One of the things that Paul Cella laments about the current economic crisis is all of the abstractions. There are certainly a great many abstract and complex structures involved. At the same time we've learned (I only just learned) that Aquinas viewed lending money at interest as morally wrong because it involves, in his view, selling something which does not exist.
We confidently reply (as thoroughgoing capitalist moderns) that contra Aquinas, money has a time value. It turns out upon reflection, though, that while it is true that (contra Aquinas) money has a time value, it is true in an equivocal sense: that is, it is sometimes actually true that money has a time value, and it is sometimes only hypothetically true that money has a time value.
Our reasoning for money having a time value in general goes something like this: If I did not lend my money to Bob (I say hypothetically, ahem) then I could invest it in General Electric Corp bonds (ahem) or a savings account, and draw interest on that money. Therefore if I loan the money to Bob, Bob owes me compensation for the opportunity cost: for the money I could have made if I had, hypothetically, done something different with it.
But as the title of the post indicates, and as is hopefully uncontroversially true, hypotheticals are not real. They don't exist. So if, when I lend my money at interest, I charge that interest based on an opportunity cost, I am charging my "customer" for something which isn't real. And if I am charging my customer for something which isn't real, that is almost certainly unjust.
On the other hand, when I hand over the money to Bob and he invests it in something productive, that is, in an endeavor which produces a profit, that money has an actual time value: it actually, and not merely hypothetically, does produce profits and grow over time. So in that kind of case it is perfectly just for me to expect a share of those profits, whether in the form of a dividend, an equity stake giving me a proportion of the profits, or a fixed interest giving me first claim to a fixed share of the profit.
The Papal Encyclical Vix Pervenit, promulgated on November 1, 1745 by Pope Benedict XIV says:
”But by this [prohibition of lending for interest] it is not at all denied that sometimes there can perhaps occur certain other titles, as they say, together with the contract of lending, and these not at all innate or intrinsic to the nature of a loan, from which there arise a just and entirely legitimate cause of rightly demanding something more above the principal than is due from the loan. Likewise, it is not denied that many times one’s own money can be rightly invested and expended in other contracts of a different nature from the nature of lending, either to secure an annual income for oneself, or also to practice legitimate commerce and business, and thus procure an honest profit.”Now I've mentioned a few times that I am only just starting to look at usury in depth for the first time. So I haven't reached any hard and fast conclusion, where I can say with confidence that I think that such-and-such a model of the moral lending of money is true.
But one thing I do think is that as modern people we might have been a bit too quick to dismiss the wisdom of the ages when it comes to the subject of usury.