Catholic Church and Speculation

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    I was not really sure where to post this question because it is kind of a mix between markets and morality. I was wondering if Mr. Woods could clarify this for me.

    I was curious to know why the Catholic Church condemns speculation? In particular, what constitutes “gambling” on prices, and “lawful buying and selling”. Does that mean that day traders that trade Forex, Futures, and Stocks are doing something morally reprehensible? If speculation provides a service to an economy, how is there wrong doing?

    Thank you very much for your time.


    I cannot speak to the contemporary situation concerning the Catholic Church’s teaching on speculation, but the history of it has been chronicled by the economist, Murray Rothbard, in his book “Economic Thought Before Adam Smith.”

    Rothbard shows how the scholars of the Catholic Church moderated and eventually overcame the restrictions placed on speculative gain initiated under Charlemagne. He cites Rufinus in his Summa (1157-59) of Gratian’s Decretum as the first scholar to justify arbitrage gain or profit from speculation coupled with the labor and expense of the lay merchant (p. 38). He did so on the same grounds as he justified profit to artisans as a result of their labor and expenses.

    As Rothbard points out, Thomas Aquinas explicitly justified uncertainty of the future as a source of gain for a merchant (pp. 53-54).

    The Late Scholastics tended to be even more favorable toward merchant activity. For example, Rothbard cites Thomas Cajetan in his treatise on foreign exchange, De Cambiis (1499), as the founder of expectations theory in economics (pp. 100-101).


    Thanks so much! Really appreciate it!

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