Described as small of stature and giant in intellect, Cardinal Tommaso de Cajetan, O.P., was praised by Pope Clement VII as the “lamp of the Church.” Cajetan is perhaps most famous for being the legate sent by Pope Leo X to Germany to try and persuade Martin Luther to back down from his confrontation with the Roman Church. Less well known are Cajetan’s important contributions to economic thought, described by the economic historian Raymond de Roover as helping “to lift the barriers that still opposed the march of capitalism.”
Born in Gaeta, Italy, into a noble family, Cajetan entered the Dominican Order at an early age. Studying in Naples, Bologna, and Padua, he was quickly recognized by his superiors and peers as possessing an unusually powerful mind. Amidst a plethora of writings, he managed to pen three short treatises on economic matters, his most important being on exchange dealings. The significance of this lies in the fact that exchange dealings were central to the practice of what we would today call money markets. The church’s ban on usury raised questions concerning whether the practice of bankers buying bills of exchange at prices determined by the foreign exchange rates was permissible or whether it involved a covert form of usury.
Cajetan insisted that such exchanges did not involve usury because they were advances of money to be repaid in a geographically different place and in a different money-currency, even though there was a time difference involved. Cajetan’s view was to become the church’s official position, and opened the door to the full development of money-markets and wider understanding that, in the conditions of a market, money was not sterile, but rather a commodity, which could be traded like other commodities.
When discussing his ventures into economic subjects, Cajetan makes a point of mentioning on several occasions that he consulted merchants and bankers about the nature of their work. As a Thomist, Cajetan understood the value of logic and philosophy. This, however, did not prevent this great Christian theologian from seeking the views and insights of business practitioners.
