Pope Benedict XIV’s 1745 encyclical Vix Pervenit “On Usury and Other Dishonest Profits” states:

The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.

Thus he says that, even if a contract is agreed upon by two consenting parties, the creditor is guilty of usury if the contract says that he is owed back more than he gave.

This applies even to loans which are to be used for productive or business ends, not just the more obviously nefarious consumer loans, for he says that the sin of usury cannot be condoned “even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions.”

The modern mind will quickly say, “What then? Can no use be made of idle money by exchange and business? Is there to be no collaboration of resources, which produces wealth?” The pope clarifies:

[It is not] denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made.

And later in the letter he says that it is an “extreme” which is “evil” to judge the matter with such severity as to say that “any profit derived from money” is illegal and usurious.

So there is certainly some category of contracts that legitimately spend and invest of money with the goal of profit. Yet this sort of legitimate contract cannot, under any guise, involve the collection of interest, for he later writes:

Some will falsely and rashly persuade themselves…that together with loan contracts there are other legitimate titles or, excepting loan contracts, they might convince themselves that other just contracts exist, for which it is permissible to receive a moderate amount of interest.

But no such legitimate, interest-charging contract exists. Therefore, what must the man do who wishes to put his money to work?

Whoever therefore wishes to follow his conscience must first diligently inquire if, along with the loan, another category exists by means of which the gain he seeks may be lawfully attained.

What kinds of contract? He doesn’t say. As in many Catholic social teachings, the pope here leaves the nitty-gritty up for us to determine, but lays out the moral principle in ironclad terms. Perhaps a profit-sharing arrangement, where the partner who sails the merchant vessel and the partner who stays home share in both the risk and the reward? Perhaps something else.

But whatever contract you make, don’t charge interest.

The pope dispels the notion, nearly ubiquitous today, that the prosperity of the modern era has depended on such conventions as these for stimulating the economy.

Christian minds should not think that gainful commerce can flourish by usuries or other similar injustices. On the contrary We learn from divine Revelation that justice raises up nations; sin, however, makes nations miserable.

If that is true, then, judging by how much our current global economy is built on the charging of interest, we are headed for great misery indeed.