Dr. Samuel Gregg, director of research at the Acton Institute, is the author of "For God and Profit: How Banking and Finance Can Serve the Common Good" (Image: YouTube)
Dr. Samuel Gregg is director of research at the Acton
Institute, the author of several books and numerous articles, and
a frequent contributor to Catholic World Report. He has
written and spoken extensively on questions of political economy,
economic history, ethics in finance, and natural law theory. Dr.
Gregg has an MA in political philosophy from the University of
Melbourne, and a Doctor of Philosophy degree in moral philosophy and
political economy from the University of Oxford.
Dr. Gregg’s previous books on economics include Economic
Thinking for the Theologically Minded (2001), The Commercial
Society (2007), and Tea Party Catholic: The Catholic Case for
Limited Government, a Free Economy and Human Flourishing (2013)
as well as monographs including A Theory of Corruption (2004), and
Banking, Justice, and the Common Good (2005). His most recent book is
God and Profit: How Banking and Finance Can Serve the Common
Good (The Crossroad Publishing Company, 2016), which is
described by Cardinal George Pell (Prefect of the Secretariat for the
Economy), who wrote the Foreword, as “a formidable book, packed
with interesting and regularly unacknowledged and unknown historical
information, especially about the contribution of Christian thinking
to the development of banking, the rise of the markets and Western
Dr. Gregg recently corresponded with Carl E. Olson,
Editor of CWR, about the book.
Is it fair to say that Church teaching about money and
economics is widely misunderstood and often
misrepresented? If so, what are some of the reasons?
Samuel Gregg: Catholic social teaching outlines clear principles
for people who want to addresses issues surrounding finance and
economic life in a way that takes human flourishing seriously. These
include the principles of the dignity of the person, solidarity,
subsidiarity, the preferential option for the poor, the principle of
common use, the principal of private property, to name just a few.
These principles are drawn from Revelation and the natural law. But
they are not well understood by some Catholics. One reason for this
is that they tend to be buriedincluding, I must say, in the social
encyclicalsamidst a range of historically-contingent reflections
and the offering of prudential judgements on present-day affairs.
English language version of Rerum Novarum (1891) is about
14,000 words. Laudato Si’ (2015) is approximately 40,000
words. More than one person has suggested that this partly reflects
the magisterium entering into the details of far too many economic
subjects, the vast majority of which Catholics are free to disagree
about among themselves. If we’re interested in equipping lay
Catholics to think through economic issues, more time should be
invested in explaining principles of Catholic social teaching and how
they relate to each other. Less time, I’d argue, should be spent
addressing questions upon which Catholics may legitimately hold a
variety, even sometimes quite different views.
What specific questions motivated you to write this book?
Gregg: There were three reasons I decided to write For God and
Profit. First, our financial systems are not in good shape these
days. The second reason is that modern Catholic social teaching says
relatively little about money and the financial sector. This is a gap
that, at the level of principle, requires filling. The third reason
is that commentary on issues concerning finance and money requires
some understanding of how these areas of the economy work.
It’s perfectly legitimate for the Church to speak about questions
such as, for example, speculation. But to do so in a way that’s
credible, it’s good for Christians to have some grasp of the roles
played by speculation in modern market economies. Speculation, for
the most part, serves to manage and even reduce risk in the economy
over the long-term. Can speculation go wrong? Absolutely. Wholescale
condemnations of speculation as a financial tool usually, however,
indicate that the condemner doesn’t quite understand its function.
An economy without speculation will be, I can assure you, far more
unstable and less productive in the long-term.
As the subtitle indicates, this is in many ways a book about
Catholic social doctrine. And what are some of the essential texts
when it comes to money and related matters?
Gregg: The book is ecumenical in its outlook but, as many
Evangelical and Eastern Orthodox Christians will tell you,
Catholicism has the longest and most developed tradition of thinking
through economic and social questions. So many of the book’s
sources are Catholic. That said, the modern social encyclicals don’t
have much to offer in reflecting upon money and finance. Rather, it’s
the thought of medieval and early-modern scholastic thinkers that is
by far the richest. Here you find very sophisticated analyses of
money, money-markets, banking, the nature of usury, the role played
by interest, etc. Ironically, some of the best were written by
Franciscansmen vowed to poverty. Once you get past the
anti-Semitic rants that often characterized these writings, you
realize they contain much wisdom about the workings of money and how
banking and finance can be made more fruitful.
these reflections are contained in confessional manuals. They are
also deeply imbedded in, first, natural law accounts of the morality
of human choice and action and, second, a profound understanding of
how these practices and institutions worked. The subsequent insights
are just as applicable today as they were when capitalism first
emerged: i.e., in the medieval European world.
You mentioned usury. Usury is an oft-mentioned and
controversial topic when it comes to Church history. What exactly is
usury and what has the Church taught about it? Has that teaching
Gregg: Usury remains as wrong today as it was in the first
century. The question is what constitutes usury. The Jesuit
theologian Thomas Divine illustrated decades
ago that blanket condemnations of charging any interest
whatsoever on any loan whatsoever are hard to find.
to use the best and most concise definition, is the
act of taking profit on a loan without just title. Those last three
words are crucial. There are
just titles to profit on loans. Christian thinkers have invested much
time over the centuries discerning what is and isn’t a just title.
Perhaps the most important developments occurred in the Middle Ages
as surplus capital became widely available during what the economic
historian Robert Lopez called the Commercial Revolution of the time.
thinkers grasped that money-as-capital is very different from
money-simply-as-a-means-of-exchange. The former is capable of being
used to generate more wealth; the latter is not. When I loan someone
my capital, I’m effectively giving up the profit I could have made
by using that capital myself. Hence, I’m entitled to interest to
compensate me for my loss. Many other titles were subsequently
established over time as theologians studied different types of loans
and developing their understanding of the nature of capital.
usury question is a great example of an authentic development of
doctrine, not least because it involves no
contradiction in what had been previously stated on the subject.
That’s one of the sure signs that a change represents a doctrinal
development rather than a corruption of church teaching.
You point out that Christianity played a key role in the rise
of modern economies, especially regarding capital. What are some
examples of this Christian influence on the Commercial Revolution?
Gregg: Through exploring the usury issue, Christian theologians,
as the medieval historian Diana Wood observed, “sanctioned many of
the monetary considerations that underlie modern economies.” Among
other things, these include money-markets, sophisticated insurance
contracts, and risk-sharing. Another historian of the period states
that “it is probable that the scholastic theory may have encouraged
bankers to participate as risk-sharers in commercial ventures.”
Without this risk-sharing and understanding how to mitigate risk,
intensive economic development would have been much, much slower.
general effect was to help shift the epicenter of economic life away
from a focus upon natural resources and agriculture to one in which
capital, and finance played a central role. It thus steered liquid
capital away from consumption loans and towards economically
productive enterprises. That translated into economic growth and a
breakaway from the static economic arrangements and mass poverty that
had prevailed for centuries.
How is the Church’s understanding of financial markets and
capital different from the capitalism about which the Church has said
many critical things since the late 1800s?
Gregg: If anything, the Church’s grasp of financial markets and
capital was much stronger in the past. Another present gap in
knowledge is the role played by monetary policy in economic life.
Modern encyclicals don’t indicate deep reflection on these matters.
That’s odd because the financial sector plays an even bigger role
in economic life today than it did, say, forty years ago. As we all
know, finance can become severely dysfunctional. But most Christian
commentary on these matters doesn’t even engage the principles that
should guide people working in this area of the economy.
doesn’t try and provide all the answers. But it does try to remind
Christians of their rich history of thinking through the myriad
questions surrounding money and finance. It also seeks to provide a
framework, grounded in Revelation and natural law, for engaging these
In what ways can work in the financial sector serve the common
Gregg: From the beginning of the first forms of capitalism in
Northern Italy, Flanders and other parts of medieval Europe from the
eleventh century onwards, many merchants involved in finance wrote
the words Deus enim et proficuum (For God and Profit) in the
upper corners of their accounting ledgers. Others began the writing
of contracts with the formula A nome di Dio e guadangnio (In
the Name of God and Profit).
wasn’t some type of prosperity gospel. One of the best scholars of
this period, the Belgian economic historian Raymond de Roover,
observes that such scribbles were neither “an expression of
cynicism” nor “a sign of materialism.” They reflected their
authors’ conviction that banking and finance were not only
economically useful endeavors. In pursuing profit, they were in some
way giving glory to God by helping to unfold the full potential of
the universe He created.
way of thinking about it is through what the Church calls “the
universal destination of material goods.” This has nothing to do
with socialism or even social democracy. The principle of common use
shouldn’t be understood as some type of end-state of affairs in
which a perfect distribution of material wealth is achieved once and
for all and never changes. This would be to deny the truth of human
freedom and the fact that our responsibilities, obligations and
holdings of wealth are in a constant state of flux.
matters is that we put our wealth to work so that the conditions that
promote the flourishing of every person and community are enhanced.
Some of this should be occur through Christians using their resources
for charitable purposes. But another way of deploying such wealth is
through investment. Those working in finance put the surplus capital
of millions of people to work in ways that benefit millions of
others. It establishes links between the economic present and
economic future of individuals and communities. It also manages risk
and develops methods for continually enhancing the management of risk
over the short, medium and long-term.
None of these functions are exercises in radical individualism.
Finance certainly helps make us independent. Yet it also increases,
and is a sign of, humans’ interdependence. Without people,
companies, and institutions willing to invest in each other, sell
financial products and services to each other, loan to and borrow
from each other, or speculate on the products and services produced
by other people, there would be no financial markets. There’s no
reality to financial markets beyond these individual and
lies the fundamental legitimacy for modern finance systems.
Insofar as they help to facilitate the allocation of resources among
individuals, households, entrepreneurs, businesses, and governments,
finance can help us to realize the principle of common use on a
national and international scale. Through private finance, anyone can
invest their surplus capital in investment firms that place capital
in businesses whose work helps to spur economic development
throughout the world. The same person can also invest some of his
capital in a retirement fund designed to help pay for his retirement.
Likewise the financial system allows government institutions to,
first, issue bonds that attract some people’s surplus capital, and,
second, use the capital raised through bond-issues to invest in
projects ranging from public works to national defense and
debt-restructuring. In this way, governments can increase their
revenues in ways that don’t require extra taxation.
And the future?
Gregg: The financial sector and capital markets aren’t in good
shape right now. Reform is needed. I don’t think, however,
that more regulation is the best way. It is often counterproductive.
But if there is anything that I hope Christians take away from the
book, it’s that we need dynamic financial sectors and
capital markets, especially if we want to get and keep people out of
Pointing out the obvious moral and economic problems in much of the
financial sector today is vital. But passionate, even wild
denunciations of finance by religious leaders who clearly have very
little knowledge of the area is unhelpful. Providing ethical guidance
to people working in these sectors requires some understanding of the
financial sector. It makes far more credible efforts to help people
understand the good that can be realized through finance: a good that
goes beyond the economic and embraces the all-round human flourishing
to which God calls all of us.