Anti-Usury Doctrine and the Evolution of Agency

Abstract

Thomas Aquinas is generally known as an opponent of usury, which means any interest on a loan (i.e. any payment over the principal capital). The doctrine created by Aquinas can be called anti-usury doctrine. The author of this article (Borkovec) argues that the main reason for the rejection of interest was the effort to protect people from financial problems (difficulties), their debts caused by loans, or mutuum, the Roman institute of law. The consequence of the anti-usury doctrine was the disappearance of mutuum, or at least the effort to eradicate it. Aquinas' doctrine thus was not only anti-usury, but anti-debt too.

In medieval economic and legal reality, other legal institutes, instead of the mutuum, had been applied for using things (real estate, chattels) without the transfer of their ownership – rent (locatio conductio rei), borrowing (commodatum) and leniency (precarium ) – institutes so characteristic of the feudal period and for the construction of the hierarchical structure of the feudal society. In addition, however, the author of this article (Borkovec) argues, the effects of the anti-usury (and anti-debt) doctrines caused the rise of the institute of agency.

The author's hypothesis is based both on theoretical considerations about the concordance of agency with the victory of anti-usury and anti-debt policies, as well as on historical facts proving the existence of agency in the period of application of anti-usury (and anti-debt) doctrine. In symbiosis with the development of agency, there were (regulated) markets as a tool to combat crime and create legal certainty for which the institute of agency was important, and markets were important for the proper function of agency.

Keywords: usury, mutuum, agency, fairs, markets, societas, commenda, partnership, price