[Question:]{.underline} Is it permissible for a Catholic to speculate on the stock market or on the international currency exchange market?
[Answer:]{.underline} The natural law right to private property brings with it the right to buy and sell, to own, and consequently to trade in property such as shares in public or private companies. Such private investment is, indeed, absolutely essential to the common good, for without capital there can be no production. The fact that the outcome of such investments is highly chancy does not change the morality, provided that a man does not thereby invest the funds necessary for the support of his family. Nor does the fact that one man’s gain is another man’s loss, provided that there is no deception, fraud, or taking advantage of another’s ignorance.
Speculation, though, is not the same thing as investment, but is rather a short term placing of money in stocks or currency to make a quick profit by a rapid sale at a time when the market is strong. Such speculation is not against justice, since the terms of the contract are kept, nor can it be considered in itself a sin, given that all the terms of the various contracts of buying and selling and the requirements of civil law are observed. Nevertheless “they are not morally commendable unless they are required by some commercial necessity.” (Merkelbach, Summa Theologiae Moralis, II, §604).
The principle is given by Pope Pius XII in a radio message to the entire world on September 1, 1944, in which he condemns not only Communism, for its denial of the right to private property, but also “the Capitalism” “founded on erroneous conception that arrogates to itself an unlimited right over property outside of all subordination to the common good” as always having been condemned by the Church “as contrary to the natural law” (PIN, §831).
The Catholic with an upright conscience ought consequently to make his capital and his investments not only for his own profit, but also for the common good of society. It is to be highly doubted whether transient speculations on stock and money markets make any real contribution to the common good. Rather more likely is that they are selfish and harmful to the common good.
Father Merkelbach explains why it is that he does not find such speculation morally commendable, for such speculators “immoderately retain their capital in intermediary operations that have no real utility; and strive to obtain riches without proportionate labor [and without subordination to the common good]{.underline}, indeed with loss for others who do not freely expose themselves to chance, but are bound to do so for business reasons. Moreover, the custom of becoming preoccupied with monetary speculations encourages an overwhelming desire for gain, to which they subordinate all things, and every activity. It entrains constant anxiety, and exposes to a great danger of wastefulness, idleness, and the financial ruin of businesses and families” (Ibid.).
It is unfortunate that some traditional Catholics consider that such a way of life is compatible with the Social Reign of Christ, indulging as they do in such trading on the internet, without consideration of how such speculative trading could serve Christ the King, or possibly following the false principle that the ends justify the means. The mind of the Church is contained in the traditional (1917) Canon Law’s interdiction of all such speculation for all clerics and religious, even for the benefit of the Church, or other persons (Canon 142).
Answered by Father Peter Scott, SSPX.