the least of these
brothers of mine, you did for me.”
Why did Jesus emphasize so forcefully the need of giving to the poor? Generally,
this injunction is characterized as being a moral injunction. And that is certainly true; but
it is not a sufficient interpretation of Jesus’ position. It is the economic content of this
injunction that links the economics of Moses to the economics of Jesus and gives
substance to the moral injunction of giving to the poor: giving to the poor not just a
pittance, but giving them what is their due. We have so far seen that the Israelites by not
practicing any of the forms of the Jubilee had gradually lost their original economic
freedom. And the number of poor people was growing at an intolerable pace. Certainly,
there were many more poor people at the time of Jesus than at the time of Moses. But this
is a historical fact that does not explain much; indeed, it is a trend that needs to be
explained. A major institutional change occurred from the time of Moses to the time of
Jesus. Hebrew stewardship of land and money was transformed into Roman private
ownership of land and money: land and money were privatized. These common goods
could then be accumulated beyond the requirement of the satisfaction of one’s needs. The
latifundia—those exceedingly large estates that still plague the world today—were born;
and the insidious accumulation of financial resources was beginning to be felt in the
economic system. A part of these resources was accumulated and kept idle—all the while
people were excluded from their utilization and were made poor as a consequence. With
the latifundia came poverty.
This, then, is the first essential characteristics of Jesus’ doctrine of not hoarding.
By turning his own negative doctrine (do not hoard) into a positive injunction (give to the
poor), the doctrine acquires an economic content that does not stand in a vacuum but is
immediately related to the rest of society. The poor are poor not because the rich are rich
nor because the rich are the creators of poverty (cf. Gorga 1998)—Jesus had nothing
against the rich. The poor are poor because the rich have too much, too much they do not
need. The second essential characteristic of Jesus’ doctrine of not hoarding is this. It
places the primary responsibility for not hoarding, implicitly on society and the law, but
explicitly on individual conscience. Hoarding clearly becomes a moral issue with distinct
economic consequences. Dishoarding becomes a voluntary act. Jesus wanted each one of
us to be convinced of the importance of our own rights and responsibilities and to act
upon them. Jesus did not start an economic movement. The third essential characteristic
of Jesus’ doctrine of not hoarding is this: Do not wait forty-nine years before divesting
yourself of unneeded wealth. The time to dishoard is now. And with this he exalted the
value of practices recommended in Mosaic and rabbinic law.
A Modern Chorus of Disapproval
Having lost the memory of the past, most economists stand ready to proclaim the
inevitability of the present. At this juncture in the conversation, joining their voices to a
chorus of free-marketers (who assume that morality is practiced, as it is practiced, by all
self-respecting economic agents) and winner-take-all analysts who study the economics
of gambling and Hollywood stardom, most economists are likely to pitch in and say:
“The forces of the market, rather than justifying the economics of Moses and Jesus, prove
that wealth accumulation—which is not recognized as being, in part, hoarding—is
‘natural’ and ‘inevitable.’ After all, did not Jesus, in Mt 26:11, quoting Deut 15:11, say,
‘The poor will always be with you’”? These analysts have not factored in their analysis
the distinction between hoarding ex post and hoarding ex ante. In so doing, they let the
mechanics of hoarding pass under their radar undetected. Jesus was concerned with both
stages of hoarding. He did not only say “Do Not Hoard” and, if you happened to have
hoarded in the past, “Dishoard Now.” Perhaps he was even more concerned with
preventing hoarding from happening at all. He went after hoarding at its roots. He also
said: “Give to Caesar What Is Caesar’s.” The evidence is strong that inordinate
accumulation of wealth is due to the contravention of this last doctrine.
3. Give to Caesar What Is Caesar’s
The third economic doctrine of Jesus, Give to Caesar What Is Caesar’s, has
traditionally been interpreted too narrowly. Betraying their intellectual roots in the work
of Consultant Administrators from the fifteenth century Italy, modern economists have
limited the application of this doctrine to the relationship between government and the
governed. Thus, having abandoned monetary policy into the hands of the bankers,
modern economists have not only reduced economic policy to fiscalism; more seriously
still, they have restricted the vision of the economics of Jesus to a master/servant
relationship. To understand the full import of the third economic doctrine of Jesus, we
need to enlarge its range of applicability by enveloping the entire gamut of relations that
exist among free men and women. Once one observes the whole economic process, as
Classical economists did and as Keynes or Hayek did, then the third economic doctrine of
Jesus reveals its not surprising complexity. The third doctrine then reads as follows: give
the other fellow what is his due. This, as it has been known from Aristotle onward, is the
very essence of economic justice. Once that is done, we shall see that giving to Caesar
what is Caesar’s is nothing but the application of Moses Law: Do not steal. Jesus did not
present any new proposition in Jewish Law. He simply transformed a negative Mosaic
commandment, “Do not steal,” into a positive injunction: “Do Justice.” Thus he followed
Deut 16:20.
Clearly, Jesus not only explicitly called for the application of Moses’ Jubilee (esp.
Lk 4:16-32 read with the help of Trocmé 1973, pp. 26-29); to preserve their spirit, he
changed the form of Moses’ injunctions and adapted them to the needs of the moment. To
become aware of this transformation in no uncertain terms, let us leave petty larceny well
alone. Putting substance into this third doctrine, and casting it into the framework of
modern institutions, this is what transpires. When people do not pay the full share of the
taxes they owe, especially taxes on land and natural resources, they steal from fellow
citizens who are burdened with the total share of the costs of running a country. When the
central bank sells a pool of common wealth—i.e., national credit—to preferred
customers, the central bank sells for a mess of pottage a national treasure that belongs to
the entire population. Private appropriation of common goods—such as land and money
—without compensation is expropriation and plunder. When stockholders cash in the
value of their stocks and bonds, they rob the workers who have originally contributed to
the creation of that value—and are excluded from that bounty by the faulty legal institute
of “wage contract.” When one purchases a whole corporation, and uses other people’s
money to concentrate the wealth of the nation into fewer and fewer hands, one robs at
least the workers, if not also the previous as well as future potential stockholders, of the
ensuing capital appreciation of the corporation.
Set these four economic mechanisms of capital accumulation aright, and hoarding
is cut at its root. You Give to Caesar What Is Caesar’s: Do not steal is a commandment.
You do justice and receive justice. With a just distribution of wealth, there is no need for
its redistribution.
Part III — Many Questions, Few Answers
Clearly, this presentation raises many questions in many fields, and the writer
offers few answers. The hope is that, once it is ascertained that the paper has fundamental
validity, other scholars will intervene and provide satisfactory answers. First, there is a
whole set of questions relating to standard issues of scholarship. How reliable are the
texts cited here? Are there better—or, even, contradictory texts—that the reader has to be
made aware of? How reliable is the attribution of each quotation to their assumed
authors? The writer, being a fervent Catholic, has taken these issues at face value, but if
challenged he cannot provide reassuring answers.
Then there is a host of issues relating to the historic application of the tenets
contained in the texts cited. Which forms of the Jubilee were practiced, if indeed they
were ever practiced at all? For how long were they practiced? And precisely when? Why
were they discontinued—as it is indeed clear they were? To this set of important
questions the writer has one general but overriding answer. Even if they were applied
only once, one can say that the world fully respected the principles of economic justice
once. And if they were never applied, one can still say that the Israelites had the moral
integrity to imagine and to fashion the intellectual conditions of economic justice.
And, of course, such an answer triggers many more questions. Were Moses and
Jesus, implicitly or explicitly, aware of the relationships between their systems of thought
and the doctrine of economic justice? Can such a relationship be firmly established? If it
can, how specifically was it met by Saint Thomas Aquinas, once he accepted the
Aristotelian doctrine of economic justice? Was, indeed, Saint Thomas aware of the
economic content of Moses and Jesus teachings?
And then a whole flood of other questions comes to the fore. Clearly the issues
are terribly complex and might become terribly contentious. To avoid such a disaster,
only a few additional points will be raised in the following paragraphs. One question, for
instance, concerns the issue whether historical conditions are ripe to have a full
application of the economics of Moses and the economics of Jesus today or at any time in
the foreseeable future? The answer is mostly negative. Yet, as pointed out elsewhere
(especially in Gorga 2009), even in the complexities of the modern world, it is fully
possible to apply, not the letter, but the spirit of this system of thought.
Would the economics of Moses and the economics of Jesus have ever been
practiced in a non-theocratic society? The answer is an undiluted, Yes. They have been
practiced since time immemorial, and are still being practiced: in the commons, until the
commons are enclosed. The size of the economy is not the issue, either. The economics
of Moses and the economics of Jesus were largely practiced by the American Indians
over the vast prairies when they were free.
Nor are there limitations of time. From Moses to Locke, everyone agreed that
economic life is covered—in one fashion or another—by the moral law. The
understanding of this complex interlacing of moral and economic injunctions was held
astonishingly constant over time. This view, confirms Wood (2002, p. 83), was in the late
Renaissance “the same as Aristotle’s.” It is only from the time of Adam Smith onward
that there has been a breach in this tradition. (To repeat, free marketers assume that this
reality still prevails—and, in a fundamental way, they are right.)
With Adam Smith’s Theory of Moral Sentiments (1759, e.g. I.I.43), the authority
of religion is expunged from the moral sciences and substituted with the authority of the
“impartial spectator.” This construct sounds so creative and impressive as to endure
through the ages—until one asks: but who precisely is this person? Then the answer
resounds loud and clear: lui meme, of course. Morality is out; narcissism is in.
In logically flawless correspondence, with Adam Smith’s Wealth of Nation (1776,
especially Bk. V, ch.1, 158, 191, and 219) morality is explicitly expunged from
economics and substituted with a presumed neutrality of the sciences: to paraphrase only
slightly, who would ever want to follow “the morality of the (drunken) monks”?
Modern economics, the economics founded by Adam Smith, it is widely
maintained, is a science—indeed, a mathematical and an autonomous science. As such,
economics is supposed to be studied by itself and, certainly, its internal cohesion
precludes the examination of any external consideration; especially any consideration
regarding morality. These statements, by themselves, are inarguable. Yet, as most people
sense, they are fallacious. Their fallacy is revealed only realizing that they do not stand
alone but are part of an intellectual system of thought—the Enlightenment Project—
whose fundamental propositions are as follows:
1. Freedom → ∞
2. Morality → 0
3. (Monetary) Efficiency = 1 (sole value)
4. Economic agents = | | (isolated logical automatons)
5. Community → 0.
One can easily demonstrate that not one of these propositions stands at the touch
of reason.
Unexpectedly, going as far back into recorded history as possible, one finds two
systems of economic thought whose moral values are inherent and inseparable from
them. They are the economics of Moses and the economics of Jesus. Analysis reveals that
they are so integrated into each other that one can speak of one system of thought: the
economics of morality. We have seen that this system of economic theory ran seamlessly
into economic policy and, merged with the Aristotelian doctrine of economic justice,
reigned in one form or another from Moses to Adam Smith.
The substance of the economics of Moses and the economics of Jesus can be
summarized simply. Morality creates freedom; and freedom creates wealth. The freedom
of wealth acquired in justice ultimately produces jubilation in the heart. That is—or
should be—the ultimate aim of the study and the practices of economics.
The exploration of whether the economics of morality can be adapted to the
modern world is an ongoing task for this writer; an essential task, in his estimation. But
certainly, no one writer can do it all, and no one paper—or even a few papers or books—
can say it all. Assistance from any and all will be most welcome.
■ Unique thanks for the framework of analysis on which this paper draws are due to 27
years of exhaustive probing by Franco Modigliani and 23 years of assistance from
Meyer L. Burstein. Mitchell S. Lurio and Norman G. Kurland have been great teachers
of economic policy. This paper is particularly due to persistent guidance by Wilfred
Wolfsma. The paper has also benefited from wise and penetrating comments on previous
drafts by two anonymous referees, as well as suggestions by Damon Cummings, Joshua
Brackett, Joseph M. Patchett, and Ralph Cole Waddey. My collegue Peter J. Bearse
offered invaluable editorial assistance—including the clarifying transformation of short
connecting lines into directional arrows in figures.
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Full-text available
J. M. Keynes had already recognized in his 1930 A Treatise on Money that the major cause of deflation and inflation problems at the macro level was the ability of Smith’s Projectors, Imprudent risk takers, and Prodigals, whom Keynes categorized as Wall Street connected speculators and rentiers (modern day hedge funds, private equity firms, and investment banks) in his General Theory in 1936, were the fundamental problem in a capitalist society because they diverted bank loans from investment in durable capital formation into the financial manipulation of paper claims in various stock and money markets. The General Theory makes it even clearer because it reiterates what he had said in both the A Treatise on Money and in the 1932 Symposium on Usury in the Economic Journal in response to Keynes’s decision to publish a 1931 article by Henry Somerville. Keynes heavily supported Somerville’s major point about the dangers of using bank loans to finance speculative debt leverage practices versus loans to finance the purchase of durable capital equipment. This is the same point made by Smith with respect to loans made to his three categories of upper-income class citizens that Smith labeled as Projectors, Imprudent risk takers, and Prodigals. Both Smith and Keynes were influenced by Aristotle. Keynes admitted that he felt that the arguments of the “ancients”, “Medieval Church”, and “Schoolmen” were also influential in his general conclusions, although he differed from them in some specifics. Smith also used the term “Scholastics” and “Schoolmen” several times in his The Theory of Moral Sentiments. By far the most prominent member of the Medieval Church, Canonists, Scholastics, and Schoolmen was Thomas Aquinas. Somerville, in his June 1936 article in The Commonweal, titled, Usury as a New Issue, argued for a connection between the views of Keynes and Aquinas specifically. He had originally pointed out in the December 1931 issue of the Economic Journal Keynes’s connection with the “canonists” in his A Treatise on Money. In March 1932, the Savings and Usury Symposium was held in the Economic Journal. Keynes essentially states what he latter restated in the General Theory in chapter 23 in 1936. Keynes’s view on the dangers to the macroeconomy of making loans to speculators and rentiers did not change from 1930 until the end of his life. Aquinas’s work on decision making under conditions of ignorance, risk, uncertainty, imperfect information, asymmetric information and imprecise/indeterminate, interval-valued probabilities puts him heads and shoulders above any contemporary thinker until Adam Smith’s Wealth of Nations was published in 1776. Aquinas’s contribution has not been correctly appreciated because of his realization that precise, mathematical, point estimates of both prices and probabilities are generally impossible. This thus greatly constrains the use of the mathematical laws of the probability calculus upon which both neoclassical and modern economics is built on. Aquinas was very far advanced for his time .Only Smith in his WN and Keynes in his TP can be considered as having improved substantially on Aquinas.
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