COMMERCIO

COMMERCE. – By commerce is meant human activity directed toward the exchange of consumer goods and factors of production. The economic foundation of individual exchange lies in the differing evaluations of the same goods by the two parties involved, a difference that is a function of needs and quantities (theory of marginal utility).

I. **Social Economy.** – The economic foundation of exchanges between different countries is to be found in the comparison between the cost of the goods exported by country A to country B and the cost that the goods obtained in exchange would have had if they had been produced in A (theory of comparative costs). The reciprocal advantage of exchanges justifies commerce; it has an economic function because it increases the utility of the goods possessed and is therefore productive. The exchange of good A for good B can be carried out through the medium of money. In this case, there are two distinct acts of exchange: good A for money (sale); money for good B (purchase).

The act of exchange, whether direct or through money, can be carried out with a view to consumption or with a view to a subsequent exchange. In this second case, the increase in utility is transformed into a monetary gain given by the difference between the cost price and the selling price: such a gain is commercial profit.

Commerce transfers goods in time and space, bringing the means to satisfy needs closer to those needs, and performs an intermediary function between producer and consumer, assuming some of the risks of production. Risk is an inseparable element of every act of exchange, and its compensation is an integral part of commercial profit.

Commercial profit has not always been justified: some economic theories (physiocracy, classical school, Marxist school), starting from an objective basis and an insufficient notion of the good, considering only those economic activities productive that quantitatively increase the product (agriculture) or transform its form (industry). Today, commercial activity is fully justified, both from an economic and an ethical standpoint, inasmuch as it performs a useful economic function for society, and, like every form of economic activity, is an expression of free initiative and therefore of human personality.

This does not exclude that, in a regulated economy, with a view to achieving the human ends of society, commerce may be subject to regulatory intervention. Such intervention should aim: a) to avoid pathological manifestations of commercial activity, such as the withdrawal of goods from the market in order to raise prices (cf. V. incetta); b) to ensure that profits arising from particular circumstances in which the supply of goods is necessarily limited (scarcity of harvests, wartime economy, etc.) are absorbed for the benefit of society, or eliminated by appropriate price policies. Examples of such regulatory interventions in commerce include the fixing of *calimeri*, i.e., forced prices below the equilibrium price. The *calimeri*, by fixing a price at which demand exceeds the availability of goods, must be accompanied by rationing. Money itself can be the object of exchange and give rise to commercial activity, normally exercised by banks.

In the modern economy, characterized by a high degree of division of labor, no individual or nation produces everything it consumes: the resulting close economic interdependence makes the activity of exchange ever broader and more complex, now inseparable from the production of goods. Some economists (Bücher) have characterized the evolution of the economy on the basis of the extent of commerce. They distinguish three economic phases: a domestic or closed economy (up to the 11th century), an urban economy (up to the 16th century), and a national economy (up to the present day), to which would respectively correspond itinerant commerce, market commerce, and fixed commerce. To this theory it may be objected that the various forms of exchange coexist and that it is impossible to reduce the manifold and complex commercial phenomena within the limits of a necessary order of development.

Commerce is distinguished into: wholesale commerce and retail commerce, according to whether the exchange is made with a view to further exchange or with a view to consumption. Of particular relevance to the problems it entails is the distinction between domestic commerce, if the exchange takes place between sellers and buyers of the same country, and international commerce, if the exchange takes place between producers and consumers of different countries. Transit commerce occurs when goods are brought in through one frontier to be reshipped through another. International commerce is divided into import commerce and export commerce, according to whether the goods are purchased from abroad or sold abroad. The schedule of payments that a country must make abroad for imports and the receipts from abroad for exports is called the **trade balance**. The schedule of payments abroad and receipts from abroad for any reason is called the **balance of payments**. It includes, in addition to import and export items, payments and receipts due to other causes (invisible items), such as tourism, the employment of capital abroad or foreign capital in the country, freight charges, remittances from emigrants, etc.

The development of commerce has led to the formation of a particular discipline that studies its organization from the standpoint of business economics: **commercial technique**. It analyzes the various elements that influence the conduct of domestic and international commerce. Among these may be mentioned: advances in production technique, means of transport, the legal system, and the spread of commercial culture. The development of commercial technique has made necessary a particular cultural preparation for those who must engage in commercial activity. Acts of commerce have given rise to one of the broadest autonomous formations within the legal system: commercial law. In Italy, the first Commercial Code was published in 1865; it was abolished on January 10, 1883, with the entry into force of the new Commercial Code. With the reform of the Codes in 1942, the laws governing commercial activity were incorporated into the unified Civil Code.

**History.** – The first form of exchange, in what might be called the pre-commercial phase, is barter and hospitality gifts. Herodotus (IV, 12) describes a typical form of barter, later found by explorers and pioneers among numerous primitive tribes: silent barter; this made exchange possible even between hostile or distrustful tribes, avoiding contact between them. Primitive economy, however, remains a closed economy; commerce does not fulfill an essential function in it, and the normal way to obtain goods that cannot be produced remains plunder.

To find true commercial activities, we must go back to the first civilizations: the Assyrians and Babylonians, the Egyptians, and the Phoenicians. These peoples introduced the use of money, weights, and measures, and established the first rules governing the peaceful conduct of trade. Above all, the Phoenicians acquired a veritable exclusive dominance of international commerce, favored in this by their geographical position, which made them the natural intermediaries between the East and the West. Their commercial predominance lasted

Up to ca. 500 B.C. The geographical position, the poverty of the soil, and the natural aptitude of its inhabitants further promoted the development of commerce among the Greeks, characterized by a particularist and free-market orientation. Great importance was assumed by the colonies spread along all Mediterranean coasts and economically tied to the motherland by continuous currents of trade. The antagonist of Greece in Mediterranean commerce was Carthage, which gathered around itself the Phoenician colonies of the western Mediterranean, binding them with a dense network of commercial treaties. Unlike the Greek system, Carthaginian commercial policy tended to establish a centralized system with monopolistic features; it provides the first example of an imperialistic commercial policy.

The simultaneous destruction of Carthage and Corinth (146 B.C.) marked the beginning of Roman economic predominance, representing the period of the most extensive and liberal economy of antiquity. With the political and economic unification achieved through the magnificent road network, the formation of large population centers, and substantial liquid capital, Roman rule enabled a notable economic specialization and thus a vast commercial traffic.

With the fall of the Roman Empire, Europe entered a period of decline in commerce, reduced to small local markets between the city and its suburbs. As in the spiritual realm, so too in the economic sphere it was the Church that slowly undertook the work of reorganization. Around the diocese, in communication with a good number of parishes, a center of social life was reconstituted. The bishop was the authority that guided the new relationships, safeguarding regularity and good faith. It was the dioceses and parishes that obtained from the declining imperial authority the privilege to manage markets and fairs, which revived regional and interregional trade. From the 12th century onward, all Western cities had fairs and markets, which, despite difficulties, traversed the routes of the Levant and the Mediterranean and extended into Germany, France, and Flanders.

With the rebirth of exchange-based economy, the foundations were laid for the communal movement, and the golden age of Italian commerce began (12th–15th centuries). The merchant was the central figure of the late medieval economy, and the great Italian companies (Medici, Bardi, Peruzzi) directed the flow of goods and money across Europe, amassing enormous fortunes. The closing of communication routes with the Orient, a result of Turkish expansion, and the geographical discoveries inaugurated a new phase in the history of commerce: the oceanic phase. Commercial primacy passed to the Atlantic nations: Portugal and Spain in the 16th century, the Netherlands in the 17th, and France and England in the 18th. The great trade routes opened toward the Americas, and Italy was never again able to regain a leading position. A developed industry, a vast colonial empire, and a refined commercial technique gave Great Britain at the end of the last century a decisive commercial advantage, making London the world’s premier market for goods and capital. In the early years of this century, Germany experienced rapid economic expansion based on a protectionist system. The period between the two world wars saw a strengthening of protectionism and a struggle for the conquest of markets. European states increasingly directed their international trade flows in accordance with political directives, while the United States increased its economic potential to become the world’s leading exporting market. Contemporary domestic and international commerce is characterized, on the one hand, by a desire for freedom—natural after the constraints of a long war period—and, on the other, by the need to aid Europe’s economic reconstruction through international agreements and to achieve greater social justice through national economic policies.

Francesca Duchini

III. MORAL OBLIGATIONS

Medieval theology was not favorable to commerce pursued solely for the sake of profit. With the Scholastics (Sum. Theol., 2a-2a, q. 77, a. 4), the criterion emerged that remained in force for many centuries: modest profit may be honest; unlimited profit, though not in itself illicit, requires a justifying motive.

In the 18th century, theologians, influenced by the development of commerce, made greater efforts to understand its legitimacy and concluded that profit is a kind of quasi-wage that does not require any other title to justify II. The medieval aversion to commerce was justified by the dangers it posed, such as the frequent frauds in this field, the violation of just price, and the pursuit of profit not for a lawful end but solely for unlimited enrichment. In contrast to medieval rigorism, the judgment of the public in our century regarding commerce is excessively permissive.

From a Catholic perspective, it is impossible to render a blanket judgment on all commercial activity, since it consists not of a single act but of a series of acts that may touch upon every aspect of morality. The first issue to be addressed is the obligation arising from commercial laws. The principle of the obligation of civil laws applies here, including commercial laws. As is well known, civil laws—with due exceptions and reservations (v. LEGGE)—regularly bind in the internal forum even when the legislator does not explicitly state this, especially those laws that create rights, obligations, and means of proof, as is the case with commercial laws. Some modern authors have proposed a new subdivision that may be accepted as more clarifying, distinguishing from a moral standpoint in this area between imperative commercial laws (which may affect the rights of third parties) and suppletive laws (which apply in the absence of agreement between the parties): the former bind in conscience “ante sententiam iudicis”; the latter bind in conscience “ante vel post sententiam iudicis” or not at all, depending on whether the parties intended to refer to them (cf. G. Bicchieri, Il mondo degli affari e la morale, Brescia 1935, pp. 46–51).

Given this premise, since the law cannot eliminate all abuses, it is appropriate to recall, alongside the obligations it imposes, all the moral principles that govern contracts (v. CONTRATTO) and, in particular, the contract of sale (v.), which underpins commerce, along with the norms governing just price (v. PREZZO). With regard more directly to commercial activity, certain specific moral principles apply.

1) The principle expressed in the well-known English saying "Business is business" cannot be accepted, as it seeks to elevate personal gain to the exclusive criterion, disregarding all other concerns. This criterion presupposes that the commercial world is a realm unto itself, exempt from moral law.

2) Therefore, commercial activity based on dubious or outright shady dealings—such as human trafficking—is not permissible.

3) It is also morally prohibited to employ illicit means to advance one's business, such as lying, violence, or exploiting others' ignorance or poverty (e.g., black-market activities). Today, advertising (v.) plays a significant role in promoting products to make them appealing to the public and drive sales. In this area, the tendency to appeal to the baser instincts of human nature through advertising is certainly condemnable, as it seeks to capture the attention of passersby through certain advertising posters.

4) Commercial activity, as is well known, can operate under a regime of free competition or monopoly. Competition in a free-market system performs a beneficial and productive function in private economies, but it must not exceed the limits set by justice (unfair competition) and charity. The question of the limits of competition is highly delicate, as it can involve multiple and complex violations. Civil law often intervenes here, and the limits imposed by it must be observed in the interest of individuals and national economy (cf. in this regard Article 2595 of the Italian Civil Code and Articles 2595). Typical examples of unfair or illicit competition include acts of confusion, denigration, and slavish imitation.

As for private monopolies, they are not inherently illicit, provided that prices are not raised above what is considered the maximum just price and other traders are not prevented from buying and selling. Traders who conspire to sell only at a maximum price, even if it is just, sin against charity, though they may not sin against justice unless one of them is maliciously prevented from selling at a lower price.

5) In the demand and supply of goods by traders, it must be noted that while the economic laws of supply and demand influence economic behavior and are thus in a sense constructive, they do not absolve traders from the higher demands of ethical order.

6) In economic circumstances, the conscious regulatory action of individuals—especially large traders—must never lose sight of the common good in favor of individual gain.

7) In relation to employees, traders have precise duties, both in promoting insurance and in creating good working conditions, as with any other employer (v.).

8) Smuggling, whether internal or external, as a violation of laws enacted by legitimate authority, is undoubtedly also morally illicit, although a distinction is still sometimes made between fiscal laws, which bind under penalty, and moral laws, which bind under guilt.

Beyond restrictions on trade within the national sphere, there are also restrictions in international law.

9) It is commonly acknowledged, for example, that a state of war imposes many restrictions on the freedom of commerce even upon states and subjects of belligerent nations. Since such restrictions often result in severe economic damage, it is necessary that the prohibition on trading with belligerents be established solely with regard to the necessities of war, and within these limits, it also binds in conscience.

10) In sales transactions, any kind of fraud must be avoided. It is permissible for traders to buy and sell goods that can be used for good or ill, but not those that, by their nature, admit only of evil use.

11) Traders may lawfully use hidden compensation in buying or selling only:
a) if they are unjustly forced to sell or have sold goods below the just price due to error;
b) if they cannot otherwise, without serious inconvenience, obtain payment of a true and certain debt.

12) In addition to the obligations of commutative and legal justice, traders cannot neglect to fulfill the obligations of the precept of charity to the extent appropriate to each individual, according to their possessions and circumstances.

13) Finally, the pursuit of profit must be subordinated to the supreme purpose of life.

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IV. CANON LAW

The *Code of Canon Law* (CIC) addresses commerce indirectly in norms concerning contracts (v.) and specifically loans (v. usury), and explicitly in Canon 142, which prohibits clerics from engaging in trade or commerce for their own or others' profit, even through intermediaries.

This norm prohibits clerics not only from engaging in commerce in the strict sense (including exchange and stock market operations) but also from engaging in industry involving the goods of others or the labor of others. However, it is generally not considered prohibited for clerics to purchase corporate bonds, nor usually to purchase shares (though if the purchase is made with the intention of speculating on resale, the liceity of such an action may be doubted).

A cleric who violates this prohibition must be punished by the Ordinary according to the gravity of the fault (Canon 2380).

Similar prohibitions, more or less specific, have existed since the early centuries of the Church, particularly in many regional synods of the 4th to 8th centuries, whose texts (often imposing severe penalties) are partly reproduced in Gratian’s *Decretum* (cf. c. 26, D. LXXXVI; c. 1, 2, 9, 10, D. LXXXVIII; c. 1, 3, 8, C. XIV, q. 4; c. 1, 3, C. XXI, q. 3) or in collections of decretals.

The Council of Trent (Session XXII, c. 1; Session XXIV, c. 12 *de ref.*) reaffirmed the prohibition while mitigating the penalties.

For further canonical texts, see the sources cited in the notes to Canons 142 and 2380 of the CIC.