Scholastic economic thought and the establishment of the new credit institution "Monte di Pietà"
Part of : Αρχείον οικονομικής ιστορίας ; Vol.XIX, No.2, 2007, pages 45-64
Issue:
Pages:
45-64
Author:
Abstract:
From the beginning of Christianity many Fathers of the Church in both the East and the West, following the teachings of the Holy books and the theses of Aristotle, turned against the imposition of interest mainly on consumption loans. Such opposition had some negative economic consequences as the rate of idle hoarding was increased while saving did not turn to investment. Moreover, the standard of living of individuals in need of consumption loans was low. In Western Europe in particular, this situation lasted until medieval times, when some scholastic fathers started to change their attitude towards usury. During this time (13th-14th centuries), because of such a position vis-a-vis usury and consumption conveniences, a new institution came into operation, the so-called Monte di Pieta. Itsmain goal was to lend money for consumption purposes to poor people at a very low interest. The purpose of this paper is to analyse the above issues and to show the impact of economic ideas on the emergence of a new economic institution.
Subject:
Subject (LC):
Keywords:
Monte di Pietà, scholastics, credit, banks
Notes:
JEL classification: B11, G21, N23
