On
the face of it, it's hard to think of two more unrelated subjects than St. Thomas
Aquinas (1225-1274), the greatest philosopher of the Middle Ages, and bitcoins,
the original blockchain-enabled digital currency that has spawned a flock of
imitations and variations. But Aquinas
set out some guidelines that can let us at least speculate (so to speak) about
what he would say about bitcoins.
It's
hard to imagine how different the economy of 1250 A. D. was from today's
economy, but some things were the same.
There were merchants, traders, banks, and markets then as well as
now. But in Europe, everything was done
under the direct or at least indirect supervision of the Church, and so anyone
who tried something too innovative had to justify it on the basis of Christian
doctrine.
Aquinas
viewed money much as his philosophical ancestor Aristotle did: as a medium of exchange, a legitimate
accounting method that allowed trade to take place without the inconvenience of
bartering this good for that unrelated service.
To use a time-honored analogy, if a shoemaker needs bread and a baker
needs his shoes repaired, a swap could conceivably be arranged without money. But if the baker needs his shoe fixed at a
time when the shoemaker doesn't happen to want any bread, the barter system
breaks down. Money solves this problem
by keeping track of the values of goods and services and allowing trade to take
place without the need for barter. The
baker takes money he's earned and pays the shoemaker for his services, even if
the shoemaker doesn't like the kind of bread the baker makes. And so on.
Even
in the case where a person gains a speculative advantage, Aquinas said that
there is nothing necessarily wrong or sinful in taking that advantage. According to an article by Murray Rothbard, Aquinas
gave the example of a trader who is the first to bring a wagonload of food to a
famine-stricken area where food is very scarce, and consequently the price he
can get is very high. In essence,
Aquinas asks the question, "Would it be wrong for the trader to charge the
prevailing high price, even though other traders will probably follow him and
lower the price? Or should he charge the
lower price that he knows will prevail after the other traders arrive?" Aquinas says charging the higher initial price
would not be a sin, though it would be more charitable to sell the food below
the market price. So in saying this, he
implied that taking advantage of a favorable market position, as we might put
it today, is not necessarily wrong.
The
bitcoin variety of digital currency is a particularly pure form of speculation
in which the thing of value is so abstract as to be nearly nonexistent. A bitcoin itself is just a record of
transactions that play out under certain rules that are publicly known, and can
be created only with the expenditure of a certain amount of energy, time, and
other resources. Its value in terms of
more familiar monetary measures such as the dollar depends entirely on what people
perceive its value to be. While that
perception is not completely random, as the throw of a die is, it is so far
beyond the control of most individuals that it might as well be random. So in this aspect, speculating in bitcoins amounts
to a kind of gambling, as many other forms of financial speculation do as
well. And Aquinas had something to say
about gambling.
In
one section of his magnum opus, the Summa
Theologiae, Aquinas says that giving gambling winnings to charity would be
wrong if the winnings were garnered from those who have "no power to
alienate their property," such as children and the mentally disabled. And if gambling is illegal according to civil
law, it would also be wrong. But he
implies that gambling winnings from a game in which everyone knows and
understands the rules, and gambles anyway, would at least not be sinful,
although as with any other indulgence, excessive gambling can become harmful to
oneself and others and becomes a sin against charity. So to the extent that buying bitcoins amounts
to gambling, Aquinas would also give them a conditional pass.
I
will close with a personal bitcoin story that I hope the subject of it won't
mind my sharing, if I don't give any names.
Some time ago I had a student in one of my classes come up to me and ask
for advice. It turns out she had learned
about the bitcoin business in the very early days of its existence when you could
get some for a few dollars each, and she'd gone ahead and bought some. At the time she approached me about the
matter, they were worth some very serious money—many thousands each, was my
impression—and she wanted some advice as to what to do with them. This was when their value was reaching a historic
high.
I
warned her about adverse tax implications, and told her I was no financial
expert, but selling a few of them with awareness of her tax situation wouldn't
be a bad thing. I'm not sure what she
did, but it's likely she was able to pay for her whole college education that
way and then some. I also encouraged her
to give some of her profit away as a way of developing a habit of charity.
To
be frank, I began this post hoping that I could find a blanket
condemnation by Aquinas of bitcoins. But
I don't see that in what I was able to find, at least in this brief and
superficial inquiry. After all, we're
used to our bank accounts being recorded in digital form, and bitcoins are just
an elaboration of digital banking, in a sense, although with different
rules. So I'm pretty sure that if we had
Aquinas with us today, and we could manage to translate the idea of digital
currency into Latin, he would catch on and probably say that there's nothing
intrinsically wrong with bitcoins. But
like any medium of exchange, bitcoins or dollars or bars of gold can either be
used wrongly—e. g. stolen—or used to benefit people. The problems with them, if any, will not be
found in the software or the hardware, but will arise from the human heart.
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